by Tom Mitsoff
If you have any three-cent postage stamps lying around, you might want
to keep them handy.
Last Sept. 11, the U.S. Postal Service announced it would be increasing
postal rates again in 2002, on the heels of the one-cent increase in
2001. That announcement came just minutes before something else that
happened that day, and understandably got lost in the shuffle.
Now comes the news that the postal service is negotiating with its major
mailers to try to accelerate the proposed 8.7 percent increase, which
was to have taken effect late this year, to a June 30, 2002 start date.
The 8.7 percent includes plans to raise the cost of a first-class stamp
from 34 cents to 37 cents, and it means that John and Jane Q. Public
will be facing a 12 percent increase in postage costs in a little more
than a yearís time.
Maybe youíve thought to yourself that postal rate hikes seem more and
more frequent and perhaps even excessive. Itís not your imagination.
In 1962, a first-class stamp cost four cents. If the cost of a stamp had
reflected trends in the Consumer Price Index -- one of the major
measures of inflation and used by the government and some in the private
business sector to calculate cost-of-living increases -- a first-class
stamp would have cost 24 cents in 2001. But as we all know, that stamp
cost us 34 cents as 2001 closed, or about 42 percent more than the
inflation rate would have indicated. So what gives the postal service
the right to set rates the way it does? After all, Social Security and
other government benefits are liked directly to the Consumer Price
Index. Why not the postal service?
Postal rates are set not by the President nor the Congress, but by the
postal serviceís board of governors. For a rate change to go into
effect, the board of governors needs the approval of the Postal Rate
Commission, which is independent of the postal service and was created
to perform a review-and-check function of postal service proposals. But
a rate commission rejection does not kill a rate increase, merely delays
it. So basically, the postal service is an entity upon itself in setting
its rates, and there is a reason for that.
Unlike most governmental programs, the U.S. Postal Service is expected
to exist on its own self-generated revenue. You never hear Congress
arguing about raising taxes for the postal service because we, the
users, are paying the costs. Even though it is a government agency with
Congressional blessing and oversight, the postal service faces the same
day-to-day challenges as does any business which depends upon its
revenues to survive.
Why does the U.S. Postal Service advertise its services so much? Because
there are competitors, and it must keep market share in order to sustain
and grow revenues. Why did the U.S. Postal Service contract with one of
its leading competitors to allow FedEx customers to drop off packages at
post offices? Because it judged the financial benefit to be worth it --
just like a private sector business.
So when you have to shell out an additional three cents for a postage
stamp later this year, remember that by doing so you are helping the
postal service from having to dip into the federal budget (your taxes)
to sustain itself. Unfortunately, the events of Sept. 11 that occurred
after the postal rate increase announcement resulted in the postal
service receiving approval for more than $675 million in emergency
federal aid, but its costs associated with coping with the
Anthrax-by-mail crimes are expected to rise into the billions of
dollars. Your additional three cents per stamp will help offset that
expense while minimizing and hopefully negating the need for additional
Tom Mitsoff is a daily newspaper editor and syndicated
editorial columnist. His web address is