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Saving the Postal Service ... Everybody's Now An Expert!
What's really happening inside the beltway? It's politics at work and it ain't pretty.
It's no secret that the USPS has been losing First Class Mail volume and revenue for the last decade. It's no secret that the USPS has operated with labor representing 80% of its costs forever. It should be no secret, since many of us have publicized it, that the USPS has a network that can support the processing, distribution and delivery of 300 billion pieces of mail each year while volume in 2011 and beyond will only reach about 165 billion pieces per year. And it should be no secret that until recently, a scant minority of Congress couldn't give two hoots about the Postal Service except for naming post offices. Funny how that has changed since the USPS became the flavor of the month on cable news and in the press. ... Now everybody on Capitol Hill seems to be the expert and has the plan to fix what ails the Postal Service.
What does that mean? It means the fix will happen through legislation from a Congress and Administration that can't or won't agree on anything. At this time, there is only one bill that is moving and that is H.R. 2309, the Issa-Ross Postal Reform Act of 2011. It was passed through the full House Oversight and Government Reform Committee last week. While there are some parts of this legislation that can be supported by Quad and the mailing industry, it’s far from acceptable. But it does start to move the process along, and that is progress on getting something done to facilitate getting the Postal Service back on solid financial footing for the long term. A similar bill in the Senate that was proposed by Senator McCain is not expected to move through a Democrat-controlled Committee.
Some in DC think that it's as simple as returning the pension fund
overpayment (about $50-75 billion) to the USPS so it can pay off the required
prefunding of retiree healthcare ($5.5 billion annually for the next 10 years).
That would solve the problem for about 12 months. But if you don't right-size
the network (i.e., facilities, transportation, equipment and people), we'll be
right back in the same predicament. NOTE: You should know that in the whacky
world of government logic, returning money that is rightfully due the USPS
actually scores; negatively on the federal budget (that is, it magically
increases the deficit).
Will any legislation find its way through the House, the Senate and the President's desk any time soon? Most in the know would bet against it. But there is also this little group called the Super Committee that was created to come up with the start of a fix for the federal budget deficit, and it's possible that something could be included within their proposal that would impact the Postal Service and the printing and mailing industry. Their decision is due by November 23, and it’s questionable whether they will even be able to agree on a recommendation. But the lobbying process has already begun.
With all the activity in Congress related to the USPS and the many varying proposals, it's logical for those who are in the business of the mail to wonder how this will impact postal prices. And with all the inactivity related to getting anything done, if anyone knows the answer to that, please let me know.
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