ABM fights latest rumored postal rate hikes
February 13, 2012 -- According to ABM lobbyist Tom Carpenter, Budget gimmicks are putting potential rate increases back on the table as rumors fly that some version of postal reform with across-the-board rate increases may be included in the payroll tax cut extension this week. The potential hike would be used to balance federal spending on the tax cut because of the way it scores. This is the same gimmick that American Business Media and allies have beaten back twice in the last six months, but it is showing up again this week.
ABM has been fighting potential postal rate increases a lot over the last year. Other than the attempt from Rep. Darrell Issa (R-CA) to raise periodical rates specifically last summer and the USPS exigent increase effort from two years ago, the threat of across-the-board increases continues to show up for one reason – an antiquated budget rule that allows postal revenue to count as general revenue to the Treasury. So, even though USPS’ budget is funded entirely and separately from the rest of the federal budget by postal revenues, the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) both score postal rate increases as having a revenue-positive impact to the federal government. Consequently, when Congress needs revenue to pay for new initiatives, debt reduction or in this week’s case, extension of the payroll tax cuts, it looks everywhere, including budget gimmicks like postal rate increases. Of course, Congress is not really paying for anything since all postal revenue goes to USPS, but it is easy money (estimated at $15 to $20 billion over 10 years), so it continues to be a target.
In just the last year, ABM, along with its mailer consortium, the Coalition for a 21st Century Postal Service, has successfully fought back attempts to use postal rate increases in the debt ceiling deal last July and again in the closing days of the Super Committee’s deliberations last December. In each of these occurrences, rate increases would have been paired with some iteration of postal reform, which ABM supports, but not at the expense of increased rates.
With the expiration of the payroll tax cuts looming at the end of this month, postal rate increases are showing up again as a potential revenue source. Through the coalition, ABM is meeting with Members of Congress and reaching out to Congressional leadership yet again to point out that using postal rates for general revenue is simply a budget gimmick that should be rejected. However, as revenue to the Treasury becomes more and more scarce, the temptation to use such gimmicks becomes stronger for Congress.
ABM will update its members as developments warrant on this latest threat. If you have any questions, please contact ABM’s Washington lobbyist, Tom Carpenter, VP, Wexler & Walker Public Policy Associates, at 202-662-3741.