Chief of Staff Louis Dejoy said the goal is to ultimately make the U.S. Postal Service self-sufficient. This could mean higher rates.
WASHINGTON – Americans need to get used to the “uncomfortable” rate increase for postal items in the coming years because U.S. Postal Service seeks to become self-sufficient, post chief Louis Dejoy said Thursday.
The postal board is setting tariffs for postage, but DeJ said he would support raising prices until “we reach our goal of projecting a trajectory that shows we are self-sustaining.”
“I believe we have seriously damaged at least 10 years of a flawed pricing model that cannot be met by one or two annual price increases, especially in this inflationary environment,” he added.
Dejoy made remarks at a board meeting at which the postal service reported losses of about $ 1.7 billion over the last quarter.
A brief reconstruction designed to support the financial future of the postal service will be reflected in the results of the next quarter. The long-delayed law also provides for mail delivery six days a week.
The bill was signed by President Joe Biden the same day the postal service announced plans for the latest rate hike.
If the increase receives the final approval of the Commission for the Regulation of Postal Services, then from July 10, the cost of first-class stamp “forever” will increase by 2 cents to 60 cents.
The Postal Reform Act repeals the budgetary requirements that contributed to the agency’s red ink, and stipulates that mail must be delivered six days a week, except for federal holidays, natural disasters, and certain other situations.
Postal services were supposed to support the postal service, but for 14 years in a row it suffered losses. Rising costs for compensation and payments to employees, as well as a steady decline in mail volume have led to worsening losses, even if the service delivers 1 million extra seats each year.
The new law removes the requirement for the postal service to finance early medical payments to employees for the next 75 years – a commitment that private companies and federal agencies do not face. Biden said the rule “stretched the finances of the postal service almost to the breaking point”.
Now future retirees will enroll in Medicare, while other health and postal plans cover only the actual health care costs of current retirees, which are not paid for by the federal senior health insurance program.
To measure the agency’s progress in improving service, the law also requires it to create an online dashboard that could be searched by zip code to show how long it takes to deliver emails and packages.
Travis Pitman contributed to this report.