Lieberman Wins Limits on Excessive Discounts to Private Mailers

WASHINGTON – To help ensure fair postal rates, Governmental Affairs Committee Ranking Member Joe Lieberman , D-Conn., Wednesday amended major postal reform legislation to limit excessive discounts private mailers may receive for doing work the Postal Service could do at cheaper rates.

The amendment on so-called “workshare discounts” was approved by a vote of 9-8 at a Committee mark-up of the Postal Accountability and Enhancement Act, S.2468. The bill was voted out of Committee unanimously.

Lieberman’s amendment limits the ability of the Postal Service to grant postal rate discounts to private sector mailers in excess of the savings the Postal Service would achieve by having mailers do the work – except in very specific circumstances. The amendment tracks similar language in the House bill.

“Under my amendment, mailers won’t be forced to pay higher rates to make up for revenue losses and the Postal Service can maintain fair and non-discriminatory rates for each type of mail it handles,” Lieberman said. “Furthermore, discounts equal to or less than Postal Service savings mean Postal jobs will not be lost to mailers who are performing work that postal employees can do for less.”

“Workshare discounts” are given to private sector mailers who perform certain Postal Service tasks – such as processing and transporting the mail. The discounts must generally be equal to or less than the savings the Postal Service achieves by having mailers do the work.

The Postal reform bill, crafted by Committee Chairman Susan Collins, D-Me., and Senator Tom Carper, D-Del., prohibits “workshare discounts” that exceed the value of the savings the Postal Service would realize – except in five circumstances.

One of those circumstances allows excessive discounts when the work done by the mailers provides a significant benefit to the Postal Service. For example, mailers who place bar-codes on their envelopes might enable the Postal Service to use new technology to process those envelopes more quickly.

“These excessive discounts, however, should not be permanent,” Lieberman said. “The Postal Service, through the use of technology, must either achieve savings that exceed the value of the discount, or pare down the discount to match the savings achieved.”

Lieberman’s amendment, therefore, imposes a four-year time limit on these excessive discounts, ensuring the tasks performed by the mailers actually make the Postal Service more efficient in a reasonable amount of time.

The amendment also strikes a catch-all provision that allows the Postal Rate Commission to approve excessive discounts it determines are “equitable and reasonable,” but which lack precise criteria that specify when the discount is appropriate. The provision opened a loophole that could eliminate restrictions on excessive “workshare discounts,” that in turn, could hurt individuals and small business mailers who cannot take advantage of the discount, and who may be forced to pay higher prices as a result of it.

In the 35 years the Commission has considered these issues, it has never approved an excessive workshare discount that would not be covered by the remaining four exceptions in the bill.