Postmaster General Signs Postal Reform Agreement with DOGE and GSA

Postmaster General Louis DeJoy signed an agreement with the Elon Musk-based Department of Government Efficiency (DOGE) and the General Services Administration (GSA) last week to help it find more cost-saving efficiencies and eradicate waste.

At the same time, he called for the abolishment of the Postal Regulatory Commission, which provides oversight, and indicated the U.S. Postal Service would be reducing its workforce by 10,000 workers within the next 30 days through its voluntary early retirement program.

Despite DeJoy’s earlier announcement that he intends to depart the U.S Postal Service — the 250-year-old agency that was first led by Benjamin Franklin — DeJoy continues to push his 10-year “Delivering for America” turnaround plan that he first unveiled in 2021. The plan has focused on reinventing what he calls a financially unsustainable, broken USPS business model (including a $9.5 billion loss in its most recent fiscal year) and a greater focus on package delivery.

At the same time, he has sought frequent postal rate hikes in combination with slower mail delivery service standards.

DeJoy’s List of Where DOGE Should Focus Efforts

In a March 13 letter to congressional and committee leaders announcing the DOGE and GSA agreement, DeJoy said more sweeping changes need to be made. “The DOGE team was gracious enough to ask for the big problems they can help us with,” he wrote. “Among other initiatives, I provided a list of items that are in your hands and that have been intractable even though they have needed to be addressed for over a decade.” His list included:

• DeJoy wants DOGE to study the mismanagement of the Postal Service’s self-funded retirement assets and the actuarial miscalculations of its retirement obligations. These work functions reside with the Office of Personal Management and the Treasury Department based on legislation enacted by the Congress. According to DeJoy, they result in several billion dollars a year in burdensome additional charges not common in private industry. Currently invested only in U.S. Treasury bonds, he contends USPS retirement funds should instead be placed in higher-yielding instruments.
• The mismanagement of the USPS Workers' Compensation Program, which DeJoy said results in approximately $400 million a year in excessive charges when compared to private industry practices. These work functions reside with the Department of Labor and are legislated by the Congress.
• The unfunded mandates imposed on the Postal Service by legislation. These well-intended laws that have been passed since USPS was created as a self -funding agency for the most part require the Postal Service to perform costly activities without providing any supporting funding. In the private industry context, he noted, this would be like UPS or FedEx providing services to the federal government without charging for them. This amount is estimated to cost between $6 billion and $11 billion annually, according to DeJoy.

DeJoy and Postal Regulatory Commission Wage Battle

• Burdensome regulatory requirements restricting normal business practice. According to DeJoy, the Postal Regulatory Commission (PRC) is 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 that encumber the Postal Service.

“They have an anachronistic view of the Postal Service's current business environment, they have failed to change as the times and the postal economy has changed, and they therefore stand in the way of the timely and necessary changes required to succeed as a self-funded enterprise in a competitive environment — which is what the Postal Service needs to do to survive,” he wrote.

In response to DeJoy’s call for the agency to be eliminated, the PRC pointed out 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, it gave USPS significantly more pricing freedom,” the PRC indicated in a prepared statement. “Combined with the 2022 law passed by Congress, the Postal Service received over $100 billion in financial assistance.”

So far, the Delivering for America Plan has wasted that help, the PRC stated, losing more money for the Postal Service, making USPS less efficient, and collapsing service, especially for rural Americans. On April 1, USPS is planning to amplify that negative impact on rural areas by deliberately slowing mail to thousands of rural communities nationwide.

“The Postmaster General has also tried to ignore USPS’ traditional role in mail delivery while expanding the role of the government in the competitive package market, a strategy which has failed miserably to this point,” the PRC argued.

On January 31, 2025, the PRC also issued an advisory opinion that DeJoy’s “Delivering for America” plan will further slow delivery standards, especially in rural areas, and is based on defective and overly optimistic modeling when it comes to the anticipated cost savings.

The Postal Service’s plan calls for operational changes to create a nationwide network of regional processing distribution centers (RPDCs), and local processing centers (LPCs) that consolidate and reduce transportation lanes among facilities. It further plans to implement its regional transportation optimization (RTO) initiative nationally, resulting in a delay in processing some outgoing mail volume, the PRC indicated.

“The Postal Service estimates that these two initiatives will allow it to improve productivity and efficiency and achieve an annual cost savings of between $3.6 billion and $3.7 billion once the initiatives are fully implemented,” the PRC pointed out. “The Postal Service also seeks to revise its service standards to align with these operational initiatives.”

The PRC added that total projected cost savings, even if fully realized, represent approximately 4.4% of the Postal Service’s FY 2024 operating expenses of $81.8 billion.

Business Mailer/Shipper Advocacy Groups Weigh In

The Coalition for a 21^st Century Postal Service, of which PRINTING United Alliance is a member, expressed its support of the positive role DOGE can play by finding efficiencies in USPS’ vast, complex network and identifying any waste, fraud or abuse that could be cut out to help USPS recover, the advocacy group said in a prepared statement. With Postmaster General DeJoy — the architect of the Delivering for America plan — having announced his upcoming retirement, the time is right to discuss broadly how to stabilize USPS and put it on a healthy course.

“For the past four years under the Delivering for America plan, regrettably the Postal Service has slowed service generally punctuated by very serious snafus in introducing new facilities, raised prices enormously, and experienced eye-watering losses,” the coalition pointed out. “Unsurprisingly, its customer usage has shrunk very substantially (>12%) since 2020. It is time to call a halt to this very expensive plan that is just not working.”

Pricing must change, as well. “Twice-a-year increases that raised prices some 40% in less than three years, with another 7-10% and more coming in July, are simply incompatible with a healthy system or what any private sector company would do. July’s price increase must be halted.”

Keep US Posted, another postal policy advocacy group, also supports a freeze on the potential double-digit July postal rate increase. “Our message to President Trump is to freeze the rates. Americans can’t afford the 11.5% July rate hike the board has been plotting,” it pointed out in a prepared statement.

“We also need to modernize the structure of USPS so that it is more efficient and accountable. Now is the time to create a more reliable, affordable Postal Service for all Americans.”