Postal rate increase on the way : Lone Star Times

Postal rate increase on the way

by The Panda Man · 11/15/2005 11:22 am

Every few years a rate hike in the price of stamps seems to come along, and it appears we will have another one for the new year. First class mail will go up to $.39 per stamp on January 8th, 2006. The reason for the increase is rather interesting as well.

The increase fulfills a requirement, passed by Congress in 2003, that the Postal Service establish a $3.1 billion escrow account. Congress is to determine later how to spend that money. The Postal Service said without the mandate it would not have had to raise rates next year.

What is all this business about an escrow account? A 2004 article in Government Executive sheds some light on what is going on.

The first involves an escrow account created when the Postal Service discovered several years ago that it was overfunding its pension obligations and could reduce payments by almost $3 billion annually. The Postal Service was allowed to use the first three years’ savings to pay expenses and reduce debt. After that, the money was to go into escrow until Congress approved a plan for the funds.

How about using the money to build some bridges?

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Comments

10 Responses to “Postal rate increase on the way”

jimb on November 15th, 2005 at 11:33 am

How about using that money to lower the Postal Service’s rates? A rare circumstance that a government agency has extra money and Congress takes the opportunity to divert it to whatever instead of giving it back to who it rightly belongs to.

Disgusting.
Tim on November 15th, 2005 at 1:03 pm

jimb,

So you’re in favor of using the money gained by raising postal rates…to lower postal rates? There’s a certain circuity to that logic, to be sure…
Matt Bramanti on November 15th, 2005 at 1:06 pm

Tim, read the second blockquote section. Why not use the savings from the excess pension funding to reduce rates?
Geni on November 15th, 2005 at 2:19 pm

Why not stop letting the mail carriers drive from house to house, business to business, spending ga$ money and keep the rate at .37?
ddw2202 on November 15th, 2005 at 2:29 pm

just boycott the PO…use online banking and bill pay…which should be free, depending on your bankng institutions. As far as sending snail mail…I dont send to many cards anymore…thus my need for their service has decressed, a xouple of rate hikes ago.
jimb on November 15th, 2005 at 3:20 pm

#2 - I may not have expressed myself clearly.

According to the article, the reason to raise the rates in the first place was to maintain the ‘escrow’ (read:slush fund) that Congress may well be able to waste at this point now that it isn’t strictly slated for postal service debt reduction.

So my answer to this would be to NOT raise the rates, pay off debt with whatever is left in the slush fund/escrow, and let the American taxpayer continue to pay less to send a letter.
beach_bum on November 15th, 2005 at 6:07 pm

#5

Thats exactly why the rates have to go up. It costs the p/o the same amount of money to run the routes every day regardless of the number of letters they deliver. Therefore, if you only send half the letters or none of the letters you sent before then their revenues have been reduced.

Regards,
Beach_Bum
gregg on November 15th, 2005 at 6:43 pm

Its time to abolish the post office. With e-mail,fax,internet,UPS,FedEx,DHL why do we need it?

It has just turned into a jobs program for overweight black women who are in no hurry to complete any type of transaction.
jimb on November 15th, 2005 at 7:19 pm

Shoulda heard the interview on KSEV this evening. If she is correct, letter carriers are well paid, especially if the numbers she gave are correct ($45K base and up to $75K with lots of overtime)
gregg on November 15th, 2005 at 7:38 pm

Working for the post office is a highly coveted job in the minority community.Good pay and generous retirement benefits. Its one notch below the settlement check.