Postal service denied rate increase

Associated Press

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 an approximately $7 billion loss this year as people do more business on the Internet and the recession erodes the volume of marketing mail.

In July, the post office had asked for a special rate increase for letters, postcards, periodicals, parcels and other services as one of several steps to cut its losses. The agency also had 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.