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.
Did I just read that there was a threat of a presidential veto? Yeah,right!
Already did that a couple of years ago. $1.50 per month with my local Credit Union. I don't know how I survived before that.
Between on-line bill pay, e-mail and UPS/FedEx, I almost never use the USPS anymore.
hmmm ebay businesses, junk mail senders, overnight mail docs, gift packages for relatives.
I think they need to make it so if you buy a first class stamp at X price it remains valid for use for a base first class letter forever.
Ya just beat me!
I have been doing "online bill pay" for over 10 yrs. Wouldn't pay bills any other way.
You know, a couple of days ago there was an article posted here regarding the high cost of gasoline. The aithor of that article broke down the actual cost of each gallon of gas. In that exercise he noted that it cost $0.11 to deliver each gallon of gas to every corner gas station. The author then compared that $0.11 cost of transportaing each 6.6 pounds of highly flammable gallon to the $0.47 required by the post office to deliver a feather-light piece of paper. Very effective contrast indeed.
Obviously, cost of a stamp is $0.39 not $0.47 - yet.
Why not just raise the cost of bulk mail? Junk is 80% of what I get anyway.
It's wonderful. I love working on the computer anyway, so paying bills online is right up my alley.
Well besides the fact that it is easier, I like that once I hit send...the bank becomes responsible for the payment. They will/do resolve any and all disputes of non-payment, payment not received, etc with the companies.
The USPS also beats all the delivery services (UPS, FEDEX,DHL) in under 3 LB packages, by a whole lot.
The USPS is one of the best deals going. Rates going up everywhere and you expect mail to stay the same? Get real.
As for UPS, they get to cherry pick what and where they deliver. They do a great job, but the USPS has to deliver all the unprofitable areas that private interests will not.
I have never been able to figure out why everyone hits on the Post Office.
Ever notice how a lot of postal workers are retired from other government agencies. No wonder the government can't function. It's full of inbreeds! (No offense to inbreeds intended)
Assuming that the USPS is actually looking for a solution.
--put advertising on the stamps.
That sounds like a good idea to me.
They just had a rate increase a few months ago!!!!
Subcontract mail service to UPS. They can probably do it better, faster, cheaper.
Prices of automatic weapons are going up, that's why!
LOL. George W. Bush's veto pen is hidden away in a crate in a warehouse next to the Ark of the Covenant.
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