JANUARY 22, 2012
With the increase of Internet mail along with the current recession, the post office has been taking a huge hit financially. The post office lost $8 billion in fiscal 2010 and it is expected that 2011 will be even worse when the final figures are released next month. Proposals to cut the losses have included reduction of mail delivery from six to five days a week and closing thousands of offices across the country. This putting more people out of work and adding to the vicious cycle of money loss.
“The overall average price increase is small and is needed to help address our current financial crisis,’’ Postmaster General Patrick Donahoe said in a statement. “We continue to take actions within our control to increase revenue in other ways and to aggressively cut costs. To return to sound financial footing we urgently need enactment of comprehensive, long-term legislation to provide the Postal Service with a more flexible business model.’’
A major financial problem for the post office has been the requirement, imposed in 2006, that it pay $5.5 billion annually into a fund designed to cover the medical benefits for retired employees in the future. No other agency has such a requirement. But while the post office is not part of the federal budget, the fund receiving the payment is, so it counts as income to the government, making the federal deficit appear $5.5 billion smaller. Because eliminating the payment would make the deficit seem bigger, there has been reluctance to drop it.
As of January 22, 2012 the rate increases will be as follows:
Because most stamps being issued are “Forever’’ stamps, they will remain good for first-class postage. But buying new Forever stamps will cost more when the prices go up.
—First class letter up to 1 ounce up 1 cent, to 45 cents.
—Each additional ounce add 20 cents.
—Postcards up 3 cents, to 32 cents.
—Letters to Canada and Mexico up 5 cents, to 85 cents.
—International letters up 7 cents, to $1.05.
New domestic retail pricing for Priority Mail Flat Rate products include:
—Small Box – $5.35
—Medium Box – $11.35
—Large Box – $15.45
—Large APO/FPO/DPO Box – $13.45
—Regular Envelope – $5.15
—Large-Size and Padded Envelope – $5.30