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DMA OPTIMISTIC THAT 2004 IS THE YEAR FOR POSTAL REFORM
NEW YORK, January 28, 2004 – The Direct Marketing Association (The DMA) applauded the leadership of the U.S. House of Representatives Government Reform Committee who today kicked off a series of hearings focused on the U.S. Postal Service’s role in a rapidly evolving communications, marketing, and delivery marketplace.
The DMA said the House oversight hearings – hosted by the committee’s Special Panel on Postal Reform and Oversight – were a positive indication that much-needed postal reform legislation has priority status for Congress this year.
The DMA and other stakeholders have long held that the viability of the world’s largest postal network, and those whose livelihoods depend on it, are in jeopardy unless meaningful postal reform legislation is not enacted into law.
"The Postal Service’s outdated business model – established by the Postal Reform Act of 1970 – significantly limits its ability to operate competitively in the communications and delivery landscape of the 21st century," said H. Robert Wientzen, president & CEO, The DMA. "Most notably, the Postal Service is being hard hit by the increasing impact of the Web and private-sector competitors. This will only accelerate over the next decade."
"We thank Chairman Tom Davis (R-VA) and Reps. John M. McHugh (R-NY), Henry Waxman (D-CA), and Danny Davis (D-IL) for moving postal reform to the forefront so early in the year," said Wientzen. "Building on the July 2003 report of the President’s Commission on the U.S. Postal Service as well as President George W. Bush’s December call to action, these leaders and their Senate counterparts have scheduled an impressive series of hearings in the coming weeks that makes us feel optimistic about the prospects for postal reform."
DMA Calls for Fair Resolution to CSRS
"We are also pleased that members on both sides of the aisle, and on both sides of Capitol Hill, support the Postal Service’s call for fair resolution to the remaining problems associated with overpayments to the Civil Service Retirement System (CSRS)," said Wientzen.
"This is particularly important to the short-term financial well-being of the Postal Service and its postage-paying customers," said Wientzen. "If appropriate legislative fixes are not enacted soon, we could see dramatic postage rate increases announced as early as the fall of this year."
According to The DMA, there are two aspects of the current law governing the USPS that must, in the interest of fairness and equity, be addressed in order to avoid needless postal rate increases and strains on the U.S. economy.
First, federal law now requires that the USPS divert certain funds to an escrow account. However, the funds in the account – which are no longer needed to fund pensions – remain dormant pending Congressional authorization on where and how to use them, rather than allowing the USPS to incorporate that money into its business plan.
The second issue relates to a legal obligation that is unique to the Postal Service – as opposed to other federal agencies. And that is the requirement that the USPS underwrite retirement costs associated with the military service time of its employees.
"It is not fair to the Postal Service’s customers – the mailing public, which entirely funds Postal Service operations through postal rates – to bear the pension costs associated with postal employees’ military service when the federal government bears that expense for every other federal employee who has served in our nation’s armed services," Wientzen said.
"It is clear that the Postal Service must be empowered to make changes in order to remain an affordable business communications channel in the face of a rapidly evolving communications and delivery marketplace," Wientzen said.
"Although he has done an outstanding job, there is a limit to how much Postmaster General John Potter and his management team can achieve when hamstrung by the constraints of a law designed for a bygone era," Wientzen added. "It’s up to Congress to ensure that he and future Postmasters General are relieved of unnecessary financial burdens and given the necessary tools so that the largest and most respected postal network in the world remains up to the challenge of affordable, reliable, universal mail service for all American households, businesses, and nonprofit organizations."
About The DMA
The DMA is the leading trade association for businesses interested in interactive and database marketing, with nearly 4,700 member companies from the United States and 53 other nations. Founded in 1917, its members include direct marketers from every business segment as well as the nonprofit and electronic marketing sectors. Included are catalogers, Internet retailers and service providers, financial services providers, book and magazine publishers, book and music clubs, retail stores, industrial manufacturers and a host of other vertical segments, including the service industries that support them. According to a DMA-commissioned economic-impact study, direct and interactive marketing sales in the United States are projected to have surpassed $1.7 trillion in 2003, including $133 billion in catalog sales and $41 billion in sales generated by the Internet. The DMA's Web site is www.the-dma.org, and its consumer Web site is www.shopthenet.org.
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