(Photo By Deposit Photo)
New legislation intended to empower the Postal Regulatory Commission (PRC) to course-correct decisions by United States Postal Service (USPS) leaders was introduced in Congress by Rep. Sam Graves (R-Missouri).
The “USPS Services Enhancement and Regulatory Viability Expansion and Sustainability for the U.S. Act” (USPS SERVES US Act), specifically targets now former Postmaster General Louis DeJoy’s 10-year Delivering for America Plan (DFA). Launched in 2021, the DFA has boosted prices and in some cases slowed mail delivery as a cost saving measure.
“Since August 2021, there have been six unprecedented postage hikes — one every six months, well above inflation — that have hurt businesses, newspapers, nonprofit mailers, and individual Americans,” said Keep US Posted Executive Director Kevin Yoder, a former Republican congressman from Kansas. “With each price hike, demand for mail, which is still the biggest revenue-generator for the USPS, declines, access to our postal network is threatened, and the USPS slips further into financial ruin.”
Elements of the bill, H.R. 9839, allow for penalties if the USPS doesn’t meet pricing, delivery and financial goals. That includes:
- Holding the USPS accountable for improving efficiency by imposing an X-factor reducing rate authority if productivity is not improved each year.
- Prohibits the PRC from creating a rate system with no price cap.
- Holds the USPS accountable for service performance by reducing rate authority if it fails to meet established service targets.
- Makes the PRC’s nature of service evaluations binding decisions, not just advisory opinions.
- Limits rate increases to once per year.
- Limits the imposition of “underwater surcharges” if service performance and cost efficiency are not maintained for the relevant products.
- Requires the PRC to apply each objective for rate setting in every proceeding.
- Creates a new volume-encouraging objective for evaluating rate increases.
- Establishes an autonomous Office of Customer Advocate within the PRC to represent monopoly customer concerns with the power to initiate proceedings on their behalf.
- Streamlines the PRC’s consideration of complaints.
- Empowers the PRC to reduce rates for affected parties if it finds a rate is unlawful.
- Requires the PRC to develop its own volume estimation model independent of the USPS.
- Enables the USPS to invest retirement assets in private index funds such as those used by the Thrift Savings Fund.
The bill has some challenges. Given the current environment in Washington, D.C., getting it passed seems by some to be a longshot. If a postal bill passes, some provisions such as investing pension funds in the market, are likely to be removed or reduced by amendments.
The bill does not have enough to overcome the USPS financial situation. The universal service obligation imposed by Congress to deliver mail and packages to every address six days a week causes costs that the USPS revenue stream from mailers and shippers cannot cover by itself even with the proposed reforms, according to postal experts.
The Direct Marketing Association of Washington (DMAW) supports the bill. “Smart and necessary reform” is how DMAW President Karin Kirchoff described it.
“Particularly during volatile times, it is critical for any organization that relies on the Postal Service — nonprofits as well as commercial mailers — to come together,” said Kirchoff. “This legislation presents an opportunity to shape smart policy and ensure the long-term viability of mail for those who depend on it to serve their missions, reach donors, and sustain our sector’s livelihoods,” she said. “DMAW is committed to working in partnership with The Nonprofit Alliance, Alliance of Nonprofit Mailers, and other associations in our sector to engage our constituents and advocate for reform that will protect and strengthen the mail for those who rely on it.”
Leaders at the Alliance of Nonprofit Mailers also support the legislation. “It contains many of the actions that we have urged in our filings at the Postal Regulatory Commission to limit excessive USPS rate increases that are so damaging to nonprofit mailers and all customers of the Postal Service,” said Stephen Kearney, executive director.
Kearney explained that “as we have strongly urged, the objectives in the law that underlie USPS pricing would have to be applied to every rate increase. The PRC would be empowered to issue binding rather than advisory opinions on USPS service changes.”
The USPS plays an essential role in the economy, said Gretchen Littlefield, CEO of Moore, a constituent relationship and technology firm. “Its ability to operate efficiently, reliably, and affordably is crucial. We need strong leadership to guide the USPS into the modern era — one that meets the demands of today’s digital and logistical landscape. The USPS SERVES US Act provides the framework for this transformation,” she said.
“A strong USPS is important to both our nation’s infrastructure and the purpose-driven industry that we serve,” she said.
