Another Round of Postal Reform?
Seems like the U.S. Postal Service just can’t catch a break.
As everybody knows, it took 11 years of sweat and wrangling (not to mention endurance) to get the 2006 Postal Accountability and Enhancement Act (PAEA) passed into law.
That was supposed to keep postage rate hikes to an annual minimum based on the inflation rate and the consumer Price Index.
Last year, the first year covered by the new law, the PAEA seemed to work with a 2.9% average across-the-board hike.
And right now, with the economy now generally going south, inflation previously feared at 5% or more has been tamped down to about 3.8%.
But the 2006 postal reform law left the USPS with a $5.8 billion-a-year millstone of pension payments of former employees that it can’t possibly pay—especially at a time when nobody wants to use the mail any more as they used to.
Because of that, the USPS is thought to be seriously considering filing a new exigent rate case that would exceed the inflation- rate-based cap the industry fought so hard and long for.
Maybe the new Congress will come to the rescue.
Earlier this month, a bill was introduced in the House that would put USPS pension relief in President Barack Obama’s economic stimulus legislation.
Maybe.
But one has to wonder how much stomach the 111th Congress will have for an issue many members probably thought was resolved with the PAEA?
January 24th, 2009 at 12:44 pm
Anyone who has read the PRC’s report on the postal monopoly is aware that the financial spiral that the USPS has gotten itself into is going to be a bigger debacle than Detroit, and will cost the taxpayers upwards of $20B just to cover its past debts and 2009 losses, not to mention $50B still outstanding of an unfunded pension trust. The time for debate is long over. PMG Potter has proven completely incapable of managing the public’s service and assets - he needs to be fired, and the USPS needs to be privatized before no investor or company will want to touch it with a ten foot pole.