Published: Jul 06, 2010 11:04 AM EDT
Updated: Jul 06, 2010 7:43 AM EDT

WASHINGTON (AP) - Battered by massive losses, the Postal Service
wants to raise rates to bring in more money.
      Postal officials scheduled a briefing Tuesday to discuss the
amount of the increase, which will go to the independent Postal
Regulatory Commission for review.
      The boost comes as no surprise. Postmaster General John Potter
said March 2 that a rate increase would be necessary for the
agency, which does not receive tax funds for its operations.
      The current 44-cent first-class rate took effect May 11, 2009.
      While that change will be the most visible, rates for other
types of mail will also go up, raising concern among business
groups and nonprofit organizations.
      Under the law, the post office is generally limited to increases
no more than the rate of inflation - 0.9 percent for the year ended
in May.
      However, the agency is allowed to seek a larger increase in
unusual circumstances. Potter said in March he planned to take that
step.
      "The projections going forward are not bright," Potter said
then. But, he added: "All is not lost. ... We can right this
ship."
      The agency lost $3.8 billion last fiscal year despite cutting
40,000 full-time positions and making other reductions. It has
continued to face significant losses this year.
      The weak economy has sharply reduced mail volume as companies
cut their advertising. At the same time there has been a
significant drop in lucrative first-class mail, with more and more
people turning to the Internet to communicate with each other as
well as to receive and pay bills.
      The proposal drew a prompt complaint from the mailing industry.
      "This proposed rate increase amounts to another tax imposed on
Americans at a time when the economy can least afford it," said
Tony Conway, executive director of the Alliance of Nonprofit
Mailers, a group representing charities and other organizations.
      "Consumers everywhere will pay more for the letters and
packages they need to send; businesses - large and small - will
suffer and even more jobs will be lost," complained Conway, who
was designated spokesman for the Affordable Mail Alliance, a
coalition of businesses, charities and other mailers formed to
oppose the increase.
      Postal officials also have proposed eliminating Saturday mail
delivery as a means of cutting costs, a change that would require
congressional approval.
      Post office finances are also complicated by the requirement
that the agency make annual payments to pre-fund future health
benefits for retirees, something not required of other government
agencies.
      And the postal inspector general contends that the Postal
Service has been overcharged billions of dollars for retirement
benefits for employees who worked for the old Post Office
Department before it was converted to the Postal Service in 1970.