Postal Service Raises Stamp Prices; Forever Stamps Still Available

The U.S. Postal Service plans to combat their $20 billion budget cut plan by raising stamp prices by early 2012.

On Jan. 22 of next year, quite a few price hikes will be implemented into the Postal Service's mail costs:
• a first-class stamp to mail a one-ounce letter will increase by a penny to 45 cents
• a regular postcard stamp will increase by three cents to 32 cents each
• postage stamps headed for Canada or Mexico will increase by five cents to 85 cents per stamp
• and stamps going to other countries worldwide will increase seven cents to $1.05 each

Until the price increase takes effect, people can still purchase Forever Stamps at 44 cents.

"The overall average price increase is small and is needed,” said Postmaster General Patrick Donahoe in a statement. “We continue to take actions within our control to increase revenue in other ways and to aggressively cut costs.”

The first increase in nearly three years is caused by the Nov. 20 deadline for the USPS and the National Association of Letter Carriers (NALC), a union of 280,000 members, to come to an agreement regarding services. If no deal is made, the Postal Service plans to cut 120,000 jobs, which accounts for a fifth of its employed workers.

The U.S. mail is the second largest civilian employer, surpassed only by Wal-Mart in sheer number of employees.

To solve this impending dilemma, the NALC has turned to Ron Bloom, the mastermind behind the reorganization of the failing automotive industry and President Obama's former advisor. On Sunday, Bloom announced his decision to lend counsel to the NALC, which has been struggling in negotiations with USPS.

Although specifics of a potential agreement have yet to be revealed, a number of possible solutions could be discussed. The Postal Service has a variety of options, including selling advertising, cutting service, or expanding services for drivers.

For the 2010 fiscal year, the U.S. Postal Service posted losses of $8.5 billion compared to the prior year's loss of $3.8 billion. In the four year period leading to 2010, mail volume declined 20 percent, leading to a $20 billion net loss.

Talks may solve short-term problems, but Donahoe said long-term legislation is necessary to give the Postal Service a "more flexible business model."

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