PRC Responds to Lawmakers’ Concerns Over DeJoy’s Authority for Big Price Hikes

The system is “working as intended,” commission says.

The U.S. Postal Service needs its authority to issue large price hikes and has acted appropriately in implementing them, its regulator found in a new report issued in response to questions from lawmakers.

Congress required the in-depth, 628-page review in the fiscal 2022 omnibus funding package that President Biden signed into law in March. Lawmakers raised concerns about the “size and timing” of USPS’ first use of its new authority that allowed for above-inflation rate hikes in August 2021, when postal management increased the cost of regular, First-Class mail by 6.8%. The law called on the Postal Regulatory Commission to once again determine if USPS should maintain its extra capacity to bump rates, particularly in the wake of the COVID-19 pandemic and the financial relief Congress provided.

The new system, finalized in 2020, ties price caps to what the regulatory commission identified as USPS’ two biggest cost drivers: fewer pieces of mail going to more addresses and mandatory payments the agency must make toward benefits for future retirees. Postal management previously could only raise rates in line with inflation.

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