The Postal Rate Commission yesterday recommended rate increases in nearly all categories of mail, including a 22-cent first-class stamp and a 14-cent post card charge. The recommendations also include increases of 14 percent in second-class rates and 13 percent for third-class mail.
In most cases, the proposed increases, which could take effect as early as February, were lower than had been requested by the U.S. Postal Service last year.
Janet D. Steiger, chairman of the independent, five-member rate commission, said the panel scaled down requested increases because higher mail volume has produced more income for the Postal Service while lower inflation reduced costs.
The recommendations now go back to the Postal Service's nine-member board of governors, which can agree to them, ask for reconsideration or accept the proposals under protest and go to federal court.
Yesterday's recommendations were seen as a major victory for direct mailers, who waged an intense campaign to keep third-class rates low.
The Postal Service had sought permission to raise those rates by 21 percent, which would have been a costly blow to direct mailers, who bundle weekly retail advertisements and mail them third class.
The commission rejected that request, saying third-class rates should be raised 13 percent. A knowledgeable source said last night that a 21 percent increase would have cost direct mailers about $700 million more; a 13 percent increase will cost about $400 million.
The commission also said second-class rates should be raised 14 percent rather than the 12 percent requested by the Postal Service. That recommendation was a blow to magazine and newspaper publishers, who use second-class rates and had fought to keep them low while lobbying for a higher third-class rate.
Newspaper publishers in particular wanted higher third-class rates because they claim that direct mailers are stealing their advertisers by taking advantage of "unfairly" low mail rates. Newspapers and direct mailers compete for pre-packaged advertising, called "stuffers" in the advertising trade and often inserted into Sunday newspapers as supplements.
In recommending a 22-cent first-class stamp and a 14-cent post card charge, the commission scaled back the Postal Service's requests by a penny in each category.
The Postal Service's board of governors could raise the commission's recommendations, but that is considered unlikely since it would have to be done by unanimous consent and the board has been sharply divided on the need for increases.
In scaling down the Postal Service requests, the commission said postal officials had "overestimated" cost projections, particularly involving labor. The panel said "smaller-than-expected recent increases in the cost of living" will reduce Postal Service labor expenses by $329 million in 1985.
The new rates, if approved, would generate another $2.2 billion next year for a total of $29.7 billion, which the commission said should allow the service to break even.
Postal officials claimed last November that the service would fall $3.6 billion in debt in 1985 if postal rates, last raised three years ago, were not raised. But the commission, after hearing testimony from more than 100 witnesses, said the service had underestimated its growing volume of first-class and bulk mail.
The Postal Service had estimated that it would handle about 126 billion pieces of mail in 1985. However, the commission's estimated total was more than 140 billion, which would mean more revenues than had been anticipated.
One source said the Postal Service is expected to handle 35 billion pieces of third-class mail next year and 10 billion pieces of second-class mail.
The biggest change between the commission's recommendation and the Postal Service's request involves Express Mail. The service had sought a 4 percent raise, but the commission recommended 15 percent.
Some postal officials said yesterday that the commission appears to be trying to prevent the Postal Service from having an unfair advantage over private-sector competition. Express Mail, for instance, competes with several private firms offering next-day delivery service.
The rate recommendations come during heated negotiations between the Postal Service and four unions representing 600,000 workers. Management has frozen workers' wages and announced a 23 percent cut in pay for new hires.