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Absent Congressional Action, USPS Stands to Lose $2 Billion in Revenue a Year

Absent Congressional action, the U.S. Postal Service’s much needed revenue-boosting surcharge will expire on Sunday, further eroding its already strained finances.

At a time when the United States Postal Service (USPS) already faces significantly strained finances, including projected losses of over $5.5 billion this fiscal year, USPS stands to lose an additional $2 billion in revenue a year absent Congressional action.

The price of First-Class stamps will fall on Sunday for the first time since the establishment of the USPS unless Congress prevents the expiration of a temporary ‘exigent’ price increase—an increase only authorized under extraordinary or exceptional circumstances. This increase was approved two years ago by USPS’ regulator, the Postal Regulatory Commission (PRC), to help recoup losses from the Great Recession. Its expiration will result in the reduction of much needed revenue.

However, preventing these surcharges from expiring would only offer a short-term solution. Comprehensive legislative reform is needed to address the structural mis-alignment of USPS’ costs and revenues.

USPS plays a vital role in our Nation's commerce and communications, and the Administration recognizes the need for Postal reform to ensure its future viability in light of structural changes in USPS’ business environment, such as the persistent decline in First-Class mail volumes as more communication shifts to electronic means.  That’s why the President’s Fiscal Year 2017 Budget proposes comprehensive reform of the Postal Service to improve its efficiency, update its business model, and better align its revenues and expenses.  Moreover, the Budget includes financial relief measures—including preventing the ill-timed rate reduction scheduled to go into effect next week—grounded on principles of fiscal responsibility as well as sound financial management.  Together, these reforms would set USPS on a sustainable business path, providing it with over $27 billion in cash relief, operational savings, and additional revenue through 2020.

Many of these proposals have been included in legislation already pending on Capitol Hill.  A hearing this past January in the Senate Homeland Security and Governmental Affairs Committee, titled “Laying Out the Reality of the United States Postal Service,” showcased a rare moment of consensus among the Postal Service’s workers, management, and its regulator:  comprehensive reform is needed to maintain the high performing and self-sufficient Postal Service that the American people deserve.  We urge Congress to act.