On May 11, the House Committee on Oversight and Government Reform held a hearing regarding the state of the U.S. Postal Service. Postmaster General Megan J. Brennan, PRC Chairman Robert Taub, Director Lori Rectanus from the GAO, Fredric V. Rolando from the NALC, and Jessica Lowrance from Postcom all testified.
As expected, Brennan continued to maintain that the financial situation of the USPS will remain in a dire state unless meaningful legislation can be passed. Specifically, the PMG is asking the House to put forth legislation that would:
- Require full Medicare integration for parts A, B and D, for postal retiree health plans
- Restore the exigent price increase for market-dominant products
- Calculate all retirement benefit liabilities using postal-specific salary growth and demographic assumptions
- Provide some additional product flexibility
Representing the postage rate payers, Lowrance stated the industry is seeking:
- Nondisruptive, predictable and affordably priced postage rates
- Complete, accurate and transparent costing of postal products and services
- Consistent and reliable mail delivery service (if the USPS says it will take three days to deliver, then it should be three days; not one and not five)
While the discussion seemed a bit less tense than prior testimonies before the House, it was clear there is still a chasm between what the USPS wants and believes it needs and what the mailing industry is willing to tolerate or afford.
Restoring the exigent price increase, for example, is an absolute nonstarter for the postage rate payers from a negotiation aspect. Less than two weeks after the hearing, a strongly worded letter signed by more than three dozen companies and associations (claiming to collectively represent 93 percent of all mail volume) was sent to Committee Chair Jason Chaffetz (R-Utah) taking a firm stance against to any proposal to restore the exigent price and furthermore objected to any other statutory rate increase.
Chaffetz himself also seemed strongly opposed to some of the USPS requests in his closing statement. For example, he clearly did not support the idea of the USPS expanding their postal retail locations into coffee shops or banks.
He did, however, believe there were ways in which the federal government might be able to leverage the vast network and daily interaction of the USPS with the public. He suggested there is potential to participate in services such as collecting census information or TSA precheck registration. He cited the success in the USPS providing passport services and encouraged more of this type of expansion rather than encroachment of the USPS into industry-provided services.
One particular item of note at the end of the testimony was the 10-year review of PAEA, the law passed in 2006 that among other things established a CPI-based cap on price increases by mail class. This review is already underway by the PRC. However, Chaffetz shared his disappointment that the assessment is not further along. He hinted to potential legislation that may be introduced by the committee sometime later this summer.
PRC Chairman Taub stated they likely won't have their review done until much later this year — perhaps not until October. This would once again leave consideration of any relief to the last minute for Congress, and this time in the midst of one of the most tumultuous presidential elections in years past.
Based on the discussions at this hearing, the inactivity in the Senate to confirm any of the Board of Governor appointments, and the financial situation of the USPS, it will certainly be an interesting 2016.
