GovernmentExecutive.com

Even with a planned postage rate increase, the U.S. Postal Service expects to go nearly $1.8 billion in the red next year, Postal Chief Financial Officer Richard J. Strasser told the agency's board of governors Tuesday.

The agency plans a 5.4 percent rate increase in January, which would raise the cost of sending a first-class letter by two cents to 39 cents.

"We project revenue of $72.3 billion, an increase of 3.4 percent, to be offset by a like percentage increase in expenses," he said.

The agency, Stasser said, plans cost reductions of $1.1 billion, including work-hour reductions of 42 million hours, the Associated Press reported.

But, he noted, the post office also faces a congressionally imposed requirement to place $3.1 billion in an escrow account. Strasser also noted that costs are now expected to be higher than originally planned when the rate increase was approved by the board.

COMMENTS

• The Postal Service will forever be in the red and no one bothers to ask why. Here are some of the reasons. It don't know how to manage its budget. Most positions are over- paid big time. Postal Service employees have higher benefits than most federal employees. The Postal Service wastes too much money. etc. Since the postal system is just another form of taxation, the politicians don't care how high rates go and therefore they don't want to contract it out or even conduct a comparability study. GovExec.com reader Posted September 29, 2005 7:11 AM