Rescind USPS pre-fund rule

By the Editorial Board – September 11, 2017
Given Congress’ politically paralyzed lack of performance over the last decade, many members might view a 22 percent postage rate increase as a means to hold down the flow of angry letters.

They should, however, recognize that boosting the cost of a stamp from 49 cents to 60 cents negatively would affect the economy and the government itself in many ways. Despite decreased mail volume, many Americans still heavily use conventional mail. And governments still use it as the primary means of official correspondence. Three states use it exclusively to conduct elections.

All of that should prompt legislators to attack the U.S. Postal Service’s deep financial problems from the other side of the ledger.

A 60-cent stamp is possible because the USPS has asked the Postal Regulatory Commission for permission to set its own rates for the first time, and to set rates higher than the rate of inflation — the current regulatory cap.

The postal service business, of course, has been deeply wounded by communications technology eroding its first-class mail monopoly. Bill-paying, banking and personal correspondence all have migrated heavily to the digital realm, drying up vast amounts of revenue. Mail volume has declined by 36 percent since 2007 and, last year, the service lost $5.6 billion.

In response, the system has shrunk and the service has attempted to reshape its business. But it also has faced an intractable problem that only Congress can address.

Under a 2006 law, Congress required the USPS to fund employee retiree health care benefits 75 years in advance. According to the service, converting to the same pay-as-you-go system used by every other federal agency would free $5.5 billion a year for the bottom line.

The law expired in 2016 and is under review for renewal. Congress should eliminate the pre-funding mandate as a major step toward the service’s short-term viability and long-term health.

Source: The Times-Tribune

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