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.
I wish I didn't get any mail at my home. 99% Of what I get is junk mail anyway.
I use the UPS store for my mail box.
People complain about the postal service because it is so bad.
Anyone know what the average annual rate increases would be calculated at over the past 20 years or so? These forever stamps might be good investments?
Well said. If mail were privatized, no company would deliver to rural and inner-city routes.
August 1, 1958 .04
January 7, 1963 .05
January 7, 1968 .06
May 16, 1971 .08
March 2, 1974 .10
December 31, 1975 .13
May 29, 1978 .15 "A" Stamp Used
March 22, 1981 .18 "B" Stamp Used
November 1, 1981 .20 "C" Stamp Used
February 17, 1985 .22 "D" Stamp Used
April 3, 1988 .25 "E" Stamp Used
February 3, 1991 .29 "F" Stamp Used
January 1, 1995 .32 "G" Stamp Used
January 10, 1999 .33 "H" Stamp Used
January 7, 2001 .34 Nondenominated Stamps Used
June 30, 2002 .37 Flag and Antique Toy Stamps Used
January 8, 2006 .39 Love True Blue and Lady Liberty Flag Stamps Used
Any math experts, is this a 975% increase over 48 years or 20% per year since 1958??
" . . . it's been what, almost a year since the last one."
Actually it's been since January 8 - not even four months. Thank goodness for online banking!
So take down your mailbox and "presto," no more mail at home.
Not really a good investment. In 1985 ,first class stamp was 22 cents. it hasnt even doubled in 20 years. With an average investment you would expect a triple over a 20 year time period.
yep, 100% over 20 years is only 5% per year.
Ya, and in 1958, gasoline cost 30 cents a gal. Now it is $3.00. Check my math:
gas 30 cents to 3.00 = 10 time price imcrease.
first class mail 4 cents to 40 cents = 10 times price increase.
I calculate a compound annual rate of increase of 4.96%.
I have basically quit using the US Postal Service. I pay all my bills electronicaly through my bank for a monthly cost less than the stamps to mail them. I send e-mails rather than letters and use private services like UPS whenever I need to send something and have even given up sending Christmas cards in favor of a holiday web site. The only time I make use of the US Postal Service is to deliver my income tax forms whenever I own additional tax as I know getting the April 15 postmark meets the filing deadline, but my forms will be lost in a blizzard of others so I can keep my money just a little bit longer.
I really thought it was last fall - October or so, but now I remember - because I also didn't like the new American Flag stamp as well as the old design.
Thanks.
looks right, not a bad return from 58. I think the house I was born in around that time was purchased for something like 12 or 15,000 and is easily worth 150,000 now. same 10x figure....scary, I wonder if Nation of Islam leader Louis Farrakhan noticed these numbers.
Yep.
they've been out pricing their product for years. I remember when, come the 6 weeks before Christmas, they had to hire temp help and have two deliveries a day to keep up with the Christmas cards and boxes.
Now it costs the same to mail a Christmas card as a reg letter - ergo = far, far less mail at Christmas
It's already out there in the form of "print-it-yourself" meter strips that you can use your home printer to make. Call the PO, don't know the details but I know I've seen 'em. Business only has to sign on and print whatever they want on the adhesive strips. The possibilities are endless!
More people will switch to online bill pay.
If you'd think about supply and demand, you'd realize that online bill pay is probably one of the factors driving the price increase.
Fewer stamps sold + Increasing costs (payroll and fuel costs spring immediately to mind) = Must increase price of each stamp to stay even.
Which congress (man/woman) said that?
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