GAO – 12/17/25
Millions of Americans rely on the U.S. Postal Service to send and deliver mail and packages—sometimes to locations that other delivery companies won’t service. But for nearly 20 years, the world’s largest mail carrier has been losing money. This puts its mission to serve the public, as well as its financial future, at risk.
Today’s WatchBlog post looks at our recent Q&A report highlighting USPS’s financial issues and efforts to reform it.
Decades of trouble plague the mail system
Postal service predates America itself, having been founded in 1775. Fast forward to 1970, when reforms reimagined the postal delivery system as an independent, business-like entity. The goal was that USPS would cover its own operating costs—primarily with revenues generated through the sales of postage and postal-related products and services.
But was that vision too lofty? Maybe—unless there is additional reform.
USPS continues to operate its universal delivery network, visiting 168 million addresses, 6 days a week. But now it is delivering a lot less mail, with First Class Mail volumes less than half what they used to be. As a result, USPS has lost money almost every fiscal year since 2007. Net losses have totaled approximately $109 billion from fiscal years 2007 through 2024.
For such reasons, USPS’s financial viability has been on our High Risk List since 2009.
We recently sat down with GAO’s David Marroni to discuss the longstanding financial challenges facing USPS. Listen to our podcast here.
Escalating expenses. Some mail service’s financial woes include:
- Increasing compensation and benefits costs for workers
- Large unfunded liabilities and debt
- Operational costs that continue to rise faster than revenues
Declining mail volumes. While USPS remains the biggest mail service in the world—delivering nearly 40% of mail sent globally— it’s losing volume in areas that typically have resulted in more profits. For example, First-Class mail volume—its most profitable product—has seen massive declines.
The U.S. Postal Service’s Mail Revenue and Volume, Fiscal Years 2007 through 2024
Delivery dilemmas. As part of its massive operation, USPS is also the only provider of “universal postal service”—meaning it is required by law to deliver to every address across the country, including rural areas. And that can be very expensive. USPS doesn’t have the authority to make many of the changes that could reduce delivery costs. Specifically, it generally must provide 6-day-a-week delivery and operate postal facilities across the country.
Federal law also limits its ability to close retail facilities. For example, no small post office can be closed solely for operating at a deficit.
Addressing financial woes and looking to the future
In March 2021, USPS introduced a 10-year strategic plan to modernize its network and products in an effort to increase financial sustainability. The plan included significant changes to processing operations, transportation, and delivery networks. Specifically, it has worked to:
- Modernize and streamline its mail and package delivery network
- Improve the career development and retention of its workforce
- Reduce unfunded liabilities—including pension benefits, retiree health benefits, and workers’ compensation—and debts
- Reduce transportation expenses, which were about $1.3 billion during the last two fiscal years.
While USPS needs to cut costs, congressional action is likely needed to restore it to financial viability. In our prior work on this issue, we have recommended that Congress consider reassessing the?level of universal postal service the nation requires. This is just one action that could help.
Otherwise, if expenses continue to exceed revenues, taxpayers risk bearing the cost of postal operations and unfunded liabilities. For more on USPS, see our latest Q&A report.
Here we go again. This is pretty much the same scenario we had prior to DFA, the old “we’re going to run out of cash soon” scenario. I don’t dispute the fact that’s it true, just the reasons why we’re here again. Despite forgiveness of billions and governmental cash infusions, the USPS hasn’t learned. Oh yeah, run it like a business but ignore best practices of business. This phrase, best practices, is a favorite of upper echelon managers yet they refuse to put it into practice themselves. Despite Dejoy’s efforts, the USPS is burdened by a huge, unaccountable and unnecessary bureaucracy that has no rival in the private sector. If the situation is this dire, the people that don’t touch the mail or directly facilitate its delivery should be subject to elimination. Service is so poor across the nation that it’s unfathomable how these people have kept their jobs. But of course they will, best practices be damned. Government moves slowly, so Steiner’s warnings will not result in any action in time. The most likely outcome is that he knows this and is preparing congress and the public for what can be the only short term solution, albeit a short term fix, and that is eliminating Saturday delivery of mail, relegating it to parcel only. It will save billions, but it won’t take long until increasing costs catch up. Another delivery day will have to go too eventually unless the USPS wakes up and gets rid of the dead weight at the top. There are a lot of USPS jobs where customers suffer when someone is out, and there are just too many that when they’re out no one notices. They need to go.