In February, the Postal Regulatory Commission (PRC), which has regulatory oversight over the Postal Service, questioned the Postal Service’s decision not to increase postage rates this year. The PRC is essentially arguing that the current postage rates are illegal because they are not sufficient to cover operating costs.
The PRC commented that if the Postal Service fails to file for higher rates, “Congress will be required again to bail out the Postal Service to avert insolvency by increasing the amount of taxpayer support through increased borrowing or subsidies.”
The Mailing & Fulfillment Service Association (MFSA), for which we are members, responded as follows:
“First, Congress’ action…is a forbearance of a debt, not a loan or grant of money as a “bail out” would be. Moreover, the debt itself is a unique mandate to prefund an expense that is yet to be incurred contrary to the practices of other agencies and most accounting rules.
Second, the Postal Service receives no taxpayer support or subsidies; the only funds it gets from the US Treasury are those payments promised it by past Congresses for required services, like free postage for the blind or reduced rates for authorized nonprofits. (Ironically, Congress regularly short-changes what it owes the Postal Service.)
Finally, it would only be appropriate that Congress remedy the Postal Service’s financial woes: Congress has prescribed the agency’s obligations and revenue sources, limited its ability to manage costs, and constrained its opportunities to enter new business lines…”
So what does this mean for you? In simple terms, mailers are facing two successive rate increases. Of course, nothing is set in stone yet and many organizations including MFSA and the Postal Service are working diligently to support the interests of those who use direct mail.
