USPS, deep within the red, has price boost declined

A postage increase of 5.6 percent was proposed by the U.S. Postal Service however denied by the Postal Regulatory Commission Thursday. Blaming a drop in mail traffic during the economic recession, the postal service wanted to raise the price of a first class stamp from 44 to 46 cents among other raises. In rejecting the request, the commission blamed internal inefficiencies, not a bad economy, for the situation the postal service finds itself in. Source for this article – As Postal Service goes broke, commission denies rate increase by Personal Money Store.

Aid desired by postal fee raises

The Postal Service, which projects a deficit of $238 billion via 2020, is about to go broke. In addition to the first class stamp price increase, Bloomberg reports the Postal Service requested an increase of 7 % on packages used to ship books, video and merchandise. It also hopes to get a rise on parcels under a pound. It is hoping that it will go up 23 %. The Postal Service has not increased its rates in about two years. For the first time since 1863, the Postal Service has requested to end Saturday postal mail delivery from Congress.

United States Mail is in dire straits

There will be no federal expending given to the Postal Service even with the spending measure that passed the Senate Wed and also the House Thurs. The bill was passed to temporarily fund federal programs until the beginning of December. Based on the Washington Post, the USPS owes a $5.5 billion payment that is required to pre-fund retiree health benefits by law. Democrats tried to postpone this payment however Republicans would not have it. The Postal Service has managed to cut $10 billion in spending since 2008. It plans to let those retiring leave without hiring anybody new. In a statement the Office of Management and Budget said mail service would not be compromised as the USPS and Congress comes up with a plan to ensure that the agency is viable in the future.

Why the postal rate is not going up

The USPS lost a lot of money in 2009. About $3.8 billion was lost. Based on the Associated Press, the proposal wasn’t declined as much as the presentation of the proposal was, claims Ruth Goldway. Goldway is the chairman of the commission. At a news conference she said the need for a rate increase was not because of the recession, as the suggestion said, however was as a result of long-term structural difficulties that have to be addressed. The rejection came from a lot of consumer groups, small businesses, charities, utilities, national retailers, banks and also the Affordable Postal mail Alliance.

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