WINDSOR, Conn. (April 10, 2003) – Congress has passed legislation stabilizing postal rates through year-end 2005, a move that will keep direct mail marketing competitive with other forms of marketing, according to the direct mail services company Advo Inc.
The House passed the bill 424-0 on April 8, after the Senate passed it a week earlier. The bill addressed the need for the U.S. Postal Service to fix a pension formula that, if left unchanged, would have forced the service to increase postage rates. The bill will allow the service to lower its contributions to the Civil Service Retirement System (CSRS) by $2.9 billion.
Rep. John McHugh, R-N.Y., chief sponsor of the bill, said it would provide future viability for a service that employs 9 million people and accounts for $900 billion in business activity. The bill "certainly would go a long way toward boosting the economic activities of this nation as a whole," he said.
The Postal Service has raised rates five times since it boosted the price of a first-class stamp to 29 cents from 25 cents in 1991. In the dozen years since, other delivery services, online banking and e-mail communications have all taken business from the mail service. The post office was $676 million in the red last year.
“By allowing rates to remain at current levels, this action improves the overall competitiveness of the mail stream as a communications medium and provides the impetus for mail volumes to grow,” said Gary Mulloy, Advo's chairman and CEO, in a prepared statement. “Furthermore, it allows the focus to be on developing reform initiatives which will strengthen the USPS's business model and financial health over the long-term.”