Issa Statement on Postage Rate Increase

Published: Sep 25, 2013

WASHINGTON – The United States Postal Service today announced a rate hike totaling 5.9% on monopoly products, like postage stamps. Some products will see a much higher rate increase. The rate increase, subject to Postal Regulatory Commission, would take effect January 2014.

House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., sponsor of the H.R. 2748, the Postal Reform Act of 2013, offered the following statement:

“Today’s rate increase is a desperate cry for help from an insolvent Postal Service. Revenue and volume are down dramatically and our mail delivery service, hamstrung by Congressional mandates and onerous labor contracts, has been unable to sufficiently reduce costs.

“While some rate increases may be necessary, the long-term key to USPS’s future is addressing its costly, inefficient delivery network. If costs are not addressed, USPS will ultimately be forced into a string of rate increases much larger than the ones today that will inevitably trigger an irrecoverable death spiral for the agency.”

“Increasingly, American consumers and American businesses do not rely on paper-based communication. The handwritten letter has lost ground to e-mail and text messaging – the mailed check to on-line bill payment. But because USPS has been prevented from implementing common sense cost-cutting reforms, like 5-day mail/6-day package delivery, the agency has not been able to reduce its infrastructure in line with the declining need for paper communication.

“As a result, the Board of Governors has reached the last resort of breaking the rate cap. I empathize with their decision, but this comes at a serious cost. If implemented, today’s announcement may ease the financial burden on USPS in the very near term. But this rate hike and the ones sure to follow will only push more and more private sector customers to stop using the mail altogether. The rate increase poses a direct threat to the eight million private sector jobs that are part of the mailing industry as businesses shift from paper-based to electronic communication and mailers are priced out of business.

“This rate increase will go forward unless mail business stakeholders get off the sidelines and encourage both houses of Congress to take up and pass their respective Postal Reform Act.

“A bipartisan, bicameral deal is within reach. Both the House and Senate committees, as well as the President, support changes that end the statutory prefunding payments, let the agency finance the remainder of its retiree healthcare unfunded liability, and allow the USPS to move to a modified six-day delivery schedule. While there are differences in each approach, we owe it to the American people to find a solution.

“The forces opposed to reform have fought to keep the status quo for years – and this rate increase announcement is a result of that legacy. It is time for the pro-reform forces to match their efforts.”