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Postal Service Says It Needs Even More |
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34-cents
for a stamp not enough, Postal Governors say
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Join the Discussion
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"An efficient
government is a small government, not the bloated slug we have today."
WICCANWOLF
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On January 7, 2001 the cost
of a first-class U.S. postage stamp increases one cent to 34-cents. Rates
for most other common postal services will also go up for an overall increase in
postal rates of 4.6 percent. But, the new rates are not
enough, according to the Board of Governors of the
Postal Service.
U.S.
Postage rates are set by the Postal Rate Commission according to the
recommendations of the Postal Board of
Governors. [See: About the U.S. Postal
Service]This
latest rate increase as proposed by the Rate Commission was allowed "under
protest" by the Board of Governors, who contend that the new rates will not provide the revenue
needed to
fund Postal Service operations and necessary improvements in its infrastructure.
Under
the Postal Reorganization Act of 1970, the Postal Service is mandated to break
even financially and should not make a profit. Each
class of mail is also expected to cover its share of the costs, a requirement
that causes the percentage rate adjustments to vary in different classes of
mail, according the costs associated with the processing and delivery
characteristics of each class.
Since the Postal Service receives no tax dollars
for operations and relies solely on the sale of postal products and services to
cover operating costs, price adjustments are necessary to respond to changes in
the cost of doing business.
According to Postal Board of Governors Chairman Einar V. Dyhrkopp,
"Statutory reform of the nation's postal system is necessary to provide the
foundation for a financially secure Postal Service, one that is capable of
meeting the needs of the American people today and far into the future,"
which roughly translated means that Americans can look for yet another postage
hike in the not-too-distant future.
Opponents to further postage rate
increases, many of whom hold seats in the U.S. Congress, argue that increases
are unnecessary. In fiscal 1999, the
U.S. Postal Service reported a profit of $363 million. Over the last five years,
Postal Service aggregate profits have amounted to over $1 billion, according to
the General Accounting Office.
According to the Postal Rate Commission, the
2001 increase of 1-cent for first-class postage alone will generate an
additional $1 billion in revenue.
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For
a semi-governmental agency, the Postal Service gets a lot of private sector
advantages. Read more about the organization and operations of the Postal
Service at: About the U.S. Postal Service.
