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Postal Reform Edges Nearer – Postal Rates Addressed

The House of Representatives Oversight committee introduced a bipartisan discussion draft of postal reform legislation. A move to five-day delivery is off the table, it calls for the development of innovative postal and nonpostal products and services, and it address post office closures, including allowing for appeals regarding the closing or consolidation of post office stations and post office branches.

It also addressed postal rate changes – here’s a summary provided by the Committee of proposed Postal Rate changes:

  • Allows the Postal Service to increase postal rates for market-dominant products by 2.15%, or 1 cent for a First-Class stamp.
  • Requires the PRC to complete its full review of the market-dominant rate system by January 1, 2018.
  • Establishes priority factors for consideration in the PRC’s rate review, including the Postal Service’s financial stability, the effect of rate increases upon users of the mail, the reliability of delivery timelines and service standards, the available alternative means of communicating and sharing information, and the requirement that all costs incurred are appropriately covered by the revenue from the product for which they were incurred.
  • Eliminates state and national political committees’ eligibility for non-profit mail rates.
  • Directs the Postal Service to raise rates on loss-making monopoly products, subject to certain overall rate increase limitations.

At one point, the USPS had wanted to cut mail delivery on Saturdays except for packages. Committee Chairman Jason Chaffetz (R-UT) said he had changed his mind on the issue, according to Government Executive, which said during a press conference, Chaffetz noted that the mailing economy is moving toward seven-day delivery and USPS should not be disadvantaged.

Chaffetz, along with Ranking Member Elijah E. Cummings (D-MD) and others on the committee held a press conference and released the following statement:

“The Postal Service is in dire financial shape. Without reform now, the problems will only worsen and reform will become far more difficult to accomplish. This bipartisan legislative solution provides the opportunity for the Postal Service to return to solvency and continue to provide universal service to all Americans.”

The USPS has been desperately calling on legislators for reform. Much of the bill deals with health benefits and with retiree health care benefit funding reform.

Postmaster General Megan J. Brennan issued the following statement in response to the House Oversight and Government Reform committee members’ news conference:

“I thank the leadership of the House Oversight and Government Reform Committee for introducing a bipartisan postal reform discussion draft. This is an important step toward enacting meaningful postal reform. We will carefully review today’s draft and continue working with our oversight committees in the House and Senate as well as other key stakeholders to pass postal reform legislation that will allow us to continue providing high-quality delivery services to the American people.”

A summary of the key provisions of the draft of the Postal Service Reform Act of 2016 can be found in PDF format on the House.gov website.

The fulltext of the draft is available on this page.

And a good overview of key issues is found in this article on GovExec.com, which also highlights some of the changes between the House proposal and the Senate bill.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.