Making a strident case for a U.S. Postal Service (USPS) that is able to react to market forces, Sen. Tom Coburn (R-OK) insisted today that the agency has to have the authority to set its own rates.
“We're going to have a postal system and we have to make the numbers work. Like I've told everybody in the [business mail] industry, there's going to have to be more than the inflation rate [increases],” said the ranking member of the Senate on Homeland Security and Government Affairs.
Coburn challenged Cerasale's depiction of the size and influence of the business mail industry and charged him with contradicting earlier statements he had made about the value of the Postal
Regulatory Commission (PRC). In his testimony,
Cerasale stated that business mailers accounted for nearly 90% of the USPS's $6
billion in revenues. Coburn estimated that mailers contributed more on the
order of $500 million.
In
response to earlier testimony by USPS Inspector General David Williams that
moderate price increases return sufficient working capital to the Postal
Service while having little effect on mail volume, Cerasale reminded the
committee what happened to the catalog industry when it was hit with
double-digit increases in 2007.“Catalog volumes plummeted 23% in the next year, a year in which other Standard Mail volume grew,” Cerasale said. “If catalogs were inelastic to pricing, postal revenues from catalogs should have increased. It did not. It dropped 11%.”
