The Association of Magazine Media

MPA on Representative Issa's Bill

MPA – The Association of Magazine Media – today commended Chairman Darrell Issa for his efforts to craft legislation to tackle the structural problems facing the Postal Service and to put it on the road to long-term stability and viability.  While MPA does not agree with every provision in the bill, MPA praised Representative Issa for his courageous and forthright stand on the postal issue.

Representative Issa’s proposed legislation includes a number of provisions based on the comprehensive recommendations of the 2003 President’s Commission on the U.S. Postal Service as well as some new provisions designed to significantly reduce USPS costs, eliminate excess capacity, and return the Postal Service to financial solvency.  All of Representative Issa’s far-reaching proposals in his 132 page bill merit careful consideration. At the same time, MPA is deeply concerned about “cost coverage” provisions contained in Representative Issa’s bill that do not adequately take into account the effect of USPS’ excess capacity on Periodicals costs, and could serve to further erode postal volumes.

Provisions that are aimed at reducing costs and improving operational efficiency include:

  • creating a Commission on Postal Reorganization, similar to a military BRAC, to review postal infrastructure and recommend facility closures and consolidations that will eliminate costly excess capacity;
  • establishing a “control board” Authority that would be activated if the Postal Service defaults on its government obligations, with a mandate to restore financial solvency, including reopening negotiations on collective bargaining agreements;
  • allowing USPS to streamline its retail network by closing financially unsustainable post offices;
  • adjusting postal employees’ health and life insurance premiums to match those of other federal workers; and
  • modifying the collective bargaining process to require “last best offer” arbitration and specify that arbitrators must take into account USPS’ financial condition and the comparability of private sector total compensation.
  • The bill would also permit the Postal Service to reduce days of regular mail delivery to five from the current level of six.

However, MPA disagrees with Representative Issa’s proposal to require certain types of mail classes to incur rate increases 5% higher than CPI if their “cost coverage” is less than 90 percent.  MPA has long questioned the Postal Service’s calculation of Periodicals attributable costs, especially in light of the enormous excess capacity within the Postal Service with respect to processing of flat-shaped mail pieces like magazines.  The proper way to improve “cost coverage” is to reduce Postal Service costs to efficient levels, not to raise rates more than the CPI cap.  This provision of Representative Issa’s bill appears to be inconsistent with the aggressive, pro-efficiency thrust of the remainder of the bill.

MPA looks forward to working with Chairman Issa as this legislation advances through the legislative process.

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