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For Immediate Release |
Contact: Robert E. McLean |
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Release No. 05-1 |
703-418-0390 |
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March 2, 2005 |
Mailers Council Calls on Congress and the White House to Prevent an Increase in Postage by Eliminating the Postal Escrow Account
WASHINGTON, DC, March 2, 2005—Mailers Council Executive Director Robert E. McLean today issued the following statement in response to the United States Postal Service’s plans for a postage rate increase.
“Recently the Postal Service’s Board of Governors authorized postal officials to start a regulatory process that will likely result in a 5-6% postage rate increase in spring 2006. The increase is necessary only because, by law, the Postal Service must make a $3.1 billion payment into an escrow account. We strongly encourage Congress and the White House to help for-profit and nonprofit mailers nationwide avoid this postage rate increase by passing legislation eliminating the pension escrow account.
“If the Postal Service increases postage, the recent trend in mail volume increases will be reversed. As we have seen repeatedly during the last three decades, when postage prices go up, mailers reduce the number or size of their mailings. The inescapable result is reduced revenue for the Postal Service.
“The solution is for Congress and the White House to approve postal reform legislation that would eliminate the escrow account. This account was created after the Office of Personnel Management found that the Postal Service was about to overpay its pension obligations by $78 billion because of an outdated pension payment formula. The law was changed to prevent the over-funding, but it also added a new escrow account that uses the collected funds to reduce the federal deficit. As a result, the Postal Service must raise rates to collect $3.1 billion and pay it to the Treasury in 2006. The Mailers Council believes that this escrow provision is unnecessary and amounts to nothing more than a stamp tax on mailers.
“The postage paid by all mailers, from individuals to large mailers, have already been used to cover postal employee pension costs. Now we are being told that these funds must be collected—again—resulting in an anticipated 6% postage rate increase.
“By avoiding this planned rate increase Congress and the White House can help the $900 billion mailing industry and the 9 million individuals this industry employs. Mailers facing a rate increase will not hire new employees and may fire some current employees. When the price of postage increases, mailers also send less mail—affecting paper companies, printers, envelope manufacturers and mailers—companies that amount to 9% of the GDP.”
The Mailers Council is a coalition of corporations, nonprofit organizations and major mailing associations. Collectively the Council accounts for 70 percent of the nation's mail volume. The Mailers Council believes that the USPS can be operated more efficiently, supports efforts aimed at lowering postal costs, and has the ultimate objective of containing postal rates without compromising service.
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