Features

July 6, 2021 •
Change on the Horizon, If You Want It

The Postal Service Reform Act can strengthen the USPS — and our industry

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

At long last, the U.S. House of Representatives has an opportunity to advance vitally needed postal reform legislation. In May, the House Committee on Oversight and Reform approved H.R. 3076, The Postal Service Reform Act. This is the first time legislation to stabilize USPS finances has been approved by the committee and eligible for passage by Congress in the last three years.

Chairwoman Carolyn Maloney (D-NY) is to be commended for accomplishing what her last two predecessors have been unable (or unwilling) to do: introduce and advance comprehensive consensus postal reform legislation. We are appreciative that the senior Republican on the committee, Ranking Member Jim Comer (R-KY), joined her in this effort. Stabilizing the vital institution of the USPS and its ability to provide universal service to the nation at least six days per week is not just important for the greeting card industry, for which USPS delivers more than half of all cards to their final recipient; it is truly a national priority.

The bill contains many beneficial provisions. It eliminates the unsustainable burden to pre-fund 70 years worth of USPS retiree healthcare expenses in 10 years that has driven unsustainable balance sheet losses and motivated the USPS to seek higher rates and reduced services. Instead, it would have future USPS retirees receive the Medicare benefits, for which they have already paid through payroll taxes. It would also endorse the USPS 10-year plan commitment to six- and seven-day delivery for mail and packages by requiring at least six-day delivery for mail using an integrated network. This makes permanent the requirement that has been annually required by Congress in appropriations legislation since 1983.

The GCA is pleased to join with Postmaster General Louis DeJoy in supporting these essential reforms. This bill must advance to final passage as quickly as possible, but some improvements are needed along the way. While we are in lockstep with the USPS on these needed reforms, we are concerned that it continues to seek excessively high rate increases, including a possible stamp price hike this year. While the USPS’s regulator has approved a greatly expanded rate-setting authority, it did so based on the huge liabilities that this bill will otherwise resolve. Furthermore, the USPS 10-year plan projections, established several months ago, are already proving to be incorrect: Instead of the more than $2 billion loss projected for this fiscal year, the USPS has generated a profit of $236 million through April of this year. GCA supports a provision supported by the entire mailing industry to require the Postal Regulatory Commission to review the limits for rate increase once this legislation is enacted.

This bill, combined with the previously enacted COVID financing and a potential appropriation for a new vehicle fleet, could reduce USPS liabilities by as much as $76 billion. Having the regulator re-examine the limit on stamp price increases is important to ensure that our customers are not overcharged — and that high postage increases do not drive more mail out of the system. The nickel price increase in 2019, which represented the largest increase in USPS history, reversed a three-year growth trend in mailed greeting cards we worked hard to achieve, and led to a 15 percent volume decline in just one year.

Postal reform may seem like an issue far removed from the day-to-day operations of makers, industry suppliers, and card retailers, but when we consider that the USPS is the only viable delivery option for over half the cards sold, the importance of affordable postage and quality service becomes clear. In addition, greeting cards are among the most valued content of the mail stream, and the potential for receiving such personal mail is what keeps Americans checking their mailbox every day, so maximizing the volume of greeting cards and other personal correspondence in the mail is vital to USPS.

This bill is the best chance in the last decade to make a fundamental improvement in USPS’s core financial stability. Fortunately, it is easy for anyone to express support for the bill and the needed improvements. By texting MAIL to 52886, you can send a message of support to your Member of Congress in just a few minutes. This is an easy way for the greeting card community to help make sure card buyers have an affordable and reliable delivery option to get cards to their friends and family for many years to come.




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