(Washington, D.C.) - Citizens Against Government Waste (CAGW) Vice President Leslie K. Paige released the following statement today in response to the U.S. Postal Service's latest rate hike:

"The Postal Rate Commission’s decision today to recommend an average 7.7 percent postal rate increase is a Band-Aid on a gaping financial wound.  In the long run, this rate hike will not serve anyone’s best interests, least of all the Post Office.  This substantial increase comes a little more than a year after the last increase and is, without doubt, only a prelude to the next, inevitable, rate case, which could come as early as October of this year.  These rate increases are coming faster and are ever more draconian.  We’ve had 3 hikes in four years and none of them have stemmed the flow of red ink.

"The USPS's numerous, exhaustively documented problems¾from its chronic financial mismanagement, abysmal investments in dead-end commercial ventures, to its heavy-handed exploitation of its monopoly status¾will never be fixed by rate increases.  Take Priority Mail, for example.  The commission today recommended a 14 percent increase in the price of this postal product in spite of the fact that it is a huge money loser and the postal service has systematically misled its customers into believing that it is any faster than regular first-class mail.  An increase of this magnitude for this product is a swindle being perpetrated on American consumers, struggling families, and America’s businesses, large and small. 

“Throwing other people's money at a thorny public policy problem that cannot be fixed with money alone is the quintessential Washington dodge.  The only way to get serious reform is to turn off the spigot that is pouring money into this black hole.

"This increase is the result of an unusual 'negotiated' settlement of a rate case involving the USPS and 56 of the 63 official stakeholders.  However, it is one of Washington's worst kept secrets that many of the parties accepted this rate hike for fear of having even more severe increases imposed upon them in the near future.  Though the rate commission stated today that this expedited settlement does not set a precedent for future cases, the public can expect the postal service to be back with more demands before the year is out and they will undoubtedly petition to have that rate case rushed through as well.  These are the desperate tactics of a failing, government-backed monopoly. 

"The  Postal Rate Commission is vested with only the weakest authority to protect ratepayers from the predations of this mismanaged and unaccountable bureaucracy, though several of its commissioners and its Office of Consumer Advocate deserve credit for exposing some of the postal service's fiscal shenanigans.  Commissioner Ruth Goldway today made clear that this rate hike is a stop gap measure and that the postal service is plagued with serious systemic problems that call for public policy action in Congress.  In the short run, measures should be instituted by Congress, including (but not limited) to: a hard hiring freeze; the elimination of the postal service's advertising budget; a full accounting of and immediate stoppage of all its e-commerce activities; a complete inventory of all its properties and a thorough review of all its construction expenditures; and the elimination of lump sum payments of any kind for postal managers and supervisors.  In the long run, the postal service must be demonopolized and reborn as a purely private sector enterprise. 

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.