WASHINGTON — Two cents could cost the United States Postal Service $2 billion.
Effective this weekend, the price of a first-class stamp will fall from 49 cents to 47 cents, when a temporary increase in postage approved in 2014 is lifted.
Two years ago, the Postal Regulatory Commission granted an exigent surcharge on mailing products and services that totaled $4.6 billion so the Postal Service could make up for the loss in mail volume and revenue. The surcharge will be removed April 10.
“Given our precarious financial condition and ongoing business needs, the price reduction required by the PRC exacerbates our losses,” said Postmaster General Megan Brennen.
“This unfortunate decision heightens the importance of the review of our ratemaking system which our regulator is required to conduct later this year.”
USPS estimates the price reductions will result in a $2 billion annual loss.
The Postal Service is seeking Congressional action to reinstate and make the exigent surcharge permanent.
The Postal Service has cut its annual costs by $15 billion since 2008. It has also seen a rise in package and shipping revenue, helping offset a continued decline in first class mail and other mail services, but it continues to lose money.
The Postal Service posted a net loss of $5.1 billion in fiscal 2015.
In addition to the two-cent drop in the cost of a first-class stamp, letters to international destinations will fall from $1.20 to $1.15 and postcards will fall from 35 cents to 34 cents.
An independent agency, the Postal Service does not use taxpayer money for its operations. But under federal law, it can’t raise prices more than the rate of inflation without approval from the Postal Regulatory Commission.
