Stamp Price Cut Could Cost USPS $2 Billion a Year

The U.S. Postal Service warns if an "irrational" stamp-price cut goes through next month, it'll cost the financially struggling post office $2 billion a year.

In a statement from the USPS, Postmaster General and CEO Megan Brennan says a surcharge granted by 2014 legislation "only partially alleviated our extreme multi-year revenue declines resulting from the Great Recession."

The legislated surcharge let the price of stamps rise by 3 cents to help the post office raise $4.6 billion in revenue — but it was only set to last two years, CNN Money explains.

"Removing the surcharge and reducing our prices is an irrational outcome considering the Postal Service's precarious financial condition," Brennan states.

The planned April 10 reduction would bring the 49-cent price of a first-class stamp down to 47 cents; the post office has been allowed to keep 1 cent of the previous increase to account for inflation.

The last time stamp prices fell was 97 years ago in July 1919, when first-class stamp prices dropped from 3 cents to 2 cents, CNN Money notes.

"Our current pricing regime is unworkable and should be replaced with a system that provides greater pricing flexibility and better reflects the economic challenges facing the Postal Service," Brennan states.

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