WASHINGTON — Facing a “precarious financial condition” as fewer customers use its services, the
The plan — which would raise the cost of first-class stamps for one-ounce letters to 49 cents from 46 cents, among other changes — is intended to generate an additional $2 billion in annual revenue for the Postal Service. The agency expects to lose about $6 billion in the current fiscal year.
Postage rates jumped one cent in January 2012 and again in January 2013, but those changes were tied to increases in the Consumer Price Index, according to the Postal Service. The proposed three-cent increase was the result of "extraordinary circumstances."
In a letter sent to customers, Chairman Mickey D. Barnett said the Postal Service put together a five-year plan earlier this year to close a $20-billion budget gap and reduce its debt, but "the uncertain path toward enactment of postal reform legislation" had necessitated its rate adjustments.
"Of the options currently available to the Postal Service to align costs and revenues, increasing postage prices is a last resort that reflects extreme financial challenges," Barnett wrote.
The Postal Service has already cut back 22,000 delivery routes, laid off 203,000 workers and trimmed its annual operating costs by $16 billion since 2006 in an attempt to reach profitability, he added.
“While some rate increases may be necessary, the long-term key to USPS’s future is addressing its costly, inefficient delivery network,” Rep.
Among the most controversial reforms suggested has been the elimination of Saturday delivery, which would save about $2 billion a year. A proposal by the Postal Service was abandoned in April after Congress passed a spending bill that prohibited cutting back to five-day service.