- The Washington Times - Friday, April 8, 2005

ASSOCIATED PRESS

The post office wants an extra 2-cents-worth for its stamps.

However, at the same time yesterday that the agency proposed the stamp price increase, it invited Congress to eliminate the need for it.

The proposal sent to the independent Postal Rate Commission calls for increases to take effect early next year.

They would boost first class stamps from 37 cents to 39 cents, increase postcards from 23 cents to 24 cents and raise other postal prices similarly.

In announcing the rate proposal, the U.S. Postal Service said it is needed only because a 2003 law requires the agency to place $3.1 billion annually in an escrow account.

Postal officials have been urging Congress to drop that requirement and said they will withdraw the rate request if Congress does so.

Postage rates last went up June 30, 2002, rising from 34 cents to 37 cents for a typical first class letter.

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. Instead 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.

?To continue to require the Postal Service to hold these funds in an escrow or other account would simply continue the overpayment and unfairly burden postal ratepayers,? the post office’s governing board said in a letter to Sen. Susan Collins, Maine Republican, chairman of the Committee on Homeland Security and Governmental Affairs.

Now that the post office has formally asked for a 5.4 percent increase, the Postal Rate Commission will hold hearings and collect information before ruling on the proposal. That process can take as long as 10 months. So if the rate increase is approved, it wouldn’t take effect until early next year.

While electronic communications such as the Internet have taken some business from the post office, there has been an increase in advertising mail. 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.

Overall the post office had $68.9 billion in income last year and $65.8 billion in expenses. The agency handled more than 206 billion items last year, a number it expects to grow slightly. While first class mail will continue to decline, the agency expects advertising mail to grow and, for the first time, to exceed the number of first class items this year.

Rate changes in the proposal include:

• First class: Increase 2 cents to 39 cents for the first ounce, increase 1 cent to 24 cents for each additional ounce.

• Postcards: Increase 1 cent to 24 cents.

• Express mail: Increase lowest charge from $10.70 to $11.30.

• Priority mail: Increase minimum charge from $3.85 to $4.05.

• Parcel post: Raise lowest rate from $2.81 to $2.96.

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