Postal Service Overhaul Bill May Delay Large USPS Rate Increases for Up to 10 Years
Congress has passed legislation that will generally prohibit the Postal Service from raising postage rates beyond the rate of inflation for the next 10 years, in order to help the USPS better compete against other delivery companies.
In exchange for accepting the new restrictions, the USPS will be relieved of billions in employee retirement expenses. The Postal Service had been required to pay retirement benefits earned by its workers during any time they spent in military service.
The measure was passed by the Senate early Saturday and now goes to President Bush, who is expected to sign the bill.
The bill also changes how rates are revised and gives the post office more flexibility to offer discounts and make changes, provided it stays under the inflation rate.
Some say the limit on postage rate increases will benefit the magazine industry and other large mailers by letting them allocate their costs better. The bill also helps the USPS battle rival delivery companies, including FedEx Corp. and United Parcel Service Inc.
Currently, any rate changes require testimony from an independent board, which then makes recommendations to the Postal Service.
For more information, visit www.usps.com.