Postal Hikes For Nonprofits Could Become Permanent

February 7, 2014       Mark Hrywna      

The Homeland Security and Governmental Affairs Committee of the U.S. Senate approved an amended version of the Postal Reform Act of 2013 (S. 1486) that could make recent temporary exigent rate increases permanent, among other provisions that have nonprofit mailers upset. The measure now can be called for a full Senate vote.

Nonprofit mailers had backed an amendment by Tammy Baldwin (D-Wisc.) that would have eliminated a key section of the legislation and while that amendment was revised, it didn’t go far enough for some mailers.

An amendment from Chairman Tom Carper (D-Del.) and Ranking Member Tom Coburn (R-Okla.) keeps parts of Section 301, which was a disaster for nonprofit mailers, according to Stephen Kearney, executive director of the Alliance of Nonprofit Mailers (ANM). The secondary amendment from Carper and Coburn “is a little better,” he said, but still very bad for nonprofit mailers.

The amendment was approved by a 10-5 vote and the committee later voted to refer the entire bill to the Senate by a 9-1 vote. The lone dissenter present for the vote was Jon Tester (D-Mont.), who said the measure “moves the Postal Service closer to privatization and could hurt rural mail delivery.”

The Direct Marketing Association (DMA) issued a statement expressing disappointment that the committee rejected Baldwin’s amendment and still opposes the legislation in its current form.

The amendment would keep the 4.3-percent exigent rate hike approved by the Postal Regulatory Commission (PRC) as permanent rather than temporary — it’s supposed to run about two years — in addition to a permanent 1.7-percent increase approved in December.

The amendment also reduces the authority of the PRC, Kearney said, which is better than the original section but the new version still changes any review of rate increases to after the fact. Mailers would have to file a complaint case with the PRC to get a fair hearing about any concerns they had or about a rate case under the new law, he said. Currently, the PRC reviews and hears public comments and questions before rates go into effect.

The revised version of Section 301 reduces the rate cap from 1 percent above the Consumer Price Index (CPI) to strictly CPI, however, it also allows individual classes of mail, like periodicals or standard, to increase as much as 2 percent above CPI, Kearney said.

The approved revisions also would allow the United States Postal Service (USPS) to propose a new ratemaking system, if necessary. The Postal Accountability and Enhancement Act of 2006 (PAEA) called for the process to be reviewed by 2017, led by the PRC through an open and transparent process. This bill, however, would give that power to the USPS, Kearney said, with a two-thirds vote of its Board of Governors. “It would be a case of a government monopoly setting its ratemaking process with no regulations at all,” he said.