Absent Congressional or court action to extend or make permanent an existing exigent surcharge for mailing products and services – including the Forever stamp – the United States Postal Service (USPS) will be required to reduce certain prices on Sunday, Apr. 10. This mandatory action will worsen the Postal Service’s financial condition by reducing revenue and increasing its net losses by approximately $2 billion per year. This will be just the third time in its history the USPS lowered postage rates.
An order from the Postal Regulatory Commission (PRC) requires the 4.3 percent exigent surcharge put in place over two years ago in January 2014 to be reversed after the Postal Service has collected surcharges totaling $4.6 billion. As outlined in a notice filed with the PRC recently, that amount is expected to be reached by Apr. 10.
Postal Service prices for Mailing Services are capped by law at the rate of inflation as measured by the Consumer Price Index for all urban consumers (CPI-U). However, the law does allow for exigent pricing (price increases beyond the CPI-U cap) due to extraordinary or exceptional circumstances. That was the case when the Postal Service sought and ultimately received approval for the current exigent pricing, citing the severe effects of the Great Recession on Postal Service mail volume.
However, the PRC did not accept the views of the Postal Service concerning the extent of the harm resulting from the Great Recession, and the PRC strictly limited the period of time the Postal Service could continue to collect the exigent surcharge. While the Postal Service has experienced rapid growth in package volume over the past few years, it is not nearly enough to offset the decline in revenues from Market-Dominant products, especially First-Class Mail.
Current Prices vs. Mandated Reduction
- Letters (1 oz.) 49 cents to 47 cents
- Letters additional ounces 22 cents to 21 cents
- Letters to all international destinations $1.20 to $1.15
- Postcards 35 cents to 34 cents
Commercial prices will also decrease. A complete listing of the new prices, effective Apr. 10, is available at www.usps.com.
The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products, and services to fund its operations.
