The U.S. Postal Rate Commission staff yesterday opposed a recommended increase in first class postal rates from 15 cents to 20 cents, proposing a rate rise to only 18 cents, the U.S. Postal Service announced.
Last April Postmaster General William F. Bolger recommended the 5-cent increase in first class postal rates and increases in other mailing rates to offset the impact of inflation. The officer of the independent rate commission proposed a lower increase in first class rates, but a larger rise in rates for parcel post and bulk mail which consists primarily of newspapers, magazines and advertising matter, a Postal Rate Commission spokesman said. The plan of the commission officer, who is charged with representing the public interest much like the local utilities' peoples counsel, would benefit household mailers, the postal service said.
The independent Postal Rate Commission will decide the issue by Feb. 20, a commission spokesman said. The Postal Service board of governors may then approve, reject or modify that decision.
The Postal Service said its 20-cent stamp proposal would cost the average household with annual family income of $5,000 or less 10 cents a year less than the 18-cent stamp rate coupled with the staff's proposed increases in other classes of mail. The proposal of the commission staff however, would cost households with annual family income of $25,000 or more 82 cents a year less than under the Postal Service's plan, it said.
Each one-cent drop in the price of first class mailings will cost the Postal Service $500 million, the commission spokesman said.
The Postal Service also contended that increases in parcel post rates would place it at a disadvantage with its chief competitor, United Parcel Service, and drive away many of the Postal Service's customers. The result would be losses in revenue and more frequent postage rate hikes for the individual mailer, the Postal Service said.
Any increase in first class mailing rates would be the first since prices rose from 13 cents to 15 cents in 1978. The proposals also would affect costs for third class mail nonprofit bulk mailers, second class nonprofit publications and regular third class bulk mail covering circulars and catalogues from profit-making organizations.