Panel rejects 2-cent increase in postage stamp cost

By Natasha T. Metzler
Associated Press / October 1, 2010

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WASHINGTON — The independent panel overseeing the US Postal Service rejected yesterday the agency’s request to increase the cost of mailing a letter by 2 cents, keeping first-class stamps at 44 cents.

Ruth Goldway, chairman of the Postal Regulatory Commission, suggested at a news conference that the problem with the proposal was more in the packaging than the plea.

In July, the Postal Service proposed raising first-class postage to 46 cents as part of a strategy for dealing with a worsening money shortfall. The request required the commission’s approval, because the margin of increase was higher than the rate of inflation. But the five-member panel unanimously voted no.

In light of the decision, the Postal Service has a number of options, including a legal appeal, filing a new special rate-increase request to the commission, or requesting a smaller rate increase that would be automatically approved for rising within the rate of inflation.

“We will need to take a much closer look at the ruling from the PRC in order to make an informed decision about what options we have and what may be the best course of action for our customers, our employees, our stakeholders, and the American public,’’ Postmaster General John Potter said in a statement.

The Postal Service lost $3.8 billion last year, and agency officials were also seeking other rate increases, including higher fees for periodicals, post cards, and parcels.

Goldway said the requested rate adjustment was not due to recent recession, as indicated by Postal Service officials, but rather was an attempt to address long-term structural problems.

The commission’s decision was applauded by the Affordable Mail Alliance, a coalition of postal customers.