The Association of Magazine Media

Postal Reform Legislation Makes Fitful Progress in Senate

S. 1789, the bi-partisan postal reform bill crafted and supported by Senators Susan Collins, Tom Carper, Joe Lieberman, and Scott Brown, and approved by the Senate Homeland Security and Government Affairs Committee in November, 2011, almost made it to the Senate floor in late March before Congress adjourned for the holiday recess. The bill made it as far as a cloture vote, a procedural mechanism that signifies a bill is ready to be considered by the full Senate. Sixty votes are needed for cloture and S. 1789 fell short of that, with Senate Majority Leader Reid changing his vote at the last minute from Aye to Nay, to allow him to bring the bill back to the Senate floor at a later date.

The main issue which derailed S. 1789's progress in the Senate revolves around the Postal Service's plans for major plant and post office closings. The Service's intention to cut plants by more than half from around 500 plants today to only 200 plants by the end of the year drew major opposition from the Service's employee groups and from Senators facing major plant closures in their states.  Working with Senator Sanders, who articulated the employee groups point of view, Senators Collins, Carper, Lieberman, and their staffs attempted to modify S. 1789 to take into account concerns that the Postal Service's downsizing plans are overly aggressive and could cause unintended consequences and loss of volume. The Senators were unable to reach an agreement on compromise language prior to the recess but discussions continue and it appears the legislation could move to the Senate floor soon after Congress returns on April 16th.

Another issue of great concern to magazine publishers – treatment of so-called "underwater" classes and products – also threatens to undermine the progress being made by S. 1789's sponsors. Senator Rockefeller (D-WV) in particular has indicated an interest in offering an amendment to S. 1789 that would immediately raise rates for underwater classes and products above inflation, at least in part to fund continued operation of some of the plants the Postal Service has scheduled for closure. MPA continues to support the underwater provision contained in both S. 1789 and Rep. Issa's postal reform bill in the House (H.R. 2309) that would not allow rates for underwater classes and products to increase more than inflation until a two year period has elapsed, during which USPS would take measures to eliminate excess capacity, and until the PRC has evaluated the impact of excess capacity on attributable costs. Then, and only then, could rates go up 2 percent a year above inflation, until underwater classes reach 90 percent cost coverage.

Also pertinent to the issue of Periodicals underwater status, on March 28 the Postal Regulatory Commission issued its Annual Compliance Determination for 2011. As it has in past years, the Commission concluded that the rates for the Periodicals class in 2011 were lawful. The Commission also reiterated a position articulated in past ACDs, that the Postal Service could do more to reduce costs for Periodicals and improve the class' cost coverage situation without resorting to above inflation rate increases. "[M]anagement has not yet fully brought to bear efficiency enhancements, network adjustments, and related changes which could alter the attributable cost picture for Periodicals. The Commission finds it appropriate to allow more time for these measures to be implemented. The Commission takes seriously the concerns that price increases on Periodicals may, as a consequence, drive periodical publishers out of the print business. Nonetheless, the persistent negative contribution from Periodicals cannot endure indefinitely.....For the reasons stated above, the Commission is persuaded that affording the Postal Service an opportunity to realize new efficiencies is the appropriate course."

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