Skip to comments.Post Office Nears Decision on Rate Hike
Posted on 02/14/2005 1:43:54 PM PST by nypokerface
WASHINGTON - Decision time is nearing for the next rate increase by the Postal Service.
Postmaster General John Potter has promised that the price of mailing a letter won't go up until 2006. But with the complex procedures needed to raise prices taking 10 months or more, the agency will probably begin the process soon, perhaps in March or April.
Complicating matters is the effort to get Congress to change the way the post office is regulated, including relieving the agency of billions of dollars in pension and escrow obligations.
The board of governors of the Postal Service is likely to begin discussions of higher rates as soon as its monthly meeting, which occurs this week.
"I expect the rate-case strategy meeting ... is going to be very lively," said Neal Denton of the Alliance of Nonprofit Mailers.
Gene Del Polito, president of the American Association for Postal Commerce, said he expects a new rate case to be filed no later than April.
"The rumor is afoot in the postal community," Del Polito said, that postage might have to go up as much as 6 percent if Congress fails to remove pension and escrow obligations imposed two years ago. That would be in addition to any increase needed for postal operations.
A 6 percent increase would add about 2 cents to First Class postage, now 37 cents. Some speculate that the increase could be 4 cents or more.
Del Polito said he had heard reports that the post office would seek a 5.4 percent increase for next year to cover the congressionally imposed obligations followed by a 6 percent rise the year after to deal with increasing expenses at the agency.
Robert E. McLean of the Mailer's Council, a trade group, said another possibility is a phased rate, with the post office filing a single case seeking approval of increases in two consecutive years.
McLean said he expects the agency to file in March of April seeking a 6 or 7 percent increase in 2006 with a comparable increase in 2007.
This idea "has appeal in some parts of the mailing community but not all," McLean said. "Certainly, to know when a rate increase is coming is very appealing ... but others don't want it any sooner than they absolutely have to have it."
Possibly, he said, the agency would seek the full increase in the first year for first-class mail sent by the public, while phasing in the increase for business mail over two years.
The obligations imposed two years ago require the post office to place funds in escrow pending approval of a decision on its use, and to pay for the retirement benefits earned by postal workers during their military service. Military-related retirement benefits of other federal workers are not charged to their agency.
Legislation prepared last year but never voted on would have ended those obligations as well as made other changes in postal operations. New bills have been introduced this year. However, the Bush administration has opposed the changes.
WHY can't they have an increase that makes the price of a stamp evenly divisible by a nickel?
So, buy 5 of them.
If I buy 5 of them, I'll lose the other 4 before I get to use them.
Guess I had better hurry up and use my Reagan stamps.
Okay. If you really only want to buy just one, and you really wish you could have spent the pennies rather than receive them in change, throw them on the ground.
Glad to help. :-)
The Postal Service was originally granted its rate
monopoly because many decades ago, as the country expanded,
it would have been a losing proposition financially for
it to serve remote, rural, and highly inaccessible locations. The quid pro quo was that the rate monopoly
would enable them to provide this service. But the situation is now totally altered. What is needed NOW is
a diversified, COMPETITIVE, mail delivery system. For
example, consider the following anachronisms:
(1) The Internet has inevitably reduced postal revenues.
(2) Who - in the 21st century!!- ever saw such an absurd
thing as NO mail delivery on Sundays?
(3) The Post Office has beome a patronage bureau of secure,
highly-paid, and unionized time-servers.
(4) In an age when even third world countries are adopting
free-market principles and economies -- why do we
insist on maintaining a communications system that
that has more in common with 19th century methodology
than 21st century technology and methods?
The fact is that the rates continue to increase in inverse
proportion to the services rendered! It's time to break
the monopoly and introduce competition -- all for better,
more efficient public service.
The funny thing is I could care less about rate increases. All my bills go to my airline credit card which is paid in full via my computer each month. I pay my mortgage the same way. I use the telephone and e-mail to communicate with family and friends. I can't remember the last time I actually mailed something but I do know I still have a bunch of 29 cent stamps.
And how about providing stamps with functional rates that remain through rate hikes (i.e. if you buy a 1oz First Class stamp today, it will always remain valid and sufficient as First Class postage for a 1oz item, on the basis that the interest on the float should in general outweigh inflation).
To be sure, this would cause a spike in stamp purchases immediately before a rate increase, but would this really be a bad thing for the USPS?
The more they charge, the fewer people use stamps, the more they charge. . . Soon, we'll figure out how to do all communications via Internet, nooone will by the one stamp for sale and it'll be priced $50Billion. Morons....
Check out the hours for our local post office (I am not making this up :)
Mo, Tu, Th, Fr: 8a-12:30p and 2p-4:30
It's pretty bad when you have to consult a written list to see if the PO is open before going there.
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