Susan Collins files brief opposing USPS in exigent rate case appeal

WASHINGTON, D.C. — U.S. Senator Susan Collins, Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, today filed an amicus brief arguing that the U.S. Court of Appeals for the District of Columbia Circuit uphold the Postal Regulatory Commission’s (PRC) unanimous decision to reject the U.S. Postal Service’s requested exigent rate hikes. Senator Collins’s committee has jurisdiction over the Postal Service.

Senator Collins’s brief argues that the PRC’s decision is consistent with the text, legislative history, purpose, and intent of the comprehensive rate system included in the Postal Accountability and Enhancement Act (PAEA) – a 2006 law that she authored. Senator Collins further notes that the Postal Service’s current financial condition is the result of numerous non-exigent factors. Under the law, these factors cannot support an exigent rate increase because they have no connection to an “extraordinary or exceptional circumstance” that the Postal Service could not reasonably be expected to have accounted for in the normal course of business.

“The economy and technology are affecting the Postal Service and, indeed, all businesses. But in writing postal reform legislation in 2006, my intention was not to permit rate increases above the inflation-based cap as relief from chronic, ordinary, or unexceptional circumstances and general Postal Service red ink,” said Senator Collins. “I hope the Court of Appeals will uphold the September 2010 PRC decision which found that the Postal Service failed to prove that its request met the standard of the law.

“Allowing the Postal Service’s exigent rate increase would undermine the stability and predictability in rates that the PAEA sought to establish. Moreover, such an interpretation of the law would produce absurd results – allowing the Postal Service to raise rates to cover revenue shortfalls from any cause, so long as it could identify an ‘extraordinary or exceptional circumstance’ affecting any portion of postal operations. The resulting loophole in the hard, inflation-based cap would lead to disastrous consequences for the Postal Service as the resulting rates would further erode volume as postal customers seek alternatives to mailing.

“The Postal Service needs to redouble its efforts to cut costs, develop new services to increase volume, re-invent its business model and work with the Administration to remedy an overpayment to the federal retirement fund. I will continue to press the Administration and the Postal Service on these vital reforms.”

The Postal Service is the linchpin of a $1 trillion mailing industry that employs approximately 7.5 million Americans in fields as diverse as direct mail, printing, catalog production, paper manufacturing, and financial services.

On July 6, the Postal Service filed its exigent rate case with the PRC, seeking approval for a wide array of rate increases. The Postal Service experienced a loss of more than $8 billion for fiscal year 2010. Its requested exigent increases, averaging 4 to 6 percent, would have far exceeded the rate of inflation. For one class of mail, for example, the proposed increase would have been a whopping 23 percent. For catalog mail, the Postal Service proposed a postage hike of more than 5 percent, which owners warned would prompt many catalog businesses to reduce mail usage and direct customers to websites.

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  • Rob

    So which part of $8B loss doesn’t she understand? For the USPS to cut costs it would have to RIF/VERA mangement and craft, reduce wages, reduce benefits, close offices, consolidate work, contract out work and more transportation and then fight the Unions, the public and Congress to achieve any of these cuts….is Collins willing to go to bat for the USPS when the cuts start to be opposed???

  • JOE

    Collins might back the USPS with cuts as long as it doesn’t affect her state. Just like all the other politicians – make the cuts, close the offices – as long as they aren’t in my back yard…. They all want the cuts, but aren’t willing to make the hard choices.

  • Randy

    Maybe Susan Collins should set the example and file a suggestion that all franking privilages be revoked for all politicians. After all this is free mail for them to elected into office, She wants to stand on the pulpit and preach about cuts and spending. Maybe she should try to reform the age old practice of free mailing for the politicians for any reason.

  • brian

    Franking cost the taxpayer around $17 million last time I checked. Not even a drop in the bucket when you’re running deficits in the trillions- so all you’d really accomplish is taking $17 million in revenue away from the USPS- why bother?

  • Lifetime Employee

    I agree with Susan Collins. The Post Office doesn’t need a rate increase. What it needs is for the Government to give it the $75,000,000,000 in CSRS overpayments. All the Government politicians are quick to complain about the rate case and the law but it’s ok for them to BREAK the law and steal billions from the Post Office.
    I haven’t met a politician yet who’s worth more than two cents.
    Pro is the opposite of Con and Congress is the opposite of Progress.

  • dude

    I agree with Brian we spend more on rubber bands than franking.