Welcome to the new edition of ACMA’s newsletter focused on Washington, D.C. goings-on that affect your business. As always, we welcome any member comments, criticism, requests for improvement, etc., by simply responding to this email.

Executive Summary
This edition focuses on new consumer privacy bills introduced by Senator Catherine Cortez Masto (D-NV), USPS annual financials, updates on ACMA’s recent privacy and tax committee actions, and a contributed piece on greater financial woes ahead for the USPS.

New Privacy Legislation – DATA Privacy Act
Last week, Senator Catherine Cortez Masto (D-NV) reintroduced three bills to strengthen data privacy protections and safeguard Americans’ personal information. One bill, the DATA Privacy Act, strengthens protections for American consumers online and simultaneously ensures that large corporations implement data security and privacy protections. The bill, if passed, would provide new authorities to state attorneys general and the FTC, allowing them to levy civil penalties for violations.

Cortez Masto: “Big technology companies are collecting massive amounts of Americans’ personal information, from social security numbers to health care data. It’s clear we need stronger privacy laws to make sure this information isn’t shared or sold without consumers’ permission.”

The ACMA Privacy Committee has been working with Congress to get this kind of bill written. During the Committee’s Nov. 8th meeting, which took place just a week before the bill was introduced, the group discussed how Congress has made clear that this bill will be an important first step in the much-needed regulation of A.I.

USPS Posts Dreary Annual Financial
Also last week, the U.S. Postal Service announced a $6.5 billion net loss for FY2023. Marketing Mail revenue fell 5.75%, down by $920 million; volume tumbled nearly 12%, down by 7.68 billion pieces. First Class mail volume fell to its lowest level since 1968. Revenue for the overall Shipping and Packages category increased $324 million, or 1.0 percent, on a volume decline of 175 million pieces, or 2.4 percent, compared to the same period last year. Link to the full press release.

Postmaster General Louis DeJoy: “We are addressing near-term financial headwinds relative to inflation as we make strong progress in our long-term cost control and revenue generating strategies, including launching new products like USPS Ground Advantage. The whole organization is highly focused on implementation of the Delivering for America plan and creating a more effective, efficient and competitive Postal Service to serve the nation far into the future.”

The ACMA is working with policymakers on the House Oversight & Accountability Committee to ensure they are aware of the USPS’s results, and most importantly the consequences of the failing Delivering for America plan and it’s negative impact on ACMA members.

ACMA Tax Committee Update
The most recent round of Hill meetings have been promising in gaining further support in the proposed sales tax legislation. Several senators – Lee, Blackburn, Thune, Cruz, and Fitzgerald – have all expressed their support in Federal sales tax legislation that will better support small businesses across the country.

As of now, the legislation is in a holding pattern due to the CR that keeps getting kicked further and further down the road while the legislative text is being finalized. Moving forward with the final bill text, the goal will be to sustain momentum on sales tax related issues facing ACMA members and other companies in the e-commerce space to continue pushing the legislation through at the beginning of 2024.

Postal Exclusive

How the Postal Service’s Finances So Quickly Returned to the Crisis Stage
By: Paul Steidler (Originally Published on Nov. 13, 2023 in FEDweek)

On April 6, 2022 as President Biden signed the Postal Service Reform Act (PSRA), there was abounding yet misplaced optimism that the U.S. Postal Service had turned the corner financially and would have a bright future.

Congress provided USPS with $107 billion in assistance from PSRA, on top of $10 billion from the December 2020 COVID package. Also in April 2022, USPS’s 10-year strategic plan said it would be breakeven in fiscal year 2023 if PSRA were enacted and if it received a far smaller amount of assistance through an adjustment stemming from a pension accounting dispute with the Office of Personnel Management. The latter has not happened.

Instead, tomorrow USPS will announce it has lost well over $7 billion for fiscal year 2023. This not only is far worse than expected in April 2022, but significantly higher than the $4.5 billion loss USPS forecast a year ago for fiscal year 2023 while anticipating a “mild recession,” i.e., a far tougher economic environment than occurred.

The financial problems facing USPS are structural, including the following, based on a report USPS filed with the Postal Regulatory Commission that tracks its performance in the first 11 months of fiscal year 2023 compared with USPS’s initial projections.

Plummeting mail volume. Twice a year, above-inflation rate increases have accelerated the reduction in mail volume at USPS. It is down 8.8 percent, more than twice what was projected and far above the historical trend of a 2.5 percent decline in the past 15 years.

Ballooning network construction costs. As USPS continues implementing a comprehensive network redesign of its sorting and delivery centers, costs for this work are rising. While USPS says this will lead to the efficiencies necessary for a financial turnaround when this will occur and by how much is unclear.

Flat package market. Package volume is down 2.3 percent versus projections of being flat this year. This is particularly concerning as the network redesign plan is based on an assumption of significant growth in package volume.

Lower productivity with a near-term turnaround unlikely. In its Fiscal Year 2022 Annual Compliance Report filed with the Postal Regulatory Commission, USPS reported its overall productivity declined by 1.7 percent to the lowest level in seven years. With mail volume down sharply, package volume down, and the time frame for when the network redesign will have its benefits kick in, further reductions in productivity, and corresponding financial decline, seem likely to continue.

To fix USPS, everything needs to be on the table. It needs to be able to invest its retiree health care and pension assets into a diversified mix of stocks and bonds for higher returns. Cost of living allowances need to be scrutinized. Cost allocation systems need to be overhauled so that every product sold is clearly breakeven or profitable.

These are major issues that merit comprehensive Congressional oversight hearings. Otherwise, the American people will be on the hook for even greater amounts of assistance to USPS and no guarantee that USPS will be able to operate in a self-sustaining manner, that is, without running annual deficits and defaulting on its retirement funding obligations.

State Privacy Watch
Enacted State Privacy Laws

Soon to be Enacted Privacy Laws

Pending Privacy Legislation

  • Only two states with privacy legislation introduced this year are still in active legislative session – Massachusetts and Pennsylvania. Neither bill has been considered by committee. Massachusetts’ legislative session concludes on January 4, 2024 and Pennsylvania’s concludes on November 30, 2024.

 

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