Rate Case, Reform Is Top of Mind at MTAC

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WASHINGTON -- While attendees at yesterday's Mailers Technical Advisory Committee meeting learned about new postal processing initiatives and addressing programs, what was on the minds of most was the fact that postal reform is all but dead and what that means for the next rate case.

Comprehensive postal legislation was passed out of both House and Senate committees this year. Both bills would repeal a provision requiring that money owed to the USPS because of an overpayment into the Civil Service Retirement System fund be held in an escrow account. Repealing this provision essentially would "free up" $78 billion over 60 years, and the USPS would use the money to pay off debt to the U.S. Treasury, fund its healthcare liabilities and mitigate rate increases. If that money isn't released, the USPS has said it will be forced to seek a double-digit rate increase in 2006.

The bills also would return responsibility for funding CSRS pension benefits relating to the military service of postal retirees -- a $27 billion obligation -- to the Treasury Department. No other federal agency is required to make this payment.

But, even though postal reform gained momentum earlier this year, most think there is little time for passage of either bill since Congress won't return to session until Sept. 7 and plans to end the current legislative session Oct. 1.

While most attendees said there is little chance of postal reform passing, some expressed hope that the CSRS issue be spun off into a smaller piece of legislation that perhaps could get passed through Congress quickly.

"Hopefully they can get the CSRS part of the bill passed, and then go back to the drawing board and come up with a better reform bill," said Charley Howard, vice president of postal affairs and special projects at Harte-Hanks.

In terms of the rate case, one postal insider said he believes phased rates or smaller, more predictable rates over a specific time period, may be a part of the next rate case.


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