National Newspaper Association Opposes Cuts In Mail Service

FOR IMMEDIATE RELEASE—National Newspaper Association President John W. Stevenson, publisher of the Randolph Leader, Roanoke, AL, said he feared cuts in United States Postal Service budgets might do what rain, snow, sleet and dark of night had not: keep the local newspaper from being delivered.

NNA expressed grave concern about a proposal by Postmaster General John E. Potter to lift a federal mandate requiring six-day mail delivery. But NNA supported Potter’s request to change the way retiree health benefits are paid, a move that could trim nearly $2 billion from annual USPS expenses. Potter in late January asked Congress to remove an annual mandate that in 1983 began to tie USPS to the six-day week.

The mandate is passed by Congress every year in USPS appropriations bills. The practice of limiting the Postmaster General’s flexibility in deciding on service began in 1983. But Potter says in an institution that might see losses as high as $6 billion this fiscal year, “it is possible that the cost of six-day delivery may simply prove to be unaffordable.

“If that should occur,” Potter told the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security. “It could become necessary to temporarily reduce mail delivery to only five days a week. We would do this by suspending delivery on the lightest volume days. Toward this end, I reluctantly request that Congress remove the annual appropriation bill rider, first added in 1983, that requires the Postal Service to deliver mail six days each week.”

Potter also asked Congress to remove a requirement imposed in the 2006 Postal Accountability and Enhancement Act that requires prefunding of the health care premiums for future retirees. Since the prefunding rule went into effect, USPS has made payments that cut into the bottom line.

In 2008, it paid $5.6 billion into the health fund, while paying current retirees an additional $1.8 billion out of current cash flows. USPS is not objecting to payments into the trust fund, but seeks to be permitted to draw down from the fund to meet payments to current retirees.
USPS is the only federal institution with such overlapping current/future retiree payments falling due each year. Potter cited cost-saving steps that have been taken to help USPS weather the economic storms that have clobbered domestic mail volume. In 2008, volume fell by 4.5 percent, helping to usher in a $2.8 billion loss.

In response, Potter has frozen executive salaries, reduced personnel at headquarters, created new services to attract package mail volume, closed 58 Airport Mail Facilities and continues to close and consolidate mail processing plants.

The requests for Congressional relief in the health benefits and six-day-delivery mandate, he said, had to be made as USPS continues to contemplate lean revenues. He assured Congress that a decision on curtailing delivery would be made by the USPS Board of Governors if the law is lifted, and would affect light volume days.

NNA has joined major mailing organizations in calling on Congress to permit the change in the health benefit contributions. But it said fixing the sour finances by curtailing delivery was the wrong move. “Beginning to cut back on delivery would accelerate the Postal Service’s present downward spiral,” NNA President John Stevenson, publisher of the Randolph Leader in Roanoke AL, said. “It would force some newspapers out of the mailstream, and cause advertising mailers to seek other avenues to get their messages out. That in turn will drive customers to change their reading habits and to rely less upon the mail. Once this mail volume leaves, I doubt it would ever return.” “I don’t believe the Postal Service is going to take such a drastic step,” NNA Postal Committee Chairman Max Heath said. “I know PMG Potter wants to have the flexibility to go to five-day service if he decides he absolutely must have it, but I am confident that the senior management of USPS realizes that moving in that direction could be irreversible and damaging to USPS, as President Stevenson says. “If
Congress will take the reasonable and right step to grant the health benefit funding adjustment requested, I feel strongly that mailers can avoid any cutback in delivery days. USPS is as seriously affected as any entity by the severe recession, and deserves the relief,” said Heath.

If the six-day delivery law is withdrawn, however, USPS might be tempted to try reducing mail delivery selectively. For example, it might choose a five-day delivery pattern in low-volume rural areas, or economically challenged urban areas that do not get much direct mail. That, according to NNA Public Policy Director Tonda Rush, would raise a host of new questions.

“Even if the six-day rule is lifted,” she said, “Congress still mandates USPS to provide universal service. If it were to try selective cuts, I would expect federal court challenges to test whether universal service is being compromised.”

Established in 1885, the National Newspaper Association is the voice of America¹s community newspapers and the oldest newspaper association in the country. The nation’s community newspapers inform, educate and entertain more than 60 million readers every week. -30-

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