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June 27 2011 09:04 PM

Congressman Darrell Issa (R-CA), chairman of the House postal oversight committee, yesterday introduced postal reform legislation that would make sweeping changes to the current postal model. The bill proposes major structural changes intended to reduce Postal Service costs, eliminate excess capacity, and return the Postal Service to financial solvency. The Alliance commends Chairman Issa for engaging in the effort to fix the broken Postal Service financial model, but strongly disagrees with the proposal to substantially reduce the nonprofit postage rate discount.

Congressman Issa's bill proposes to reduce the Standard mail nonprofit rate discount from the current 40% to 10%. This 40% discount would be reduced by 5% a year until it reaches 10%. That 5% reduction would be on top of annual CPI rate increases.

The bill would also require a 5% rate increase above the CPI annually for classes such as Periodical mail that are below 90% cost coverage.

The Alliance will continue to assert that the Postal Service's financial problems are driven by substantial excess capacity and cost. The way to address this problem is to reduce those excessive costs, not increase rates. It is particularly disheartening to see a proposal to substantially increase nonprofit rates at a time nonprofits are being called upon to do even more for American society.

The Alliance will be working with congressional leaders in the months to come to find legislative solutions for the Postal Service's financial problems that do not unfairly impact nonprofit organizations that depend on affordable and reliable mail service.