July 25, 2022 •
Affordable Postage Requires Better Decisions
Vital work still remains to fulfill the promise of postal reform.
With Congress in the grip of gridlock on almost every major piece of legislation, bipartisan support that led to the enactment of the Postal Service Reform Act (PSRA) is truly an achievement. It provides the USPS with significant financial benefits; removing $57 billion from its balance sheet and eliminating the need to pre-fund future retiree healthcare costs. Coupled with $10 billion in COVID grant funding and far better-than-predicted revenue performance, this significantly improves the USPS’s financial position and outlook.
Sadly, the USPS leadership has refused to alter the course they set in their Delivering for America Plan, which proposes large rate increases and assumes a 42% reduction in mail volume. In recent comments, Postmaster General Louis DeJoy has doubled down on that formula advising mailers that they should be prepared for uncomfortable rate increases. This path represents a big challenge for the greeting card industry, particularly because greeting cards are one of the mail categories where GCA has worked to create growth potential.
While outreach continues to USPS leadership, the Greeting Card Association (GCA) has also been active in seeking opportunities for the Postal Regulatory Commission (PRC) to exercise its authority to review rate limits. The day the PSRA was signed GCA submitted a petition with the American Forest and Paper Association to ask the PRC to conduct an updated review of rate limits factoring in the major financial improvements that have occurred since its decision in 2020. The Association for Postal Commerce (PostCom) also submitted a similar petition.
We hope that the PRC will accept one or both of these petitions, despite the Commission’s resistance to earlier requests. Last year, GCA supported efforts to obtain a requirement for a review in the annual appropriations legislation that resulted in report language directing the PRC to consult with stakeholders, which thus far they have failed to do. We have hit the ground running in the FY2023 appropriations process to get bipartisan requests in both the House and Senate for a binding legislative requirement and are leading efforts within the Keep US Posted campaign to support that goal.
Postal reform remains a significant legislative achievement that has brought fundamental financial benefits for the USPS, but USPS leadership must alter their approach to mail and allow those benefits to result in a rate strategy that balances more moderate rate increases while retaining as much mail volume as possible to fulfill an accurately calculated revenue requirement. If it fails to do so, then the PRC must step up and exercise its authority to protect the interest of citizen mailers who are captive to the USPS’s monopoly. GCA will continue to devote its efforts to those goals.