Sackler Policy Services, LLC

21st Century Coalition:  Focusing the Impact of the Mailing Industry In a Time of Crisis

Arthur B. Sackler1


The Postal Service stands in the midst of a financial crisis unlike anything seen since the 1930s, and perhaps even exceeding that low-water mark if measured by percentage of decline.  Closing the 10-year $238 billion budget gap projected by the Postmaster General will entail a number of critical decisions by Congress that will shape the postal system for a generation or more.  It is, therefore, painfully obvious that mailers and suppliers must persuasively provide their points of view to the Senate and the House on those decisions, or the consequences could, indeed, be painful.

Evolution of a United Mailer and Supplier Voice

This financial crisis and impending Congressional decisions are why a large segment of the mailing community has gathered together as the Coalition for a 21st Century Postal Service.  There is a great need to concentrate our views and resources as we approach the debate that will lead to these momentous decisions.  The name is a revival of one used during the final years leading up to postal reform, a successful example of what can happen when mailers and suppliers work together in one organization to get it done.

It is not as if mailers and suppliers have not been lobbying consistently on Capitol Hill for decades. Groups such as the Direct Marketing Association, Magazine Publishers of America, Alliance of Nonprofit Mailers, Printing Industries of America and National Postal Policy Council, have been active and effective, as have numerous other associations and many companies.  However, it is also no coincidence that there has been no major postal legislation, other than postal reform, enacted in decades:  while there were multiple important factors in its passage, the Postal Accountability and Enhancement Act of 2006 (PAEA) was the first time the mailing community had come together under one banner in all that time.

PAEA was an epic legislative slog that took eleven years and the hard work and leadership of key players on the Hill, the Postal Service, the postal unions, and two Administrations to accomplish but it did not make it over the goal line until mailers and suppliers were engaged in coordinated fashion.  That legislation was to revamp the way USPS set rates and generally conducted business.  It was vital to update the system.

The challenge we all face now is even more important:  engineering the survival of the system in a form that is recognizable, useful and affordable not only to mailers and suppliers, but also to the mailing public, while assuring its solvency for the foreseeable future.  The place to start was education.


1  Arthur B. Sackler of Sackler Policy Services coordinates the Coalition for a 21st Century Postal Service along with Ben Cooper of Williams & Jensen.


A Postal Primer:  Broadening the Knowledge Base in Congress

There is always a small handful of knowledgeable Members of Congress who attend to and lead on the many issues, large and small, that regularly confront the Postal Service.  Today, examples are Senators Tom Carper and Susan Collins, and Representatives Stephen Lynch and Jason Chaffetz.  The Chairmen and Ranking Members of the full Committees in each House which include jurisdiction over postal affairs also show significant interest, and others on those two Committees become engaged when an issue becomes substantial enough or there are constituent concerns.

That should not be enough at any time for an institution at the heart of a $1 trillion industry, generating more than 7.5 million jobs, which affects every community and every citizen in America, and especially so when it is fighting for its fiscal life.

As a result, the first objective of the 21st Century Coalition was to raise the level of awareness of, and knowledge about, the Postal Service, its basics and its challenges.  To accomplish that, the Coalition first commissioned a series of brief white papers on elements of the system and its issues.  These were straightforward educational pieces meant for background and not for advocacy.

This “postal primer” encompassed seven subjects, describing and discussing:  the sources of, and decline in, volume and revenues;  the Retiree Health Benefits Fund background and impact on postal expenses;  the cost of labor and collectively bargained contracts;  the scope and limits of USPS debt, and its inclusion in the unified federal budget;  the delivery network and retail presences;  reducing days of delivery; and the still-enormous mailing/supplying industry.2

The Postal Primer, finished in January, turned out to be very timely:  the House Subcommittee with postal jurisdiction was determined to go down the same track of broadening the postal knowledge base within Congress.  After discussing the matter with the Coalition last Fall, the Subcommittee set up its well-received “Postal 101” Sessions.  Postal 101 was designed to convey fundamental information about how the postal system works, its issues and challenges, as seen from the perspectives of its stakeholders.  These included:  the postal agencies and other government institutions, such as the Government Accountability Office;  postal unions and management organizations; and the mailing community.

There was one session devoted to each group of stakeholders, preceded by an overview session.  In Postal 101B, from the perspective of mailers and suppliers, the Coalition was asked to arrange for a panel of industry experts to outline the industry and its views on the postal system.  We also were the lone mailing community representative in the overview, Postal 101A session.  But in perhaps a symbolic measure of how far mailers and suppliers have to go to deepen their impact, and underscoring the need to concentrate our resources and views, that session featured senior officials form various agencies plus a representative from the Congressional Research Service, all four unions and all three management associations and, again, just one from the folks who pay the bills.

Nonetheless, these Postal 101 Sessions appear to have substantially exceeded expectations, attracting cumulatively literally hundreds of staffers from throughout the House.  They dovetailed perfectly with the Coalition’s own educational goals, and provided an opportunity for us to distribute well over 200 copies of the Postal Primer.  It is clear that knowledge and awareness levels were raised.  We continue to be in touch with key Senate offices, which have taken doing a similar series under advisement, and the Coalition is about to embark on a series of meetings in individual House offices in part to evince this broader education.


2  If anyone would like a copy of the Coalition’s Postal Primer, please contact the author at:  asackler@sacklerpolicyservices.com


Initial Coalition Substantive Positions

On March 2, before an extraordinary gathering of postal stakeholders -- mail users, suppliers, postal unions, regulators, Capitol Hill staff -- the Postal Service painted a bleak picture of its future absent drastic action.  Projecting a cumulative deficit of $238 billion over the next ten years, caused by a steady and increasing migration of remittance and promotional mail to the Internet, exacerbated by the deep recession, Postmaster General Jack Potter presented a suite of plans to eliminate that gap and place the Postal Service on firm financial footing for "decades to come."

Among these plans are:  an ambitious effort at cost-cutting;  ending Saturday mail delivery;  an "exigent," or emergency, price increase and more flexibility in pricing in general;  restructuring the prefunding of employees' retiree health benefits;  labor contract changes;  greater innovation;  and increased access to postal products and services.  From cost-cutting, the PMG expects to wring $123 billion out of the system, still leaving another $115 billion to be recaptured through the other elements of his plan.

In a letter released on March 26, the Coalition expressed initial reactions to the elements of these plans.  The Coalition supported restructuring both the system overall to match the amount of volume it is likely to have in the coming years, and the prefunding of Retiree Health Benefits premiums.  It also underscored the need to closely examine the recent finding of the USPS Inspector General that the USPS Pension Fund had been overfunded by some $75 billion.  It supported innovation, such as the “Sales” and the new Priority Mail Box, and making greater use of technology.

Two other key points of the plan involved labor negotiations and ending Saturday delivery.  On labor negotiations, the Coalition recognized that when 80% of costs are for personnel, it is vital that workforce costs at every level of USPS fully reflect the changes wrought by its massive decline in business.  Regrettably, attrition, which has been very successfully employed by the Postal Service, has not been able to keep up with the scale of the decline, meaning some tough workforce choices may be unavoidable.

On ending Saturday delivery, the Coalition believes that the proposal must be studied carefully by all concerned, and especially Congress, once evaluation of the financial, operating and marketability aspects, both positive and negative, of the plan has been offered not only by the Postal Service itself, but by the Postal Regulatory Commission and the Government Accountability Office.

Finally, two issues threatened to have a strong adverse impact on an industry already weakened substantially by the difficult economy and, in many cases, with ready access to alternatives to the postal system.  The Coalition opposed an “exigency,” or emergency, rate increase as simply unaffordable.  With mailers and suppliers at least as financially challenged as USPS itself, raising prices in January, 2011, as seems likely, or at any time under foreseeable conditions, would be counterproductive and create a self-fulfilling prophecy of an even more serious volume decline than previously predicted.

On changing the measurement of whether increases are properly averaged to the Consumer Price Index - Urban from within classes to across the face of market dominant, or monopoly, offerings, the Coalition again felt compelled to oppose.  This is because the current measurement was the product of a carefully crafted agreement that balanced the need of all concerned and was approved by Congress in PAEA;  the broader measurement had been previously rejected by Congress.  The Coalition believes that balanced agreement should not be disturbed.

Where Does the Coalition Go From Here?

In general terms, the Coalition will be following the release of its letter and initial positions with meetings on Capitol Hill to both continue to broaden the knowledge base, and begin to communicate in a more in-depth way about its positions.  It plans to be heavily engaged in the debate meaning everything from working specifically with the Postal Service or congressional staff, to testifying and providing “grass roots” support for achieving meaningful, balanced change for the system.

To reemphasize at the end, only if mailers and suppliers have a united, strong voice will they be able to be really heard in this debate.  That places a premium on working through as many differences of opinion within the community as possible;  the surest way to arriving at outcomes uncomfortable or unacceptable for mailers and suppliers is to be divided and speaking from a variety of standpoints. And it places another premium on as many mailers, suppliers and their associations’ joining the Coalition as possible. The greater the numbers, the greater the impact: it’s as simple as that.


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