From NNA, July 27 press release
Contact: Tonda F. Rush

Long-awaited postal reform approved by House; Senate to take up bill this fall

Adoption by the House of Representatives of the first reform of postal laws in more than 35 years is a major step toward a sound Postal Service for mailers—like community newspapers—who depend upon its viability, National Newspaper President Mike Buffington said July 27.

“Congress has produced a bill that drew bipartisan support, and passed over the opposition of only 20 Members, a sign that NNA's long decade of working on this legislation has paid off,” Buffington, publisher of The Jackson Herald, Jefferson, GA, said. “The Postal Accountability and Enhancement Act will begin, at long last, a new era at the Postal Service. We hope the Senate is able to pass this bill as well.”

The legislation would end the painstaking 18-month-long postal rate case process and instead give USPS the ability to raise prices on its own, but only under a rigid inflation-based price cap. It would preserve within-county newspaper mail, and introduce new restrictions upon USPS, such as compliance with antitrust laws. It also would roll back a 2003 law that would require USPS to fund military pensions for its employees. Some of the money saved in the rollback would be devoted to a fund for retiree health benefits. Some economists have suggested the looming health costs would lead to major postage rate increases in the future, if the Postal Service does not begin setting aside funds.

Buffington said NNA believed the price cap system would lead to less shocking rate increases.

“No one likes to pay higher rates, but the fact is that rates generally do go up. The key is to make the increases manageable,” he said. “In the past 35 years, the increases have been stunning at times. In-county mailers have seen increases in excess of 2000 percent in 35 years. It hasn't been unusual for a rate case to produce 10-12 percent hikes in a single bite. This new law would keep the Postal Service from passing along those big bites. Instead, it would need to find new productivity and efficiencies so that our increases would be within the range of inflation.”

NNA Postal Committee Chairman Max Heath, vice president of Postal/Circulation of Landmark Community Newspapers, Inc., Shelbyville, KY, said the legislation was the most feasible next step in helping the Postal Service to survive in an era of Internet messaging. His committee had overseen 10 years of negotiation on the bill so NNA's key goals of ensuring the continuation of within-county postage rates and correcting overpayments by the Postal Service into its pension fund would be met.

"After 10 long years of off-and-on work, NNA's Postal Commitee applauds the passage of HR 22, offering a balanced approach that also contains significant protection for community newspapers with in-county rate language, some return of overpaid CSRS pension funds to USPS, and rate case simplification,” Heath said. “While it's not perfect, with lots of compromises, NNA members should benefit from this bill. Now we have to get the Senate bill passed, the two houses to work out differences, and the president to sign postal reform legislation. NNA and community newspapers are better off for NNA's staying engaged in this effort."

The Senate is expected to take up the bill in the fall. The Bush administration has so far opposed passage, on the grounds that giving back the pension overpayments would remove that money from the federal treasury and increase the US budget deficit.