Postal Reform: How Long Must Publishers Wait For Congress to Deliver?

About a year ago this time, I ran a nostalgic clip from the movie “Miracle on 34th Street” in which Kris Kringle’s lawyer gives his classic postal service defense argument, citing the judgement of the “efficient, authoritative and prosperous” USPS as the last word on Santa’s legitimacy.

Those were the days. Now, it seems as if Benjamin Franklin himself couldn’t get no respect in the halls of Congress, as the fate of the 237-year-old institution is batted around like a deflating beach ball. Compromise is still far off on how to fund retiree pensions and health care, the question of five- versus six-day delivery, changes to USPS leadership, and whether to implement massive proposed cuts in delivery capacity that could, among other things, extend the time it takes to deliver periodical mail.

The stakes are dire. The USPS reported a $15.9 billion net loss for the fiscal year that wrapped up Sept. 30, over two-thirds of which came from required payments to fund future retiree health benefits. For over a year now, Congress has put off passing reform. With the “fiscal cliff” negotiations now a priority, it may not happen before the new Congress is installed next year. Folks like D. Eadward Tree at the blog Dead Tree Edition are understandably cynical about the whole process.

The USPS has long been caught in the middle between its desire to implement private-sector style reform and its status as a government agency expected to serve all while funding its own operations. Cutting the number of distribution centers would be painful, but is necessary—the only question is where and how many. To better compete with private carriers like FedEx (who have absolutely no interest in taking on the universal delivery mandate of the USPS), the service should be allowed to deliver a wider variety of packages, including beer and wine.

The MPA has urged the House and Senate to schedule floor votes on reform legislation, pointing out that 90 percent of all delivered magazines are sent through the mail. The organization supports key provisions of House bill H.R. 2309 and Senate bill S. 1789 (both are opposed by postal workers’ unions) and is even willing to go along with five-day delivery, though it’s concerned about proposals to drastically raise rates on so-called “underwater” classes of mail, such as periodicals, where current rates do not cover the cost of delivery. (The MPA and others have argued that periodicals would not be “underwater” if processing technology such as the Flats Sequencing System were properly implemented.)

Will reform come this year or next? Jim O’Brien, VP of distribution and postal affairs at Time Inc., said in a presentation in June that, even if nothing is done, the USPS has the cash to continue with normal operations until next fall if Washington chooses to dither that long. To quote his powerpoint: “Stay tuned!!!!”

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