U.S. Postal Service looking for an emergency increase in stamp prices?
posted at 7:01 pm on September 7, 2013 by Erika Johnsen
The United States Postal Service has been hemorrhaging money for years now, and with their credit from the U.S. Treasury completely maxed out they continue to operate at a loss while attempts at reform keep getting punted around Congress like so many political footballs. The USPS has had trouble implementing reforms even when it actually wants to, because the ‘quasi-governmental agency’ has so many rules and regulations governing its operations that competing special interests have plenty of opportunities to gum up the works.
A prime example comes in the form of the USPS recently mounting another effort to try to increase the price of stamps — you know, to actually reflect market forces and cover their costs of doing business. The federal government requires that “market dominant” (i.e., monopolistic and in this case government-sponsored entities, good grief) products’ annual prices increases do not exceed inflation, but the USPS can request an increase above the inflation rate from their regulator, the Postal Regulatory Commission, in the event of special circumstances.
However, the lobbyists for businesses that frequently use the USPS — like greeting cards and magazines — feel compelled to take the widely available opportunities to chime in, because they in turn don’t want their own costs of doing business to rise. Via The Hill:
The troubled U.S. Postal Service on Thursday postponed a decision on whether to seek price increases.
The service is widely expected to ask the Postal Regulatory Commission this fall to allow it to raise stamp prices to deal with its massive financial problems.
“The Postal Service Governors met today at a regularly scheduled Board meeting. As part of the agenda, the Governors considered pricing issues, including the possibility of filing for price adjustments,” the USPS said in a statement. “The Governors continue to listen to stakeholders and have postponed final pricing decisions until the next scheduled Board of Governors meeting, Sept. 24 – 25, 2013.”
Lobbyists opposed to the increase had expected the Postal Service to seek as much as a 3 cent increase in the price of the 46 cent first-class stamp and a double digit increase in the average 27 cent cost of mailing magazines. The price increases would take place in January, if approved.
And hey, if keeping prices artificially low for their own niche ends means driving the USPS further into debt and insolvency, why should these businesses and their lobbyists care? If they have the opportunity to rent-seek, they are going to rent-seek, and meanwhile, unions are staunchly resistant to the idea of actually privatizing and/or selling off the USPS for good and turning it into a properly functioning business. Heaven forbid anyone ever have to compete based completely on their own merits and consumer preferences based on free market signals, am I right?
Breaking on Hot Air