7/22/26 – The Postal Service is expected to be self-sustaining and cover its costs through the sale of postal products and services. However, USPS is in dire financial condition, with costs exceeding revenue every year after fiscal year (FY) 2006 and combined losses over that timeframe totaling nearly $118 billion. If left unaddressed, ongoing losses will threaten the Postal Service’s ability to continue operations.

To support efforts aimed at addressing the Postal Service’s financial gap, the U.S. Postal Service Office of Inspector General (OIG) compiled 15 revenue-generating and cost-saving options for long-term sustainability. These options are not OIG recommendations. Instead, they are policy proposals made by various stakeholders over time, including the U.S. Government Accountability Office (GAO), mailers and shippers, think tanks, and Congress.

The options include strategies to grow revenue, fund the Postal Service’s universal service obligation (USO) activities, enact benefits reform, restructure the workforce, and reduce operational costs.

Because no single option is likely sufficient to address the financial gap in the near term, this white paper also combines the 15 options into four theoretical scenarios designed to achieve financial breakeven status. The scenarios range from prioritizing current service levels over independent self-sustainability, to ensuring self-sustainability through service cuts, as well as balanced approaches in-between.

Given the Postal Service’s mounting financial pressures, maintaining the status quo is no longer a viable path. USPS is limited in its ability to achieve breakeven status through self-help measures alone. A dialogue among stakeholders to address the complex choices and difficult trade-offs required to restore the Postal Service’s financial sustainability is both timely and essential to secure its future.

STRATEGIC GOAL	OPTIONS
Growing Operating Revenue	Adjust Market Dominant pricing by modifying the price cap system
Obtaining Government Funding	Receive government funding for fulfilling the Universal Service Obligation (USO)
Making Changes to the Workforce	Change the Postal Service’s workers’ compensation rules Restructure the Postal Service’s workforce Explore modifications to collective bargaining rules
Enacting Benefits Reform	Invest CSRS and FERS assets in a diversified portfolio Invest PSRHBF assets in a diversified portfolio Change the allocation of CSRS costs to reduce the portion owed by USPS Adopt a new pension model Amend the funding of retiree health benefits
Reducing Operational Costs	Outsource the middle mile  Outsource the retail network Convert door delivery points to curbside or cluster box Reduce delivery days Stop providing select USO services