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THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING
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Stamp cost to go up 3 cents US Postal Service cites $1.65b deficit By Randolph E. Schmid, Associated Press, 9/12/2001
Citing a looming $1.65 billion deficit, the US Postal Service announced yesterday that it will seek rate increases averaging about 9 percent.
''The fact is, our options are limited,'' said Robert F. Rider, chairman of the agency's board of governors. ''We must take the necessary action today.''
Rider said the decision by the governing board was unanimous.
The current 34-cent mail rate took effect in January, along with increases in many other classes of mail. Another boost in some rates kicked in July 1.
Nonetheless, rising costs for fuel, labor, and health care threaten more red ink for the agency, officials said. Currently, the Postal Service is in labor negotiations with unions representing about 700,000 workers.
''We do not intend to mortgage the future of the Postal Service,'' Rider said of the need to raise money to balance the budget.
Earlier, managers ordered a freeze on new construction and cut back on overtime and other costs, trimming the deficit from $3 billion to an estimated $1.65 billion.
The increase in the price of first-class stamps will be accompanied by increases in other rates, as well. The increases include: first-class mail, 8.2 percent; Express Mail, 9.7 percent; Priority Mail, 13.5 percent; periodicals, 10.0 percent; advertising mail, 7.3 percent; and packages, 8.9 percent.
The Postal Service, although a part of the federal government, does not receive tax money for its operations. It is required to pay its own expenses from fees changed for moving the mail and to break even over time.
Postmaster General Jack Potter said that because of continuing financial problems the construction freeze will remain in place and that management will be looking for other ways to cut costs.
Raising postal rates is a complex process. The agency's request for an increase is submitted to the independent Postal Rate Commission, which holds hearings and has 10 months to rule on the rate request and possibly change it.
Only after that ruling can the Postal Service impose the higher rates. The lengthy process means that a rate request filed this month would probably not take effect before late summer or autumn 2002.
This story ran on page A26 of the Boston Globe on 9/12/2001.
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