GCA Member Company Testifies: "Ratemaking Provisions Are A Matter Of Grave Concern"

Washington, D.C. – The Greeting Card Association (GCA) issued the following statement regarding today's Senate Committee on Homeland Security and Governmental Affairs hearing on United States Postal Service reform:

"Today's hearing underscored the urgent need for reform, and it is our hope that the Committee will seriously consider the implications of the current Senate bill," said Rafe Morrissey, GCA's Vice President of Postal Affairs. "While we are supportive of several provisions in the bill, in key areas, it undoes the progress made by the Senate in the last Congress."

John Beeder, President and Chief Operating Officer of American Greetings, testified on the GCA's behalf. In his prepared testimony, Beeder noted, in part:

"The GCA has long been a strategic partner of the United States Postal Service, since some 60 percent of all greeting cards sold are mailed. We have a proud history of representing the household mail user on many different issues before policymakers, regulators, and the public...

"While the overall thrust of the bill is properly toward a leaner, more efficient Postal Service, some provisions meant to produce cost savings are unlikely to be effective and will only exacerbate the problem. Principally, I am referring to the authorization to reduce delivery days - not just tfive per week, but possibly to even fewer. We believe this could cost the Service too much in lost revenue and lost economies of scale and scope from lost volume for the claimed cost savings to be worthwhile, even if they were achieved...

"We also urge that the Committee, at a minimum, restore the approach to consideration of reducing delivery frequency included in the bill passed in the Senate last year...Encouraging a short-sighted approach to financial problems that would facilitate potentially large rate increases needlessly undermines the beneficial features of the bill, and eliminating independent review of important decisions is not in the interest of mail users, the Congress, or, in the long run, the Postal Service itself."

In July, the GCA released a report that laid out more than 100 alternative savings options available to put the Postal Service on a sustainable path to financial solvency without cutting essential services or raising rates, drawn from an exhaustive review of existing recommendations from the Government Accountability Office (GAO) and the Postal Service Office of Inspector General (OIG).