ACMA Wants Hard-wired Rate Increase Dropped From H.R. 2309

The American Catalog Mailers Association wants to have a portion of a postal reform bill pending in the House of Representatives that would allow a hard-wired annual rate increase for mail the postal regulator deems to be underwater eliminated.

This underwater class, according to the ACMA, is presumed to be standard mail flats – the category affecting most catalog mailers – and would be assessed by a new congressionally-appointed authority that would oversee the U.S. Postal Service.

H.R. 2309, sponsored by U.S. Rep. Darrell Issa (R-CA) and U.S. Rep. Dennis Ross (R-FL), would create a Postal Service Financial Responsibility and Management Assistance Authority that would approve changes in rates and classifications, new products and services, and other matters before the Postal Regulatory Commission.

The ACMA wants its members with ties to Republican congressional districts to contact their elected officials and voice their displeasure regarding the annual rate increase for catalogs contained in the House postal reform bill.

Paul Miller, vice president and deputy director of the ACMA, said the annual hard-wired postal rate increase for standard mail flats translates to 2% in addition to the CPI-capped rate increase. Miller said that means if a rate increase for standard mail flats was accomplished through legislation, it could only be undone by Congress passing subsequent legislation.

Aside from the rate increase provision, Miller said the ACMA supports the House bill as it “represents our best chance for reforming the USPS at this point.”

According to H.R. 2309, the 2% annual rate increase would be assessed to each class of mail that bears less than 90% of its attributable costs – and standard mail flats fall into that category. This isn’t the first time that standard mail flats have attracted the attention of government officials and were deemed underwater.

The PRC’s annual compliance determination for fiscal 2010 found that rates for standard mail flats were not in compliance with the 2006 Postal Accountability and Enhancement Act when it comes to “a fair and equitable apportionment of the cost of postal operations.”

Industry experts have referred to the U.S. Postal Service’s costing methodology as “flawed, outdated and inaccurate,” adding that the majority of standard mail flats mailings are not made up of just one subclass, but a combination of regular and carrier route.

It’s unclear when the House will vote on H.R. 2309, but Miller said it could happen sometime in July. If approved, H.R. 2309 would be discussed by a House-Senate conference committee, along with S. 1789 – postal reform legislation passed by the U.S. Senate in April – before a combined bill winds up before President Obama.