USPS raises first class rates, expected to do so again

Washington, DC- Since January 8, the price of stamps has risen 5.4% with another increase on the way for 2007. It now costs ratepayers citizen 39 cents to send a first class letter. This increase, however, is a pittance compared to what the USPS is expected to request for next year. Ironically, while in the midst of two consecutive rate cases and unable to control or even identify much of its costs, the USPS is asking Congress for so-called “pricing flexibility,” a streamlined rate-setting process which they claim will allow them to more accurately respond to the market. However, since the Postal Rate Commission has not prohibited a rate increase since the 1970 Postal Reorganization Act, it appears the agency already enjoys a fair amount of flexibility.

“The USPS needs to find other ways of balancing its books – say, cutting costs. Raising rates
should never be the first option for covering their costs,”
said Grover Norquist (President of
Americans for Tax Reform). “USPS has always been suspected of using its monopoly on first
class mail to cross-subsidize its package delivery service. By cross-subsidizing its package
service, the USPS can offer artificially low prices for their delivery services enjoy an unfair
advantage in competitive markets.”

“Before undertaking yet another moneygrab, the USPS might consider cutting the size of its
workforce to be effective in the 21st century,”
continued Norquist. “If you look at the size of their workforce, it is bigger than any two branches of the armed forces. Now that’s a lot of

The USPS is widely expected to begin a case before the Postal Rate Commission to impose yet another, larger rate increase in 2007.