Postal Service reaches for 20-cent stamp, longer ZIP
The price of a first-class stamp -- which increased to 18 cents just three months ago -- likely will rise again in the near future. President Reagan wants the US Postal Service to pay its own way, and postal officials say automation -- particularly the nine- digit ZIP code -- could make this possible. But Congress may well zap "ZIP-plus-4," as it is called, even though Postmaster General William Bolger says it would save $600 million a year by 1986.
Postal union three-year contracts expire next month, and some labor cost increases can be expected as was the case this week with air traffic controllers.
This adds weight to postal officials' contentions that a stamp costing at least 20 cents is necessary. They point out that even that rate is considerably below what letter writers in Japan and Western Europe pay. Even this year's 3 -cent hike (the first increase in three years) left the cost of a stamp considerably below inflation in recent years, they add.
The Postal Service's board of governors this week unanimously rejected a ruling by the independent Post Rate Commission holding the price of a first-class stamp to 18 cents. This sets the stage for a legal confrontation between the two federal bodies since, under the Postal Reorganization Act of 1970, the governors board can boost rates on their own. If that happens -- as officials predict -- it would be the first time since the Postal Service became a quasi-independent agency.
Rate Commission members contend that the Postal Service can break even this year with the rate hike they allowed in March. Postal Service officials disagree. They predict an operating loss of nearly $700 million over the 12 months ending in May 1982, if current mail rates are maintained.
Postmaster General Bolger points with pride to increased productivity in his domain since postal reorganization. While the annual volume of mail has risen from 85 billion pieces in 1970 to more than 106 billion pieces last year, the number of postal employees has been reduced from 741,000 to 667,000.
Much of this productivity gain can be traced to increased mechanization and automation of postal operations. Since labor costs account for 85 percent of postal expenses, Mr. Bolger wants to accelerate this trend through further modernization.
The next logical step, he says, would be the nine-digit ZIP code which would enable faster and more precise mail handling and reduce sorting costs from $25 per thousand pieces to $17. Even if "ZIP-plus-4" were voluntary and included a half-cent rate reduction as an inducement (especially to businesses, which account for 84 percent of all mail), Bolger contends that significant savings would result.
Congress is not so sure. Many members feel the Postmaster General's projections are much too optimistic, and that a nine-digit ZIP code would be more trouble than it's worth to mailers. Bills in House and Senate would ban its use, as does the House Post Office Committee budget reconciliation measure.
President Reagan, meanwhile, wants to cut the Postal Service's 1982 operating budget of $1.5 billion by $632 million. The federal postal system has shown a surplus only once in the past 35 years.
Bolger agrees that the federal subsidy ought to be reduced.
But he contends that in order to have "a period of stability" in postal rates , 20 cents for first-class stamps now is necessary. If this is not allowed, he warns, even higher rates (perhaps 23 or 24 cents) will be required to make up for a continuing deficit.
One of the more unique suggestions for helping the Postal Service into better financial times has been offered by Rep. Barry Goldwater Jr. (R) of California.
He has proposed legislation allowing corporations (for a profitable fee) to have their business logos printed on postage stamps.