The U.S. Postal Service has proposed increasing the prices to help close a projected $7 billion budget shortfall in 2011 Fiscal Year. Under the proposal the cost of a First-Class stamp 2 cents to 46 cents. Periodicals will see an 8 percent increase, catalogs rates will increase 5.1 percent and Standard Mail will see a 23 percent increase.
The increases would go into effect January 2, 2011. The Postal Service says the price increases will generate $2.3 billion for the last three quarters of the 2011 Fiscal Year.
The Affordable Mail Alliance, a coalition of industry associations and Postal customers is lobbying the Postal Regulatory Commission to reject the prices increases. Jerry Cerasale, senior vice president, Government Affairs at DMA, and spokesperson for the Affordable Mail Alliance issued a statement saying, "Rather than gouging its customers with rate increases that are 10 times the rate permissible by law, USPS should be eliminating its operating costs; inflation in postal costs was over six percent in 2009. They should be making the hard business decisions and not raising rates."
Other groups question the legality of the increase after postal reform in 2006 tied postal increases to inflation. The law allows the Postal Services to increase prices above inflation if it can demonstrate “exceptional or extraordinary circumstance.”
Tony Conway, executive director of the Alliance of Nonprofit Mailer told DIRECT Magazine, “We don’t think it’s legal at all. And we don’t think these circumstances that the postal service is apparently going to use to justify this increase are up to what Congress intended when it drafted the [PAEA] legislation.”