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Behind the Scenes Talks on Postal Reform

Written by: Donna Hanbery, Executive Director | Saturation Mailers Coalition

February 2016

Dear SMC Members:

I wanted to share some “behind the scenes” discussions that are taking place about postal reform.

First, I thought you might be interested in seeing an ARTICLE that shows the Postal Service has backed down on its efforts to eliminate Saturday mail delivery.  Deputy PMG Stroman commented that “5-day delivery was one of the things the USPS dropped” from its reform plans.

You may be hearing discussion about mailers “agreeing to” accept the current exigency increase as a permanent increase in rates.

Arguments have been made by some coalitions that mailers should accept some “permanent” change in the rate base to help the Postal Service get on a better financial footing.  The argument is also made that mailers need to agree to this to have some “skin in the game” of postal reform and that if mailers do not give up something, reform will not be achieved.  If there is no postal reform, and the Postal Service is still in the red when the PRC starts its 10 year rate review, this could lead to higher increases or adverse changes in a future rate setting mechanism.

I wanted to remind you of the position that SMC has approved and share with you the actions I am taking to support reform that would give our members the chief objectives that have been approved by our Steering Committee.

SMC has joined with other mailers and mailer associations in opposing any postal reform measure that simply “accepts” all or part of the 4.3% exigency without some additional trade-offs or assurances for our members in terms of predictability of rates and efforts to preserve the price cap ceiling on annual adjustments.

I am working through my participation in PostCom to consider a proposal that would allow the Postal Service to do a one-time increase above CPI in January 2017, with the “extra” increase limited to approximately 2% (@ half of the exigency surcharge).

In return for allowing some higher than CPI rate increase for January 2017, we would ask that the law extend the time for the PRC to begin its “10 year” rate review under the Reform Act from 2017 to 2018.  This proposal would also seek to have the one time higher than CPI price change for January 2017, remain in effect for 2 years until December 31, 2018, until the PRC can complete its system of rate review.

At this point all of these proposals and discussions are very fluid.  I simply wanted to share with members what I am doing behind the scenes and the existing direction and positions I have been advocating as authorized by the Steering Committee.


Questions? Contact: Donna E. Hanbery, Executive Director | Saturation Mailers Coalition

33 South Sixth Street, Suite 4160, Minneapolis, MN 55402

(612) 340-9350 Direct Line

(612) 340-9446 Fax

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