US & World News

WASHINGTON (CBS News) ― A postal regulatory commission recommended a 2-cent increase in the cost of mailing a letter Monday and urged the Post Office to introduce a "forever" stamp valid for first-class postage even when rates rise.

The recommendation to increase postage to 41 cents was a penny less than the postal service had requested.

The commission recommended a 26-cent rate for post cards, also a penny less than the Post Office had sought.

The first ounce of a first-class mail would rise to 41 cents, but each additional ounce would cost 17 cents under the proposal. Currently, each additional ounce of first-class mail costs 24 cents.

The matter now goes back to the Board of Governors of the Postal Service for a decision on whether to accept the recommendation or ask the commission to reconsider. If the governors accept the recommendations the new rates could be implemented in 60 days.
The governors won't make a decision until at least March 8, a USPS spokesman told CBSNews.com.

However, postal officials and mailers have been expecting a rate increase in mid-May. In fact, most of this year's new postage stamps have been pushed off until after that date. Only stamps with a definite date tie-in (Ella Fitzgerald for Black History Month, Love and Kisses for Valentine's Day) and two others will be issued before then. (The Oklahoma centennial commission requested that the statehood stamp be issued early in the year, and the Henry Wadsworth Longfellow stamp will be issued at a stamp collecting show the USPS co-sponsors.)

A key part of the plan is the so-called forever stamp, which would allow consumers to hedge against future rate increases.

No design or theme has been announced for the Forever stamp. While the Postal Service might lose money on customers who stock up on the issue and hold it past subsequent rate changes, it will make money on stamps purchased but not immediately used, as well as not having to issue as many rate-change stamps.

The U.S. already has something of a "forever" stamp: the Breast Cancer Research charity stamp, reports CBSNews.com's Lloyd de Vries.

Issued in 1998 for a two-year period, part of the price of this stamp goes to charity. It's already raised more than $53 million, and outlasted all other charity stamps. Every time the stamp is due to expire, Sen. Diane Feinstein (D-Calif.) moves to extend it.

Right now, it costs 45 cents, or 6 cents more than the current first-class letter rate. When postal rates go up later this year, as is expected, the Breast Cancer Research stamp will go up another dime, to 55 cents.

If it was purchased at a cheaper price, customers are supposed to pay the difference when they use it to mail a letter. But there's really no way to know what was paid.

The broad-ranging rate proposal covers a multitude of types of mail, and, under the proposal submitted to the PRC, some rates — including that for additional ounces — would actually go down.

Letters, cards, bill payments and other first-class mail items have been declining in recent years as people turn to the Internet. At the same time, there has been an increase in advertising mail.

And Postmaster General John E. Potter has pointed out that "the Postal Service is not immune to the cost pressures affecting every household and business in America."

For example, each penny increase in the price of a gallon of gasoline costs the post office $8 million, and the Postal Service cannot simply add a fuel surcharge to its rates.

Other proposed rate changes included:

• Express Mail, flat rate up from $14.40 to $16.25.

• Two-ounce barcoded bank statement, down from 54.5 cents to 48.6 cents

• Bulk-mailed weekly newsmagazine, up from 17.9 cents to 20 cents.

• Presorted catalog, up from 32.1 cents to 33.6 cents.

• Postcard, up from 24 cents to 27 cents.

The cost of a first-class stamp went from 37 cents to 39 cents in January 2006. Before that, the price had been unchanged since 2002.

The rate request was filed last May, when gasoline prices and other transportation costs were soaring.

(© 2007 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)