No USPS Rate Increase in 2011

Proposed First Class fee hike denied by postal commission.

by staff writer
- Oct 01, 2010

A request by U.S. Postal Service to raise mail service prices next year has been shot down by the Postal Regulatory Commission.

The proposed 2-cent fee hike would have gone above the rate of inflation, which sets the legal price cap. While the commission can approve rate increases higher than the annual cap under extraordinary circumstances, it unanimously ruled that the USPS' internal structural problems did not qualify.

In March, the financially struggling USPS had asked for permission to raise the price of a First Class stamp to 46 cents, and a postcard to 30 cents—an average increase of 5.6 percent. The higher rates would have generated about $2.3 billion in revenue within 9 months, partially offsetting an expected $7 billion budget deficit for 2011, according to the postal service.

The proposed rate increases were part a 10-year restructuring plan, which also figures on a move to a five-day delivery schedule. That element of the plan was not addressed by the commision, but Senate Democrats have introduced a bill that would give the postal service flexibility to make changes to its business model without congressional approval.

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