Saturday, April 09, 2005

Stamp Out the Stamp Increase

Chicago SunTimes reported The post office wants an extra 2-cents-worth for its stamps. As the agency proposed the stamp price increase Friday, however, it also invited Congress to eliminate the need for it.

The proposal sent to the independent Postal Rate Commission calls for increases to take effect early next year. They would boost first-class stamps from 37 cents to 39 cents, increase postcards from 23 cents to 24 cents and raise other postal prices similarly.

In announcing the rate proposal, the Postal Service said it is needed because a 2003 law requires the agency to place $3.1 billion annually in an escrow account. Postal officials have been urging Congress to drop that requirement and said they will withdraw the rate request if Congress does so.

I believe we should urge Congress to make a change, but not the change requested by the Postal Rate Commission. I believe we should urge Congress to pass a law requiring the rate commission to increase the cost of stamps to 40 cents and to then place in escrow the additional money, and inform them that they must live with the revenue from the 40 cent stamps for at least 5 years, and whenever they require additioinal funds after that, the increases must be in 5 cent increments. The rate for additional ounces should be set at 35 cents, and it also should be required to stay there until they can justify raising it to 40 cents. Post cards should be 25 cents until the Postal Rate Commission can justify raising them to 30 cents. That way we only have to have a supply of 5 cent stamps, rather than one, two, and three cent stamps, to upgrade old stamps.

An alternative proposal would be to require that all first class stamps just say First Class, and whether they cost 37 cents or 39 cents they would always be good for First Class Postage (stamps for Post Cards would be labeled as such, and stamps for additional ounces would be so labeled, and they would always be good for that purpose). That way if we wanted to stock up on 37 cent stamps before the rate went up we could, and they would still be good for First Class postage, even after the rate went up.
Congress mandated the requirement in 2003 when it passed a law [Public Law 108-18] reducing the amount of money the agency has to pay into its retirement system, which was overfunded. Congress ordered the money to be put into the escrow fund. AP

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