1/8/06 Postal Increase

[JCP]

New Postal Domestic Prices Effective Sunday, January 8, 2006

The Governors of the U.S. Postal Service voted November 14 to accept the Postal Rate Commission's recommendation to increase most rates and fees by approximately 5.4 percent.

This price increase – the first since 2002 – is needed to fulfill a federal law passed in 2003 that requires the Postal Service to place $3.1 billion in an escrow account by October 1, 2006. Without this federal mandate, it would not have been necessary to raise prices in 2006. Among the adjustments, the 1 ounce single-piece rate for First-Class Mail will increase from 37 cents to 39 cents, and the postcard rate will increase by one cent, to 24 cents.

The Board of Governors set Sunday, January 8, 2006, as the effective date for the new rates and fees.

Visit the USPS site to see selected rate and fee changes here-- http://www.usps.com/ratecase/welcome.htm?from=bannercommunication&page=rate

[bear]

A bit more information about the mandated escrow:
According to a recent report by the Institute for Research on the Economics of Taxation, “The Postal Service is already gearing up for the next rate case, which is expected to be a major one, and will probably submit its request in 2006. Following a change in the law, the Postal Service needs to contribute much less to finance workers’ pensions. The savings are going temporarily into an escrow fund. The Service wants to use the escrow money for various purposes, including holding down rates. When Congress did not quickly go along with that, the Service misleadingly called this the "Escrow Rate Case" (misleading because the escrow expense, under a different name, was already built into the old rate base.) A better use for the escrow money would be to protect the next generation of mail users and taxpayers by gradually paying down the Postal Service’s huge – about $65 billion – unfunded retiree health care liability.”

Reading this statement is sort of amusing, in a way. They want to increase rates to have an escrow fund which will help to keep rates down.... :eek: Wow, who writes this stuff?