U.S.

Postal Rates Get A Step Closer To Rising

February 26, 2007 / 11:28 AM EST / CBS/AP

Postal rates could be a step closer to going up later today, when the Postal Regulatory Commission reports its findings.

The Postal Service has 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.

That 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 CBSNews.com's Lloyd de Vries. The USPS went along with the request, in the hopes of expediting the panel's findings.

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.

The governors won't make a decision until at least March 8, a USPS spokesman told CBSNews.com.

However, 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.

The broad-ranging rate proposal covers a multitude of types of mail, and, under the proposal submitted to the PRC, some rates — including that for additional ounces — would actually go down.

Letters, cards, bill payments and other first-class mail items have been declining in recent years as people turn to the Internet. At the same time, there has been an increase in advertising mail.

And Postmaster General John E. Potter has pointed out that "the Postal Service is not immune to the cost pressures affecting every household and business in America."

For example, each penny increase in the price of a gallon of gasoline costs the post office $8 million, and the Postal Service cannot simply add a fuel surcharge to its rates.

The rate request was filed last May, when gasoline prices and other transportation costs were soaring.

Proposed rate changes included:

While the first ounce of a letter would rise 3 cents to 42 cents, additional ounces would cost 20 cents instead of the current 24. That means a saving on heavier items such as wedding invitations. The cost to mail a 2-ounce letter would drop from 63 cents to 62 cents.
Express Mail, flat rate up from $14.40 to $16.25.
Two-ounce bar-coded bank statement, down from 54.5 cents to 48.6 cents. Many banks, however, are encourage customers to "go paperless" and receive statements via the Internet.
Bulk-mailed weekly newsmagazine, up from 17.9 cents to 20 cents.
Presorted catalog, up from 32.1 cents to 33.6 cents.
Postcard, up from 24 cents to 27 cents.

The cost of a first-class stamp went from 37 cents to 39 cents in January 2006, because Congress had required the USPS to help fund federal pensions. Before that, the price had been unchanged since 2002.