Mailers up in arms over proposed hike

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Industries that are among the cash-strapped U.S. Postal Service’s biggest customers are up in arms over a new Senate proposal that could make it more expensive to use the mail.

The mailing industry – representing banks, magazines, greeting cards and catalog companies, among others – says it’s already reeling from a recent decision that would temporarily boost the cost of stamps from 46 cents to 49 cents later this month. 

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But those groups say a proposal from Sens. Tom Carper (D-Del.) and Tom Coburn (R-Okla.) – the top postal negotiators in the upper chamber – could be even more of a drag on their business. 

Carper, the chairman of the Homeland Security Committee, and Coburn, the panel’s top Republican – who hope to mark up their bipartisan postal bill on Jan. 29 – propose making the looming rate hike permanent. 

On top of that, they’re proposing a rate cap that would allow USPS, which lost $5 billion in fiscal 2013, to raise the price of postage 1 percent quicker than the rate of inflation. And come 2017, they’re seeking to give the Postal Service greater say in revising its rate system. 

For the mailing industry, each of those proposals is distasteful on their own. Packaged together, the industry says there’s no way it can back Carper and Coburn’s bill unless the provisions are tossed out. Plus, coupled with this month’s rate increase, mailers feel as if they’re being forced to bear too large a burden for putting USPS on more solid ground.

“For an industry already reeling from the cultural shift away from paper to electronic communications, the prospect of having to pay billions more in postage is absolutely chilling,” said Art Sackler of the Coalition for a 21st Century Postal Service, which represents large mailers. “It is unaffordable and unsupportable.”

But Carper and some congressional aides suggest that the industry’s arguments are a bit overheated. 

They say most of the cost reductions the Postal Service – which has lost more than $25 billion over the last three years – has implemented in recent years have come from closing facilities, reducing the agency’s workforce and rolling back delivery standards. Now, they add, the mailers have to make their own sacrifices.

Carper told The Hill that his strategy with Coburn was to build on the recent rate increase, which the Postal Regulatory Commission approved for about two years in December.

By locking the rate increase into place permanently, Carper says the mailers can get some certainty, and the Postal Service an influx of revenue.

“It can’t just be about cut-cut-cut,” Carper said. “You need some revenues.”

More broadly, Carper and Coburn have both complained that the Postal Service – which does not receive taxpayer money for operations – needs more flexibility, and to have its hands tied less by government mandates.

“In order to help the Postal Service survive and thrive over the long term, we need a more balanced approach,” a spokeswoman for the Homeland Security panel added.

Carper and Coburn have yet to put their most recent revisions to their postal bill – first introduced last August – into legislative language, so the rate proposals aren’t yet set In stone.

Carper has also been forced to delay committee consideration of the bill several times in the last couple of months as he tries to marshal support on his committee, but both the chairman and his aides are hopeful this month’s mark-up will remain on the calendar.

If the current rate proposals stay in the measure, the mailers say they’ll do everything in their power to defeat the bill. The groups do have some allies on the Homeland Security panel, including Sen. Tammy Baldwin (D-Wis.).

To the mailers, the rate increases is a losing proposition for them and the Postal Service. Sharply higher rates, they say, will just force them to use the mail less frequently, which will hit the Postal Service in the pocket.

The mailers are especially concerned with the proposal to allow USPS and its regulator to work together on a new rate system in a couple of years. 

Under the plan, the Postal Service’s board would be allowed to reject any objections from the Postal Regulatory Commission via two-thirds vote. The mailing industry says that is akin to allowing a de facto monopoly set its own price structure. 

“Our challenge is to get these members to understand that the impact of this on our industry is monumental,” one mailing official said.

Carper himself doesn’t seem too troubled by the idea. “I think if the Postal Services raises rates on a particular product, and the bottom falls out on that product, the Postal Service is smart enough to know they need to lower the rate,” he said.

But the flap does illustrate just how difficult it is for Carper and other postal negotiators to get a bill to President Obama’s desk. In addition to rates, lawmakers are dealing with knotty issues like whether to keep Saturday delivery, how to deal with a mandated pre-payment for future retiree healthcare and the agency’s delivery standards.

The mailing industry, for instance, did support a postal bill Carper co-authored that passed the Senate in April 2012. 

Carper, who has long sought bipartisan solutions to the Postal Service’s woes, had to move his latest effort to the right to bring Coburn on board, a move that left Sen. Bernie Sanders (I-Vt.) and other supporters of the 2012 bill scratching their heads.

Democrats on the Homeland Security panel like Sen. Jon Tester (D-Mont.) are fighting for the quickest delivery standards possible. And unlike the mailing industry, postal unions seem fine with rate increases, but fiercely oppose the prepayment and any potential dents in six-day delivery.

 

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