USPS Covers up its 5-year Forecast:

Justification for Removal of Price Cap

March 20, 2018

There are many ironies in this ten-year anniversary review of the PRC pricing system. But one of the ultimate ironies is to be found in the monopoly government agency’s secrecy about its five-year forecast. To help justify removing the price cap, the agency projected what will happen without the cap-busting changes proposed by the PRC, and with 2 percent of the total 5 percent proposed surcharges above inflation.

The 2006 postal law established the basic standard governing the protection of information

designated non-public by the Postal Service. “In determining the appropriate degree of

confidentiality to be accorded information . . . the Commission shall balance the nature and

extent of the likely commercial injury to the Postal Service against the public interest in

maintaining the financial transparency of a government establishment competing in commercial markets.”

While we’re talking about “commercial injury,” how about the impact on the private sector of the proposed governmental taking of 5 percent above inflation from the private businesses, nonprofits, and citizens? And what is the USPS afraid of if the public were to see its five-year projections?

When a government agency proposes major increases in user fees or taxes, our democratic government should require complete transparency and full disclosure to the citizenry about why the increase is needed.

The secrecy in the “redacted” charts filed by the USPS late last Friday is in sharp contrast to the report it made public in 2010, Ensuring a Viable Postal Service for America: An Action Plan for the Future. We have written before that the 2010 Action Plan marked a turning point for USPS management. It started predicting massive losses and demanding major policy and governance changes, including complete pricing discretion.

In the 2010 report, USPS showed mail volume and contribution projections, workforce costs, and projected net losses through 2020. For example, in 2010 the loss projected for 2020 was $33 billion; that’s right around the corner. The USPS is now projecting a loss of $5.2 billion for 2018.

The “base case” in 2010 for mail volume was 150 billion pieces (very accurate), and the “worst case” was 118 billion. In the new projections, USPS uses a “Baseline (with recession)” and an “Optimistic Scenario (no recession).” But the public, that will bear the brunt of the PRC/USPS proposals, cannot see what they are. A couple of representatives of the Alliance and other associations who asked permission, have been allowed to look at the details redacted from public view.

On Friday, the Alliance and allies filed a request that the numbers be made public. It seems only fair that the citizens who rely on this agency for basic services be allowed to see the projections that the agency is relying on to justify removal of regulatory price caps. The late Friday redacted versions are shown below.

And lest we forget:

The Mission of the Postal Regulatory Commission is to: