WASHINGTON — The Postal Service’s bid to raise the cost of mailing a letter by 2 cents was rejected Thursday, denying the agency immediate relief from a worsening financial crisis.
The Postal Service lost $3.8 billion last year and is headed toward a loss of about $7 billion this year as people do more business on the Internet and the recession erodes the volume of marketing mail.
In July, the post office asked for a special rate increase and suggested cutting delivery service to five days a week and closing or consolidating offices — issues that were not addressed in Thursday’s rate decision by the independent Postal Regulatory Commission. The rate increase needed the commission’s approval because it was higher than the rate of inflation.
The commission’s unanimous denial of the increase was a signal to the post office to deal with what its chairman says is an even bigger financial problem — a $5.5 billion-a-year obligation to set money aside for future retiree health benefits.
Commission Chairwoman Ruth Goldway said the Postal Service’s request failed to fully justify the rate increase. She said the requested rate adjustment was not a result of the recent recession, as indicated by Postal Service officials, but rather was an attempt to address long-term structural problems.
