Panel Recommends 2-Cent Postal Rate Hike

Postal rates are a step closer to going up, but not as much as the Postal Service had wanted.

The Postal Service asked to raise the cost of mailing a basic letter by 3 cents, to 42 cents, and to establish a "Forever" stamp, largely because of higher fuel costs.

What it got in a recommendation by the Postal Regulatory Commission was only 2 cents more for letters and postcards, for a 41-cent first-class rate.

However, each additional ounce would cost 17 cents under the proposal, down 7 cents, a boon for those mailing documents, tax returns and wedding invitations. Currently, a two-ounce envelope costs 63 cents to mail; if this proposal is adopted, it would cost 58 cents.

The PRC took ten months to reach its conclusions, but they're only recommendations. The panel doesn't always agree with the Postal Service, which can accept the findings, or, by a unanimous vote of its Board of Governors, reject them or modify them, reports CBSNews.com's Lloyd de Vries.

The governors won't make a decision until at least March 8, a USPS spokesman told de Vries. It's expected new rates will go into effect in mid-May.

The Forever stamp, or stamps, would be sold at the current rate, whatever it is, and good for mailing a letter even if rates subsequently go up.

"If you buy it today, or whenever you buy it, it will always be good for mailing a single letter at the one-ounce rate," David E. Failor, executive director of Stamp Services of the USPS, said.

Other countries already have these "Forever" stamps, and the PRC has wanted one in the U.S., too, to cut down on the confusion when postal rates change, reports de Vries. The USPS went along with the request, in the hopes of expediting the panel's findings.

Postal officials and mailers have been expecting a rate increase in mid-May. In fact, most of this year's new postage stamps have been pushed off until after that date. Only stamps with a definite date tie-in (Ella Fitzgerald for Black History Month, Love and Kisses for Valentine's Day) and two others will be issued before then. (The Oklahoma centennial commission requested that the statehood stamp be issued early in the year, and the Henry Wadsworth Longfellow stamp will be issued at a stamp collecting show the USPS co-sponsors.)

No design or theme has been announced for the Forever stamp. While the Postal Service might lose money on customers who stock up on the issue and hold it past subsequent rate changes, it will make money on stamps purchased but not immediately used, as well as not having to issue as many rate-change stamps.

The U.S. already has something of a "forever" stamp: the Breast Cancer Research charity stamp, reports de Vries.

Issued in 1998 for a two-year period, part of the price of this stamp goes to charity. It's already raised more than $53 million, and outlasted all other charity stamps. Every time the stamp is due to expire, Sen. Diane Feinstein (D-Calif.) moves to extend it.

Right now, it costs 45 cents, or 6 cents more than the current first-class letter rate. When postal rates go up later this year, as is expected, the Breast Cancer Research stamp will go up another dime, to 55 cents.

If it was purchased at a cheaper price, customers are supposed to pay the difference when they use it to mail a letter. But there's really no way to know what was paid.

Other highlights from the proposal (.pdf) include:

• Express Mail, flat rate up from $14.40 to $16.25.
• Three-ounce barcoded bank statement, down from 73.9 cents to 58.4 cents
• Bulk-mailed weekly newsmagazine, up from 18.5 cents to 20.6 cents.
• Household magazine, up from 28.9 cents to 33.6 cents.
• Postcard, up from 24 cents to 26 cents.