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article imageUS postage may climb two cents

By Vilma Cajigas     Jul 6, 2010 in Business
The US Postal Service (USPS) recommends an increase of two cents for its First-Class stamps after being faced with a possible $7-billion deficit for 2011.
Confronted with a dramatic loss of mail volume due to the recession and increased internet usage, USPS has proposed a two-cents increase to the Postal Regulatory Commission. If approved, the price change will go into effect January 2, 2011, the first since their 44 cents price increase on May 11, 2009.
Although more than $1 billion dollar cutbacks in expenses and 1 million man hours have been made every year since 2001, substantial losses still remain.
The proposed increase is expected to raise $2.3 billion in the first nine months of 2011, leaving them with another $4.7 million in losses.
In a Google news report:
“The rate increase is part of a series of money-saving plans announced in March. These also include reducing mail deliveries to five days a week, closing offices and making other cuts in expenses. Congress must agree to eliminating deliveries on Saturdays.”
Since the Postal Service receives no tax dollars to run its operation, its survival is heavily dependent on postage sales, products and services.
“There is no one single solution to the dire financial situation that the Postal Service faces,” said Postmaster General John E. Potter. “These proposed rate adjustments are moderate and part of a fair and balanced approach to insuring mail service for all Americans well into the future.”
To help ease customers into the new price change, on October 2010, Forever Stamps, with its new holiday evergreen image, will be sold at the current 44 cents rate. Forever Stamps are not subject to any future price adjustments.
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