AMA and PIA Rally Against Postal Hike
The Affordable Mail Alliance (AMA) has called on the Postal Regulatory Commission to dismiss the Postal Service's rate hike proposal filed earlier this month.
AMA's motion argues that the rate hike violates the cost controls Congress put into law to protect consumers and that the Postal Service needs to cut costs and modernize rather than raise rates an average of ten times the rate of inflation. Given the potential precedent-setting nature of the exigency rate case, Printing Industries of America has joined with the AMA to block this rate increase.
"Allowing the Postal Service to raise prices above the Consumer Price Index in this case would nullify the single most important safeguard for mailers and the public in the Postal Accountability and Enhancement Act of 2006 (PAEA)," AMA argues in its motion.
Republican Senator Susan Collins, an author of the 2006 law, has already said the proposed increases do not qualify for an exception under the standards established by Congress.
The PAEA limits the average postal rate hike to inflation as measured by the Consumer Price Index (CPI). There is an exception to the CPI cap only for "exigent circumstances" when the Postal Service could not continue operating without overall price increases above the CPI.
But this exception is intended only for "extraordinary or exceptional circumstances" that would leave the Postal Service short of funds to provide necessary services despite "the best practices of honest, efficient, and economical management."
The AMA argues that the Postal Service has not met that test, pointing out:
- Economic downturns are a part of life. The ups and downs of economic cycles, like changes in the weather, are not "extraordinary" or "exceptional" circumstances.
- The trend toward Internet communications and away from mail has been taking place over the past fifteen years, giving the USPS years to prepare for the decline in volume. It hasn't.
- While the recession, which began in December 2007, caused sharp declines in volume and revenue, competitors of USPS, such as FedEx and UPS, had comparable or even greater declines. Those and other well-run firms, made the necessary and painful cuts in operating costs and capacity to increase productivity. The USPS did not and its productivity has fallen.