Postal Accountability and Enhancement Act

Signed December 20, 2006, the Act divided products into market-dominant, such as First-Class Mail, and competitive, such as Priority Mail and parcel services. It capped market-dominant price increases by class at the CPI and required competitive products to cover their costs and contribute to overhead. It renamed the Postal Rate Commission the Postal Regulatory Commission with stronger oversight, and required about $5.5 billion a year in prefunding of retiree health benefits, a mandate repealed in 2022.

PAEA created the competitive products category under which USPS sells its e-commerce parcel services, so it shapes how USPS prices against UPS and FedEx. Commercial discounts, negotiated service agreements and annual parcel rate changes all operate under this framework. For example, a high-volume shipper can sign a negotiated service agreement with USPS for discounted Priority Mail rates, which the Postal Regulatory Commission reviews as a competitive product contract. The prefunding mandate it created drove much of USPS's reported losses until 2022.

• Priority MailUSPS 1 to 3 day parcel service
• Parcel SelectUSPS service for parcels dropped near the buyer
• Negotiated RatesContract discounts off carrier list prices

• Postal Reorganization Act of 19701970 · Replaced the Post Office Department with USPS
• Postal Service Reform Act of 20222022 · 2022 USPS reform that ended retiree health prefunding

1. H.R.6407, Postal Accountability and Enhancement Act, Congress.gov congress.gov