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article imageU.S. Postal Service has to lower prices — But there's a price

By Nathan Salant     Apr 9, 2016 in Odd News
Washington - Now for something completely different; the cost to mail a letter is going down in the United States. Yes, prices going down — you heard that right.
A two-cent surcharge from 2014 is expiring and, starting Sunday, a first-class stamp will cost 47 cents instead of the usual 49 cents.
But hold on — before you get too excited, don't forget that lower prices from the Postal Service come at a price — less revenue for the government.
Postmaster General Megan Brennan said in a statement Friday that the lower price was going to make ongoing postal service losses even worse — $2 billion worse, to be exact — which necessarily means higher stamp prices in the future.
"To properly compete for customers and continue to meet America's evolving mailing and shipping needs, the Postal Service needs the financial capability to invest in the future," Brennan said.
The announcement comes as the Postal Service reported a $307 million profit for the last quarter of 2015 due largely to a big jump in shipping over the winter holiday season.
But officials said that without the 2-cent surcharge and favorable interest rate changes, the post office would have lost $700 million.
And, under its operating authority, the Postal Service does not use taxpayer money for operation and cannot raise prices faster than the rate of inflation unless it gets approval from the Postal Regulatory Commission — often a lengthy, uncertain process.
Of course, the post office still is trying to get more authority to raise rates on its own, and to relax a mandate imposed by the U.S. Congress to pre-fund health benefits paid to retired employees -- a cost not imposed on any other business or federal agency.
"We continue to seek legislative reforms to put the Postal Service back on a sustainable financial path, and pricing is an important component," Brennan said.
More about Us postal service, Mail, Stamps, first class, Price
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