The U.S. Postal Service announced that President George W. Bush signed into law on Wednesday new postal legislation that ties postal price increases to the rate of inflation. The Postal Accountability and Enhancement Act is the first major change to the Postal Service since 1971. The current rate case under consideration will proceed as scheduled.

Postmaster General John E. Potter stated in the press release, "This new law could not have come at a better time. The Postal Service has never been stronger and this law enables us to build on our successes."

The legislation is the culmination of a 12-year effort by Congress to secure changes to the laws governing the Postal Service. It will link future rate increases to the Consumer Price Index and give the Postal Service more flexibility for pricing competitive products. The Act also reconstitutes the existing Postal Rate Commission into a regulatory body with greater authority and responsibility.

The new law directs the Department of the Treasury to resume the funding of military pensions for postal employees and abolishes a federally mandated escrow requirement, directing those monies to pre-fund retiree health benefits. Potter said, "Over the next decade, these changes will free the Postal Service of future legacy costs. We are now on firm financial footing for the future."

http://www.usps.com/communications/news/press/2006/pr06_089.htm