Government affairs

Legislative Updates

Exigency expiration: what does it mean?

In December 2013, the Postal Regulatory Commission (PRC) approved an emergency, or “exigent,” rate increase, which raised the price of a First Class stamp from 47 cents to 49 cents. The price increase was promoted as a way to help the U.S. Postal Service recover from the dramatic drop in mail volume caused by the Great Recession. That rate increase is set to expire on April 10 and the consequences are expected to cost the Postal Service $2 billion annually in lost revenue as a result. Over a 10-year period, this could add-up to $20 billion in lost revenue.

Here is some background information to help you understand this situation:

Because the Great Recession had a such a negative impact on mail volume, the Postal Service encouraged the PRC to make the rate increase permanent. But in its 2013 decision, the PRC only authorized USPS to charge the higher rates until it recouped more than $3.2 billion in exigent surcharge revenue.

The Postal Service appealed the PRC’s ruling to the U.S. Court of Appeals for the District of Columbia Circuit, seeking to make the increase permanent. (A group of corporate mailers also appealed the PRC’s ruling—but they sought to cancel out the exigent increase.)

The court ruled that the PRC needed to reevaluate some aspects of its 2013 decision. The PRC did so and allowed USPS to recoup additional revenue of more than $1.3 billion—but it still did not make the rate increase permanent.

To maintain rate stability for the Postal Service and to prevent unnecessary financial difficulty for it, Congress would need to intervene with a legislative solution. Absent that, USPS would be forced to further reduce operating expenses not only by cuts to service standards but also by likely cuts to letter carriers’ wages and hours.

To address the rates issue beyond April 10, NALC is working with Congress and postal stakeholders to try to identify a permanent solution.

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