Posted on 05/03/2006 8:10:38 AM PDT by Extremely Extreme Extremist
WASHINGTON - The Postal Service said Wednesday it wants to raise the price of a first-class stamp by 3 cents — to 42 cents — and proposed a "forever" stamp that people could use as hedge against future rate increases.
The changes would take effect in the spring of 2007 if approved by the independent Postal Rate Commission.
"A forever stamp would help ease the transition to any future price adjustments," board Chairman James C. Miller III said.
Postmaster General John E. Potter said the agency would not be making a rate change if it were not necessary.
"The Postal Service is not immune to the cost pressures affecting every household and business in America," he said.
For example, each penny increase in the price of a gallon of gasoline costs the post office $8 million, and payroll, health expenses and other costs also have been rising.
And, unlike private delivery companies, the post office cannot simply add a fuel surcharge to its rates.
In addition to the increase in first-class prices, the package of rate changes includes boosts in other categories — and even some rate cuts.
For example, while the first ounce of a letter would rise 3 cents to 42 cents, additional ounces would cost 20 cents instead of the current 24 cents. That means a saving on heavier items such as wedding invitations. The cost to mail a 2-ounce letter would drop from 63 cents to 62 cents.
Other changes would include Express Mail, flat rate up from $14.40 to $16.25; 2-ounce barcoded bank statement, down from 54.5 cents to 48.6 cents; bulk-mailed weekly newsmagazine, up from 17.9 cents to 20 cents; presorted catalog, up from 32.1 cents to 33.6 cents; post card, up from 24 cents to 27 cents.
The forever stamp would help soften the blow of a rate increase by allowing customers to stock up. As originally proposed it would sell for the first class rate and, once purchased, the special stamp would remain valid for whatever the first-class rate is when it is used, regardless of future increases.
Once the post office proposes a rate change, including the new stamp, the matter goes to the Postal Rate Commission, which holds hearings and has 10 months to consider the matter before responding.
The earliest a change would take effect would be May 2007.
The cost of a first-class stamp went from 37 cents to 39 cents in January. Before that, the price had been unchanged since 2002.
The proposed increase would boost the price of mailing a letter to 42 cents.
The increase in January was required so the post office could place some $3 billion in an escrow account, a step required in law.
The House and Senate have both passed bills to eliminate that requirement and efforts are under way to resolve differences between the two versions, but it also faces the threat of a presidential veto.
Since that increase went into the escrow account, the Postal Service still must cover rising costs of fuel, salaries, equipment and other expenses.
In addition to its own fuel expenses, the post office has about 70,000 employees who use their own vehicles and are reimbursed for fuel costs, and there are some 17,000 contractors whose rates are adjusted for rising fuel costs.
Overall, the Postal Service expects to finish this fiscal year about $2 billion in the red.
While a 3-cent increase in first-class stamps would be the most visible change, rates will change for other types of mail also.
For example, it currently costs 63 cents to mail a two-ounce first-class item whether it's a letter, large flat envelope or package. But the post office makes more than 30 cents on the letter, 10 cents on the flat and loses money on the package.
That means the agency will be looking at shape as well as weight in setting new rates, officials have said, particularly in the face of a decline in first-class mail as more people pay bills and send messages via the Internet.
Congress mandated the escrow requirement in 2003 when it passed a law reducing the amount of money the agency has to pay into its retirement system, which auditors said was being overfunded. Instead, Congress ordered the money to be used to reduce debt and, when that was done, to be put into the escrow fund.
The White House has opposed the release of the money from the fund because placing it there counts as income for the federal government and releasing it would have the effect of raising the deficit.
Another postage increase ALREADY?? Cripes.
Good grief! Cost of living just keeps increasing while businesses import slave low wage illegals to bring down everyones wages.
snaps and dittos and bttt to that!
Here's a solution--put advertising on the stamps.
I suppose pretty soon they'll find a way to charge me for sending my payments from my bank account to pay our bills....WITHOUT THEIR HELP.
More people will switch to online bill pay.
It's still the best deal around. I'm not one to support price increases but (based on my experiences, yours may vary) the postal service is efficient and cost effective for first-class mail.
Once again part of the increase results from illegal aliens jamming the post office, senduing packages and money orders back home.
Visit your local post office and notice who is in line. Medicate, educate, incarcerate and now (what's a good word for citizens subsidizing illegal alien use of the mail)?
Or at least let UPS/FEDEX/DHL/ETC handle letters and junk mail.
I remember the 3 cent stamp and twice a day delivery, That of course was BEFORE the Postal Workers Union took control of things. Way to Go big government Unions.
If the price of doing business goes down as in the cost of gas for transport, will the cost of postage go down? Snork, chortle.
Online bill paying will become even more attractive and the Postal Service will continue to lose more money.
I did. A few years ago. I love it!!!!
Is there some rule that postage can never end in a 0 or 5?
And yet, in Gulfport, MS, they have yet to hire new postal workers for those they lost in the aftermath of Katrina. Over eight months later and they are holding off on new hires "in case they get some transfers". The result is piles of mail on the floors of the main post office and no idea of when it might ever get delivered. The only stuff getting through reliably is local stuff and junk mail. Anything from out of the area is gathering dust. The IRS says my check was mailed on 7 April and it has not shown up yet - I'll bet there are thousands of important items piling up and yet the Post Office wants yet another rate increase for even worse service. Heck, our grand daughter never got her first Christmas package from us and I turned in the insurance claim and never got contacted. Now I am told that they have no record of it. UPS is the way to go and the USPS is an evil that can't be totally pushed aside.
How fitting it would be for GWB to make something like this the target of his only veto.
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