Contact: Robert E. McLean
703-418-0390
bmclean@mailers.org
www.mailers.org

Postal Facts: USPS Background

USPS Defined

Congress created the United States Postal Service when it approved the Postal Reorganization Act in 1971 (implemented in 1972). It created the USPS as an independent establishment of the executive branch of the U.S. government. As detailed in Title 39, United States Code, the USPS is directed by an 11-member Board of Governors. The Board directs and controls postal expenditures and reviews USPS practices and policies. Nine of the governors are presidential appointees; they appoint the other two board members, the postmaster general and deputy postmaster general.

Postal Rates

In 2006 Congress approved the Postal Accountability and Enhancement Act which dramatically changed the way postage rate increases will be implemented. The legislation prohibits the average rate for a product from rising higher than the annual increase in the Consumer Price Index except under extraordinary circumstances. This change eliminated lengthy and expensive litigation that preceeded a nine-month process, saving mailers millions of dollars.

The bill also redesignated the Postal Rate Commission as the Postal Regulatory Commission (PRC) and gives it broader regulatory and oversight authority, including subpoena power.

The final ratemaking rules ( RM2007-1: New Order Establishing Ratemaking Regulations for Market Dominant and Competitive Products) are available on the PRC's website (www.prc.gov).

Recent Rate History

The last postage rate case under the system established in 1971 was implemented on fective May 14, 2007. The next postage rate increase under the system established in 2006 is expected to occur in May 2008. The Price Cap for Market Dominant Products is 2.5% as of 11/15/2007. The next update will be with BLS release of new monthly CPI-U on 12/14/2007.

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