US Postage Rates Set to Drop for the First Time in 97 Years

For the first time since Woodrow Wilson was president, the price of a US postage stamp is set to decrease in April.

According to the US Postal Service, the price of a US-bound first class stamp will decrease 2 cents — to 47 from 49 cents — starting April 1o.

Stamp prices last declined in 1919 when the price of a first class stamp fell to 2 cents from 3 cents. 

This expected decrease stems from an act of Congress passed in 2013 that allowed the USPS to add a 4.3% surcharge in order to stem the massive losses for the Service because of the Great Recession.

In a release from the USPS, the group said the act expires when the surcharges had accounted for $4.6 billion in revenue, which will happen April 10.

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At that time, stamps will revert back to their inflation-pegged pricing, dropping the price to 47 cents for a first class stamp and sticking the USPS with an additional $2 billion in annual losses.

Postmaster General and CEO Megan Brennan says this will be a disaster for the postal service.

"The exigent surcharge granted to the Postal Service last year only partially alleviated our extreme multi-year revenue declines resulting from the Great Recession, which exceeded $7 billion in 2009 alone,” said Brennan in a release. “Removing the surcharge and reducing our prices is an irrational outcome considering the Postal Service’s precarious financial condition.”

The problem is that stamp prices, absent the surcharge, are pegged to inflation by Congress. Inflation, as we've noted, has barely moved in the past few years so it has not caught up to where the USPS was charging for the past few years.

So even with inflation perking up recently, prices aren't rising fast enough to save the postal service from massive losses. The release also said that while the USPS has seen an increase in package flows since 2009, it has not been enough to offset the decline in letter service and the sudden drop in prices.

Brennan said in the release that the USPS should be allowed more flexibility in setting its own prices based on its financial conditions, though right now the only way to reverse the change would be an act of Congress or the courts.

Other USPS rates will also fall:

• Letters weighing more than 1 ounce: 21 cents per additional ounce (down from 22 cents)
• Letters to all international destinations: $1.15 (down from $1.20)
• Postcards: 34 cents (down from 35 cents)

Commercial prices will decrease as well.

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