Trump floats privatizing US Postal Service: What you should know

Topline

President-elect Donald Trump said Monday he is considering trying to privatize the U.S. Postal Service, confirming recent Washington Post reporting, as the president-elect has long eyed major cuts to the federal agency – which is now in his second term could be possible.

Important facts

Crucial quote

USPS did not respond to a request for comment on Trump’s comments on Monday, but the agency noted its recent efforts to reduce costs in a statement to the Post and said it was “already engaged in an initiative to ensure “We are able to deliver to our customers with a high level of service to any delivery address in the country, at least six days a week, in an efficient and financially sustainable manner, as required by law.”

How might Trump privatize the US Postal Service?

Fully privatizing the USPS or ending its universal service obligation would likely require an act from Congress, and it’s unclear whether Republicans would find enough support to do so. Many Republican lawmakers represent rural counties that rely on the Postal Service’s universal service mandate. Although there was bipartisan opposition to privatization during Trump’s first term, it remains to be seen whether enough right-wing lawmakers would still be willing to stand up to Trump as he proposes it again in the coming months. However, the new president may have wide latitude to force reforms on the USPS without Congress, even if he cannot completely privatize the USPS, the Post suggested. Trump appears poised to exert significant influence over the agency’s Board of Governors, which oversees the USPS and can push through sweeping reforms. Two Trump appointees already serve on the nine-member board, and there are three vacancies on the board that are not expected to be filled by the time President Joe Biden leaves office, potentially giving Trump a majority of appointees to fill his The agency could sign the vision. The USPS also relies on federal loans from the Treasury Department, which Trump may seek to withhold unless the agency makes the changes he wants, the Post said.

What would happen if USPS was privatized?

Both critics and supporters of the plan have noted that an overhaul of the USPS into a privatized operation could likely increase the price of mail and packages and lead to worse service, as an emphasis on revenue rather than universal service could lead to cost cutting shorter mail delivery days, longer mail delivery times, or less access to USPS services in sparsely populated rural areas that are not as profitable. This could also impact Amazon deliveries, the Post notes, as the e-commerce giant often relies on USPS to provide last-mile delivery directly to customers’ homes, as well as the E -Commerce shipping that relies on USPS and corporate supply chains more broadly. Proponents of privatization have pointed out that it could solve the USPS’s long-standing financial problems because the agency would now be able to accept and allow private capital funding and raise prices rather than continuing to rely on government loans The Postal Service must innovate more and implement better technology than it would if it were subject to a smaller budget and government control.

Main critic:

Democrats have already begun opposing any efforts to privatize the USPS. “Privatizing the Postal Service would have catastrophic consequences for the Americans and businesses that rely on USPS every day,” Rep. Gerry Connolly, D-Va., a key USPS supporter in Congress, said Monday on X. “If you in If the private sector goes, the profit motive is everything.”

Cons:

Trump’s potential attempt to privatize the USPS comes even though it would likely hurt many of his own supporters the most, as rural areas most dependent on the agency’s universal service commitments were a primary candidate for the president-elect.

Big number:

$9.5 billion. That’s how much money USPS lost in fiscal year 2024, the agency reported in November, compared to a net loss of $6.5 billion in 2023. The agency – which has long struggled with financial problems – attributed those losses to factors such as Retirement pensions and an increase in pay back for some workers.

Surprising fact:

Postmaster General Louis DeJoy, who leads the USPS, was widely criticized by the left ahead of the 2020 election for being a Trump donor and ally, sparking fears he could influence the election by obstructing ballot delivery. However, the Post reports that DeJoy is now “no longer popular” with Trump and his team after the postmaster general sparked “significant anger” for encouraging mail-in voting.

Important background:

The USPS’s long history of financial troubles has made the Postal Service a major political issue in recent years, between Trump’s frequent attacks on the agency and DeJoy taking control in the summer of 2020 and introducing reforms aimed at improving its finances to restructure the agency. Democrats were angry at DeJoy before the 2020 election for making a series of changes at the agency that slowed mail delivery, ultimately leading to court rulings ordering the changes to be rolled back. While mail delivery ultimately passed without conflict in the 2020 election, DeJoy remained a controversial figure, adopting a cost-cutting plan at USPS that lawmakers from both parties have criticized for its negative impact on the service. Congress passed legislation in 2022 aimed at combating the agency’s financial woes while improving service, but DeJoy has continued his cost-cutting measures: The Post reported in August that USPS was considering a plan to increase mail delivery in rural areas areas to slow down. Lawmakers from both parties voiced their displeasure with DeJoy during congressional hearings in December as they complained about his cost-cutting measures that led to mail delays for their constituents. Sen. Josh Hawley, R-Mo., told DeJoy: “I hate this plan and I’m going to do everything I can to kill it.”

Further reading:

Trump considers privatizing US Postal Service, citing financial losses (Washington Post)

House Committee Criticizes DeJoy’s Postal Reform Plans (Government Agency)