US Postal Service to raise first class stamp prices by 6.5%

[tsai3904]

U.S. Postal Service Announces New Prices for 2014

Price increases expected to generate $2 billion in new revenue to improve financial situation

WASHINGTON — The United States Postal Service today announced proposed price changes, including an increase in the price of a First-Class Mail single-piece letter from 46 cents to 49 cents. The proposed changes, which would go into effect in January 2014, are intended to generate $2 billion in incremental annual revenue for the Postal Service.

Highlights of the new single-piece First-Class Mail pricing, effective Jan. 26, 2014 include:

Letters (1 oz.) — 3-cent increase to 49 cents
Letters additional ounces — 1-cent increase to 21 cents
Letters to all international destinations (1 oz.) — $1.15
Postcards — 1-cent increase to 34 cents

Stamp prices have stayed consistent with the average annual rate of inflation of 4.2 percent since the Postal Service was formed in 1971.

More:
http://about.usps.com/news/national-releases/2013/pr13_077.htm

[jkr]

"FOREVER" STAMPS?

[BlackTerrel]

WASHINGTON — The United States Postal Service today announced proposed price changes, including an increase in the price of a First-Class Mail single-piece letter from 46 cents to 49 cents.

I was going to send this parcel but now with the extra 3 cents I'll just wait till I see my friend in person.

[torchbearer]

they make my life a living hell.
when the rate changes takes effect, i'll have 900 businesses calling about their damn postage machines not registering the correct amount on stamps.
postage machines are the least interesting thing i have to deal with... and a tidal wave comes everytime the USPS increments a rate.
why not make it a fucking dollar already.

[oyarde]

Two for a dollar :) , lol , still a bargain , what can you buy for 1 FRN ??

[fearthereaperx]

USPS is still cheap especially considering how reliable it is.

[tsai3904]

USPS is still cheap especially considering how reliable it is.

factor in their billions in losses and unfunded health care obligations that are guaranteed by taxpayers

[ObiRandKenobi]

will they accept bitcoins?

[DamianTV]

Two for a dollar :) , lol , still a bargain , what can you buy for 1 FRN ??

What can you get for a Penny?

Lets compare to 100 years ago. What could One Dollar buy you back in 1913?

When the Price of things goes up, people think they are only being charged more for One Product or Service. There is a BIG TRICK here. It isnt the Price actually going up. Prices are increased because either Revenue or the Value of the Currency has decreased. At least in terms of Postal Mail, most of us understand that the Revenue is decreasing. However, when you see almost everything continue to go up and up and up, thats when you realize its not the Prices going up, its the Value of the Currency going down.

I dont get a 1% raise when Walmart adjusts the prices of ALL of its items to increase their Revenue by 1%. The other trick is they dont do it on all items at the same time. This week, a package of 8 Burritos will cost a $1.99. The following week, they cost $3.28, while the price of frozen pizza remains the same.

Point is, every single day, the dollar buys less than it could the previous day. Little by little you get less and less. Oh, you are still expected to perform the same level and quality of work for that money that is now worth less and less and less, and you are expected to be happy about it.

[Cap]

What can you get for a Penny?

Lets compare to 100 years ago. What could One Dollar buy you back in 1913?

When the Price of things goes up, people think they are only being charged more for One Product or Service. There is a BIG TRICK here. It isnt the Price actually going up. Prices are increased because either Revenue or the Value of the Currency has decreased. At least in terms of Postal Mail, most of us understand that the Revenue is decreasing. However, when you see almost everything continue to go up and up and up, thats when you realize its not the Prices going up, its the Value of the Currency going down.

I dont get a 1% raise when Walmart adjusts the prices of ALL of its items to increase their Revenue by 1%. The other trick is they dont do it on all items at the same time. This week, a package of 8 Burritos will cost a $1.99. The following week, they cost $3.28, while the price of frozen pizza remains the same.

Point is, every single day, the dollar buys less than it could the previous day. Little by little you get less and less. Oh, you are still expected to perform the same level and quality of work for that money that is now worth less and less and less, and you are expected to be happy about it.Good post thanks.

[tod evans]

What can you get for a Penny?

Lets compare to 100 years ago. What could One Dollar buy you back in 1913?



1oo years ago men grew stuff, built things, harvested resources....

Now men are the resources.

[DamianTV]

1oo years ago men grew stuff, built things, harvested resources....

Now men are the resources.

Very true. They are the products being sold to schools and to prisons.

[jtstellar]

USPS is still cheap especially considering how reliable it is.

ha

federal employee sighting

[thoughtomator]

factor in their billions in losses and unfunded health care obligations that are guaranteed by taxpayers

Little known story to inform your thinking on this one. Thanks to a massive lobbying effort by UPS and FedEx, the USPS is forced by law to fund their retirement system 75 years in advance. These losses are primarily by design.

[tsai3904]

Little known story to inform your thinking on this one. Thanks to a massive lobbying effort by UPS and FedEx, the USPS is forced by law to fund their retirement system 75 years in advance. These losses are primarily by design.

Right, as they should. Even with the prepayments, there's STILL unfunded liabilities.

You would rather have the USPS be like every other company and government organization have a pension/healthcare liability funded ratio of 50%? No one wants to fully fund their pensions because they all expect a bailout if things get ugly.

Is there a difference as to letting the USPS underfund their obligations to save money now and require a bailout later or require them to fund their obligations now and require a bailout now?

[thoughtomator]

Right, as they should. Even with the prepayments, there's STILL unfunded liabilities.

You would rather have the USPS be like every other company and government organization have a pension/healthcare liability funded ratio of 50%? No one wants to fully fund their pensions because they all expect a bailout if things get ugly.

Is there a difference as to letting the USPS underfund their obligations to save money now and require a bailout later or require them to fund their obligations now and require a bailout now?

I don't think you properly grasp the nature of the situation. Even for the most financially conservative, diligently responsible company, prefunding retirement obligations for employees who aren't even born yet is ridiculous.

[MRK]

USPS is still cheap especially considering how reliable it is.

Reliable? I send a lot of packages, and they often deliver to the wrong address, sometimes in another state, despite using a preprinted label from their website.

[RickyJ]

Reliable? I send a lot of packages, and they often deliver to the wrong address, sometimes in another state, despite using a preprinted label from their website.

Does your label look anything like this: Location កំពង់សោម

[tsai3904]

I don't think you properly grasp the nature of the situation. Even for the most financially conservative, diligently responsible company, prefunding retirement obligations for employees who aren't even born yet is ridiculous.

That's not what's happening. USPS currently has about a $48 BILLION unfunded health care liability (they're only about 50% funded). The USPS had a policy of paying as you go to cover the liability. That policy would have never paid down the liability. Their required payments by law now would make it so that they'll eventually pay it off.

A lot of governments, including my city, are covering these unfunded liabilities on a pay as you go basis. PAYGO does not address the unfunded liability. It's like always having a balanced budget will never allow the government to pay down its debt. You need a surplus to pay down debt and by requiring the USPS to pay more than PAYGO, they're addressing their unfunded liabilities.

I can see a scenario where it wouldn't make sense for a startup to overcover for these future liabilities, but any company or government that currently has unfunded liabilities funded at only 50% cannot survive with a paygo policy.

[thoughtomator]

Sorry, but I don't believe you have the details correct.

Perhaps this will help: http://my.firedoglake.com/kaytillow/2011/09/26/whats-the-real-story-behind-the-postal-crisis/


In 2006, Congress passed the Postal Accountability and Enhancement Act. This law requires the Postal Service to do something that no other business or government agency has to do–pre-fund its FUTURE retiree health care benefits. This is a 75 year liability that has to be paid in 10 years. The Postal Service makes a payment of approximately $5.5 billion on September 30 at the end of every fiscal year to meet this obligation. The Post Office has been paying these benefits the past four years into a trust fund for employees who have not even been born yet. This is the burden that is creating the “financial crisis” for the Post Office. The recession that has gripped America the past few years has undoubtedly affected the Postal Service, but even in the worst economic times since the great depression, the USPS has had a net profit of $611 million dollars. Unfortunately, the red ink associated with the post office is the mandated pre-funding since 2006.

[tsai3904]

From the GAO:


The Postal Service Retiree Health Benefits Fund (PSRHBF) covered about 49 percent of the U.S. Postal Service's (USPS) $94 billion retiree health benefit liability at fiscal year-end 2012.

Their future liabilities are only 49% funded. Do you think paygo will solve this problem?


GAO's analysis of maintaining current law requirements compared to five alternative approaches showed differing impacts on USPS's future annual payments and unfunded liabilities. For example, three of the approaches--1) the Administration's Approach, 2) Senate Bill (S. 1789) and 3) "Pay-as-You-Go" (no prefunding)--would reduce USPS's annual payments in the short term, thereby easing its immediate cash flow problems and financial losses. However, these approaches would increase USPS's unfunded liability, sometimes substantially, and require larger payments later.

Deferring funding could increase costs for future ratepayers and increase the possibility that USPS may not be able to pay for some or all of its liability. Conversely, a fourth approach--the House Bill (H.R. 2309)--and the current law requirement would reduce USPS's unfunded liabilities more aggressively but may result in significantly higher USPS financial losses in the near future.

If USPS stopped prefunding and let the existing fund grow with interest, the unfunded liability is projected to significantly increase.

http://gao.gov/products/GAO-13-112

They can go back to paygo and survive in the near term until they can't afford future retiree health care...then what?

[thoughtomator]

From the GAO:



Their future liabilities are only 49% funded. Do you think paygo will solve this problem?



http://gao.gov/products/GAO-13-112

They can go back to paygo and survive in the near term until they can't afford future retiree health care...then what?

The "future liabilities" are fake, exclusively a result of a specific piece of legislation, and not something that any other organization anywhere would choose to do. It is not normal to pay 75-year obligations on a 10-year timeframe, the only reason this obligation ever existed is the lobbying of the USPS' private competitors.

[tsai3904]

The "future liabilities" are fake, exclusively a result of a specific piece of legislation, and not something that any other organization anywhere would choose to do. It is not normal to pay 75-year obligations on a 10-year timeframe, the only reason this obligation ever existed is the lobbying of the USPS' private competitors.

What do you mean the future liabilities are fake? They have contracts to provide healthcare for their retired employees. These are real liabilities. Every single government, from local to state, has this obligation and almost every government has severely underfunded these liabilities.

The legislation you're referring to required USPS to pay more than paygo to address their 49% underfunded liabilities. What the legislation did is similar to forcing the federal government to not only balance its budget but also pay down its debt right now. It would be an immediate shock but to most of us, it would be necessary for the long term financial survival of the govt.

Yea the USPS is probably unfairly singled out but what they're required to do is what they should have been doing in the first place. If they couldnt afford it, they shouldn't have offered those benefits. By the way, they're not prefunding future employees that aren't even born yet. From the GAO: "The liability covers the projected benefits for about 471,000 current postal retirees and a portion of the projected benefits for about 528,000 current employees; it does not cover employees not yet hired."

[thoughtomator]

What do you mean the future liabilities are fake? They have contracts to provide healthcare for their retired employees. These are real liabilities. Every single government, from local to state, has this obligation and almost every government has severely underfunded these liabilities.

No, these are not real liabilities. There cannot exist a legitimate retirement obligation to a person who is not born yet. A party to a legitimate contract cannot be nonexistent and hypothetical.

These liabilities are manufactured out of thin air by what is effectively a Bill of Attainder sponsored by private competitors. Go and read the details I linked for you - your apprehension of the situation is completely missing the most essential element, its artificiality.

[MRK]

Does your label look anything like this: Location កំពង់សោម

Haha no they do not, I ship only domestically. I can't imagine the problems international shipments would have.

[Bruehound]

I am awaiting the day they announce first class mail will require two forever stamps.

[tsai3904]

No, these are not real liabilities. There cannot exist a legitimate retirement obligation to a person who is not born yet. A party to a legitimate contract cannot be nonexistent and hypothetical.

It sounds like your argument is that USPS is forced to prefund liabilities for future employees that aren't even on their payroll yet. Your FDL link has this quote:


The Post Office has been paying these benefits the past four years into a trust fund for employees who have not even been born yet.

Unfortunately, that isn't true. Just read the first couple pages of the GAO report that summarizes the problem.


The Postal Service Retiree Health Benefits Fund (PSRHBF) covered about 49 percent of the U.S. Postal Service’s (USPS) $94 billion retiree health benefit liability at fiscal year-end 2012. USPS’s deteriorating financial outlook, however,will make it difficult to continue the current prefunding schedule in the short term, and possibly to fully fund the remaining $48 billion unfunded liability over the remaining 44 years of the schedule on which the 2006 Postal Accountability and Enhancement Act (PAEA) was based. The liability covers the projected benefits for about 471,000 current postal retirees and a portion of the projected benefits for about 528,000 current employees; it does not cover employees not yet hired.


The Postal Accountability and Enhancement Act (PAEA) required USPS to make fixed annual payments to begin prefunding the cost of future retiree health benefits accrued by current employees and retirees.

This is from the House Oversight Committee:


“Contrary to some claims, there is no [retiree health benefits] liability held, nor contributions made for any future employees who have yet to be hired or yet to be born.” Instead, about half of the $94 billion liability is for retired postal annuitants and their survivors, while the other half is for current career postal employees.

For the sake of argument, I'll agree that USPS is forced to prefund benefits for people not yet born. Can you at least agree that there is still a healthcare iability for current and former employees? Just like how every local, state and federal govt has underfunded pension obligations for current and former employees, they all have underfunded healthcare obligations for the same employees. The USPS is no different. They have promised healthcare obligations to their current and former employees, which they have not properly funded.