WASHINGTON, D.C. — U.S. Senator Susan Collins, Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, today filed an amicus brief arguing that the U.S. Court of Appeals for the District of Columbia Circuit uphold the Postal Regulatory Commission’s (PRC) unanimous decision to reject the U.S. Postal Service’s requested exigent rate hikes. Senator Collins’s committee has jurisdiction over the Postal Service.

Senator Collins’s brief argues that the PRC’s decision is consistent with the text, legislative history, purpose, and intent of the comprehensive rate system included in the Postal Accountability and Enhancement Act (PAEA) – a 2006 law that she authored. Senator Collins further notes that the Postal Service’s current financial condition is the result of numerous non-exigent factors. Under the law, these factors cannot support an exigent rate increase because they have no connection to an “extraordinary or exceptional circumstance” that the Postal Service could not reasonably be expected to have accounted for in the normal course of business.

“The economy and technology are affecting the Postal Service and, indeed, all businesses. But in writing postal reform legislation in 2006, my intention was not to permit rate increases above the inflation-based cap as relief from chronic, ordinary, or unexceptional circumstances and general Postal Service red ink,” said Senator Collins. “I hope the Court of Appeals will uphold the September 2010 PRC decision which found that the Postal Service failed to prove that its request met the standard of the law.

“Allowing the Postal Service’s exigent rate increase would undermine the stability and predictability in rates that the PAEA sought to establish. Moreover, such an interpretation of the law would produce absurd results – allowing the Postal Service to raise rates to cover revenue shortfalls from any cause, so long as it could identify an ‘extraordinary or exceptional circumstance’ affecting any portion of postal operations. The resulting loophole in the hard, inflation-based cap would lead to disastrous consequences for the Postal Service as the resulting rates would further erode volume as postal customers seek alternatives to mailing.

“The Postal Service needs to redouble its efforts to cut costs, develop new services to increase volume, re-invent its business model and work with the Administration to remedy an overpayment to the federal retirement fund. I will continue to press the Administration and the Postal Service on these vital reforms.”

The Postal Service is the linchpin of a $1 trillion mailing industry that employs approximately 7.5 million Americans in fields as diverse as direct mail, printing, catalog production, paper manufacturing, and financial services.

On July 6, the Postal Service filed its exigent rate case with the PRC, seeking approval for a wide array of rate increases. The Postal Service experienced a loss of more than $8 billion for fiscal year 2010. Its requested exigent increases, averaging 4 to 6 percent, would have far exceeded the rate of inflation. For one class of mail, for example, the proposed increase would have been a whopping 23 percent. For catalog mail, the Postal Service proposed a postage hike of more than 5 percent, which owners warned would prompt many catalog businesses to reduce mail usage and direct customers to websites.