Postal Rate Commission Rejects Rate Hike

PRC Rejects Exigent Rate Increase,
Punts Financial Crisis to Congress
NALC Latest News

Commission backs NALC on definition of exigent circumstances,
faults USPS case

Noting that the U.S. Postal Service and its employees had successfully adapted to the adverse effects of the Great Recession—cutting costs enough to more than offset the loss in mail revenue due to the recession—the Postal Regulatory Commission on Sept. 30 rejected the Service’s request for a 5.6 percent “exigent” rate increase.

The PRC did not dispute that the severity of the recession constituted “extraordinary or exceptional” circumstances, but it concluded that the Postal Service had failed to demonstrate that its recent financial losses were “due to” the Great Recession. Rather, the Commission argued —as the NALC has for the past two years—that recent large financial losses are the direct result of the congressional mandate to massively pre-fund retiree health benefits.

The USPS filed for the emergency increase in July.

“Congress and the Obama administration should sit up and listen to what the PRC is saying,” National Association of Letter Carriers President Fredric V. Rolando said. “The time for delay is over. We must adopt Congressman Stephen Lynch’s bill [H.R. 5746] and repeal the pre-funding provisions of the law as soon as possible.”

The Lynch bill would allow the USPS to pre-fund its future retiree health benefit costs with the massive postal surplus in the Civil Service Retirement System, calculated by independent experts for both the PRC and the USPS Office of Inspector General.

The NALC called on Congress to adopt Rep. Lynch’s legislation during the so-called “lame duck” session of Congress after the mid-term elections, which would lay the groundwork for repeal of the annual pre-funding payments now currently in the law in the early days of the next Congress.

“Contrary to the irresponsible rhetoric of hyper-partisan leaders in the Republican party, the Lynch bill does not involve any taxpayer money and cannot honestly be called a ‘taxpayer bailout,’” Rolando added. “We want to use our own money—excess pension funds amassed over decades as a result of employee and employer contributions to the CSRS—to pre-fund our future retiree health benefits.”

Ruling a victory for NALC

“The Commission finds that the Postal Service has shown the recent recession to be an exigent circumstance but it has failed both to quantify the impact of the recession on its finances and to show how its rate request relates to the resulting loss of mail volume,” said PRC Chair Ruth Goldway. “Therefore, we unanimously deny its exigent rate request.”

Read the rest of the article here.


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