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Senator Collins says no way to postage rate hike

By Ed O'Keefe

Postal regulators will meet Tuesday to start considering a U.S. Postal Service request to raise first class stamp prices to 46 cents and other postage rates beyond the rate of inflation.

Susan Collins
Sen. Susan Collins (R-Maine).

But the senator who coauthored the law allowing USPS to file what's called an "exigent rate case" told the Postal Regulatory Commission on Monday that it shouldn't approve the hike this time.

At issue is a clause in the 2006 Postal reform law that allows the mail agency to raise prices beyond inflation in the event of "extraordinary or exceptional circumstances."

Sen. Susan Collins (R-Maine) told regulators that they should dismiss the case because the Postal Service's current financial condition "is not the result of 'extraordinary or exceptional circumstances' required by law to initiate an exigent rate case."

"I envisioned that this authority would be limited to very few and extreme instances, such as terrorist attacks, the anthrax case, and natural disasters," Collins wrote. "For example, the terrorist attacks of September 11, 2001, or the anthrax attacks later that year could serve as the basis for an exigent rate case. These events had profound effects on the Postal Service well outside normal business cycles. No similar circumstances exist today."

The Affordable Mail Alliance -- a coalition of hundreds of companies and nonprofits opposed to rate increases -- thanked Collins for her support, saying she "understands better than anyone else why the Postal Service’s increase would cause severe hardship to businesses and customers across the nation."

But the Postal Service stands by its request to raise rates. "We're pleased the PRC is moving forward with hearings on our request," said spokeswoman Joanne Veto.

Sen. Tom Carper (D-Del.), who coauthored the bill with Collins, said he's concerned about how customers and businesses would be affected by a postage rate increase.

"That said, the Postal Service is clearly in a difficult position as it tries to shore up its finances," Carper said in a statement. "I will be closely following the proceedings before the Postal Regulatory Commission as they consider the merits of the Postal Service’s request.”

What do you think? Leave your thoughts in the comments section below

By Ed O'Keefe  | August 10, 2010; 9:00 AM ET
Categories:  Agencies and Departments, Congress  
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So the inability to make payroll in Fiscal year 2011 is not an exigent case? Meanwhile, it’s against the law to close a post office, don’t release any employees, pay $5 billion dollars into a health care fund that has no actuarial basis and deliver six days a week even when mail volume is at an all time low.

Does the fine senator from Maine have a solution? Returning $75 billion in overpaid retirement benefits is a start – but where will that money come from?

Bash postal management all you want but it can’t do much until congress acts. And apparently only a crisis creates congressional action.

Posted by: Fantheflames | August 10, 2010 1:06 PM | Report abuse

The Postal Service should follow the example of the Census: double postage rates to 88 cents, then decrease to 87 cents and call it a savings.

Posted by: jiji1 | August 10, 2010 1:37 PM | Report abuse

Collins proves the lie that the USPS is independent of Congress if they have to go, hat-in-hand, to ask to raise their prices.

The USPS is not a business, but a toy of Congress. If it can't raise prices as it sees fit, it has to have complete freedom to fire unneeded workers to reduce its costs. The USPS has a program called Smartpost, where it delivers other delivery companies shipments that are brought to the local post office. I keep wondering why delivery companies would do that unless it was more profitable to let the taxpayers pick up the bill for making this last-mile delivery.

Posted by: Jimmy371 | August 10, 2010 5:59 PM | Report abuse

The USPS reminds me of fannie Mae and Freddie Mac. Just keep throwing money down a hole and getting nothing in return. Are they the next bailout?

Posted by: Roamer1 | August 11, 2010 8:52 AM | Report abuse

Senator Collins logic defies logic.

Posted by: JackRabbit2 | August 11, 2010 8:55 AM | Report abuse

An act of terrorism such as the anthrax crisis, though harsh, would not have great enough financial impact on USPS to require a multi-billion dollar response such as a price increase. Previous comments she's made indicate that she thinks USPS can spend their way out of a financial crisis by expanding services. But that is not possible, as USPS does not receive tax subsidies. At the end of 2011, they will have nothing to spend. Time is of the essence. Sen. Collins is basically denying that USPS has a financial crisis. In doing so, she is one of the biggest roadblocks to progress for the agency.

Posted by: Harry527 | August 11, 2010 1:33 PM | Report abuse

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