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.
That's it in a nutshell!the disappearing middle class. So much for the American dream, it has become a nightmare for many of us. We play by the rules while those who don't are rewarded. We are given excuse after excuse, about how THEY need to support their families, while we struggle to find ways to support ours. At the end of the day the rich get richer, and no one cares about those who fall through the cracks, who are actually dare I say it? AMERICAN CITIZENS!
He's starting to be a real embarrassment on domestic issues.
True at every time an increase came about, a profit center feeding the general fund of the USA.
Not a tax, just a well hidden one!
Yes, and with the gas prices everything goes up, food, clothes, etc.
Yet the poor oil companies post yet another "record" earnings quarter with profits 50% greater than the previous quarter.
Your packages arrive in better shape with the USPS, too.
I will never ship UPS again unless I absolutely positively need to do that.
That is an excellent idea!!!!
"Overall, the Postal Service expects to finish this fiscal year about $2 billion in the red."
So this is a lie?
Your opinion. That's not my experience.
That is an excellent idea!!!!
Well, h*ll yes, it's been what, almost a year since the last one.
I pay my bills through online banking - the only stamps I need are for a few birthday cards, IRS things like that. My stamp consumption is about 1/10 of what it was just 2-3 years ago.
So does the PO get it? No-oo, they just raise the price for whoever does still use their service.
Their pensions are underfunded and their UNION wants to fund them.
IMO, we were going to be profitable by mid year without the last increase, but the Post Office said by law they had to have reserves which is why they raised the price just months ago.
Let's face it, people are using less and less mail and it should probably be delivered 3 times a week to save money.
I do not think there should be any price raises for ten years at least.
What would happen is those companies would zone the mail and
you'd pay about the same as now for local mail and a lot more the further the mail traveled.
Some low volume areas just wouldn't be serviced.
Now you pay the actual cost since USPS doesn't make a profit. Profit delivery companies will charge the actual cost plus their profit.
Standard Class mail has no monopoly. The reason private companies don't deliver it is because there's not enough profit margin to be worth setting up the infrastructure.
I sure hope Norm's Mallard stamp gets it.
Because people love to b_tch :~D
And I agree with you.
Please make this into a banner and bumper stickers. It's hilarious!!! However, I think one of our substitute substitute carries is an alien....from another planet!
Purchasing Postal Services is 100% voluntary.
The post office could be run much more efficiently. At the post office I have to use there is a machine that dispenses stamps, weighs packages and prints out postage, etc. Guess what? It is down most of the time. If these machines were available like ATMs we would not need all those union thugs were are on break most of the day.
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