Association for Postal Commerce
"Representing those who use or support the use of mail for Business Communication and Commerce"
"You will be able to enjoy only those postal rights you believe are worth defending."

WHO'DA THUNK?

The following is a perspective by postal commentator Gene Del Polito. The views expressed are solely the author's. The PostCom Bulletin will accept comments offered by responsible spokespersons of alternative views.

As the late Vince Palladino used to put it: "Who'da thunk?" That's right. Who'da thunk that after seven successful years of cost-cutting and after the enactment of a new postal law, the U.S. Postal Service (USPS) once would again find itself stuck between a fiscal rock and hard place? Of course, this time, it's different. This time, no one can blame the leadership of the USPS for not doing their mightiest to trim postal costs to reflect rapidly changing postal realities. So what's the cause of the current fix?

Very simply, the largest part of the Postal Service's current financial woes can be found within the Postal Accountability and Enhancement Act of 2006. Am I saying that Congress passed a rotten postal law? Not at all. What I am saying is that some of the ambitiousness that made up some of the ardor for reform needs to be tempered with fiscal realities that no one could have envisioned.

Who would have thought that the nation's fisc would be crippled by a banking crisis that rivaled the days of the Great Depression? Who would have thought that the desire for home ownership would have been at the root of a financial disaster from which the U.S. may take years to recover? But what has all this to do with the Postal Service?

One of the Administration's main objectives in encouraging Congress' enactment of PAEA was to make sure that users of the mail, not the Federal Treasury, would be responsible for paying all the costs of operating a universal postal service. Key among these costs were those pertaining to postal retiree health insurance costs.

In PAEA, Congress required the Postal Service (that is, postal users) to make an amortized payment of five billion dollars a year toward the funding of postal retiree health-related obligations. Five billion dollars is a heaping sum in anyone's way of thinking, but, with the eagerness to get a new postal law finally enacted, most of the supporters of PAEA were willing to pull a Scarlet O'Hara by simply putting off thinking about the issue to another day. Well, with today's financial crises, "another day" has finally arrived, and postal leaders (and postal users) are awakening to the reality, and the challenge, of figuring how to pay an enormous expense without bankrupting the postal fisc.

Up to this point, the Postal Service has been somewhat sheepish about bringing this issue before Congress. Everyone once in a while, a postal leader may nod in the right direction, but, thus far, no one seems eager to hammer home to Congress the point that the current postal retiree health amortization schedule is pressing the postal system to the breaking point.

Far be it from me to say that postal constituents should petition Congress to be relieved of this PAEA obligation. Given the current state of the nation's finances, there is little chance such request would be seriously entertained. There is every good reason, however, to let Congress know that these PAEA funding expectations are a little step with today's fiscal realities. There is absolutely no reason whatsoever why postal officials and customers alike should not be asking Congress to relax the amortization funding schedule to comport a little better with today's realities. For instance, instead of expecting postal users to pony up five billion a year, where would be the crime in asking Congress to reduce that payment by about two billion a year by extending the payment amortization schedule over time. Even if Congress appled at the idea of extending the payment schedule permanently, there's nothing wrong or imprudent with relaxing this payment schedule during these times a great financial distress. In fact, if the USPS' fiscal 2008 payment amounted to three instead of five billion, the USPS would have completed FY 2008 on nearly a break-even basis.

So who should make the first call on Congress? Who should be the first to tell the men and women on Capitol Hill that a payment adjustment is in order? Who should take responsibility for drafting the language for a bill that would make this possible?

Well, mailers can do it, and, indeed, they should. On the other hand, its the Governors of the Postal Service who are vested with the responsibility for stewarding our nation's postal system. It would be really nice for them to take the leadership on bringing about this sorely needed postal change.