By now, direct marketers should have heard the fantastic news about the Office of Management and Budget's recalculation of the U.S. Postal Service's Civil Service Retirement System deferred liability.
OMB has learned that the investments made for postal retirees over the past 15 years have appreciated sufficiently to cut the postal service's CSRS liability from $32 billion to $5 billion. This recalculation has the potential of providing the USPS with a fiscal windfall that could drastically change its revenue needs over the next few years.
The actualization of this windfall, however, hinges on our industry's ability to win from Congress legislation that would change how the USPS calculates and makes its retirement obligation payments — no small task. But succeeding at this is of the utmost importance.
If Congress were to agree to the changes being recommended by OMB, the Office of Personnel Management and the U.S. Treasury, the postal service would be able to pay down its long-term debt more aggressively and there would be no need for any postal rate increases until, at the earliest, 2006! But if this legislation isn't in the president's hands by April, the USPS will file its previously announced request for another rate hike in 2004.
I can't emphasize enough the importance of getting everyone in the industry to explain to President Bush just how critical expeditious congressional action on this matter is for companies that communicate and do business by mail.
The president has to appreciate that without this change, the next round of postal rate increases could be large enough to bring many companies in our industry to their knees. Businesses such as yours would be unfairly “taxed” with unnecessarily higher postage costs, which would cause an immediate retreat in spending by businesses that rely on affordable postage. Passage of this bill, on the other hand, would ensure stable postal rates and facilitate a recovery for the industry.
If you haven't done it yet, be sure to get out your letter urging the president to tell Congress it's essential to approve the Office of Personnel Management's bill that proposes changes in the way the USPS funds its retiree obligations.
It's time to get our economy going, so let's roll.
GENE A. DEL POLITO is president of the Association for Postal Commerce (PostCom) in Arlington, VA.
