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Legislative loopholes leave stamp prices too high

The United States Postal Service (USPS) is a vital public institution, but since 2006 there have been just two major postal reform bills passed to stabilize it. While these laws had many positive elements, each came with unintended consequences that left major problems unsolved.

The 2006 law created a massive, unsustainable liability for USPS to pre-fund retiree healthcare costs. The law passed last year fixed that problem, providing more than $100 billion in financial relief to the USPS, but it failed to ensure that at least some of those savings would go to keeping stamp prices more affordable.

Last year’s law also gave the USPS Board of Governors the responsibility to fund the organization that was created to protect consumers from the postal monopoly, the Postal Regulatory Commission (PRC). On its face, this is like giving the fox the keys to the hen house, but it is actually not the first time this has happened. From 1970-2006, the USPS Board also had control of the PRC’s purse strings, but with one major difference. During that period, every rate increase was automatically reviewed in a lengthy but thorough review process. When the rate-setting system was changed in the 2006 law, Congress wisely took away the USPS’s funding authority for the PRC but now with the 2022 law, it has turned back the clock.

Another major problem is that last year’s law did not include a key requirement that the PRC review the cap on stamp prices and other postage rates that had been in drafts of the legislation. Supporters of the legislation assumed that the PRC could not ignore the impact of postal reform and other measures in the COVID response that eliminated more than $120 billion in overall USPS liabilities — but it has done just that. The day the president signed the bill into law last year, GCA filed a petition for the PRC to review the rate caps. That petition has so far gone unanswered.

But this is just the most recent instance in which the PRC has failed to meet its obligations to constrain the USPS since 2006. Beginning with abolishing the dedicated consumer advocate that had effectively served since 1970, the commission has since limited itself to merely checking the USPS’s math rather than taking the opportunity to look at the impact of its policies which are projected to intentionally cut mail volume in half within the next eight years.

The Greeting Card Association believes fiscal prudence must be balanced against the public service responsibility of the USPS and that rates should be designed to maintain as much volume as possible, not drive customers away on purpose. After two rounds of postal reform, Congress should consider whether it is time to restore and modernize the regulatory process for postage rates and quality mail service.

Nora Weiser is the executive director of the Greeting Card Association (GCA), and Rafe Morrissey is GCA’s vice president of public affairs.