(Washington, D.C.) — Citizens Against Government Waste (CAGW), America’s largest taxpayer watchdog group, today announced its opposition to the one-cent postage increase proposed by the U.S. Postal Service (USPS) Board of Governors.  CAGW cited the Postal Service’s $363 million profit in fiscal 1999, along with unaccountability and waste throughout the agency, among reasons for its position.

“During the past five years, the Postal Service has made more than five billion dollars in profit,” said CAGW President Thomas Schatz.  “Why do they need the extra money, to print more Bugs Bunny t-shirts?”  Schatz noted that USPS continues to leverage its government-sanctioned monopoly on first-class mail to undercut expedited delivery services like Federal Express and United Parcel Service.

“The Postal Service will use this rate increase on its first-class mail monopoly to subsidize delivery services that duplicate the work of private companies in the marketplace,” Schatz continued.  “That extra penny on a first-class stamp won't go to improving first-class mail.  Instead, it will subsidize services that replicate what already exist in the private sector.”

CAGW believes that USPS should continue to do what it does best — provide universal mail delivery service at a low price — and allow the marketplace to determine who can best provide other shipping services.  “Both Congress and the Postal Rate Commission have said that the Postal Service doesn’t need a rate increase.  Unfortunately, the Board of Governors has chosen to shun the oversight of these important bodies,” Schatz said.

Schatz noted that USPS's own 1998 annual report projects “total mail volume over the next decade will grow 3 to 4 percent a year, with First Class Mail growing 1 to 2 percent a year.”  CAGW also discounts USPS claims that a rate hike is necessary because it will lose business to e-mail.  “This is the same tired argument that postal bureaucrats made upon the advent of the telegraph, the telephone, and the fax machine.  Yet every year, the Postal Service's business grows and grows.  The service is in no danger of collapsing.  It’s time that management focused on its core mission and let the private sector handle the rest.”

CAGW is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.