An independent federal agency, the Postal Regulatory Commission (PRC) has the thankless task of trying to make the U.S. Postal Service run more efficiently. Given the Postal Service’s long history of troubles, rate increases and consumer complaints, it might seem at first glance that the PRC is falling down on its own job. However, the commission only recently (as of 2006) was given the demanding task of shaping up the USPS’s long-sagging performance. Although the commission was first established in 1970 (as the Postal Rate Commission), it was largely a rubber stamp operation for its first three-and-a-half decades of operation, regularly approving postal rate increases requested by the Postal Service. But in 2006 Congress decided to broaden the PRC’s responsibilities and give it some teeth to enforce its new regulatory powers over the Postal Service. In the short time since its reorganization, the PRC has garnered some criticism for supporting postal rate changes that favored large corporate publishers and banks.
Following the adoption of the U.S. Constitution, members of Congress adopted legislation in 1789 that established the post office and the Office of the Postmaster General. These two entities were responsible for the delivery of mail throughout the country. In the early part of the 19th century, officials in Washington D.C., began referring to the post office as the Post Office Department, although it wasn’t until 1872 that lawmakers formally created such an office by name as part of the Executive Branch.
By the 1930s, letter carriers began delivering mail to customers at the edges of cities using “mail boxes” located along the curbside of roads. As Americans began moving increasingly to the suburbs in the 1950s, more and more curbside mailboxes began to spring up.
By the mid-1960s, the Post Office Department found itself in serious financial trouble, due to neglect and fragmented control. Facilities, equipment, wages, and management efficiency needed to be overhauled. In October 1966, the Chicago Post Office came to a halt as the volume of mail surpassed workers’ ability to sort and deliver it. A 1967 House Appropriations Subcommittee labeled the postal service “a race with catastrophe.” Five to ten million pieces of mail were being sent each day, but the system could not keep up.
In 1970, the Post Office Department was reorganized as a semi-independent agency of the federal government. Its name was changed to the United States Postal Service (USPS). The same legislation created an independent Postal Rate Commission, charged with reviewing proposals by the Postal Service to change postal rates, fees, and mail classifications. The commission was headed by members appointed by the President and confirmed by the Senate to serve six-year terms.
The work of the commission consisted primarily of conducting public, on-the-record hearings concerning proposed rate, mail classification or major service changes, and recommending decisions for action by the postal governors.
Over the next three decades, Americans continued to complain about the quality of service provided by the USPS, especially in light of ever-increasing postage increases that the commission would often rubber stamp. Beginning in the 1990s, members of Congress began to debate the need for overhauling the postal service. Some advocated radical changes, such as privatizing the delivery of mail.
Finally, in December 2006, Congress and President George W. Bush agreed to the most significant postal reform law since the Postal Reorganization Act of 1970. The Postal Accountability and Enhancement Act (PAEA) (pdf) affected the Postal Service’s finances, the way it sets rates, and how it is governed and regulated. It also made changes to the Postal Rate Commission, altering its name to the Postal Regulatory Commission (PRC), to reflect what is now supposed to be a body that provides greater oversight of the Postal Service.
The new law required the PRC to develop new regulations that would govern postal rates, consult with the Postal Service on delivery service standards and performance measures, consult with the State Department on international postal policies, prevent cross-subsidization or other anticompetitive postal practices, promote transparency and accountability, and adjudicate complaints.
With bad economic times and the Internet bringing about a reduced need for postal services, USPS has found itself $8.5 billion in annual debt and on the General Accountability Office’s “high risk” list. In light of that, the PRC debates such cost-saving measures as raising postage prices, ending Saturday mail deliveries, and closing postal outlets across the nation. In July 2011, USPS proposed to the PRC a plan to study up to 3,600 post offices for closure, and in February 2012 it announced the closure of 223 mail processing centers, resulting in the loss of 35,000 jobs and an annual savings to USPS of $2.6 billion.
History of First-Class Stamp Rates
History of Postcard Rates (Postal Regulatory Commission)
Domestic Special Service Fee History (Postal Regulatory Commission) (pdf)
The PRC is an independent federal agency that is charged with improving the work of the U.S. Postal Service. The PRC has a number of oversight responsibilities, including making sure the Postal Service is complying with federal laws. The commission also develops accounting practices and procedures for the Postal Service to follow. The PRC has the power to subpoena records, direct the Postal Service to adjust rates and take other remedial actions, and levy fines against the USPS.
The PRC is composed of five commissioners appointed by the President and confirmed by the Senate to serve six-year terms. No more than three members of the commission may be from one political party. The PRC’s staff consists of those with expertise in law, economics, finance, statistics, and cost accounting.
PRC Offices:
The Office of Accountability & Compliance conducts technical analysis and formulates policy recommendations for the commission in both domestic and international matters. It performs analyses of rate changes, negotiated service agreements, classifications of new products, post office closings, and other issues. The office evaluates Postal Service accounting records, financial reports, and other financial data to assess accuracy and conformity.
The Office of General Counsel provides legal assistance for the PRC, defends its decisions in court, and manages the formal complaint process.
The Office of Public Affairs & Government Relations handles communications between the commission and the media, the public, Congress, and other federal offices.
The Office of Secretary & Administration records the official actions of the PRC. It archives commission documents, maintains personnel records, and provides other support services involving the commission’s library, docket room, and computers.
The Office of Inspector General performs audits and investigations of the PRC’s work. It reports fraud and abuse in commission programs and operations.
The commission’s library makes available numerous reports and documents to the public, including dockets, PRC reports and studies, and USPS periodic reports.
From the PRC Web Site
International Postal Regulation
The Postal Regulatory Commission (PRC) FY 2012 Congressional Budget Justification outlines the planned distribution of the agency’s projected FY 2012 appropriated funds in terms of both program activity and overhead expenses:
Spending according to PRC program activity:
Integrations and Support $6,314,000
Financial Accountability and Compliance $2,714,000
Modern Rate Regulation $2,700,000
USPS Service and Performance $2,232,000
Office of Inspector General $490,000
Spending according to PRC overhead expenses:
Personal Compensation $10,628,000
Rent $1,884,000
Supplies $230,000
Consulting services $695,000
Contractual services $400,000
Travel $122,000
Information technology $100,000
Printing and reproduction $95,000
Communications $70,000
International Policy Development $50,000
Training $26,000
Commission Relocation (Lease termination) $25,200
Office furniture and equipment $10,000
Office equipment rental and repair $10,000
Miscellaneous, subscriptions $10,000
Medical services $8,000
Advertising $5,000
Ruth Goldway’s Travel Expenses
Members of Congress criticized the Postal Regulatory Commission’s leader, chairwoman Ruth Goldway, in 2012 for her frequent overseas travel at a time when the U.S. Postal Service was bleeding billions of dollars.
In fact, while the House conducted a hearing into the matter, Goldway wasn’t even available to testify due to her making her third trip to Switzerland within the past year. During that time, she also had traveled to Belgium, China, Portugal, Puerto Rico, and Scotland.
Lawmakers complained that in addition to Goldway being out of the country so often, her commission was falling behind on finding ways to help the Postal Service save money and keep from implementing drastic measures, like ending Saturday mail deliveries.
Lawmakers Question Postal Regulator Chief's Travel As USPS Bleeds Cash (by Bernie Becker, The Hill blog)
Postal Regulatory Commission Chairwoman Ruth Goldway defends travel schedule (by Ed O’Keefe, Washington Post)
Congressman Connolly Defends PRC Chairman Goldway as Advocate of Innovation (SavethePostOffice.com)
PRC Supports Money-Losing Deal for Postal Service
In October 2007 the Postal Regulatory Commission (PRC) supported a rate change for Bank of America mailings that, by the commission’s own findings, could cost the Postal Service more than $45 million. The union representing postal workers opposed the rate change for BofA, arguing that Postal Service predictions of savings were based on obsolete data. After the BofA deal was approved, Capital One filed a legal complaint with the PRC accusing the Postal Service of breaking the law by refusing to strike a similar agreement with them. Capital One eventually withdrew its complaint after allegedly striking a private deal with the Postal Service, which, theoretically, could further increase the agency’s financial loss.
USPS Could Lose Millions in Proposed Deal (American Postal Workers Union)
Capital One files response to USPS NSA dismissal request (by Bryan Yurcan, Direct Marketing News)
Commission Favors Corporate Giants in Rate Decision
In July 2007 the Postal Regulatory Commission set new postage rates that favored large-circulation publications (such as those owned by Time Warner) over small and medium-sized periodicals. The change followed years of lobbying by Time Warner officials. Instead of facing an 11% rate increase, many corporate giants of the publishing industry were going to enjoy smaller increases, and some were even receiving rate reductions, while small- and medium-sized publications were stuck with 20-30% jumps in postage costs. One periodical (the American Conservative) was looking at a 58% rise. The Nation magazine reported that it expected to pay $500,000 more a year in print costs. The change was likely to drive some publications into bankruptcy. In 2009, periodicals as a whole were able to cover only 76% of their costs, leaving them in the red by $600 million. Since 2001, the mailing of periodicals has dropped by 20%, the result of the worsening economic atmosphere and the public’s increased use of electronic media, particularly the Internet. Across-the-board reduction in mail use left USPS with a $3.8 million loss in 2009—plus an $8.5 billion loss in 2010, and a $5.1 billion loss in 2011—landing the agency on the Government Accountability Office’s “high risk” list.
The Freedom of the Press Belongs To...Those Who Can Afford Lobbyists (by Hilary Goldstein and Isabel MacDonald, Huffington Post)
Postage Rates for Periodicals: A Narrative History (United States Postal Service) (pdf)
Periodicals Are Profitable for USPS, Publishing Exec Testifies (Dead Tree Edition)
Bush Uses Postal Accountability Act to Claim Right to Open Mail without Warrant
When he signed into law the Postal Accountability and Enhancement Act of 2006, President George W. Bush added a signing statement claiming the right to open mail without a warrant.
Bush Warned About Mail-Opening Authority (by Dan Eggen, Washington Post)
W Pushes Envelope on US Spying (by James Gordon Meek, New York Daily News)
President’s Statement on H.R. 6407, the “Postal Accountability and Enhancement Act” (White House)
Changes for Postal Service
With the blessing of the Postal Regulatory Commission (PRC), lawmakers considered legislation in July 2011 that would drastically change the way the U.S. Postal Service operates.
The reforms were necessary, according to the commission, due to the Postal Service losing so much money in recent years. The USPS was expected to lose $8 billion last year, which came on the heels of another $8 billion loss in 2010.
Among the changes under consideration was a plan to shutter about 10% of the Postal Service’s retail outlets. Another change would have allowed the agency to dip into its surplus retirement fund to help close its budget gap. Other reforms included ending Saturday mail delivery and permitting the Postal Service to ship wine and beer.
Post Office Ponders Closing 1 In 10 Retail Outlets; Enid Area Offices Make The List (by Randolph E. Schmid, Associated Press)
Ending Saturday Delivery Would Reduce Costs, but Comprehensive Restructuring Is Also Needed (Government Accountability Office)
Many Seek to Revamp Post Office (by Sean Collins Walsh, New York Times)
Funding Future Retirees Killing Postal Service
With one legislative fix, the financial problems of the U.S. Postal Service could be eliminated, according to reformers.
Back in 2006, the Republican-led Congress adopted the Postal Accountability and Enhancement Act (PAEA), which forced the USPS—which does not receive any money from the federal budget—to prefund its future health care benefit payments to retirees for the next 75 years. In other words, the Postal Service was ordered to pay for the benefits of workers it hadn’t yet hired and do it an accelerated time frame.
The mandate proved very costly, draining billions from the Postal Service’s coffers.
Ruth Goldway, chairwoman of the Postal Regulatory Commission, has called for lifting this requirement. “A majority of the commission believes the Postal Service’s current financial predicament is rooted in the PAEA mandate to rapidly pre-fund health benefit premiums for future retirees,” Goldway told lawmakers.
Consumer advocate Ralph Nader said removing the retiree-funding requirement would put the Postal Service immediately in the black.
Manufactured Crisis About to Cripple the Post Office (by Noel Brinkerhoff, AllGov)
Making the Service Profitable Again (National Association of Letter Carriers)
Note: The following former chairmen presided over the predecessor to the Postal Regulatory Commission (the Postal Rate Commission)
Dan Blair (R) Dec.15, 2006-August 2009
George A. Omas (R) Nov. 30, 2001-Dec. 9, 2006
Edward J. Gleiman (I) Feb. 23, 1994-Feb. 2, 2001
George W. Haley (R) Feb. 14, 1990-Oct. 14, 1993
Janet D. Steiger (R) Feb. 3, 1982-Aug. 10, 1989
A. Lee Fritschler (D) Jul. 31, 1979-Mar. 4, 1981
Clyde S. DuPont (R) Mar. 14, 1975-Jul 29, 1979
Fred B. Rhodes (R) Jan. 18, 1974-Dec. 30, 1974
John L. Ryan (R) Aug. 4, 1973-Oct. 31, 1973
William J. Crowley (R) Oct. 15, 1970-May 1, 1973
- Table of Contents
- Overview
- History
- What it Does
- Where Does the Money Go
- Controversies
- Suggested Reforms
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