Page 11 - Postal Magazine Final
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AMERICAN MAIL ALLIANCE: OUR THOUGHTS
Contrary to restoring financial stability THE COMMISSION PROPOSAL
PUTS TOO MUCH WEIGHT ON
to the Postal Service, the Commission’s A SINGLE OBJECTIVE
proposal will drive a great deal more
he current system has met mailer needs
volume and revenue out of the system, Tand funded ongoing USPS operations. But
when it comes to the future of ratemaking,
imperiling businesses, jobs, and the among all of the relevant Objectives and
Factors, the Commission appears to unduly
Service itself. focus on Objective 5, the Postal Service’s
financial stability, at the expense of other
objectives.
THE POSTAL SERVICE’S POOR
FINANCES ARE NOT ‘DUE TO’ For every shortcoming identified in the 10-year
DEFICIENCIES IN THE RATE- lookback, the only parties required to suffer
MAKING SYSTEM any consequences, through vastly higher rates,
are the mailers. There is no reason within the
AMERICAN MAIL ALLIANCE: T due primarily to the Congressional current scheme of postal ratemaking that the
he Postal Service’s poor finances are
Postal Service cannot be asked, and expected,
OUR THOUGHTS retiree health prefunding mandate to pay to achieve improvements in service and more
efficient pricing.
for the full liability for retiree health care
on an accelerated schedule. Having begun
the PAEA era with a financial handicap,
the Service’s situation was immediately TWO WRONGS
worsened when expectations of continuing DON’T MAKE A RIGHT
growth in postal volumes proved wrong.
he Commission ruling in the 10-year
Trate review, and its resulting rulemaking,
Over 90 percent of Postal Service losses in
the last decade are “due to” this misguided largely stem from the Commission’s
prefunding schedule. The Postal Service acceptance of the Postal Service’s $62 billion
is better funded for retiree benefits than in retirement liabilities “as a given” that the
any other federal, state, or private sector Commission must accept and that it alone
entity. In total, more than $340 billion are must repair. In determining that it must offset
already set aside in the U.S. Treasury for these obligations with rate increases, the
that purpose. (The other shortcomings the Commission compounds the problem and the
Commission finds in its rate review—not error of the fundamental assumption in PAEA
maintaining high quality service standards that USPS could indefinitely fund crushing
and not increasing price efficiency—could prefunding payments.
be ameliorated without burdening mailers
with prices that are significantly higher than
the rate of inflation for the next five years.)
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