Why are first-class stamp prices being raised?
Need to pay your bills or finish sending out those last minute holiday cards? Better send those out as soon as you can or switch to digital. Starting next month, sending out mail may set you back a pretty penny thanks to the new increase in first-class stamps.
Regulators on Tuesday approved a temporary price hike of 3 cents for a first-class stamp, bringing the charge to 49 cents a letter in an effort to help the Postal Service recover from severe mail decreases brought on after the 2008 economic downturn per USA Today.
Effective Jan. 26, 2014, first-class postage will be raised. Forever stamps, which are good for first-class postage whatever the rate, can be purchased at the lower rate until the new rate takes effect.
The higher rate is expected to last no more than two years, allowing the Postal service to recover $2.8 billion in losses. Attempts to keep the increased postage cost permanent were shot down by a 2-1 vote by the independent Postal Regulatory Commission.
The higher cost “will last just long enough to recover the loss,” Commission Chairman Ruth Y. Goldway said.
The Postal Service, contrary to popular belief, is actually an independent agency that does not depend on tax money for its operations but is subject to congressional control. Under federal law, it cannot raise prices more than the rate of inflation without seeking approval from the commission first.
The post office has been struggling for years with the rise of growing internet use and more companies allowing for electronic communication rather than written. A 2006 congressional requirement is that the post office is to make an annual $5.6 billion payment to cover health care costs for future retirees. So far it has defaulted on three of those payments.