Congressional hearings will be held to discuss its priorities as the U.S. Postal Service faces huge losses and could run out of funding next year.
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Six months after taking over a new postmaster general, the U.S. Postal Service faces significant challenges as it seeks to cut costs and stem massive losses while hand-delivering mail to nearly every address six days a week.
The service’s woes come as President Donald Trump continues to attack mail-in voting, linking it to “massive voter fraud.” But there is no evidence of widespread mail-in voting fraud, and voting rights groups worry that his attacks will undermine overall confidence in the Postal Service. President Trump has previously floated the idea of privatizing the service or merging it with other federal agencies.
Congress is holding an oversight hearing on the Postal Service on March 17, where postal officials are expected to protect their authority to raise rates and ask the agency to allow them to borrow billions of dollars to stay open through 2027. Unlike the military or the Department of Homeland Security, the Postal Service is supposed to cover its own costs, but often falls short.
“The financial situation is dire, with billions of dollars in losses,” said Leo Raymond, managing director of Mailers Hub, a Virginia-based trade group. “Congress must decide what the Postal Service should do in the 21st century, because private ratepayers can no longer support all of the Postal Service’s costs. The economic landscape is changing, and no one is willing to address it.”
The Postal Service’s internal inspector general has repeatedly identified financial failures within the system, including spending nearly $19 million last year on unexpectedly high labor costs as part of other cost-cutting measures. Last fall, the service reported an annual loss of $9 billion, a slight improvement from the $9.5 billion loss the year before.
For many Americans, the Postal Service is their most visible connection to the federal government, with 640,000 employees working every day to deliver holiday cards, deliver packages, and pick up prescription drugs. And it remains one of the most beloved government agencies. A 2024 Pew Research Center survey found that 72% of Americans have a favorable opinion of the service, second only to the National Park Service and 10 points ahead of NASA.
The Postal Service is under pressure from the growth of online retailers like Amazon and a decline in first-class mail volumes. Since the late 1990s, first-class mail volume has declined by 80%. Unlike UPS or FedEx, the Postal Service must charge the same amount to send a letter anywhere in the United States, regardless of distance. This service is not funded by taxpayers for ongoing operating costs.
Mail volume peaked at 213 million pieces in 2006, but fell to about 112 million pieces in 2024, the latest year for which data is available.
The postal service is overseen by the five-member Postal Regulatory Commission, which is appointed by the president. Congress also has authority over the service, and lawmakers often intervene to halt post office closures or other proposed cost-cutting measures in their districts.
Other groups representing paper companies, greeting card companies, and magazine and newspaper publishers say the Postal Service should improve first-class mail service and try to stabilize rates.
Postmaster General commits to continued reform
Postal Service leaders said they are committed to continuing at least some of the reforms they initiated in 2021 under their “Delivering For America” plan, which included significant increases and consolidation of first-class postage rates and, in some cases, delays in mail delivery.
The price of a first class stamp is currently 78 cents, up from 55 cents for most of 2021. Businesses that rely on mailing large volumes of letters argue that the 41% surcharge is unfair, especially when first-class letters are often delivered slower than usual.
Postmaster General David Steiner acknowledged the challenges ahead during a meeting of the Postal Service Board of Directors last month. Mr. Steiner, a longtime FedEx board member, had been criticized by unionized postal workers who feared his appointment as postmaster general would be too aligned with private delivery services. The board appointed Mr. Steiner in May, and he took office in July.
“You can’t choose whether the market changes or not. The only choice you can make is whether you have enough flexibility to respond to the market. And, as I’ve said before, you can’t cut costs to prosper,” Steiner told the board.
The Postal Service is currently on target to deliver first-class mail on time 88% of the time, well below the 2023 goal of 92.5%. Part of the challenge, previously reported by the inspector general, is that the Postal Service has not properly adjusted its systems to compensate for the decline in first-class mail volumes while maintaining its legal obligation to deliver to all addresses.
Former Postmaster General Louis DeJoy signed a cost-cutting review agreement with Elon Musk’s DOGE team before resigning in spring 2025.
Changes Mr. Steiner is exploring include whether the Postal Service can help Americans profit from things like shopping on Amazon, and whether it can allow small businesses to sign delivery contracts, as Amazon and other big retailers have done in the past.
Steiner told reporters earlier this month that funding could run out next year unless the Postal Service gets approval to borrow billions more to cover costs. According to the U.S. General Accounting Office, the Postal Service has lost money nearly every fiscal year since 2007. Losses totaled about $109 billion from fiscal 2007 to fiscal 2024, according to the watchdog.
The post office declined an interview request. Steiner is scheduled to appear before the House Oversight and Government Reform Committee on March 17.
Mr. Raymond, of the business trade group Mailer’s Hub, said he would pay close attention to how Mr. Steiner would be received by Congress. He said DeJoy’s “Delivering For America” plan has not been widely accepted in Congress, but acknowledged that the Postal Service needs to rethink how it operates as fewer people are sending first-class mail. Raymond said those changes could include anything from reducing delivery frequency to changing union contracts to allow the company to hire more part-time workers.
“There’s a romanticized view of what the postal service should be based on what it used to be,” he said. “But the world has changed.”
Union members are concerned about privatization
The majority of postal workers are unionized, and the American Postal Workers Union is fighting efforts to privatize parts of the postal service. The union insists the service is a service to the American people, not a company intent on extracting every last penny from its customers.
The union said President Trump’s privatization proposals would only enrich private investors and weaken one of the federal agencies specifically created by the Constitution.
“Such a move would lead to price increases, service cuts, and threaten the very concept of affordable mail and package service for everyone, no matter where they live. This is a dagger aimed at America’s heartland, especially rural areas and seniors who rely on the mail for prescriptions,” the union said in a statement.
Postal voting debate and the role of the post office
The ongoing financial challenges facing the Postal Service come as President Trump has repeatedly cast doubt on mail-in voting, which is common in most parts of the country. President Trump has claimed that mail-in voting is unreliable, but has offered no evidence that mail-in voting is widely unsafe.
In his State of the Union address in February, President Trump said, “There will be no more fraudulent mail-in voting, except for those due to illness, disability, military, or travel.” “none.”
The Postal Service warned voters in January that the way ballots are postmarked would change, impacting whether they were counted in the election. About 48 million people voted by mail in the last presidential election, according to the Center for United Democracy, a nonpartisan voting rights group.
Previously, voters who mailed their ballots on Election Day could be confident that they would be postmarked immediately and counted later, even if election officials didn’t receive them for several more days. Under the new process, ballots may not be postmarked and counted for several days after they are mailed. The Postal Service recommends mailing your ballot at least one week before the election deadline.
Tammy Patrick, chief program officer at the nonpartisan National Association of Election Officials, said Trump’s comments about mail-in voting disrupt the landscape in a way that reduces confidence in both elections and the Postal Service. Millions of Americans vote by mail, but even if President Trump were successful in banning mail-in voting, the volume would not be large enough to have a financial impact on the Postal Service.
“We constantly hear that there are problems with mail-in voting, that there are various frauds, that voters can’t trust the Postal Service. But the truth of the matter is that millions of Americans have received their ballots from postal workers for years and have chosen to return them the same way,” Patrick said. “People should trust the way they vote… but that’s hard to do when you’re constantly fed information that isn’t factual. The problem is, when the president of the United States speaks like this, some people may question whether they can trust the Postal Service.”
