Magazine Publishers of America
We have some good news regarding the Postal Service’s ongoing financial crisis. Late yesterday, the U.S. Senate gave final Congressional approval to a bill giving USPS $4 billion in short-term financial assistance, and President Obama is expected to sign the measure into law. The assistance -- though by no means addressing the Postal Service’s need for fundamental restructuring and reform -- does alleviate the Service’s short-term cash flow problem and increases the likelihood that the postal system will be able to function through most of the new fiscal year (FY 2010) that begins today.
The new law approved last night reduces by $4 billion the amount of the 9/30/09 cash payment that USPS had been scheduled to make for partial funding of its health benefits liability for postal retirees. The law prior to yesterday’s action called for USPS to make a payment of $5.4 billion. The new law reduces that amount to $1.4 billion, thereby freeing up $4 billion in cash.
The impact of the new law on the Postal Service’s pending decision on whether to seek a postal rate increase in 2010 is unclear at this time. That decision will likely be made by early January. It is widely believed that, if USPS seeks an increase, it would look to implement the new rates in May of 2010. Certainly, we believe that the new law’s $4 billion in cash assistance should go far toward enabling USPS, with continued cost-cutting, to survive 2010 without imposing a rate increase on its customers -- especially during these challenging economic times.
MPA and its allies worked very hard over the past several months, in concert with Postmaster General Jack Potter, to win final approval of the $4 billion relief bill. But this victory, while vitally important, is only a temporary measure. Our work on urgently needed restructuring and reform of the nation’s postal system resumes in earnest today.
Thanks for your continuing interest and assistance.
Jim CreganEVP, Government AffairsMagazine Publishers of America
