Feds overcharge for new US passports

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Feds overcharge for new US passports

Post by Har Dy on Tue Nov 06, 2007 7:58 am

WASHINGTON - The U.S. government has overcharged Americans by more
than $100 million a year in its fee for new passports, according to
cost figures uncovered by congressional investigators and analyzed by
two senators and The Associated Press. ADVERTISEMENT
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The
two senators said Americans have been quietly gouged since 2002. The
report they initiated showed the costs incurred by the State Department
and the U.S. Postal Service, for accepting passport applications, were
considerably less than the fee charged.
The $97 adult fee for new passports is set by the State Department, which denied Friday that it overcharges anyone.
"We are not trying to gouge the American public," deputy department spokesman Tom Casey said.
The costs surfaced only months after thousands of Americans fell
victim to passport processing delays, finding their vacations,
weddings, honeymoons and business trips ruined and their
nonrefundable deposits gone.
Over the past year, as the government issued nearly 14 million new
passports, Americans paid at least $111.4 million more in passport fees
than the government's stated costs, according to calculations by the AP
using information from State Department and the Government Accountability Office.
Sens. Byron Dorgan, D-N.D., and Charles Schumer,
D-N.Y., who jointly asked for the GAO study, estimated the government
overcharged travelers $112.7 million during 2002, when less than half
the number of new passports were issued.
The senators demanded a State Department accounting of where the
passport profits have gone, at a time when more Americans than ever are
required to have the travel documents as an anti-terrorism measure.
The revelation of the costs has angered some of the people who had
passport problems this year, as well as at least one major travelers'
group.
"It's outrageous," said Linda Kocher, of Wahpeton,
N.D., who ended up paying twice for three passports after the initial
passports she ordered failed to arrive on time for a family vacation.
"You always trust the Post Office. You think they're not trying to make any money off me. That's baloney," she said.
Most Americans apply for their passports at post offices. For
handling the applications, the Postal Service gets to keep part of the
fee and according to the GAO figures make a handsome profit.
"It's the combination of excessive fees plus the long wait that's
most galling to passengers," said David Stempler, president of the Air
Travelers Association. "It's just another way the federal government
has ill-served passengers. Airline passengers are taxed and fee'd more
than any other group. To see that we're being gouged on top of that is
most irritating."
The $97 passport fee $82 for children under $16 dates back to
2005. The GAO studied whether a $30 portion of that fee was justified.
The $30 is intended to cover the cost of clerks examining and
accepting passport applications at post offices, State Department
passport offices, courthouses, libraries, municipal offices and
universities.
The investigators' findings? The government's $30 fee was roughly
double the actual cost when imposed in 2002. The Postal Service, which
operates 5,382 locations where people can apply for passports,
estimated its costs at $13.31 in 2002. The State Department, which
operates 14 passport offices, said its costs were $16.20 at that time.
"This is not supposed to be a profit-making venture," Dorgan said.
"They charge 30 bucks just for passing something across the counter."
The remaining $67 is spent producing the passport booklet and for
related costs, such as rent at passport offices, security guards and
background checks. Investigators did not look into that portion of the
fee.
A Postal Service spokeswoman, Joanne Veto, said the agency's
$13.31 figure was not an accurate reflection of its costs when the fee
was imposed. Congressional investigators, however, said that was the
figure the Postal Service gave the State Department for use in setting
the $30 fee.
Casey, the State Department spokesman, said, "We always want to
make sure we're providing a good and high-quality service for the
American people. We are comfortable (the $30 fee) represents our actual
costs."

The department told the GAO it has hired a contractor to perform a new cost study of the fee before December 2008.

"It's sort of a tax," Schumer said. "Where did all the money go? What are they going to do to correct it?"
The GAO said the State Department and the Postal Service also
benefited from a dramatic surge in the numbers of passports issued,
rising from 7 million in 2002, including renewals, to more than 18
million over the past year.
More Americans are required to have passports because of new
anti-terrorism laws. The State Department has said it expects to issue
as many as 23 million passports next year and 30 million more in 2010.

Since January, for the first time, travelers visiting Canada, Mexico, Central and South America, the Caribbean and Bermuda
by air have needed passports or proof they applied for passports. The
requirement will take effect for land and sea travelers before June
2009.

Since many Americans travel often to these areas, including regular cross-border travel to Canada and Mexico, the State Department plans to introduce a new $45 Western Hemisphere passport card next spring.
The fee for accepting the applications would drop from $30 to
$25 for the card and traditional passport books, under a State
Department proposal.
The State Department told congressional investigators its cost
for accepting applications at its offices in 2005 had risen to $24.36,
virtually the same as the proposed new $25 fee. But consular officials
could not describe how they calculated that estimate, investigators
said.
The Postal Service initially told the GAO, in April 2006, its
cost for accepting applications had jumped to $19. But later the mail
service revised its cost estimate upward to $32.86 adding overhead
costs not associated with passport processing making its cost appear
to be higher than the $25 fee it would collect.

"It is unclear whether USPS's estimate accurately reflects its costs," the GAO said.


Sorry , too many words guys.
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Har Dy
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