If you have any three-cent

postage stamps lying around, you might want to keep them handy.

Last Sept. 11, the U.S. Postal

Service announced it would be increasing postal rates again in 2002, on

the heels of the one-cent increase in 2001. That announcement came just

minutes before something else that happened that day, and understandably

got lost in the shuffle.

Now comes the news that the

postal service is negotiating with its major mailers to try to accelerate

the proposed 8.7 percent increase, which was to have taken effect late

this year, to a June 30, 2002 start date. The 8.7 percent includes plans

to raise the cost of a first-class stamp from 34 cents to 37 cents, and

it means that John and Jane Q. Public will be facing a 12-percent increase

in postage costs in a little more than a year's time.

Maybe you've thought to yourself

that postal rate hikes seem more and more frequent and perhaps even excessive.

It's not your imagination.

In 1962, a first-class stamp

cost four cents. If the cost of a stamp had reflected trends in the Consumer

Price Index one of the major measures of inflation and used by the government

and some in the private business sector to calculate cost-of-living increases

a first-class stamp would have cost 24 cents in 2001. But as we all know,

that stamp cost us 34 cents as 2001 closed, or about 42 percent more than

the inflation rate would have indicated. So what gives the postal service

the right to set rates the way it does? After all, Social Security and

other government benefits are liked directly to the Consumer Price Index.

Why not the postal service?

Postal rates are set not by

the President nor the Congress, but by the postal service's board of governors.

For a rate change to go into effect, the board of governors needs the

approval of the Postal Rate Commission, which is independent of the postal

service and was created to perform a review-and-check function of postal

service proposals. But a rate commission rejection does not kill a rate

increase, merely delays it. So basically, the postal service is an entity

upon itself in setting its rates, and there is a reason for that.

Unlike most governmental programs,

the U.S. Postal Service is expected to exist on its own self-generated

revenue. You never hear Congress arguing about raising taxes for the postal

service because we, the users, are paying the costs. Even though it is

a government agency with Congressional blessing and oversight, the postal

service faces the same day-to-day challenges as does any business which

depends upon its revenues to survive.

Why does the U.S. Postal Service

advertise its services so much? Because there are competitors, and it

must keep market share in order to sustain and grow revenues. Why did

the U.S. Postal Service contract with one of its leading competitors to

allow FedEx customers to drop off packages at post offices? Because it

judged the financial benefit to be worth it just like a private sector

business.

So when you have to shell out

an additional three cents for a postage stamp later this year, remember

that by doing so you are helping the postal service from having to dip

into the federal budget (your taxes) to sustain itself. Unfortunately,

the events of Sept. 11 that occurred after the postal rate increase announcement

resulted in the postal service receiving approval for more than $675 million

in emergency federal aid, but its costs associated with coping with the

anthrax-by-mail crimes are expected to rise into the billions of dollars.

Your additional three cents per stamp will help offset that expense while

minimizing and hopefully negating the need for additional federal aid.

[Tom Mitsoff is a longtime

daily newspaper editor and syndicated columnist.]