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USPS seeks increase in cost of stamps, to 49 cents

By Andrew Miga

Associated Press

LAST UPDATED: 10:27 a.m. HST, Sep 25, 2013

WASHINGTON >> It soon could cost 49 cents to mail a letter.

The postal Board of Governors said today it wants to raise the price of a first-class stamp by 3 cents, citing the agency's "precarious financial condition" and the uncertain prospects for postal overhaul legislation in Congress.

"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," board chairman Mickey Barnett wrote customers.

The rate proposal must be approved by the independent Postal Regulatory Commission. If the commission accepts it, the increase would become effective Jan. 26.

Under federal law the post office cannot raise its prices more than the rate of inflation unless it gets approval from the commission. In seeking the increase, Barnett cited "extraordinary and exceptional circumstances which have contributed to continued financial losses" by the agency.

As part of the rate increase request, the cost for each additional ounce of first-class mail would increase a penny to 21 cents while the price of mailing a postcard would rise by a cent, to 34 cents. The cost to mail a letter to an international destination would jump 5 cents to $1.15.

Many consumers won't feel the increase immediately. Forever stamps bought before an increase still would cover first-class postage. The price of new forever stamps would be at the higher rate, if approved.

The Postal Service also said it would request price increases totaling 5.9 percent for bulk mail, periodicals and package service rates, according to a filing to be made with the commission Thursday.

Media and marketing businesses that rely on postal services say a big increase in rates could hurt them and lower postal volume and revenues.

Rafe Morrissey, the Greeting Card Association's vice president of postal affairs, said the rate increases were "no substitute for common-sense, structural reforms" and the group hoped they would be rejected.

The post office expects to lose $6 billion this year and is seeking help from Congress to fix its finances.

Barnett said the increases, if approved, would generate $2 billion annually for his agency. The agency last raised postage rates on Jan. 27, including a penny increase in the cost of first-class mail to 46 cents.

The Postal Service unsuccessfully sought an emergency 5.6 percent rate increase in 2010, citing the recession. The commission acknowledged that the recession had hurt revenues, but said the rate request was more of an attempt to address long-term structural problems.

Barnett said the post office would reconsider its rate request if Congress passes legislation to put the agency's finances back on track. But prospects in Congress are unclear.

A bipartisan bill in the Senate would end Saturday mail delivery after one year and cease door-to-door delivery for new residential and business addresses. The agency says ending Saturday mail delivery would save $2 billion each year. But many lawmakers, along with postal worker unions, have resisted such changes, saying they would inconvenience customers.

Postal Service supports the proposed delivery changes. It also is seeking to reduce its $5.6 billion annual payment for future retiree health benefits. It missed two of those payments in 2012, one deferred from the previous year, and is expected to miss another at the end of this month, when its fiscal year ends.

The Senate bill would change the method by which the retiree health costs are calculated, as well as allow the agency to ship alcoholic beverages and compete with private shippers.

Postmaster General Patrick Donahoe was to appear before a Senate panel on Thursday to press lawmakers for swift action.

The House Oversight and Government Reform Committee approved a bill this year that would allow the Postal Service to gradually shift from door-to-door delivery to cluster box and curbside delivery. No Democrats voted for the measure.

The bill, introduced by the chairman, Rep. Darrell Issa, R-Calif., also would end Saturday delivery and change how pension and retiree health costs are calculated.

Issa said the proposed rate increases were merely a short-term solution and that the agency's "costly, inefficient delivery" system needs to be fixed. Such increases could hurt businesses that rely on the post office, he said.

The Postal Service is an independent agency that receives no tax dollars for its day-to-day operations but is subject to congressional control.

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loquaciousone wrote:
Why not just make it 50¢ already. Now days you can't even buy a candy bar for 50¢.
on September 25,2013 | 08:50AM
allie wrote:
I will now be able to judge the seriousness of my suitors: If they send me a love letter by regular mail, they are serious. An email love note for free will be considered less serious!
on September 25,2013 | 10:19AM
1local wrote:
Place all government employees and retirees on Obama Care - also make it a requirement for all lawmakers to have Obama care. mike.
on September 25,2013 | 12:35PM
DiverDave wrote:
loquaciousone, They could raise it to a buck and this poorly run, over unioned, underfunded pension program, mess called the U.S.P.S. would still be broke! Because of the union they will not do what is necessary to bring costs of doing business under control.
on September 25,2013 | 10:22AM
Bdpapa wrote:
Yup just do 50 cents, no big deal.
on September 25,2013 | 10:26AM
Bully wrote:
Save yourself money and pay your bills on line.
on September 25,2013 | 09:06AM
aomohoa wrote:
Most people do. That is part of the reason the post office is losing o much money.
on September 25,2013 | 09:30AM
false wrote:
Unless one has to pay those outrageous "convenience" fees that utility companies and government agencies charge for the privilege of paying online with a credit card. Then it's much cheaper to use USPS.
on September 25,2013 | 10:08AM
paniolo wrote:
Agree. I tried to pay my property tax online several years ago, but their fee was like what you said, "outrageous."
on September 25,2013 | 11:40AM
paniolo wrote:
Stock up on the 46-cents Forever stamps. Any and all future increases will be good with the stamps you buy before the increase.
on September 25,2013 | 09:14AM
loquaciousone wrote:
Unless USPS goes broke and then your forever stamps are forever useless.
on September 25,2013 | 09:32AM
aomohoa wrote:
Never happen. The taxes payers will continue to bail them out.
on September 25,2013 | 09:54AM
loquaciousone wrote:
Never say never. Those were George Armstrong Custer's last words.
on September 25,2013 | 10:12AM
HonoluluHawaii wrote:
We have lost battles, never a war. We were tied in Vietnam.
on September 25,2013 | 10:54AM
loquaciousone wrote:
Uh we left Vietnam with our tails between our legs. That's the sign of a loser and communism still flourishes in Vietnam.
on September 25,2013 | 11:58AM
MariaBetty wrote:
FedEx and UPS is doing somethings right delivered at your door 7 days a week.
on September 25,2013 | 09:25AM
aomohoa wrote:
Exactly. And you can really track a package with them.
on September 25,2013 | 09:55AM
paniolo wrote:
But how much more than USPS rates are you paying for it? They don't deliver letters, magazines or newspapers. If they did, you would pay way more than USPS. Some online retailers on the mainland charge 3 times USPS rates if they ship it, because they use FedEx or UPS. FedEx and UPS rates are only cheap on the mainland because most of it is delivered by trucks from state to state. When they ship to Hawaii, it has to come by air. That's when you add in fuel costs for their airplanes. Try and send a letter at FedEx or UPS. They'll put it in their large envelopes and see if it's the same price as USPS.
on September 25,2013 | 11:20AM
steveoctober wrote:
actually it's cheaper for medium to large businesses to ship by UPS or FedEx because they get a discounted rate that's massive. For example, my company it cost less than 5 dollars to ship a legal size envelope packet by overnight anywhere in the country. Problem with USPS is they cannot provide the same kind of massive discount rates so will never be competitive for package or overnight delivery services.
on September 25,2013 | 12:23PM
paniolo wrote:
But it won't work for us individual customers.
on September 25,2013 | 01:06PM
nitpikker wrote:
true! and have you ever seen junk mail come via fedex or ups??
on September 25,2013 | 01:18PM
rytsuru wrote:
Just get to the bottom of the problem of their annual losses: a required $5 BILLION pay in to their pension plan. It has long been known that the postal service has a great pension plan and leans towards hiring veterans, which is a good thing. BUT no money is no money. Congress may see it as unpopular but they should legislate to bring down the mandated pension pay-ins
on September 25,2013 | 09:26AM
aomohoa wrote:
It won't help. They are so inefficient, they will always be losing. That is why Fedex and UPS are so much better. They are private enterprise and know how to run a business.
on September 25,2013 | 09:27AM
HawaiiNoKaOi wrote:
Enough already on this nonsense................postal workers should be working for FEDEX & UPS. Stop this money loser!
on September 25,2013 | 09:40AM
primowarrior wrote:
Congress made the Postal Service's financial situation worse several years ago when it required it to finance something like 75 years worth of it's employee retirement benefits within 10 years, then when the USPS asked Congress to approve measures to help it to cut costs, it refused. If the USPS is in financial trouble, Congress can take part of the blame.
on September 25,2013 | 09:29AM
cojef wrote:
Stop the franking privileges each congressman has as well as all the free mail sent by the Federal Government. Cut off the low rates paid my mail-order houses and advertiser and make them pay 1st class rates. Then compare them against Fed-Ex or UPS operations, it will level the playing field.
on September 25,2013 | 10:05AM
kahuku01 wrote:
cofef: Untrue, Federal government or members of congress must pay for mailing. Nothing is free except if sent by the USPS for official use only.
on September 25,2013 | 01:43PM
kahuku01 wrote:
There's an exception for free matter for the blind. No postage is required.
on September 25,2013 | 02:19PM
mcc wrote:
3 days a week is enough for all the advertisements. Charge bulk mail more and cut delivery days. Most people pay bills online, use e mail and the telephone.
on September 25,2013 | 09:35AM
Bdpapa wrote:
3 days is good!
on September 25,2013 | 10:27AM
nodaddynotthebelt wrote:
You can thank the federal government for this. They will not allow the post office to cut Saturday service. The government does not pay for the cost of running the service but they have the ability to decide what the post office can and cannot do to remain viable. They should cut the Saturday service entirely to cut unnecessary costs. Typical government bureaucracy for you.
on September 25,2013 | 10:24AM
nodaddynotthebelt wrote:
Oh, you can also thank the union.
on September 25,2013 | 10:29AM
HonoluluHawaii wrote:
Just raise it to 99 cents and be done with lol.
on September 25,2013 | 10:51AM
iwanaknow wrote:
Cut out middle management for a start.
on September 25,2013 | 10:54AM
GooglyMoogly wrote:
I like the idea of doing away with Saturday delivery. Superfluous in this day and age, it would lead to some serious savings for them. I also agree that they should move to $0.50 instead of holding at $0.49 and then going for that penny increase next year like we know they will.
on September 25,2013 | 11:13AM
gari wrote:
start fixing the cost side .. start with stamp collection :) saturdays ...
on September 25,2013 | 11:18AM
nitpikker wrote:
raise the rates of junk mail. rates must be too low considering all the junk mail iget. that includes political junk mail too!
on September 25,2013 | 01:16PM
kahuku01 wrote:
Can't understand why the Postal Service would continue to come out with commercials on TV when they're already in the red. It's very costly for a 15 second commercial, especially when they're already in the red. The nation knows the function and locations of their post office and yet they continue to spend millions on commercials. Cut out the commercials if they're already in the hole. The responsible person should be held accountable for non-impact commercials and for sponsoring Armstrong for all the bicycle races. Poor decisions by someone who spent millions for unnecessary sponsorship and TV commercials that keeps USPS going deeper in the red.
on September 25,2013 | 01:58PM
nodaddynotthebelt wrote:
"But many lawmakers, along with postal worker unions, have resisted such changes, saying they would inconvenience customers." Unions must think we are stupid to believe that this is about us being inconvenienced by it. I guess having higher postage rates is better for us customers. I know for myself that not having Saturday delivery will not inconvenience me. I am sure that most customers fall in my category. I would rather not see higher postage rates and lose Saturday deliveries than have higher postage rates and keep Saturday deliveries. Unions are just full of it.
on September 29,2013 | 12:43AM
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