Last year at this time we were being presented with a lump of coal from the USPS in the form of the exigent price increase. Fortunately for us, that won’t be repeated as we transition into 2015.
Instead, we actually got something we were wishing for … Senate confirmation of two nominees – Nanci Langley and Tony Hammond – as commissioners to the Postal Regulatory Commission (PRC). Commissioners Langley and Hammond had previously served on the PRC, but have been in Senate confirmation purgatory for the last year. We welcome them back. That regulatory body is now whole once again with 5 commissioners, including the recently appointed Acting Chairman Robert Taub.
While the Senate was confirming commissioners on the PRC, it neglected to take any action on nominees to the USPS Board of Governors (BOG). You’ve probably read that the BOG, normally made up of 9 board members plus the Postmaster General (PMG) and Deputy Postmaster General (DPMG), had been reduced to 4 members because of expiring terms and Presidential nominees being held up in the Senate. That did not constitute a quorum, but action the BOG took allowing the PMG and DPMG to vote on all issues before the Board resolved that problem for a short period of time. However, with the expiring term of the BOG Chairman on December 5, that quorum would be lost without last minute action by Senate confirmation of the current BOG Chairman, leaving the BOG with no authority to make any major decisions, including pricing changes … or so we thought. But remember that this is Washington DC.
So the Board of Governors, while it had a quorum, adopted a resolution regarding the exercise of those powers reserved to the Board upon the loss of a quorum. The resolution created a quorum by delegating authority to a Temporary Emergency Committee composed of the remaining members of the Board. This may or may not be legal, and it is being reviewed by many in the legal community. Should we be concerned? Will the mailing industry take any action or a position? That’s yet to be determined, and would most likely be influenced by any action taken by the Board related to pricing. With a new Congress, the nominees will have to go through the process once again. Hopefully, that will happen early in the year with hearings and confirmation following soon thereafter so that this becomes a non-issue. It will be important for the 114th Congress to take decisive action when it returns in January on the confirmations of the BOG nominees. The nation's mailers desire a full compliment of Governors to ensure that the management of the Postal Service is thoughtful and representative of the industry overall.
Litigation related to the PRC’s original exigent decision leaves us all in the dark as to what pricing decisions the USPS will make in 2015. The good news is that it has resulted in a delay in any increase, with April 26 appearing to be the earliest any price change (CPI, which currently gives the USPS pricing authority for a 1.965% increase) will be implemented. The bad news is that it has made projecting what to budget for 2015 nearly impossible. As we’ve been telling anyone who asks, budget for an additional 2% (stemming from the normal CPI increase) starting in late April. Then we’ll see what happens when the court renders its decision. We’re still optimistic that its decision will support the PRC, the exigent increase should be temporary, and that it should be rolled back as soon as the lost revenue from the 2008 recession is recouped. That could be as early as June or July 2015, leaving open the possibility of a reduction in postage at that time.
Whether the USPS implements CPI separately from an exigent rollback is still to be determined. It has been consistent in stating that it would like to avoid multiple price changes because of software changes and the associated resources and cost. As an MVP quarterback recently said … ”R-E-L-A-X.” Let’s enjoy the holidays, and when we get some definitive news we’ll be able to provide a summary and roadmap for 2015.
Joe Schick, Quad/Graphics’ Vice President of Postal Affairs is an advocate for mailers and the print industry and works closely with the USPS and Congress to achieve effective postal reform.