The Association of Magazine Media

Financial Pressures Mount for USPS as Postage Increase Is Scheduled for January 2013

November 9, 2012

After announcing losses of $11.6 billion for the first three quarters of their fiscal year in August, just a month later, the Postal Service hit its $15 billion Treasury borrowing limit.  In order to continue funding operations after reaching this limit, the USPS defaulted on yet another retiree health fund payment of $5.6 billion on September 30, a number included in the total reported losses.

The Postal Service has been working to stem the tide through early retirement and buyouts for employees, reducing their retail network, closing processing plants, and potentially changing service standards - but the steps undertaken thus far are not likely to be sufficient to avoid future losses. The USPS may default on other obligations in order to keep operations funded unless Congress intervenes. MPA has continued to advocate for the passage of a postal reform bill that will put the Postal Service on the path to financial stability.

Following the latest financial news, the Postal Service filed its notice of rate adjustment on October 11 announcing the postage rates that will go into effect on January 27, 2013. The average rate increase for Periodicals will be 2.56 percent. This increase is within the CPI cap that was instituted by the 2006 Postal Accountability and Enhancement Act.  MPA members may view a rate increase chart here: January 2013 Postage Rate Increase.