Business Community Responds to USPS Task Force Report: Recommendations Likely to Make the Situation Worse for Prices, Services & Affordable Access; Focus Should be on Reforming the Prefunding of Retiree Benefits
Washington, D.C. (December 4, 2018) – The Coalition for a 21st Century Postal Service (C21), an organization of public and private companies, trade associations and other industry groups which rely on the U.S. Postal System to do business, today raised grave concerns with the recommendations outlined by President Trump’s Task Force on the United States Postal Service.
Art Sackler, manager of C21, released the following statement on behalf of coalition members:
“While we’re pleased to see the Task Force agrees that the Postal Service should not be privatized, the reality is that many of the report’s recommendations will functionally privatize mail and package delivery by impairing the USPS’ ability to deliver everywhere and every day at an affordable price. Driving up prices will accelerate the departure of mail from an already declining base, and, at the very least, damage the USPS’ package business, which has been its lone and very profitable bright spot in recent years. If the Task Force’s price strategies become reality, they will decrease the Postal Service’s revenue and compromise its capacity to serve all of its delivery points.
“Among other things, we believe the ‘elasticity models’ relied upon by the Task Force are outdated and inaccurate. Other recommendations, such as recycling the previously rejected ‘fully distributed costing’ model, separating packages from mail and diluting the universal service obligation, are generally problematic – perhaps acutely so for rural Americans, who stand to lose the most if competitors and customers are incentivized to more rapidly divert USPS volume out of the system. Less volume means less revenue, and compromises mail and package delivery, which is especially crucial for millions of rural Americans who rely on the U.S. Postal Service to deliver medications, food, clothes and communications to every citizen, no matter how remote.
“What the Administration truly needs to do is work with Congress to reform the prefunding of USPS retiree health benefits. The existing mail and packaging price caps remain fully functional if retiree health prefunding is adequately addressed through bipartisan legislation that enjoys broad stakeholder support and is currently pending in the U.S. House and Senate. By lifting tens of billions of dollars from the USPS balance sheet, at no cost to taxpayers, the Postal Reform Acts would help stabilize the Postal Service for several years – giving everyone, especially Congress, breathing room to come up with long-term reforms.”
The Coalition for a 21st Century Postal Service (C21) consists of public and private companies and industry associations representing newspapers, advertisers, catalogers, e-commerce, parcels, greeting cards, financial services, telecommunications, insurance, paper, printing, technology, envelope manufacturing, and mail services, which understand the essential role of USPS and want it sustained for the future. C21 broadly represents an industry generating $1.4 trillion in sales and supporting 7.5 million private sector jobs, and supports both versions of the Postal Reform Act (S. 2629/H.R.6076), which would stabilize USPS in the short-to-medium term.