The U.S. Postal Service's Board of Governors for the second time rejected the Postal Rate Commission's recommended 4.6% postal rate increase that went into effect in January and asked the PRC for a new recommendation "as quickly as possible."
The action was announced this morning by BOG Chairman Robert F. Rider at the board's monthly public meeting.
Postal governors, according to Rider, "found that the rates and fees recommended by the Commission do not meet the statutory policy of break-even and jeopardize the postal service's financial situation during this fiscal year and future years."
There was no immediate comment from the PRC.
The first time the BOG rejected the PRC's recommended rates was in December after it authorized the USPS to implement a 4.6% rate increase instead of the 6% sought by postal officials.
On February 9 the PRC reaffirmed its earlier recommendation, again refusing to go along with a 6% increase and brushing aside a USPS challenge to its authority to cut the amount of money held in reserve for contingencies or "unknown adverse occurrences" to $1.7 billion from $2.8 billion.
Neal Denton, Alliance of Nonprofit Mailers executive director, said postal governors, by sending the case back to the PRC for a second time "seems to be headed in the direction of unilaterally increasing rates over and above the levels the PRC authorized."
Postal governors, he added "opened the door to unanimously overrule the PRC and raise rates to add about $1 billion more to the postal service's rate base."
Postal governors can, by law, ask the PRC to reconsider its recommendations; vote unanimously to override its recommendations and give the USPS the rate increase it wants, or challenge the PRC's actions in court.
Gene A. Del Polito, Association for Postal Commerce president, predicted the PRC "will probably make some adjustments in its recommendations to address the issue of break-even."
He saw those adjustments being made to first class mail over one ounce and special service fees.
