The post office is getting ready to ask Americans to ante up a few more cents to clear up its billion-dollar losses.
A decision to seek a rate increase could come as early as Tuesday, with stamp prices likely to rise to between 32 and 35 cents _ 3 to 6 cents more than the current rate.
Rates also will increase for other classes of mail _ including magazines and catalogs, parcels and those items that the post office doesn't like to call junk mail. How much those prices will go up remains to be seen.
Each penny increase means an extra $920-million for the agency. It lost $1.7-billion last year and expects to wind up $1.3-billion in the red this year.
Since its 1971 independence, the Postal Service has operated on an approximate three-year cycle, making money one year, breaking even the second and losing money the third year _ followed by a rate increase and a return to profit. The agency no longer receives any tax subsidy to operate.
Whatever new rates are proposed, they won't take effect until at least early 1995 because of the complex legal processes required to increase postage prices.
The post office must make separate proposals on all postal rates _ which don't increase by the same amount _ and interest groups will spend thousands of hours and millions of dollars trying to convince officials that their price should go up less than everyone else's.
Not only that, whatever the Postal Service proposes must go before the independent Postal Rate Commission which can, and sometimes does, come up with a different answer.
The last time the post office raised rates, it wanted a 30-cent stamp. Instead, a 29-cent rate took effect Feb. 3, 1991.
This time around, postal officials have not disclosed what stamp price they will propose. But insiders say 32 cents and 33 cents are the leading possibilities.
For a person who mailed 300 letters a year, a 4-cent increase in the stamp price to 33 cents would raise annual postage costs by $12 _ from $87 to $99.
Asked about a possible 35-cent rate, Postmaster General Marvin Runyon told a convention of postal customers: "It won't happen. Period. We are committed to keeping rate increases at about the rate of inflation."
Inflation from 1991 until the time the new rate takes effect is expected to total 13 percent to 14 percent, indicating a new rate of 32 or 33 cents.
A coalition of organizations representing major mailers has announced it could accept an across-the-board increase leading to a 32-cent stamp.
But don't expect to actually see a 32-cent stamp _ or even a 33-cent or 35-cent stamp _ immediately after the new rate takes effect. Instead, expect a "G" stamp.
Millions of stamps with the letter "G" instead of a price already have been printed for use at whatever the new rate turns out to be.
The history of postal rates
The U.S. Postal Service is getting ready to raise the cost of a first-class stamp _ a price that has varied widely.
In the country's early years postal charges were based on distance traveled and applied to each piece of paper.
Letters were simply folded and sealed, because an envelope would have resulted in an extra charge.
Prices ranged from 25 cents per sheet for mail traveling more than 400 miles to between 6 cents and 8 cents if the distance was under 40 miles.
A standard rate, regardless of distance, was established in 1863 at 2 cents per half-ounce. It rose to 3 cents in 1883.
The current system of basing the rate on a full ounce was established in 1885. The rates:
July 1, 1885 _ 2 cents per ounce; Nov. 3, 1917 _ 3 cents; July 1, 1919 _ 2 cents; July 6, 1932 _ 3 cents.
Aug. 1, 1958 _ 4 cents; Jan. 7, 1963 _ 5 cents; Jan. 7, 1968 _ 6 cents; May 16, 1971 _ 8 cents; March 2, 1974 _ 10 cents; Dec. 31, 1975 _ 13 cents; May 29, 1978 _ 15 cents; March 22, 1981 _ 18 cents.
Nov. 1, 1981 _ 20 cents; Feb. 17, 1985 _ 22 cents; April 3, 1988 _ 25 cents; Feb. 3, 1991 _ 29 cents.
_ Associated Press