US mailer groups question timing of Potter remarks

Mailer groups blasted the timing of Postmaster General Jack Potter's reiteration of the U.S. Postal Service's commitment to hold postage rates steady until 2006. They fear it could delay passage of reform legislation that's now before Congress.
Potter said the USPS could delay rate hikes because the USPS has already cut $8.3 billion in costs over the past three years. At a Sept. 14 meeting of the postal Board of Governors in Boston, USPS CFO Richard Strasser said the postal service planned to trim another $1.4 billion, which includes a reduction of 23 million work hours.
“Potter made this statement just as Congress was coming back into session and the National Postal Forum was coming into town for their meeting,” said Neal Denton, executive director of the National Alliance of Nonprofit Mailers. “It might give some people the impression that postal reform isn't needed so urgently.”
Denton also warned that the USPS' financial assumptions were based on money it would receive as a result of not having to pay the costs of the military pensions of former postal workers.
“That law expires in 2005 and then the postal service would have to resume making these payments,” said Denton. “That was not made explicit by the USPS.”
In a rate case likely to be filed early next year, the USPS is expected to ask for rate increases in the range of 7% to 8%, he said, assuming the USPS still has the benefit of not paying the Civil Service Retirement System (CSRS) money. “If the USPS has to pay, we'll be seeing postage increases of 15% for standard mail and even more for periodicals.”
If new corrective legislation isn't passed by Congress, Denton estimated the postal service will be required to resume funding an escrow account set up to hold overpayments for former employees' military service beyond 2006.
Other groups questioned the USPS' commitment to postal reform and keeping it afloat beyond just cutting costs.
“The USPS has turned the positive work it's done this year in cutting postal costs into a negative by constantly trumpeting to Congress that the postal service is in its best financial position in years. At the same time, it's pigheadedly insisted that Congress repay the USPS every red cent it's ever been owed during a time of soaring budget deficits,” said Gene Del Polito, president of the Association for Postal Commerce. “Yes sir, that's the way to win Congress' hearts and minds and convince them of the urgency of business' plight.”
On top of this, two postal reform bills are stalled in the House and Senate and their passage this year remains doubtful.
Those measures were based on recommendations made last year by the President's Commission on the U.S. Postal Service.
“The USPS has alleged before the President's Commission and congressional committees that it wants postal reform. Yet it has said and done absolutely nothing to signal its approval or disapproval of either of the bills introduced [before] the 108th Congress,” said Del Polito.
The issue of the postal service's CSRS overpayments came up last year when the Office of Personnel Management discovered that the USPS was on its way to overfunding the system by some $78 billion.
After this discrepancy was discovered, a coalition of mailer groups lobbied furiously to get Congress to pass legislation — eventually becoming P.L. 108-18 — which transferred payment of those funds to the Treasury Department and put the money into an escrow account to gradually be released to the postal service. President George W. Bush signed that bill into law in April 2003 (Direct Newsline, April 23, 2003).
The measure called for using three years of the overpayments — some $9.2 billion — to keep postal rates stable until the beginning of 2006 and to pay down USPS debt.
The mailer groups and others warned then that the bill was merely a stopgap and meaningful postal reform was badly needed.
Soon thereafter, Bush set up the President's Commission, which became the blueprint for the bills now in Congress.