Postal Rates: First "Forever Stamp"
Stamp Could Be Available As Early As May

Dan G. Blair
Chairman, Postal Regulatory Commission
Tuesday, February 27, 2007 2:00 PM

Dan G. Blair, chairman of the Postal Regulatory Commission, which recommended on Monday a new way of buying stamps by locking in a rate to mail a first-class letter, was online Tuesday, Feb. 27, at 2 p.m. ET to discuss and explain the new plan and what it means for consumers.

Postal Commission Favors Selling Stamp That Locks In Current Rate ( Post, Feb. 27)

A transcript follows.

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Dan G. Blair: Good afternoon. I'm Dan Blair, chairman of the Postal Regulatory Commission. We're a new federal agency and the successor to the former Postal Rate Commission. We had some big announcements yesterday regarding our recommendations on postage rates. I'm glad to be with you here today and I'm ready to answer your questions.... ask away!

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Laurel, Md.: But the commission recommended that a limit be placed on how many of these stamps can be sold to any individual or organization at one time. The limit has not been set, but Sharfman observed, "If someone comes in and wants to buy $1 million worth of forever stamps, that's not reasonable."

1. But couldn't I visit 20 post offices and buy 200 stamps at each, locking in what for me would be a lifetime supply?

2. Why would anyone buy a NON-lifetime stamp if it sells for the same rate?

Offering "lifetime" stamps at a small premium, say 5 cents, over current seems like a better economic move.

Dan G. Blair: Who is going to have the time to visit 20 post offices???? We expect the Postal Service to place reasonable limits on the purchase of the quantity of these stamps. Other countries have offered this kind of stamp with success and we have every reason to believe the USPS will be successful as well. As a matter of fact, the USPS proposed this and we expect they will accept its establishment.

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washingtonpost.com: Postal Regulatory Commission

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Washington, D.C.: What is to prevent a secondary market on these opening up in the future?

(i.e., Corporation X buys 2 million forever stamps at 41 cents, Postal Rate goes up to 60 cents in 5 years, Corporation X resells their 2 million stamps at 41 cents to the public)

Dan G. Blair: Last year, the Congress enacted new legislation limiting future stamp increases to that of the rate of inflation. I doubt much of a "futures" market would develop around this product. Also, these stamps will be sold at retail only.

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Philadelphia, Pa.: Will foreign countries accept American mail with a forever stamp?

Dan G. Blair: Good question! The U.S. Postal Service is responsible for making sure that letters sent abroad have adequate postage. If our Post Office gives this mail to a foreign post for delivery, that foreign post should deliver it.

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Washington, D.C.: I definitely applaud the Postal Service's decision to provide a general 1st class stamp. The thought of not having to EVER purchase one cent stamps again is GREAT! Will this change also extend to postcards?

What day does the change take effect? Will there still be stamps printed with monetary values for collectors or general use?

Dan G. Blair: At this point, the "Forever Stamp" will only be good for letter mail. Maybe in the future, the Postal Service may seek to extend its coverage to postcards. We expect the changes in rates to take effect as early as May. It's up to the Postal Service to choose the implementation date.

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Potomac, Md.: Hi! I don't have a problem with sortation discounts on Standard Mail per se, though I think the DMM is WAY TOO complex in this regard. My problem, as a citizen, is the fact that UPS, FedEx, and other parcel shippers have a seat at the table when it comes to USPS rate setting. These two competitors have an insight into USPS business decisions that they never would grant their own competitors, and in the name of their market share and profit, USPS seems to suffer. Is this the case? Is it not the case? If it is the case, doesn't this seem wrong?

Dan G. Blair: It's important to remember that the Postal Service is a public organization and should operate in a transparent fashion. It's not a private organization. During this recent case we heard from 99 witnesses with 139 pieces of testimony. You are right, though. Cases are complex. That's why we will be moving to a new, hopefully less complex, system to set rates over the course of the next couple of years.

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Springfield, Va.: With personal computers and printers very well able to encode mail with the bar codes that help speed mail to a destination, will the PRC ever give consumers and small business a REAL savings via a "Personal Automation Rate" which credits us for doing what used to be the sole work of the USPS?

Dan G. Blair: Can personal computers and their printers pass the acceptance test for a barcode from the Postal Service? I don't know the answer to that question. I do know that the bar code has to pass a strict test of legibility to make sure the USPS sorting machines can read the code. Maybe this will be something we see in the future.

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Washington, D.C.: Why doesn't the USPS print the denomination of the stamp directly on the stamp? I have found over the years that prices increase to cover postal costs, and that I cannot tell whether the stamps I have remain current or not? What authority, if any, does the PRC have to either recommend to the Postal Service Board of Governors or require that the USPS put the denomination on every stamp sold?

Dan G. Blair: We have heard from consumers with similar complaints. The new "Forever Stamp" won't need to have a price printed on it since it will be valid, even after rates increase.

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Potomac, Md.: Has there been a good cost-benefit analysis on eliminating Saturday delivery? Residential or business? Could we live with it? Potential savings would come from labor, fuel, maintenance. Or is eliminating Saturday delivery off the table?

Dan G. Blair: It's been a long time, I'm told, since a good cost-benefit analysis has been done regarding Saturday delivery. With increasing volume, decreasing the days of delivery could cause logistical problems. Plus, I imagine that policy makers in Congress would want to be heard from as well regarding such a proposal.

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Arlington, Va.: I'd like to reiterate a question asked before ... Why would anyone buy a NON-lifetime stamp if it sells for the same rate? I certainly understand the benefit of the lifetime stamp, but doesn't it obsolete the denominated stamps?

Dan G. Blair: You need to remember that many postal customers like to purchase commemorative stamps or popular semi-postal stamps like the "Breast Cancer" Stamp. I would expect many consumers to purchase the Forever Stamp just for the reasons you give.

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Reading, Pa.: How in the world can the USPS maintain a balanced budget on a go-forward basis if the cost of the Forever Stamp is the same price as the prevailing rate of a first-class stamp? It would seem that there might be an initial bump in sales, but then once sales stabilize and rates must be increased, consumers will begin "spending" the forever stamps that they bought in abundance, thereby keeping the USPS from receiving increased revenues.

Dan G. Blair: When the USPS sought this proposal, they gave the Commission their best estimate it would be budget neutral. The USPS gains revenue of such stamps and the cost of providing such service may not be incurred until a year or two down the line. Plus, the USPS avoids costs in terms of printing and selling "makeup" stamps. Thanks for the question!

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Washington, D.C.: The company we lease our postage equipment from at my workplace recently informed us that beginning in May of this year, USPS will start charging different amounts for packages of the same weight but different shapes/sizes ... they indicated that we will need to upgrade our postage meter to accommodate these changes. True?

Dan G. Blair: I'm not sure what the impact will be regarding your need to upgrade your meter. But you touched on an important part of our recommended decision yesterday. The Commission worked hard to recommend rates that reflect costs better and the shape of the mail is an important cost component.

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Columbia, Md.: True or false. We continue to raise the price of stamps in correlation to how popular e-mailing becomes. It just seems like the more we use alternate delivery (online bill pay, online banking, secure e-mail, catalog/newsletter/magazine Web sites, etc. ...) means, the smaller the usage of stamps and the profit from stamps. Therefore, raise the price of stamps.

Dan G. Blair: Postal rates are set to reflect the costs of the postal service provided. As the costs for providing mail delivery go up - wages, rents, transportation costs - postage rates have to increase to reflect those increasing costs.

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South Riding, Va.: When you said, "You need to remember that many postal customers like to purchase commemorative stamps or popular semi-postal stamps like the "Breast Cancer" Stamp," were you trying to imply that these stamps would not be available as forever stamps? I would think the Post Office would take as much time to create designs for collectors even if they do not have a printed value.

Dan G. Blair: As a first step, we expect the Postal Service to offer a non-denominational "Forever Stamp." If it proves successful, maybe they will offer additional stamps of kind you describe.

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Arlington, Va.: If I use the USPS's "Stamps By Mail" envelope to order stamps, I have to fill out a form manually and write a manual check -- however, the stamps are delivered with no surcharge. Why is there a surcharge for buying stamps online on the USPS Web site, which should be nothing more than an electronic way of transmitting the same order to USPS?

Dan G. Blair: That's a very good question. To be honest, I don't have an answer for you at this moment. But as the regulator, that is something we should look into. Thanks for raising this.

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California: How do you anticipate this change in pricing to affect businesses who do a lot of shipping with the USPS? Also, will there be a change to the bulk rate? Media mail rate?

Thank you for taking time to answer questions!

Dan G. Blair: The USPS sought increases in all its rates. When rates increase, volumes naturally take a dip. Over the past three decades, the Commission's recommended rate increases have been at or below the rate of inflation.

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Washington, D.C.: Who will decide what the forever stamp will look like? I vote for the American eagle!

Dan G. Blair: Currently, the Citizens' Stamp Advisory Committee recommends stamp designs to the Postal Service. You can find the address for the committee on the USPS Web site.

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Harrisburg, Pa.: When they make the presidential coins, will the coins include living presidents? If so, and noting that an official commemorative coin has already been issued that with Ethel Kennedy on it, has this ended the tradition that no coins will be issued with living people depicted? If so, is there any consideration to changing the tradition that postage stamps depict no living person?

Dan G. Blair: You may want to contact the USPS and the Citizens' Stamp Advisory Committee which recommends stamp designs to the Postal Service.

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Washington, D.C.: Mr. Blair, thanks for doing this chat. Few federal officials are willing to expose themselves to the public these days, it seems. My question -- is the Postal Service on a path to become a vehicle for advertising mail, since e-mail seems to be the preferred communication in families these days?

Dan G. Blair: The Postal Service is already an important advertising medium. Advertising mail makes a significant contribution to the overhead costs of the Postal Service.

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washingtonpost.com: USPS News Online

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Vienna, Va.: Will all stamps have the "forever" feature, or just certain ones? It might make sense to offer commemoratives at 41c and the perpetually-valid definitives at, say, 43c. If they were the same price, then of course everyone would buy the forever stamps, right?

Also how will this affect the rare semi-postal issues?

Dan G. Blair: We expect the USPS will continue to release regular and commemorative stamps. The new "Forever Stamp" will supplement this offering.

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Dan G. Blair: Thanks, everyone, for your questions today. Increases in postal rates always seem to generate great interest and your questions were appreciated. If I did my job well enough here today, maybe I'll get the chance to do this again!

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