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Postal Service seeks higher stamp prices

First-class mail would rise 2 cents

WASHINGTON -- The Postal Service filed a request yesterday seeking a 2-cent increase in first-class mail. Postage rates last rose in 2002.

If the proposal is approved, there would be similar increases for other types of mail, and the higher rates would take effect early next year. The new pricing plan would increase the cost of regular mail from 37 cents to 39 cents.

The agency said it is seeking the increase, 5.4 percent across the board, only because of a requirement that it establish a $3.1 billion escrow fund.

The agency has sought congressional action to eliminate that requirement. If that happens, postal officials said, the request for an increase will be withdrawn.

Congress mandated the escrow requirement in 2003, when it passed a law reducing the amount of money the agency has to pay into its retirement system, which auditors said was being overfunded. Congress ordered the money to be put into the escrow fund.

Elimination of that fund has been included in bills that would make other changes in postal operations, but Congress has not acted on the proposals.

Yesterday's request to increase rates was filed with the independent Postal Rate Commission, which will hold hearings and collect information before ruling. That process can take as long as 10 months, meaning that if the rate increase is approved, it wouldn't take effect until early next year.

While electronic communications have meant less business for the post office, officials have said that were it not for the escrow requirement, the agency would not need to seek an increase for at least another year.

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