The sixth postal rate increase in 10 years and the second this year goes into effect tomorrow, raising the price of first-class postage that was 6 cents 10 years ago to 20 cents.
The increase has been criticized for coming right before the Christmas-card season and for hurting individuals more than businesses, whose costs in many cases are lower under the new rates.
Postmaster General William F. Bolger has said that computerized, pre-sorted business mail is cheaper to handle than individual letters and that mailers must pay their own way.
What would Bolger say to little old ladies and low-income customers struggling to send out Christmas cards this year? "We need the money to pay our bills," Bolger explained. "We're not immune to inflation any more than Aunt Jane or Uncle Joe. We can only hold so long."
Bolger said he hopes he won't have to ask for another increase for two years.
The postal service already has begun issuing first-class stamps bearing the letter "C" and nondenominated post cards for 13 cents. The stamps are for domestic mail only.
The postal service has had its hand out since 1851 when Congress decided to subsidize the mails to make service cheaper and more efficient. As part of the Postal Reorganization Act of 1970, government subsidies were supposed to be phased down from an annual $920 million in 1970 to $460 million that the postmaster general may request in 1984. Now the subsidy will be eliminated in 1984, Bolger said.
Congress cut $250 million from the service's 1982 budget, and the Reagan administration has proposed cutting another $250 million next year.
The postal service is attempting to increase productivity through new automated equipment, but Congress has prevented it from starting the controversial nine-digit zip code, also intended to increase productivity, at least until 1983.
Bolger said Congress' action will slow productivity growth and reduce the return on the investment in automated equipment. In the meantime, the postal service, which handles 360 million pieces of mail a day, must pay wages of $1 billion a month, Bolger said.
Bolger said he expects a "sizeable deficit" for fiscal year 1981, but he said he was unable to estimate how large the deficit would be. He said the service might have been able to eke out a slight profit if he had gotten the 20-cent rate increase in March when he asked for it and if the subsidy hadn't been cut.
Bolger said he expects a slight profit for fiscal year 1982. The new rates should allow the postal service to generate $1 billion in additional revenues.
Its last black ink was recorded in 1979. It was the first time since 1945.
But not everyone is sympathetic. In an attack last summer on the proposed nine-digit zip code, Sen. Dave Durenberger (R-Minn.) likened the postal service to "an out-of-control wagon rolling down a hill."
Consumer advocates like Ralph Nader decried the rate increase and said the postal service needed to get its house in order instead of raising rates for households.
The National Association of Greeting Card Publishers lamented that the increase came before the Christmas-card season. They also said the new rate discriminates against individual mailers because the rates for certain types of second-class mail, such as so-called junk mail, will drop somewhat.
Although the cost of a first-class stamp will rise from 18 cents to 20 cents, the cost of each additional ounce will remain at 17 cents. There will be no increase in parcel post.
Second-class mail rates for publications delivered within a county will decrease from 3.5 cents per pound to 3.4 cents per pound and from 1.9 cents per piece to 1.8 cents per piece.
For delivery outside of a county, regular second-class postage will start at 12.8 cents per pound compared with 10.6 cents per pound under the old rate. The rate for nonprofit publications also will decrease from 6.8 cents per pound to 6.6 cents per pound.
Express mail rates will start at $5.85 instead of $5.30.
To raise more revenue, two proposals are floating on Capitol Hill to allow advertising on stamps, on postal vehicles and in post office lobbies. Bolger said that would be difficult to administer.
To help cut costs the postal service even marketed smaller stamps. But that brought complaints. Bolger may be able to offset complaints in a few years if he succumbs to thousands of requests for an Elvis Presley stamp.
And so the complaints about the new 20-cent stamp will probably soon start filtering through the U.S. mail. Bolger, no relation to actor Ray Bolger, said he is used to complaints and they don't bother him personally.
However, he fondly remembers one complaint letter he received from a woman several years ago. He wrote back to her and she sent him another letter with the postscript, "I loved you in the Wizard of Oz."