Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

USPS to Hike Stamp Prices

As email, e-cards and online newsletters increasingly replace traditional snail mail, the U.S. Postal Service announced that it will raise the price of stamps from 46 cents to 49 cents in an attempt to close its $20 billion deficit.

“It was a last resort,” said Katina Fields, senior public relations representative for the Postal Service.

Over the past year, the Postal Service has reduced its costs by over $16 billion, consolidating 306 mail process facilities, reducing about 22,000 city delivery routes, reducing the number of town post offices by about 7,500 and reducing its workforce by 2,000 employees — 29 percent of its original workforce.

“The problem,” Fields said, “is that it’s not enough.”

The increase in stamp prices — which will take effect on Jan. 26, 2014 — will raise $2 billion of revenue each year, theoretically balancing the budget in 10 years. Currently, the Postal Service takes in $40 billion a year from stamp sales — 43 percent of revenues.

Fields, however, characterized it as only a short-term solution because the Postal Service’s financial problems are ongoing. If the Postal Service is unable to raise enough revenue to balance its budget, it may require a taxpayer bailout of nearly $50 billion in 2017.

According to The Atlantic, the Postal Service currently stands to lose $6 billion this year, less than 2012’s $16 billion losses.

For a long-term solution, the Postal Service has pushed Congress for the last two years to pass legislation that would drastically cut costs by closing more facilities, eliminating Saturday deliveries and allowing the Postal Service to determine its own healthcare plan.

In February, the Postal Service announced a plan to limit Saturday deliveries to packages, which would have saved the agency $2 billion. Congress, however, refused and attached a six-day delivery requirement to the Postal Service’s funding. Although the Postal Service does not receive taxpayer dollars, its funding is still controlled by the federal government.

Nevertheless, Congress itself has yet to propose a bill to address the Postal Service’s budgetary problems.

“When people call here, angry about prices going up, I always tell them, well, contact your local senator, contact your congressperson, because we need the postal reforms to be passed,” Fields said. “If you’re angry about the changes, then do something about it.”

The Postal Service is legally permitted to increase all of its prices up to a cap of 5 percent per year.

“We just use the cap in other areas of our prices, but this year, you know, people are really feeling it because the stamp prices have gone up 5 percent,” Fields said.

The Postal Service spent over $550,000 last week to hire marketing company Faith Popcorn’s BrainReserve to judge both the future of the organization at large, as well as the viability of the stamp. Although a large portion of Postal Service revenue currently comes from stamp sales, NBC News reported that the Postal Service expected a drop of 4 percent to 0.5 percent in first-class mail pieces from 84 billion in 2009 to 50 billion in 2020.

“Technology’s forever changing,” Fields said. “You have people who are hacking the Internet now, and maybe people aren’t going to trust the Internet, they’re going to go back to putting a stamp on something and dropping it off at the mail. It all depends on technology and what happens to the Internet in the future.”

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