The Washington Post

Postal rates to rise Monday; court challenges ahead

U.S. Postal Service letter carrier Doug Hanson crosses Harlem Boulevard at Guard Street on Monday, Jan. 6, 2014, while walking his route in Rockford, Ill. (Max Gersh/AP)

Postage rates on first-class letters and most other mail will rise Monday by 3 cents to help the financially ailing U.S. Postal Service recoup millions of dollars it lost during the economic downturn.

But the largest rate increase in 11 years will be in effect only for about 24 months, the time postal regulators determined it would take the Postal Service to recover recession-related losses.

The new prices will take effect despite legal challenges filed in federal court last week by the mail agency and the industry representing bulk mailers. Both were unhappy with the Postal Regulatory Commission’s Dec. 24 ruling authorizing the increase. The Postal Service is frustrated because the higher price is not permanent, and the mailers are unhappy because the price boost exceeds the rate of inflation at which postage costs have been capped for years.

The price of a first-class letter will jump to 49 cents, but the Postal Service is not printing new stamps to reflect the change. Instead, it will rely on its popular “Forever” stamps, which will now cost 49 cents instead of 46.

A new “Forever” stamp in honor of Shirley Chisholm, the first African American woman elected to Congress, is scheduled to come out Friday. Another, featuring winter flowers, is due out Feb. 14.

The cost of a postcard will rise to 34 cents; a first-class additional-ounce stamp to 21 cents; a first-class two-ounce stamp to 70 cents; a first-class three-ounce stamp to 91 cents; and a Priority Mail Express flat-rate stamp to $19.99.

The Postal Service, which sought a permanent, 6 percent rate increase from regulators, is asking the U.S. Court of Appeals for the District of Columbia Circuit to stop the higher price from being phased out in two years. That’s about how long regulators said it would take for the agency to recover its losses from the recession, the justification postal officials used when requesting an emergency or “exigent” increase.

The mailing industry, which depends low postal rates to keep profits healthy, is asking the same court to overturn the ruling, saying the agency’s request for a hike based on recessionary losses masks other, structural problems.

“We hope the legal system will see through the Postal Service’s fuzzy math,” Mary G. Berner, president of the Association of Magazine Media, said in a statement last week. The association is part of a broad coalition of postal mailers, from direct marketers to newspapers, that is appealing the commission’s ruling.

The court did not stop the Postal Service from moving ahead with the price increase, a 4.3 percent jump regulators allowed on top of the customary 1.7 percent adjustment for inflation.

The Postal Service petitioned regulators for an emergency rate hike last year, claiming it needed $1.4 billion in extra annual revenue to compensate for business losses the agency suffered during the economic downturn between 2008 and 2011.

But the commission rejected a permanent increase, saying that a $2.8 billion infusion from the higher stamp rate over two years should help recoup recession-related losses. Regulators said that allowing the higher rates to become permanent would be in effect asking customers to offset structural losses caused by Americans’ growing use of electronic communications and commercial package-delivery companies.

The Postal Service filed a brief petition with the court Thursday challenging the commission’s ruling. The document says the agency is appealing but gives no details. In a statement on Dec. 24, the Postal Service said it was “disappointed in the [commission’s] decision to limit the duration of a modest exigent rate increase.”

The mail-dependent publishing industries had lobbied against an increase, saying that it would depress mail volume and burden consumers.

“The Postal Service has been losing mail volume to the Internet for years, even with very small annual rate increases,” Art Sackler, executive director of the National Postal Policy Council, another group representing mailers, said in a statement. “To think that as large an increase as this one will not seriously accelerate the decline in mail volume is a miscalculation.”

In addition to first-class mail, the higher rates will apply to magazines, newspapers, advertising mail and bills, which together account for most of the 158 billion pieces of mail delivered every year.

Ann Fisher, a spokeswoman for the Postal Regulatory Commission, said in an e-mail, “Given the nature of the case, an appeal, or two, was expected.”

Lisa Rein covers the federal workforce and issues that concern the management of government.

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