Even the USPS Doesn’t Blame This One on Us

Burrus Update #02-06, Jan. 10, 2006

Effective Jan. 8, 2006, postage rates were increased 5.4 percent, changing the first-class rate from 37 cents to 39 cents for a single, one-ounce letter. This means it will now cost the average American citizen 2 cents more to pay their gas bills, send birthday cards, and make mortgage payments.

Unlike previous rate increases, this price hike is not related to increases in USPS operational costs: It is not the result of increased energy costs for the largest vehicle fleet in the country, or increased costs for health benefits, or improved employee wages. Even the Postal Service doesn’t blame this rate increase on the workers!

This rate increase is the direct result of the actions — or inaction — of Congress and President Bush.

In 2002, a review by the Treasury Department revealed that the Postal Service was overpaying into the Civil Service Retirement System (CSRS), and that if the payments continued, the USPS would over-fund the government pension program by more than $70 billion.

However, instead of permitting the Postal Service to reduce payments to the fund, Congress required the USPS, beginning this year, to place the annual $3.1 billion payment in an escrow account that would be unavailable to pay general operating expenses.

Postal Reform legislation is pending that would release this $3.1 escrow payment and permit the Postal Service to use the funds to pay for increased operational costs, but legislative activity has stalled because the president has indicated that he will veto any legislation that returns control of this money to the Postal Service.

This rate increase is solely for the purpose of replacing the $3.1 billion currently held hostage and unavailable to be used to cover increased postal costs.

William Burrus
President

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