The USA Postal Service has reached a pivotal second. Challenged by technological disruptions and constrained by outdated laws, it’s within the midst of a serious restructuring plan to modernize operations, obtain service excellence and survive financially.
However to allow its transformation, the Postal Service urgently wants legislative and regulatory reforms to make sure entry to vital liquidity and to undo pricey mandates over which it has no management. Time is of the essence.
The Postal Reorganization Act of 1970 made the service an unbiased company that might work like a personal enterprise, with a twin mandate of delivering mail to each deal with and being financially self-sustaining.
Since 2007, the service has gathered greater than $100 billion in recurring losses that decapitalized the group and have been funded primarily by deferring capital expenditures, not paying mandated amortizations of pension deficits, and borrowing.
These losses weren’t merely the results of declining mail volumes due to the web; in addition they stemmed from congressional mandates that prevented the USPS from working like a enterprise as initially meant.
After Louis DeJoy turned postmaster common in 2020, he led the formulation of the Delivering for America (DFA) plan, a balanced technique with three key components: self-help initiatives consisting of price reductions and income development; exterior reforms; and strategic pricing. Since taking up as postmaster common in July 2025, David Steiner has reaffirmed help for the DFA and acted decisively to maintain its momentum.
To attain its mission, the Postal Service should basically restructure its nationwide community into an economical, built-in mail and bundle logistics system. Its bundle enterprise should contribute adequate money stream to cowl working prices, spend money on infrastructure (together with $20 billion of deferred capital expenditures), and meet its different obligations. The transformation is already effectively underway, even because the Postal Service continues to deal with about 350 million items of mail and packages day by day.
The 2022 Postal Service Reform Act supplied essential reduction by ending the weird requirement to pre-fund retiree well being advantages and integrating Medicare into the Postal Service’s healthcare program. However additional legislative reforms are wanted.
Monetary Flexibility
Enough liquidity is vital for any group to outlive. The Postal Service doesn’t have entry to conventional credit score or capital markets; its solely line of credit score has been with the Federal Financing Financial institution. In 1991, Congress set a debt restrict of $15 billion, and that capability is exhausted. In right now’s {dollars}, this restrict would prime $30 billion. Till the Postal Service turns into worthwhile, it urgently wants entry to contingent financing to make sure the uninterrupted implementation of the restructuring plan.
Retirement Plans Reforms
The service’s pension and retiree well being advantages funds are underfunded, by way of no fault of its personal. Present regulation mandates that the funds be invested solely in Treasury debt. In accordance with the USPS inspector common, if the funds had been invested in a conventional portfolio, they might have had an $800 billion surplus as an alternative of a $100 billion deficit on the finish of 2022. Notably, Postal Service pension funds have been 70% funded on the finish of 2025 whereas the remainder of the federal workforce’s have been solely 34% funded in 2024.
Two pension reforms are wanted. One, when the Postal Service reworked into an unbiased company in 1970, the duty for funding the pensions of staff who had labored for the outdated Put up Workplace Division was unfairly apportioned, as identified in a latest report by the inspector common. Fixing this might finish the annual fee mandated by the Workplace of Personnel Administration (OPM) to cut back the pension fund deficit related to these staff. Critically, if finished within the present fiscal yr, it will allow the ensuing $95 billion surplus to be instantly transferred to the retiree well being advantages fund, extending the lifetime of that depleting fund from about 5 years to over 25.
Two, the Postal Service must be allowed to take a position its retirement belongings in a conventional portfolio like different unbiased businesses, equivalent to Amtrak and the Tennessee Valley Authority. In any occasion, the Postal Service shouldn’t should amortize its pension deficits, as mandated by the OPM, as long as it’s funded at a higher proportion than the remainder of the federal workforce. These reforms would eradicate what was a $5.3 billion amortization expense in 2025.
Employees’ Compensation Administration
In contrast to private-sector corporations, the Postal Service is restricted in managing its employees’ compensation program. In accordance with the inspector common, potential annual financial savings may have reached $700 million in 2024. The lack to handle this program contributed to employees’ compensation liabilities of $17.4 billion, a stability that fluctuates with rates of interest and actuarial modifications, which resulted in a $1 billion cost in 2025.
Regulatory and Pricing Flexibility
The present regulatory framework was arrange when the service had a worthwhile mailing monopoly. The Postal Service wants extra pricing and working flexibility and the elimination of value caps. The US at present has one of many lowest stamp costs on this planet. Additional, the Postal Regulatory Fee (PRC) requirement that part of income derived from value will increase be diverted to pay for the amortization of pension deficits is inconsistent with the mandate to be self-sustaining. This requirement was $1.5 billion in 2025, and it’s estimated to whole $12 billion over the subsequent 4 years.
The Postal Service is a nationwide necessity, connecting each nook of the nation — binding rural, city and in-between. Its survival shouldn’t be a partisan challenge. The reforms wanted aren’t radical however frequent sense, and so they require sturdy management from the White Home and Congress, and real looking regulation from the Postal Regulatory Fee.
Roman Martinez IV served as chairman of the board of america Postal Service from 2022-2024 and as a governor till December 2025. He was beforehand a managing director at Lehman Brothers till 2003./Tribune Information Service
