Rate increase rejected for Postal Service as cuts mount

The United States postal service submitted a request to raise postage by 5.6 %. Thurs, the Postal Regulatory Commission denied that request. Blaming a drop in mail traffic during the recession, the USPS wanted to raise the price of a first class stamp from 44 to 46 cents among other raises. The commission rejected that notion and said the postal service’s problems are a result of its business practices.

Help wanted by postal fee increases

The Postal Service, which projects a deficit of $238 billion through 2020, is about to go broke. In addition to the first class stamp price increase, Bloomberg reports the Postal Service requested a rise of 7 % on packages used to ship books, video and merchandise. It also hopes to get a rise on parcels under a lb. It is hoping that it will go up 23 percent. There has not been a rise within the USPS for a while. It has been two years. To cut costs, the Postal Service also wants approval from Congress to end Saturday mail delivery for the first time since 1863.

U.S. Mail altering

The Postal Service was left out of a temporary spending measure to finance federal programs through early Dec that passed the Senate on Wed and cleared the House Thursday. The Washington Post reports that Republican opposition also kept Congress from letting the Postal Service postpone a $5.5 billion payment required by law to pre-fund retiree health benefits. The Postal Service has managed to cut $10 billion in spending since 2008. It plans to let those retiring leave without hiring everyone new. In a statement the Office of Management and Spending budget said postal mail service would not be compromised as the USPS and Congress comes up with a plan to ensure the agency is viable within the future.

Postal fee will not be increasing

In 2009 alone, $3.8 billion was lost by the Postal Service. The presentation of the suggestion rather than the details was the reason why Ruth Goldway, chairman of the commission, thinks it was refused, reports the Associated Press. The rate boost was something she said at a news conference that had to change because of structural problems that need to be addressed rather than the recession hurting it. The commission’s rejection was lauded by the Affordable Mail Alliance, a coalition including consumer groups, small business, charities, utilities, national retailers and banks.

Citations

Bloomberg

bloomberg.com/news/2010-09-30/u-s-postal-service-denied-another-rate-increase-by-regulatory-commission.html

Washington Post

washingtonpost.com/wp-dyn/content/article/2010/09/29/AR2010092906645.html?wpisrc=nl_pmheadline

Associated Press

google.com/hostednews/ap/article/ALeqM5iqbZ05-vr6nAfjJzyIXr_d1k26DwD9IIDJ4O0?docId=D9IIDJ4O0