May 21, 2024 - Business

Scoop: Senators to debut a measure providing postal service relief for newspapers

Photo illustration of a blue newspaper box with a US Postal Service logo on the side.

Photo illustration: Brendan Lynch/Axios. Photo: Christopher Dilts/Bloomberg via Getty Images

A bipartisan group of Senators will introduce a bill Tuesday that will require the U.S. Postal Service to perform to a certain level before it can apply a surcharge to periodicals, or local newspapers, to deliver their papers.

Why it matters: Facing a delivery worker crisis, local newspapers have increasingly turned to the USPS to deliver newspapers to subscribers.

  • Newspapers previously relied on gig economy workers to distribute newspapers via their own vehicles early in the morning. The rise of ride-sharing services, like Uber and Lyft, have created alternative jobs that are often more lucrative and more flexible in terms of hours.

Zoom in: The Deliver for Democracy Act, which is being introduced by Sen. Peter Welch (D-Vt.), is meant to provide relief to local news outlets by curbing rate increases and holding the USPS accountable for on-time delivery.

  • It requires that the USPS must either achieve at least a 95% on-time delivery rate for periodicals or improve its on-time delivery rate by at least 2 percentage points in order to be able to unlock its 2% surcharge authority for papers.
  • It also puts accountability measures in place, including directing the USPS to report its progress annually to the Postal Regulatory Commission and instructing the Government Accountability Office to conduct a study and submit a report to Congress on options for alternate USPS pricing models that would support newspapers.

Zoom out: The bill's co-sponsors argue that the USPS has "maximally exercised" an authority granted to it by the Postal Regulatory Commission that provides an additional 2 percentage points of rate authority for any class or product of mail where costs exceed revenue.

  • The increases and poor service "jeopardize local news outlets' ability to reach readers and supply the information so essential to an engaged citizenry and a vibrant democracy," Sen. Welch said in a statement provided to Axios.

Between the lines: The bill is co-sponsored by lawmakers across the aisle: Sens. Amy Klobuchar (D-Minn.), Ron Wyden (D-Ore.), Tina Smith (D-Minn.), Jeff Merkley (D-Ore.), Mike Rounds (R-S.D.), Kevin Cramer (R-N.D.) and Bernie Sanders (I-Vt.).

  • The measure is endorsed by the National Newspaper Association and News/Media Alliance, which collectively represent hundreds of local newspapers across the country.

The big picture: The local news industry is facing a crisis in the digital era, prompting advocates to push for any form of relief from lawmakers, including tax credits, vouchers and government subsides.

  • Around one-third of U.S. newspapers as of 2005 will be gone by the end of 2024, one study estimates.
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