Thursday, September 26, 2013

Increase Postal Service Rates

The Postal Service proposes to increase rates by 7 percent to cover a meaningful portion of its mounting endemic deficits. It's a move that goes a long way towards requiring the users of the system to cover the costs of its operation (more increases will be needed if Congress continues to block Postal Service cost control initiatives). 

Who are the mailers and rate payers? Not really you. When you want to communicate with friends and relatives you almost never mail personal letters; instead, you pick up the phone or email and text your friends, or you post to Facebook. These days, if you are like most people, you no longer use the mails to pay your monthly bills. Automatic deductions are drawn against your credit card bills, cable and internet bills, and electric, gas, sewer and water. Or you go online and pay directly. You electronically file your income taxes. The net result is that typical household will pay but a few bucks more a year for increased postage.

There still are large and significant users of the mail -- businesses and predominantly big business at that. Big banks flood the mails with statements and notices, plus solicitations. Utilities send much of the same. AT&T, Verizon and Sprint use mail to bill customers who insist on paper. Harte-Hanks and Valassis are huge direct mail marketers, as are mail order firms like Lands End and LL Bean. Catalogs are still big in gardening, used by companies like Burpee, Springhill and Jackson and Perkins. Publishers like Time Inc., Conde Nast and Readers' digest collectively send billions of magazines and direct mail pieces through the Postal Service each year.

You have a choice. Mail users can pay the full cost of mail service. Or postal deficits can continue to spiral out of control, and the bill will be passed along to your children and grandchildren. Is that what you want?

As on so many issues, the only sane and balanced voice on postal is coming out of the Republican side of the House of Representatives, led by Darrell Issa (R - Calif.), Chairman of the House Oversight and Government Reform Committee.

“The Postal Service isn’t just broke,” Issa said before lawmakers debated his bill, noting that the agency is facing insolvency. He described the mail system as an “absolute federal entity that delivers your right to communicate and be communicated with. It must be saved.”
The agency lost close to $16 billion in the last fiscal year as mail volume continued to plummet. Postal Service officials defaulted on two $5.5 billion payments to set aside health care for future retirees, another financial burden causing huge losses.
As its revenue has fallen, the agency said it is hampered by more workers and facilities than it needs. By law, it cannot raise prices faster than the rate of inflation. Legal restrictions also keep it from easily expanding into new products or services.
Congress has worked to address these obstacles for two years but has bumped up against competing demands of unions, mailers and lawmakers representing rural districts.
Issa had a long business career before being elected to Congress. We need more like him. Even the Washington Post has endorsed Issa's bill.

But the unions, the special interests and their Washington representatives (aka lobbyists) stand in the way. They are happy to stand for a status quo that is leading to almost $50 billion in accumulated losses.

The Hallmark Cards guy says increasing rates to recover costs "will exacerbate the Postal Service's current predicament."
GCA along with dozens of Washington
lobbyists stands in the way of
postal rate increases.
Please, I still send Christmas cards, but not those put out by Hallmark, which cost 5 times the price of postage. Does any thinking person actually believe that adding a few cents to the price of a missive that cost three or four bucks is going to drive away "much needed volume." C'mon, in Obama's print, borrow and spend world the price of most everything else is going up. 

 “No private company would increase prices when sales are already plummeting,” said Mary Berner, chief executive officer of the Association of Magazine Media, Of course, the magazines who make up her association have been increasing newstand and subscription prices all along as their circulation has declined and managed to survive. They didn't throw out fundamental economic principals when their business weakened and neither should the Postal Service. 

The Direct Marketing Association stands with its fellow lobbyists in opposing rate increases that would have their members actually pay compensatory, unsubsidized prices for the services they receive.

And in Montana, the yoke around our neck is the joke in the Senate who goes by the name of Jon Tester. He invokes the fictitious constitutional right to mail delivery to stand in the way of meaningful Postal Service cost reforms and compensatory rates. He actually does believe thus in protecting big business and passing postal costs along to our children and grandchildren. I didn't vote for the dude, and have nothing kind to say about those who did. Just increase rates and ignore the dork.

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