The United States Postal Service (USPS) has been in dire financial straits for decades.  It first landed on the Government Accountability Office’s High-Risk List in April 2001 and has been there ever since due in large part to its “unsustainable business model.”  The USPS has lost money in every quarter since 2009.

In 2021, Postmaster General Louis DeJoy released the Delivering for America plan, which sought to stabilize the USPS over 10 years and included $34 billion for “self-help” cost reductions.  Only two years into this plan, it seems that the USPS will fall short of the goals included in the Delivering for America plan.  While some progress has been made, more can be done to stabilize the finances of USPS and improve efficiency for customers.

  In the 117th Congress, the Postal Service Reform Act of 2022, which the Council for Citizens Against Government Waste supported, received bipartisan support in Congress and was signed into law by President Biden.  This bill codified the mission of the USPS, helped stabilize the finances of the Postal Service, and improved transparency and accountability at the USPS.  The Postal Service Reform Act provided much-needed stability and reform to the USPS, but some major hurdles continue to cost the USPS money. 

 Improving the USPS has continued to be a focus in the 118th Congress.  On May 17, 2023, the House Oversight and Accountability Subcommittee on Government Operations and the Federal Workforce held a hearing examining the USPS’ progress on the Delivering for America plan.  In his testimony to the committee, Postmaster General DeJoy said that while the USPS fell short of its goal of breaking even in 2023 the agency “did reduce its projected 10-year deficit by more than 50 percent.”  Postmaster General DeJoy said that the USPS will take more aggressive steps to continue making progress towards the goals laid out in the Delivering for America plan. 

House Oversight and Accountability Committee Chairman James Comer (R-Ky.) praised Postmaster General DeJoy for being “the only Postmaster General since I’ve been in Congress who even came up with a plan to reform.”  Chairman Comer focused his questions on how the USPS can cut costs to achieve its goals and described the Postal Service Reform Act of 2022 as “the last-ditch effort to set the Postal Service in a position to where it can do what it’s supposed to do, and that is be self-sustaining.”  

But to get there, the USPS has several major issues that need to be resolved, the first of which is controlling labor costs, which make up about 75 percent of expenses and have risen about 6.5 percent from fiscal year 2021 to fiscal year 2022.  Since October 2020, the USPS has converted 125,000 temporary employees to full-time employees.  These full-time employees are much harder to terminate, which makes the USPS less adaptable to changing market conditions.  This influx of new employees has not led to increased service and efficiency.  In fact, the Postal Regulatory Commission found that current efficiency and service performance today is lower than it was in 2021.   

Another major obstacle to the USPS cutting costs is the creation of new facilities.  The USPS has been spending billions of dollars on these new facilities when there are already excess facilities that could be used or sold.  If the USPS continues to spend money that it does not have, it’s inevitable that customers will face the consequences either in higher prices or decreased service and efficiency. 

The USPS should be applauded for the steps it has taken to improve its finances and trajectory towards breaking even.  However, the USPS has so far fallen short of its goal and more remains to be done to achieve self-sufficiency and addressing high labor costs and closing excess facilities are two steps the USPS should take.  The House Oversight and Accountability Committee should continue to exercise its authority to make sure that taxpayers, ratepayers, businesses, and customers all get to benefit from an efficient and effective Postal Service.