The U.S. Postal Service signed an agreement with the Department of Government Efficiency and the General Services Administration this week to identify more ways it can cut costs.
"This is an effort aligned with our efforts, as while we have accomplished a great deal, there is much more to be done," Postmaster General Louis DeJoy told members of Congress in a letter Thursday. "We are happy to have others to assist us in our worthwhile cause."
DOGE's aggressive cost-cutting approach throughout government agencies is being spearheaded by Tesla CEO Elon Musk, a prominent voice in the Trump administration who has called for the Postal Service to be privatized. The White House has been mulling ways to limit the agency's losses, such as a potential absorption into the Commerce Department.
DeJoy pointed out ways his Delivering for America plan has already helped the financially strained agency cut costs and increase revenue, such as limiting air transportation expenses and growing its package shipping business.
The Postal Service also plans to cull 10,000 employees in the next 30 days via a voluntary early retirement program, building upon previous workforce reductions of 30,000 since fiscal year 2021, DeJoy said. The Postal Service employs around 635,000 people currently.
DeJoy said he shared details of the USPS’ longstanding financial obstacles with the DOGE team that Congress has yet to address. Those issues include:
- Mandates that require the Postal Service to perform costly activities without additional funding, costing the agency between $6 billion and $11 billion annually. Unfunded agency mandates include maintaining operations at rural, low-traffic Post Offices, six-day mail delivery and uniform First-Class Mail rates.
- The Postal Regulatory Commission restricting the agency's business practices, including its ability to adjust pricing. In a statement Thursday, the Postal Regulatory Commission said it's safeguarding fair competition and is ready to work with Congress to ensure the Postal Service's stability.
- Several billion dollars a year in additional charges tied to retirement-related expenses outside of USPS management's control.
- Charges of $400 million annually related to "mismanagement of" the agency's workers' compensation program.
Brian Renfroe, president of the National Association of Letter Carriers union, voiced support for the pension liability and retirement fund reform DeJoy mentioned. However, he pushed back against any potential privatization efforts, saying it would threaten employee jobs and the agency's universal service obligation.
"If DOGE wants to improve the Postal Service’s finances, the above actions will do just that," Renfroe said. "Misguided ideas like privatization will not."
