Randy Weiler, SPC’s Director of Postal Affairs and Logistics, is here to help you navigate the labyrinth of the USPS. What does it take to efficiently move your projects through the USPS system? What efficiencies can you gain from SPC’s lettershop expertise? Who determines postal increases?
Every month, Randy fields your burning questions about mail and postal affairs in a Q&A format. You can email him at firstname.lastname@example.org or post a question via Facebook or Twitter using the hashtag #AskRandyUSPS. We post the questions and his answers each month both here on the SPC blog and on social media. To see a full list of questions that Randy has answered, check the Ask Randy Index.
1) Can you provide some background information on H.R. 2382, referred to as the USPS Fairness Act, passed by the U.S. House of Representatives on February 5, 2020?
First off, it is important to note that the United States Postal Service (USPS) is not funded by taxpayer dollars.
H.R. 2382 would amend the Postal Accountability and Enhancement Act of 2006 (PAEA), repealing the portion of the PAEA requiring the USPS to calculate and prefund all of its likely pension cost for the next 75 years between 2007 and 2016. The PAEA requirement amounted to close to $5.6 billion per year that the USPS had to pay.
The USPS started defaulting on the PAEA payments in 2012 and has reported a financial loss of $62.4 billion between 2007 and 2016. Of this $62.4 billion loss, $54.8 is attributed to the PAEA mandated prefunding of retiree benefits.
H.R. 2382 would allow for a “pay as you go” process in which the USPS could fund its retirement obligations as they are incurred, mimicking parameters commonly used in the private sector.
Having laid the background for the USPS Fairness Act, it is important to note, as Schoolhouse Rock! taught us: It’s just a bill. Yes, it’s only a bill. And it’s sitting there on Capitol Hill. The Senate still has to act, so questions abound: Will the U.S. Senate vote on this bill? Will the bill pass as is, or be amended thus changing the intent or effectiveness? If passed as is, will the president sign the bill into law?
2) Please weigh in on the mailing industry’s perspective regarding H.R. 2382?
From a mailer’s perspective, I believe that H.R. 2382, as currently written, would be a welcome change to the current USPS financial situation if signed into law. Removing the excessive financial burden of the accelerated prefunding of USPS retirement benefits would afford the USPS the opportunity to invest in necessary equipment upgrades for operations and transportation. Additionally, having the prefunding albatross removed from its neck would cast the USPS overall in a more positive light.
3) What impact would the passage of the USPS Fairness Act have on postage?
From a postage cost viewpoint, I believe that enacting the USPS Fairness Act into law would have little to no impact on postage prices. The USPS and Postal Regulatory Commission would still be held to the cost of living price increase cap language that is part of the 2006 PAEA Law.
Director Postal Affairs and Logistics