The U.S. Postal Service has authorized Elon Musk’s Department of Government Efficiency to help eliminate red tape hurting financial and operational performance in a move Democrats decried but some postal workers say could be beneficial.
It also gave concrete figures on previously announced force reductions, saying it expects to eliminate 10,000 jobs through a voluntary early retirement program. Meanwhile, postal workers and community activists this week plan to protest Trump administration expressions of interest in selling the Postal Service to private sector owners.
Postmaster General Louis DeJoy informed congressional leaders on Thursday that he signed an agreement with the General Services Administration and Department of Government Efficiency (DOGE) to identify further efficiencies and stem billions of dollars in annual losses – including $9.5 billion in the most recent fiscal year. The new review goes beyond steps already taken under DeJoy’s 3-year-old transformation initiative to make the agency profitable within a decade.
DOGE is a small office within the Trump administration – not a formally established department – that is working across government to cancel contracts and shrink agencies. DeJoy gave it permission to tackle big challenges related to retirement benefit calculations and investments, which have been a drag on Postal Service finances, and reform the Postal Regulatory Commission.
“The Postal Service once faced the immediate threat of insolvency, which would have required a taxpayer bailout. … Our efforts have provided a lifeline to our organization and [a pathway that is] financially sustainable. I ask that you please engage with the Postal Service, our DOGE representatives, and the federal agencies that need . . . to correct for the deficiencies of the past,” DeJoy wrote the lawmakers.
DeJoy, who recently announced plans to step down in the near future, said DOGE will complement cost-cutting and revenue-growing initiatives already underway. Since 2021, the Postal Service has cut $3.5 billion in annual transportation and mail processing costs by streamlining delivery networks and facilities, reduced layers of upper management, increased revenue by $5 billion per year over base projections in 2021, and introduced new package products through his turnaround program, called Delivering for America.
DeJoy specifically wants the DOGE team of outside tech specialists to address actuarial mistakes by the Office of Personnel Management and Treasury Department that have led to misallocated pension liabilities, costing the agency tens of billions of dollars, and a new investment strategy for the Postal Service’s three retirement funds. The funds are currently held in Treasury bonds, missing out on hundreds of millions in annual returns from higher-yielding instruments. Under the law, the Postal Service must self-fund retirement plans, putting it at a major disadvantage compared to private industry, which doesn’t face the same financial liabilities.
Another DOGE target is the service’s workers’ compensation program, which has paid out $400 million per year in excessive charges compared to private industry practices, according to DeJoy. The program is managed by the Department of Labor.
DeJoy also singled out burdensome regulatory requirements that hamstring normal business functions, including unfunded mandates imposed by Congress that require the Postal Service to perform activities costing $6 billion to $11 billion per year.
And he escalated a feud with Postal Regulatory Commission, calling it an “unnecessary agency” that has “inflicted” more than $50 billion in damage to the Postal Service by “administering defective pricing models and decades old bureaucratic processes” with an “anachronistic view” of how a self-funded organization should operate in a competitive environment.
The comments suggest DOGE will look for ways to dismantle or even terminate the PRC, which was created by Congress to approve rate changes for stamps and packages and ensure necessary service levels. The PRC in January questioned the effectiveness of DeJoy’s Delivering for America initiatives, saying they are negatively impacting service for certain products and rural communities, and that cost savings are overstated.
Critics, including many postal workers, say the PRC has held back the Postal Service for years because it sets prices based on the actual delivery cost without considering overhead and capital expenditures in buildings, vehicles and technology necessary to maintain service.
The PRC on Thursday struck back at DeJoy’s characterization of its work.
“The Commission follows the law to ensure that USPS provides universal service to all Americans, including those in rural and remote locations, and also safeguards fair competition in package markets by preventing the Postal Service from abusing its monopoly position. The price cap the Postmaster General has complained about for years was established by law, not by the Commission. Once the Commission had the legal authority to change the price cap, the Commission gave USPS significantly more pricing freedom. Combined with the 2022 law passed by Congress, the Postal Service received over $100 billion in financial assistance,” it said in a statement.
The commission also took credit for rapidly approving thousands of specialized service agreements with postal customers in recent years.
It blamed the Delivering for America overhaul for wasting assistance, losing money, making the Postal Service less efficient and reducing service to rural communities. It said DeJoy has expanded the Postal Service’s role in the competitive package market at the expense of its traditional role in mail delivery, “a strategy which has failed miserably to this point.”
On April 1, the Postal Service is scheduled to start phasing out afternoon mail collection at a large number of post offices. The change is designed to improve overall network efficiency but could slow delivery times for people in remote locations.
Rep. Gerald Connolly, D-Va., the ranking member of the House Oversight and Government Reform Committee, decried the Postal Service-DOGE partnership.
“The only thing worse for the Postal Service than DeJoy’s ‘Delivering for America’ plan is turning the service over to Elon Musk and DOGE so they can undermine it, privatize it, and then profit off Americans’ loss. This capitulation will have catastrophic consequences for all Americans – especially those in rural and hard to reach areas – who rely on the Postal Service every day to deliver mail, medications, ballots, and more. Reliable mail delivery can’t just be reserved for MAGA supporters and Tesla owners,” he said in a statement.
The National Association of Letter Carriers, which represents 200,000 delivery personnel, endorsed DOGE’s involvement based on the need for structural changes to achieve profitability, which could ultimately lead to workers getting more pay, and initial assurances it doesn’t involve job cuts or access to workers’ records.
“These policy changes are needed to improve the Postal Service’s financial viability, and we welcome anyone’s help who can influence Congress and the administration to finally enact them,” NALC President Brian Renfroe said in a statement.
The American Postal Workers Union, which represents more than 200,000 postal employees and retirees and nearly 2,000 private sector mail workers, blasted the Postal Service’s invitation to DOGE.
“There is no legitimate role for DOGE in the USPS or any other federal agency. The public Postal Service was created by Congress as an independent government agency with robust oversight from the Office of Inspector General, the Postal Regulatory Commission, and the Board of Governors, as well as congressional committees,” the union said.
“The moment there is any indication that DOGE is seeking access to personal and private information regarding employees, the APWU is prepared to take immediate legal action. Our collective bargaining agreement is between the APWU and the Postal Service. Any effort by DOGE, or any other entity, to weaken our union rights or target our contractual protections and working conditions, will be met with immediate and sustained resistance by postal workers,” it added.
Job cuts
The Postal Service expects an additional 10,000 people will participate in a voluntary early retirement program in the next 30 days, adding to the 30,000 people eliminated since 2021, DeJoy said in the letter. The workforce reductions have saved $2.5 billion in the past three years. The service employs about 640,000 to deliver mail and packages across the United States and its territories.
The Postal Service announced the plan in January during the waning days of the Biden administration but didn’t give the size of the labor reduction. Under the retirement incentive negotiated with the American Postal Workers Union, the service will make lump sum payments totaling $15,000 to eligible full-time employees.
Privatization protests
Meanwhile, thousands of postal workers are expected to join other community groups this week to rally against potential Trump administration moves to transfer the Postal Service to the Department of Commerce, break it up and sell it off in pieces, or privatize the entire organization.
Privatizing the Postal Service could jeopardize guaranteed mail service to every American address, potentially leaving people in less dense areas of the country without deliveries they depend on.
The APWU said it will hold rallies in front of 150 postal facilities across the country to sound the alarm of a potential takeover of the Postal Service.
“U.S. Mail is Not for Sale” events are planned in Washington, Atlanta, New York, Philadelphia, Seattle and other large cities, according to a union announcement.
The NALC said local branches will conduct rallies on Sunday opposing any Postal Service deconstruction. Although the union supports DOGE efforts to improve Postal Service finances, it opposes privatization.
Last month, President Donald Trump said his administration is considering transferring management authority for the Postal Service to the Commerce Department. Unions, major mail users and other critics say such a move is illegal. Trump’s comments followed a Washington Post report that the president plans to decapitate the Postal Service board of governors and carry out a hostile takeover.
In December, before taking office, Trump suggested he was open to the idea of taking the Postal Service private. The first Trump administration looked into the idea before backing down in the face of congressional opposition. Republicans now control both chambers of Congress and have not shown much interest in challenging any White House policies.
In public comments earlier this month, Trump adviser Musk said he was exploring privatizing the Postal Service.
“This is the people’s postal service, emphasis on ‘service,’” said APWU President Mark Dimondstein. “If this administration succeeds in taking over the USPS, it will lead to higher prices and reduced service, especially in rural areas. It belongs to the people on Main Street, it shouldn’t be handed over to Wall Street.”
A recent Wells Fargo advisory note said privatization of the Postal Service would most likely take the form of a carve-out for the parcel operation. The new private service would likely raise rates, which would benefit FedEx and UPS. It said the Postal Service needs to raise rates 30% to 140% in order to stabilize finances even if the status quo is maintained.
Whatever the outcome, experts say Musk will have a hard time firing workers and cutting benefits because most postal employees have contracts that are locked in.
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