Industry Profiles

April 21, 2021 •
As USPS founders, Congress treads water

Multi-colored envelopes

Significant reform is on the horizon, but hasn’t yet actually begun.

By George White, president, Greeting Card Association, and Rafe Morrissey, vice president of public affairs, Greeting Card Association

George White, president GCA
George White, president GCA

Nothing is ever as easy as it should be. When it comes to Congress enacting legislation to fix the USPS, no truer words could be spoken. It took 36 years to enact the only major piece of postal legislation after the 1970 Postal Reorganization Act, in 2006, so the fact that we continue to wait for Congress to fix the unintended consequences of that bill should not be too surprising.

Rafe Morrissey, vice president of public affairs, Greeting Card Association
Rafe Morrissey, vice president of public affairs, Greeting Card Association

Based on what the media has been reporting, it would be easy to think that the biggest problem facing the USPS is finding a way to replace Postmaster General Louis DeJoy. Many members of Congress certainly appear to think so.

Much of a recent hearing that was intended to consider legislative solutions instead focused on him. The narrative that began last summer is based on the notion that DeJoy had been brought in as a partisan plan to destroy the USPS, so as to keep it from effectively enabling a largely vote-by-mail election. It’s continued to simmer, with some Congresspeople urging the President to fire the entire USPS Board of Governors and install a new one that will remove DeJoy.

This would not only be an unprecedented (and legally questionable) politicization of the Board but more importantly, it misses the boat. It is as productive as arguing over who should be the captain of the Titanic after it has hit the iceberg.

The reality is that the USPS has hit several icebergs since Congress last passed major postal legislation in 2006. The invention of the iPhone, the 2008 recession and the COVID-19 pandemic have all exacerbated structural problems in the law that created unsustainable financial burdens to pre-fund USPS retiree healthcare expenses. Those unique obligations, imposed on no other Federal agency, led to the imposition of an unsustainable rate structure recently imposed by the USPS’s regulator and the degradation due to crumbling infrastructure. This became evident during the holiday season, when mail service collapsed due to an inability to process huge volumes of packages that the system could not handle.

Ironically, the only mail pieces the USPS handled well last year were ballots. The problems crippling the USPS predated DeJoy and will still exist in the event he is replaced, unless Congress does the tough work of passing legislation to address the structural financial problems it faces. To her credit, Representative Carolyn Maloney, chair of the House committee with jurisdiction over the Postal Service, has indicated that she wants to pass comprehensive postal reform legislation out of the House before the summer, and has made efforts to work with her Republican colleagues and Postmaster General DeJoy to negotiate a bill. A discussion draft circulated in recent weeks is encouraging, and reflects many key elements of a consensus approach that has been on the table for several years, but more of her colleagues need to focus on it to get it moving, and time is running short.

The Postal Regulatory Commission finalized a new rate-setting system that provides the USPS with the authority to dramatically increase stamp prices. Lacking any ability to fix the financial obligations Congress established, this could set up a rate structure that in theory can fulfill these obligations, but in reality will only drive more customers out of the system. The greeting card industry is all too aware of the negative impact of unaffordable rates, as card buyers endured the largest hike in the price of a first-class stamp in history in 2018, which reversed a multiyear growth trend of mailed greeting cards. There is no doubt that the Commission’s decision will produce the same result for all mail products if it is not changed by legislation.

Service is equally important. After the significant delays that occurred over the holiday season, restoring the confidence of customers in the system will be critical. The USPS board and Postmaster General DeJoy have embraced 6- and 7 day delivery as a critical competitive advantage. The greeting card industry has long recognized and promoted the value of 6-day service in maintaining the relevance and value needed to maintain mail volumes, but it too depends on financial restructuring that only Congress can achieve.

The USPS is a leaky ship but it can still be saved. For that to happen, the leaders of the House and Senate oversight committees must avoid allowing the recent, unwarranted politicization of the USPS to overtake the process, and instead accomplish the difficult but necessary task of bringing stakeholders to the table to identify needs and resolve differences to preserve consensus behind an approach. Ron Stroman, former Deputy Postmaster General and newly nominated candidate for the USPS Board of Governors, commented that this is the best opportunity in the last decade to pass comprehensive postal reform. The time is now for leaders in the House and Senate to take advantage of it.

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