The Obama Administration proposed above-inflation increases in postage rates Monday, just a week after the Postal Service indicated it had backed off of just such a rate hike for fear of hurting the printing industry.
The President released a deficit-reduction plan that would "permit USPS to seek the modest one-time increase in postage rates it proposed a year ago."
A week earlier, Deputy Postmaster General Ron Stroman explained in an interview why the Postal Service had decided not to pursue such an "exigent" rate increase: "One of the things we have seen in ongoing discussions with the print industry is that the industry itself is functioning with very close profit margins. We have been very concerned that we not raise prices too high because you just drive people out of the business."
The USPS proposal a year ago, which was rejected by the Postal Regulatory Commission, had average rate hikes of 5.8% for the market-dominant classes of mail. But for Periodicals mailers the increases would have been in the 8% to 9% range.
The president's plan would also "give USPS the ability to better align the costs of postage with the costs of mail delivery while still operating within the current price cap." That may refer to postal executives' desire to impose the highest rate hikes on products on which USPS allegedly loses money, such as Standard flats (catalogs) and Periodicals mail.
The president's plan would also "reduce USPS operating costs by giving USPS authority, which it has said it will exercise, to reduce mail delivery from six days to five days." That's an about face on Saturday delivery: Just seven months earlier, Obama released a budget proposal that included the usual language about requiring six days of delivery and banning the closing of small post offices.
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