The media informed the public about the U.S. Postal Service raising the price of a first-class stamp to 49 cents in January 2014. What many of you don’t know is that the hike is only temporary.
The Postal Regulatory Commission approved the request by the Postal Service to raise the price to offset losses suffered as a result of the Great Recession of 2008-2009.
In a press release dated Dec. 24, 2013, the Commission found that the Postal Service experienced financial harm and is legally entitled to implement price increases in excess of the CPI cap for less than two years. The Commission also denied the Postal Service’s request to make the increases permanent.
Each quarter the Postal Service must report the revenues generated by the rate increase. And once the Postal Service has recouped the $2.8 billion lost during the recession it must phase out the rate hike.
Some of you might think that the losses were a direct result of the Internet. In reality, these losses were due to businesses going out of business and people being out of work. Mail isn’t generated when people are not working.
Postmaster General Donahoe recently reported that the Postal Service saw a $600 million profit in fiscal 2013, but a net loss of $5 billion due to the 2006 congressional mandate to massively pre-fund future retiree health benefits. This congressional mandate went into effect prior to the Great Recession when the Postal Service was setting record profits. But now the mandate accounts for 100 percent of the Postal Service’s debt and at least 80 percent going back to its inception.
All the stakeholders involved with the Postal Service want to see a solution to make the agency survive. Some ignore the massive pre-funding mandate and propose eliminating more service to postal customers. Others want to expand products and services that the Postal Service can provide to its customers to capitalize on same-day delivery and Sunday parcel delivery.
Whatever the outcome, I believe it is our best interest to preserve one of the greatest agencies in our country. We need to expand the services offered by the Postal Service, not cut more. Perhaps you know of an outstanding employee. And perhaps you know how valuable of a service the Postal Service is.
Lastly, the Postal Service does not collect any taxpayer money to fund its services. It is funded through the revenue it generates.