CAGW BLASTS TODAY’S POSTAL RATE INCREASE | Citizens Against Government Waste


Press Release

For Immediate ReleaseContact:  Sean Rushton or Melissa Naudin
May 8, 2001(202) 467-5300


Washington, D.C. – Citizens Against Government Waste (CAGW) today criticized the U.S. Postal Service (USPS) for modifying its January rate hike by increasing postal rates on additional classes of mail.  As of July 1, most mail besides one-ounce First Class letters, including periodicals, two or more ounce First Class letters, and postcards, will see substantial price increases.  This latest rate hike follows a substantial increase for postage that took effect in January.  The USPS claims the latest rate hike will yield close to $1 billion in new revenue in a year in which it predicts losses of $2-$3 billion. 

“In a world of rapid communications, globalization, and falling prices, the Post Office management seems to think it can coast on the public’s good will and generosity forever,” CAGW Vice President Leslie K. Paige said.  “It is time for the Postal Service to start behaving like a business: cut waste, increase efficiency, and reduce prices.”

In addition to today’s announced rate hike, the USPS appears to be poised to file yet another rate case sometime early this summer, this time reportedly seeking somewhere between 20 and 30 percent increases for most mail.  The USPS – loath to address its true inefficiencies and bloated worker rolls, has also threatened to cease Saturday mail delivery.  The Post Office’s own Inspector General has reported $1.4 billion per annum of waste, fraud, and abuse in its operations.

“Once again the Post Office is showing why it must be privatized if it is going to survive,” Paige added.  “There is no private business on Earth that would find itself losing money, hugely overstaffed, and completely inefficient and say, ‘Hey, let’s raise prices and cut service!’  The Postal Service is going to ruin itself if it keeps operating like this.”

Since 1980, despite stagnating postal demand, the Postal Service has increased its workforce by 36 percent.  It now employs more than 900,000 people.  Meanwhile, despite multi-billion dollar outlays on technology upgrades, USPS’s productivity is expected to be an anemic 0.7 percent this year and has had only an 11 percent increase in productivity over the last 30 years.  In addition, the Postal Office had $9.3 billion in debt at the end of fiscal year 2000 and has no repayment program in place.  The only things propping it up are its special tax breaks and government-granted monopoly status in the First Class mail business.

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.

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