Mailers Say Another Postage Rise Likely; USPS Board of Governors to Meet Next Week; Rate Boost Could Come by Summer

Mailers Say Another Postage Rise Likely; USPS Board of Governors to Meet Next Week; Rate Boost Could Come by Summer
From WASHINGTON POST, May 2nd, 2001
Ben White Washington Post Staff Writer Members of the U.S. Postal Service Board of Governors met over the phone yesterday to discuss what might be done to improve the service’s bleak financial picture. The meeting was closed to the public and postal officials declined to comment on it, but major mailers and other postal interests said they feared the board was preparing to vote on a rate increase that could take effect as early as this summer.

The governors plan to meet on Monday and Tuesday, when they may vote on a possible rate increase.

However, sources watching the situation, several of whom are likely to be directly affected by any postage increase, said it is unlikely that the board would vote to raise the price of a first-class stamp for fear of a serious public backlash. More likely, they said, would be small increases in most other categories of postage or larger increases targeted at only one or two types of mail, such as post cards, first-class mail beyond the first ounce or periodicals.

Traditionally, rate increases are proposed by the independent Postal Rate Commission after lengthy deliberations in which groups that would be affected by any rate changes are invited to testify.

Made up of nine political appointees and two nonvoting members — the postmaster general and the deputy postmaster general — the board of governors typically approves the proposed rate changes.

The nine appointed governors would have to vote unanimously next week for the board to be able to impose new rates. Such votes are rare but not unprecedented.

Late last year, the governors voted to accept the commission’s most recent proposal “under protest,” complaining that the increases — which included a one-cent rise in the price of a first-class stamp, to 34 cents — were not enough to overcome the large losses anticipated as a result of higher wage and fuel costs, increased competition from the Internet and private delivery companies, and other factors.

The Postal Service had asked for a 6 percent across-the-board increase.

The Rate Commission, instead, submitted an overall 4.6 percent increase, which ultimately went into effect in January. At the time, the commission said the increases it proposed were sufficient to produce the required revenue and that larger boosts could drive away customers.

An independent federal agency, the Postal Service is expected to break even every year. After several years of operating in the black, the agency reported a loss of $199 million in 2000. That number is expected to rise this year, to $3 billion or more.

WASHINGTON POST, 02nd May 2001