Archive for September, 2013

USPS Price Adjustment Filing with PRC

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Notice Price Adjustment.pdf.

Click on link to access full text of Price Adjustment filing.  Note that there is a SEPARATE Exigency filing as well…

United States Postal Service hereby provides notice that the Governors have authorized the Postal Service to adjust the prices for its market-dominant products. This adjustment will take effect at 12:01 a.m. on January 26, 2014, and affects all the market-dominant classes. This Notice is being filed  today along with the Postal Service’s Renewed Exigent Request of the United States Postal Service in Response to Commission Order No.1059 (Exigent Request)

 

Written by Lisa.Bowes

September 27th, 2013 at 10:13 am

Posted in USPS

Dead Tree Edition: Why the Exigent Postal Rate Increase Will Backfire

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What we mailers see is not a one-time price hike but rather the first of many “emergency” increases that will increasingly thrust USPS into a death spiral. Congress will keep blocking meaningful action on the Postal Service. But USPS customers (and employees) will be the ones who are punished.

As the mythical pirate captain told his crew, “The beatings will continue until morale improves.”

Except that, starting yesterday, mail-dependent companies began redoubling their efforts to get off the ship.

via Dead Tree Edition: Why the Exigent Postal Rate Increase Will Backfire.

Be sure to read the entire post.  Well worth clicking on the link…

Written by Lisa.Bowes

September 26th, 2013 at 3:54 pm

Posted in USPS

PMG Testimony

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From an Industry Alert:

FOR IMMEDIATE RELEASE

Sept. 26, 2013

 

 

Postmaster General Says Postal Service Health Care Plan

Key to Solvency

 

Below is the Postmaster General’s oral testimony before the Senate Committee on Homeland Security and Governmental Affairs today. Please note that the delivered remarks may vary from the prepared text.

 

The Postmaster General’s written testimony is available at: http://about.usps.com/news/testimony-speeches/welcome.htm

 

# # #

Good morning, Mr. Chairman, Dr. Coburn, and members of the Committee.  Thank you, Mr. Chairman, for calling this hearing.

There is a fundamental question to be answered about the future of the Postal Service….and it is this:

Will the Postal Service be given the authority and flexibility that enables it to continue as a self-funding entity? I believe everyone wants the answer to be yes.

  • The Postal Service can be profitable and pay down its debt.
  • It can continue to provide secure, affordable, and reliable universal service.
  • It can continue to meet the needs of rural America.
  • It can continue to drive economic growth.
  • It can continue to be a responsible employer and a great place to work.
  • And, if given the flexibility and authority to adapt to a changing world, it can meet all of these goals without becoming a burden to the American taxpayer.

The choice is simple: greater flexibility and authority now, or massive taxpayer exposure and service degradation later.

The Postal Reform Bill of 2013, S. 1486 goes a long way toward putting us on the path to financial stability.  It provides flexibility and authority in many critical areas.

Most importantly, it acknowledges our primary challenges — the related issues of health care benefits and the need to pre-fund liabilities.  As currently written, the bill would provide significant savings.  But, as both you, Mr. Chairman, and you, Dr. Coburn, have said: it remains a work in progress.  Working together with all stakeholders, and by including stronger language regarding Medicare integration and health care costs, Senate Bill 1486 can accomplish the goals we all share.

As the committee knows, we are seeking the added authority under the law to control our health care costs.  We want to negotiate better and more cost efficient health care coverage for our employees and retirees, and ensure better integration with Medicare.  If we do so, we can virtually eliminate our unfunded liability for retiree health care benefits.  We can also reduce the amount we will need to set aside for our retirees in the future to an amount we can manage.

This in turn will secure lifetime coverage for all of our retirees; it will maintain choices for all employees and retirees; and it will immediately reduce our health care cost burden from 20 cents out of every revenue dollar to just 8 cents.  This is a savings of approximately $8 billion a year through 2016, compared to our current expenses.

Today, the Postal Service and its employees are paying for benefits we don’t even use.  We are effectively buying insurance we don’t need, and we’re overpaying for it.

Both the Postal Service and our retirees have paid $27 billion into Medicare; yet many don’t draw the benefits that they’re entitled to.  And so we are obligated to overpay to compensate for this fact.

Under the current law, the Postal Service and our retirees pay full freight to insurance companies within the FEHB system.  Instead, our retirees should be using Medicare Parts A, B and D as their base coverage.  Under this vastly preferable scenario, the Postal Service and our retirees would merely need to fund far less costly benefits wrapped around full Medicare coverage.

This is more than just a budgeting issue: this is an issue of fairness.  It is fundamentally unfair to ask our employees, our retirees—and ultimately our ratepayers—to continue to needlessly overpay for healthcare insurance.

In simple terms, we are merely asking to be able to manage our retiree healthcare, not by reducing benefits — like many employers are currently doing — but by wrapping supplementary plans around Medicare.  This will allow us to maintain current levels of coverage and generate annual savings for both the Postal Service and our employees and retirees.  We can do this simply by eliminating unwarranted overpayments.

Does the Postal Service have an obligation to its employees and retirees to provide health care insurance for decades to come?  Of course it does.

And the best way to meet that obligation is to create a program that is financially sustainable in the long-term.  Our proposal accomplishes that goal.  We developed our plan with leading experts in the field, which is essentially the approach that nearly every other company takes, and which the GAO supports.

If we are allowed to negotiate our own health care program—either within FEHB or in a separate program—the Postal Service will be able to provide the same or better coverage at a much lower cost for the vast majority of our employees and retirees.

I cannot overstate how important it is for the Postal Service to have its own health care plan—or—to have the FEHB and OPM work with us to negotiate new integrated health care plan choices, specifically for the Postal Service, within FEHB.

We want to work with this Committee to establish an effective—and sustainable—health care program for our employees and retirees.  We want Senate Bill 1486 to include a clear mandate for the Postal Service, FEHB and OPM to make this happen.

Mr. Chairman, by taking this approach, the Postal Service can reduce its annual costs by up to $8 billion dollars annually through 2016.  This goes a long way toward our goal of closing a projected $20 billion dollar budget gap.

Yesterday the Postal Service announced a price increase above the rate of inflation.  We did not want to take this step, but we had little choice due to our current financial condition.  Resolving our healthcare issues will mitigate the pressure to raise prices and to take other unpalatable steps in the future – but – we must fully address our health care costs to do so.

I would like to thank the Committee for taking up postal reform legislation this year, and for holding this important hearing today. I look forward to answering your questions and supporting your work in any way that I can.  This concludes my remarks.

 

 

Written by Lisa.Bowes

September 26th, 2013 at 3:44 pm

Posted in USPS

Letter from the Chairman of the USPS Board of Governors

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Letter from the Chairman of the BOG.

Regarding proposed rate increase…

Written by Lisa.Bowes

September 26th, 2013 at 2:27 pm

Posted in USPS

AF&PA Opposes USPS Postal Rate Increase Plan

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“Today’s announcement of a 5.9 percent postal rate increase is more than troubling. The critical problems of overcapacity and falling demand for mail cannot be solved by raising prices.”

via AF&PA Opposes USPS Postal Rate Increase Plan.

Written by Lisa.Bowes

September 26th, 2013 at 1:45 pm

Posted in USPS

Hearings | Homeland Security & Governmental Affairs Committee

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Written by Lisa.Bowes

September 26th, 2013 at 12:41 pm

Posted in USPS

Less Talk, More Action

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“Chairman Carper Statement on Postal Service?s Rate Increase” http://feedly.com/k/16KiOnF

Written by Lisa.Bowes

September 25th, 2013 at 10:18 pm

Posted in USPS

Congress Needs to Act

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“Magazine industry fights postal rate increase | Crain’s New York Business” http://feedly.com/k/16KiuVW

Written by Lisa.Bowes

September 25th, 2013 at 10:15 pm

Posted in USPS

Postage Hike Chart

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“CHART: Even With 3-Cent Hike, Postage Still Cheap by Historical Standards – US News and World Report” http://feedly.com/k/16KihCo

Written by Lisa.Bowes

September 25th, 2013 at 10:13 pm

Posted in USPS

U.S. Postal Service Announces New Prices for 2014

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U.S. Postal Service Announces New Prices for 2014

Price increases expected to generate $2 billion in new revenue to improve financial situation

WASHINGTON — The United States Postal Service today announced proposed price changes, including an increase in the price of a First-Class Mail single-piece letter from 46 cents to 49 cents. The proposed changes, which would go into effect in January 2014, are intended to generate $2 billion in incremental annual revenue for the Postal Service.

Highlights of the new single-piece First-Class Mail pricing, effective Jan. 26, 2014 include:

· Letters (1 oz.) — 3-cent increase to 49 cents

· Letters additional ounces — 1-cent increase to 21 cents

· Letters to all international destinations (1 oz.) — $1.15

· Postcards — 1-cent increase to 34 cents

Stamp prices have stayed consistent with the average annual rate of inflation of 4.2 percent since the Postal Service was formed in 1971.

Pricing for Standard Mail, Periodicals, Package Services and Extra Services also will be adjusted as part of a filing to the Postal Regulatory Commission (PRC) scheduled to take place Sept. 26.

The Governors of the Postal Service voted Sept. 24 to seek price increases above the typical annual increases associated with changes in the Consumer Price Index (CPI).

In a letter disseminated to customers today, Board of Governors Chairman Mickey Barnett described the “precarious financial condition” of the Postal Service and the “uncertain path toward enactment of postal reform legislation” as primary reasons for seeking price changes above the CPI increase. He also indicated that the price adjustment above the CPI increase is necessary in order to ensure that the Postal Service will be able to maintain and continue the development of postal services of the type and quality which America needs.

“Of the options currently available to the Postal Service to align costs and revenues, increasing postage prices is a last resort that reflects extreme financial challenges,” said Barnett in the letter. “However, if these financial challenges were alleviated by the timely enactment of laws that close a $20 billion budget gap, the Postal Service would reconsider its pricing strategy. We are encouraged by the recent introduction of comprehensive postal reform legislation in Congress, and despite an uncertain legislative process, we are hopeful that legislation can be enacted this year.”

Except in exceptional or extraordinary circumstances, postage price increases are capped at the rate of inflation as measured by the CPI-U. The Postal Service is filing a price increase above CPI-U due to extraordinary and exceptional circumstances which have contributed to continued financial losses. The Postal Service recorded a $15.9 billion net loss last fiscal year and expects to record a loss of roughly $6 billion in the current fiscal year, and has an intolerably low level of available liquidity even after defaulting on its obligation to make prefunding payments for retiree health benefits.

The PRC will review the prices before they become effective Jan. 26, 2014, and must agree the prices are consistent with applicable law. The new price proposals are scheduled to be filed Sept. 26 and will be available on the PRC website at www.prc.gov and also will be available at http://pe.usps.com.

The full text of the Board chairman’s letter sent to postal customers about the pricing decision will be available later today at the following link:

http://about.usps.com/news/national-releases/2013/pr13_chairman-letter.htm.

The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.

# # #

For reporters interested in speaking with a regional Postal Service public relations professional, please go to http://about.usps.com/news/media-contacts/usps-local-media-contacts.pdf.

Please Note: For broadcast quality video and audio, photo stills and other media resources, visit the USPS Newsroom at http://about.usps.com/news/welcome.htm.

A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation: 152 million residences, businesses and Post Office Boxes. The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations. With more than 31,000 retail locations and the most frequently visited website in the federal government, usps.com, the Postal Service has annual revenue of more than $65 billion and delivers nearly 40 percent of the world’s mail. If it were a private-sector company, the U.S. Postal Service would rank 42nd in the 2012 Fortune 500. The Postal Service has been named the Most Trusted Government Agency for seven years and the fourth Most Trusted Business in the nation by the Ponemon Institute.

Follow the Postal Service on twitter.com/USPS and at facebook.

Written by Lisa.Bowes

September 25th, 2013 at 11:10 am

Posted in USPS