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No Postal Law Will Force Price Increases, Donahoe Says

The U.S. Postal Service, approaching next month with only five days cash on hand, may need to raise prices by more than the inflation rate if Congress change the service’s business model, Postmaster General Patrick Donahoe said.

“Unless the Postal Service is given the legal authority to close the budget gap, an exigent price adjustment may be necessary in order to ensure that the Postal Service will be able to maintain and continue the development of postal services of the type and quality the country needs,” Donahoe said in testimony prepared for a hearing today on the Senate’s postal bill.

The service’s board is scheduled next week. It can’t implement price increases beyond the rate of inflation without regulatory approval.

The service has said it expects to lose $6 billion this year and miss a third year of required payments to cover costs of future retirees’ health care.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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