The sound you heard from the U.S. Postal Service this morning was the other shoe dropping in the wake of its its failed attempt to end Saturday mail delivery earlier this year. The “exigent” rate increase proposed today would raise about $2 billion per year, or roughly the same amount that cutting Saturday delivery was supposed to save.
Much of the added revenue would come from a hike in the price of a first-class stamp from 46 cents to 49 cents. The proposal would also increase the charge for additional letter ounces from 20 cents to 21 cents, raise postcard prices by a penny to 34 cents, and push the cost of an international letter to $1.15.
After the Postal Service dropped the planned Saturday delivery cuts in April, its board told agency officials both to try to renegotiate existing labor contracts and study possibilities for raising more money. The first idea predictably went nowhere with postal unions and managerial groups. So the only option is the rate increase announced today that would take effect Jan. 26 if—and this is a mighty big question mark—the Postal Regulatory Commission approves.
In a letter cited in the USPS news release, board Chairman Mickey Barnett laid the blame on Congress for failing to pass legislation that would put the Postal Service back on a secure long-term financial footing.
“Of the options currently available to the Postal Service to align costs and revenues, increasing postage prices is a last resort that reflects extreme financial challenges,” said Barnett in the letter. “However, if these financial challenges were alleviated by the timely enactment of laws that close a $20 billion budget gap, the Postal Service would reconsider its pricing strategy. We are encouraged by the recent introduction of comprehensive postal reform legislation in Congress, and despite an uncertain legislative process, we are hopeful that legislation can be enacted this year.”
Of course, that rationale will be cold comfort to the mailing industry trade groups who have already re-united to kill the proposal just as they blocked a similar effort back in 2010. The issue is likely to dominate tomorrow’s previously scheduled hearing on postal issues before the Senate Homeland Security and Governmental Affairs Committee.
The proposed increase is likely to dominate