Postal Commission Rejects USPS Rate Hikes

The U.S. mailing industry received a split decision in September, as the Postal Regulatory Commission (PRC) unanimously rejected the United States Postal Service’s (USPS or Postal Service) request for an “exigent rate increase” (more than inflation) averaging 5.6 %, while the Office of Personnel Management (OPM) refused to recalculate the Postal Service’s purported $55 billion overpayment to the Civil Service Retirement System (CSRS). NPES lauds the PRC’s decision, but is disappointed by OPM’s stance.

 

Meets the requirement

 In rejecting the Postal Service’s plea, the PRC agreed that the severe recession, and decline in mail volume meet the legal requirement of “extraordinary or exceptional circumstances,” but disagreed that the need for the requested rate increases were due to these factors. According to PRC Chair Ruth Y. Goldway “the primary cause of the [USPS] liquidity crisis was structural and related to an overly ambitious requirement for the Postal Service to prefund its future retiree health benefit premiums.”

Mailers were dealt a setback, however, by OPM’s refusal to recalculate the Postal Service’s $55 billion overpayment to the CSRS, in the face of what seems to be clear direction to take such action under the Postal Accountability and Enhancement Act of 2006. In failing to act, OPM said that only Congress could authorize such a recalculation. 

The USPS Inspector General and an independent actuary have confirmed that the Postal Service has overpaid the CSRS Pension Fund at least $50–55 billion due to antiquated OPM actuarial calculations.

 NPES will work to address these issues in the 112th Congress, as the likely new chairman of the House Oversight and Government Reform Committee, Representative Darrell Issa (R-49-CA) has indicated interest in postal legislation in 2011. 

For more information contact NPES Government Affairs Director Mark J. Nuzzaco at phone: 703/264-7235 or e-mail: mnuzzaco@npes.org.

 

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