SalemNews.com, Salem, MA

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September 26, 2013

USPS seeks an increase in cost of stamps

(Continued)

Media and marketing businesses that rely on postal services say a big increase in rates could hurt them and lower postal volume and revenues.

Rafe Morrissey, the Greeting Card Association’s vice president of postal affairs, said the rate increases were “no substitute for commonsense, structural reforms,” and the group hoped they would be rejected.

The post office expects to lose $6 billion this year and is seeking help from Congress to fix its finances.

Barnett said the increases, if approved, would generate $2 billion annually for his agency. The agency last raised postage rates on Jan. 27, including a penny increase in the cost of first-class mail to 46 cents.

The Postal Service unsuccessfully sought an emergency 5.6 percent rate increase in 2010, citing the recession. The commission acknowledged that the recession had hurt revenues but said the rate request was more of an attempt to address long-term structural problems.

Barnett said the post office would reconsider its rate request if Congress passes legislation to put the agency’s finances back on track. But prospects in Congress are unclear.

A bipartisan bill in the Senate would end Saturday mail delivery after one year and cease door-to-door delivery for new residential and business addresses. The agency says ending Saturday mail delivery would save $2 billion each year. But many lawmakers, along with postal worker unions, have resisted such changes, saying they would inconvenience customers.

Postal Service supports the proposed delivery changes. It also is seeking to reduce its $5.6 billion annual payment for future retiree health benefits. It missed two of those payments in 2012, one deferred from the previous year, and is expected to miss another at the end of this month, when its fiscal year ends.

The Senate bill would change the method by which the retiree health costs are calculated, as well as allow the agency to ship alcoholic beverages and compete with private shippers.

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