Postal Updates

By Bill McAllister, Washington Correspondent

Rate increase delay hits USPS hard

May 18, 2015 08:39 AM

"The Postal Service gave up about $100 million in the delay in postal rate increases due to filing errors."

That troubling statement comes from an official at the Postal Regulatory Commission.

It underscores the difficulties U.S. Postal Service had this spring securing approval of its annual rate increases. These are the increases that must be allowed by the commission provided that they do not rise above the rate of inflation.

The USPS had seemingly crafted a way to get the most out of the allowable increase without boosting the 49¢ price of a first-class letter.

Postcards would increase and so would the second ounce of letter under a series of first-class changes that quickly won the endorsement of the commission.

But there were a mix of other rate increases for publications and packages that the commission refused to endorse.

It refused not once but twice, declaring that the Postal Service had failed to show its requested higher rates complied with the law.

The agency's filing was a mess, the PRC said, warning the USPS it must get its act together.

USPS spokesman David Partenheimer did not comment directly on the $100 million estimate. "It's unfortunate that we were not able to implement our proposed new pricing in April as originally planned," he said.

"With regards to lost revenue, most of it was due to our decision to delay implementation of the approved First-Class Mail and Shipping Services prices so as not to inconvenience our customers with two sets of price changes while we waited for the PRC to rule on our revised pricing for the other products."

The higher prices are to become effective May 31.

Ensuring the Postal Service had an automatic rate increase tied to inflation was one way that Congress wanted to make certain it stayed out of the business of setting stamp prices.

Lawmakers believed that they had done that by establishing USPS as an independent organization within the executive branch of the federal government in 1971. Until the USPS began operations that year, it was dependent on Congress for annual funding and setting stamp prices.

That was something the late Melvin R. Laird, a nine-term Republican congressman from Wisconsin and later Defense Department secretary, said caused the greatest grief from his mother. Of all the votes he cast during his 18 years on Capitol Hill, nothing so troubled his mother as a vote he cast for a more expensive first-class stamp, he said.

That interview with Laird helped explain why congressional Republicans were among the strongest proponents of an independent postal service. They didn't want to continue to be blamed for rising stamp prices.

Laird's observations also may explain why many Congressional Republicans are not anxious to rush to the aid of today's financially troubled Postal Service. They openly fear that voters will also hold them liable for rising stamp prices and the slower delivery of mail.

And they don't want to have to "bail out" another federal agency that can't manage its own finances. Slower deliveries have already begun because mail processing plants continue to be closed.

Higher stamp prices seem assured as well, and they seem likely to make the challenges facing new Postmaster General Megan Brennan even more daunting.

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