Affordable Mail Alliance: Proposed Stamp Price Increase is a "Tax" Hike

Just hours after the United States Postal Service (USPS) announced that it would seek a number of rate increases, opponents of the proposal created the Affordable Mail Alliance in an attempt to fight the plan.

According to their website, the newly formed organization is a coalition of charities, small businesses and customers who use the post office everyday--all of whom are "customers that will suffer if USPS successfully raises rates again." Their members include the Alliance of Independent Store Owners and Professionals, the Alliance of Nonprofit Mailers, the National Geographic Society and several magazines publishers such as Conde Nast, Hearst Magazines, Reader's Digest and ESPN the Magazine.

In a statement released today, the group's spokesman Tony Conway said, "This proposed rate increase amounts to another tax imposed on Americans at a time when the economy can least afford it." He added: "Consumers everywhere will pay more for the letters and packages they need to send; struggling businesses - large and small - will suffer and even more jobs will be lost."

Among the proposed rate hikes is a 2 cent increase on first-class stamps, which would bring the total cost up to 46 cents. The current 44-cent first-class rate took effect May 11, 2009, after the post office issued another set of increases.

But according to the USPS, such measures are needed to help rescue the institution from mounting fiscal losses and a severe decline in mail volume.

"Faced with plummeting mail volume traced to the recession and increased use of the Internet, the Postal Service is projecting a deficit of nearly $7 billion for the next fiscal year," a statement from the USPS read. "Despite eliminating millions work hours and reducing expenses by more than $1 billion every year since 2001, a budget gap remains."

Postmaster General John E. Potter called the proposed rates, "part of a fair and balanced approach to insuring mail service for all Americans well into the future," and according to the statement, the increases are expected to generate about $2.3 billion.

The Postal Service has also proposed eliminating Saturday mail delivery and closing several offices nationwide.

The Alliance argues, however, that such increases will in fact do little to aid the ailing institution and is an undue burden on people who depend on the post office.

"The Postal Service claims that a rate increase is essential to maintaining its solvency. However, USPS has done little to improve its business model," they said. "For example, the average USPS employee is paid substantially more than comparable private sector jobs. In 2009, USPS volume went down 13%, but labor costs only went down 1%. Because of work force issues, many USPS employees are under-used or sit idly, forcing consumers to subsidize them."

Conway, who is also the executive director of the Alliance of Nonprofit Mailers, added: "The first rule of business is if you're in the hole, stop digging. Increasing rates won't put the Postal Service back on track - it will just drive more customers away, making their situation even worse. USPS needs to stop avoiding the difficult decisions and stop taking out their problems on the customers they desperately need."

In order for the plan to be implemented, the request must be approved by the independent Postal Rate Commission, which has 90 days to respond. If approved, the increase would take effect January 2, 2011.