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Postal Service Board Postpones Decision on Rate-Hike Request

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By Billy House

September 5, 2013 | 7:30 p.m.

The U.S. Postal Service on Thursday postponed until late September its decision on whether to request a postal-rate increase—which some outside groups have said they fear could reach as high as 10 percent.
A statement released by the Postal Service’s board of governors confirmed that the panel met Thursday and, as part of its agenda in a closed-door meeting, “considered pricing issues, including the possibility of filing for price adjustments.”
The governors, the statement said, “continue to listen to stakeholders and have postponed final pricing decisions until the next scheduled Board of Governors meeting” scheduled for Sept. 24 and 25.
The board is weighing the move as the Postal Service continues to bleed money—as much as $19 billion since early 2012. The increased costs would hit everyone, including individuals who put a stamp on a piece of mail. Coalitions and groups that represent big mailers—like magazines, newspapers, and direct-marketing groups—have been lobbying aggressively against any big hike.
Members of Congress led by House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., have been wrestling with ways to cut the Postal Service’s costs, such as ending Saturday mail delivery.
“It’s an agency in crisis,” Issa said this summer, “but it’s also an entity that must be saved, but it’s an entity that needs to trim costs.”
Postal-rate increases are capped at inflation, as measured by the Consumer Price Index. That would mean an allowable increase of about 2 percent for implementation in January.
But a 2006 law also allows the Postal Service to seek a higher rate increase beyond the CPI in instances of “exigent” circumstances—and that is what is under consideration now. Such requests are to be made to the Postal Regulatory Commission, which has 90 days to pass them.
In 2010, the Postal Service submitted a request for an exigent rate increase of 5.6 percent—far avove the CPI cap—that would have brought in more than $3 billion annually. But the mailers fought that increase in court and it was derailed.
Some of the same groups that lobbied against that hike said Thursday they were encouraged by the decision to delay a new formal request for such an “exigent” rate increase.
“This action affords us additional time to work with them and detail the devastating impact a rate increase would have on the mailing industry and the 8.4 million jobs that depend on it,” said Mary Berner, president and CEO of the Association of Magazine Media, in a statement.
“It also gives us, the Postal Service, and the entire mailing industry additional time to continue working in concert to convince Congress that the solution to the Postal Service’s problems lies not in rate increases, but in meaningful postal-reform legislation,” she said.

This article appears in the Sept. 6, 2013, edition of National Journal Daily.

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