USPS Chief Financial Officer Admits Rate Increase will have No Effect on Solvency of USPS
(Press Release) Washington, DC — The Affordable Mail Alliance—a growing coalition of nearly 1,000 non-profits, Fortune 500 companies, small businesses, major trade associations, consumer groups and citizens representing most of the mail sent in the United States—highlights the testimony of USPS CFO Joseph Corbett that makes clear the proposed rate increases are not justified under the law or necessary for the continuation of mail services.
Testifying Tuesday at the Postal Regulatory Commission hearing, Corbett admitted that the Postal Service's cash position this year is no worse than in 2009, when the Postal Service did not seek a rate increase of this kind.
Corbett went on to describe the sophisticated computer modeling system the USPS has had for 20 years that tracks the decline in mail volume due to diversion to internet communications. When asked why then the Postal Service had no contingency plan for the impending decreases in mail volume, a USPS key argument for needing the rate hike, Corbett replied that the system is used for "looking backward, not forward."
"Today, we learned that not even the Postal Service's top managers believe this rate increase meets the standards laid out in the "extraordinary and exceptional" clause in the PAEA," said Tony Conway, AMA spokesperson and Executive Director of the Alliance of Nonprofit Mailers yesterday at the hearing. "We are encouraged by the tough but fair questioning by the Commissioners and believe that ultimately, they will be convinced that a rate hike ten times the rate of inflation is not justified by law."
Many of the Commissioners expressed concern that if the PRC approves a rate increase that is ten times the rate of inflation, the USPS, instead of putting its financial house in order, will come back year after year asking for more money - a key argument of the AMA motion to dismiss, filed July 19 (http://affordablemailalliance.org/motion.pdf).