It is often said that small businesses fuel the country's economic engine, and statistics certainly back up this assertion.
The U.S. Postal Service recognizes the importance of this sector to our overall economy and its continued recovery, as illustrated by its 2012 marketing campaign targeting small businesses to support the USPS's growth and financial stabilization.
That's why it's puzzling that USPS would propose to raise postal rates beyond inflation and risk devastating millions of the very "mom and pop" companies it just targeted for more business.
But that is exactly what the USPS could decide to do.
As early as Thursday, the USPS Board of Governors could use "exigent" (legalese for "emergency") authority provided by Congress to impose price hikes far in excess of inflation.
The USPS's exigency authority was provided specifically — and solely — to help it recover from devastating events such as terrorist attacks. Congress intended this authority to be used only as "an extremely limited safety valve" in instances for which Postal Service management couldn't reasonably be expected to plan.
So what is today's "emergency?"
It is one we've all seen coming from miles away and have known about for years. The USPS has been losing many billions of dollars because it faces unreasonable fiscal obligations, such as having to prefund more than $5 billion worth of retiree health care benefits annually, when no other federal agency — and virtually no business at all — does so.
The USPS also has lost more than 25 percent of its mail volume in just six years as more and more Americans choose to communicate and conduct business online rather than on paper. The USPS has not cut its costs rapidly enough to keep pace.
This is a critical issue for businesses around the country, including for those of us in Kentucky because our own economy, struggling to come back from the recession, simply cannot afford a spike in postal rates that will make advertising, billing and distribution much more expensive. (Postage is, on average, about 60 percent of the cost of any piece put in the mail).
All businesses, but most notably those with fewer than 20 employees, make up 90 percent of the 5.8 million employer firms in the United States. Since this recession started in 2009, small firms have accounted for 67 percent of new jobs. And what these small businesses need from their vendors in these uncertain times is predictability, stability and manageability — not random and exorbitant price hikes.
This price hike couldn't come at a worse time for our nation's fragile economic recovery. Increases to operating costs could force businesses to stall their growth, lay off employees or, worse yet, close altogether.
It's hard enough for small firms to succeed, with only half surviving more than five years, so why would our lawmakers and the Postal Service want to make it harder for them?
And it's not just small businesses: larger businesses will simply divert more mail onto the Internet and other alternative media.
The USPS's plan to use its "emergency" authority to raise rates under these circumstances is a terrible mistake, a temporary substitute for a badly needed overhaul of the postal system — not to mention a dangerous precedent — and one that inevitably will lead to another round of sharp declines in mail volume and revenues.
These additional declines will dig the hole deeper for USPS by compounding its problems of excess capacity and falling revenues, not solving them.
Instead of making the situation worse by exercising a power Congress intended to be used only in real emergencies, the USPS should concentrate on further cutting costs, promoting new business and working with small businesses and other postal stakeholders to prompt important legislative changes.
Congress must enact meaningful reforms that reduce costs and improve the system's long-term outlook. It's long past time for it to address the USPS's systemic woes and give it the means to save itself.