Postal Service hikes rates to recoup recession losses


Need an incentive to write and mail those holiday thank-you notes promptly? On January 26 a first-class stamp will increase from 46 to 49 cents. Similar changes will apply to magazines, newspapers, advertising mail, and bills. Forever stamps, however, if purchased at 46 cents each before the increase, will still be valid for all one-ounce letters.

The Postal Regulatory Commission (PRC) approved 4.3 percent rate increases on December 24, in addition to increases of 1.7 percent, an amount tied to the rate of inflation, previously approved in November. Although the USPS has been required since 2006 to limit rate increases to the rate of inflation, it requested higher than usual increases to offset economic losses during the recession of 2008-2011.

The PRC approved the Postal Service’s request in a 2-1 decision. However, the commission denied the request to make the increases permanent and limited them to a period of less than two years.

“The Postal Service will be reimbursed for exigent losses that can be reasonably quantified,” PRC chairman Ruth Y. Goldway said in a press release issued December 24. “We have determined that amount to be $2.8 billion to cover the 25.3 billion pieces of volume lost between 2008 and 2011. The funds will come from a rate surcharge that will last just long enough to recover the loss.”

The PRC directed the USPS to report quarterly on revenues from the rate increases and to develop a plan to phase them out once the $2.8 billion in revenue is achieved.