Another Hearing Is Not Enough—USPS Needs Reform

Lawmakers must push for accountability.

Photo by Ian Hutchinson on Unsplash

Today’s House Oversight Committee “Hearing with the Commissioners of the Postal Regulatory Commission” is a critical opportunity for lawmakers to examine the inner workings of the Postal Regulatory Commission (PRC) and the United States Postal Service (USPS). Despite repeated promises of reform, the USPS continues to lose billions of dollars annually and remains on an unsustainable financial trajectory. In fiscal year 2025, America’s mail carrier lost an astounding $9 billion. USPS leadership has increasingly relied on postage rate increases—seven price hikes in the past five years—as a substitute for meaningful operational reform. Congress and the PRC must reject this approach and instead focus on structural changes that improve efficiency, accountability, and long-term viability.

Despite the claims of its leadership, the USPS’s financial challenges are largely of its own making. Postmaster General David Steiner’s frenzied last-minute restrictions on “non-essential” spending—including “promotional items,” in-person conferences, and office décor—should have been put into place years ago. In the wider context, the agency’s own projections have repeatedly failed to materialize, while service performance remains inconsistent across large portions of the country. These fiscal issues largely stem from the agency’s hiring policies. Compensation and benefits cost the agency more than $55 billion per year, or about 60 percent of total operating expenses. This figure has increased significantly from $44 billion ten years ago, largely because the USPS added—on net—40,000 career employees since 2015 and compensates them at higher rates.

A 2021 analysis by the Government Accountability Office estimates that the compensation gap between career and pre-career employees is around $25 per hour, though this total shrinks to $8 per hour when comparing similar types of workers with similar experience. Even after controlling for these factors, the USPS saves nearly $2 billion per year by retaining 115,000 non-career workers—and could likely double these annual savings by doubling its proportion of pre-career workers.

Instead of addressing this issue, the USPS continues to rely on repeated postage rate increases to fund increased spending. This strategy is largely a futile one. According to a 2024 analysis conducted by the economic consultancy NDP Analytics, “Under the current process, the USPS proposes new rate increases before the impact of prior increases can be fully realized. USPS demand models, which are used to justify rate increases, have never been tested in this way. USPS stands to lose considerably from miscalculating its customers’ sensitivity to price.” As stamp prices rise, households and businesses increasingly turn to digital alternatives, reducing mail volume and further shrinking USPS’s customer base. This creates a dangerous cycle in which declining mail volume leads to higher rates, which in turn drive away even more customers. No private-sector enterprise could indefinitely raise prices while losing customers and expect to remain viable. Yet USPS increasingly appears committed to this strategy.

The PRC was established to serve as an independent regulator and safeguard against irresponsible postal policies. Congress strengthened the Commission’s oversight role through the Postal Accountability and Enhancement Act to ensure transparency, accountability, and meaningful review of postal rates and operations. The Commission should not merely act as a passive observer of USPS decisions; it should rigorously evaluate whether proposed rate increases genuinely advance the public interest and whether USPS has exhausted opportunities for cost reductions and operational efficiencies before turning to consumers for additional revenue.

Lawmakers and the PRC should focus on modernizing the postal network, improving operational flexibility, and embracing innovation that reduces costs while ensuring more reliable deliveries. Congress should encourage the USPS to identify underutilized facilities and assets for sale, expand opportunities for partnerships with private-sector carriers where appropriate, streamline procurement practices, and rely more heavily on its pre-career workforce.

The USPS risks running out of cash without meaningful reform. The solution is not an endless series of stamp price increases that drive away customers and further weaken the postal system. Instead, Congress, the PRC, and USPS leadership must work together to pursue reforms that improve efficiency, modernize operations, and protect consumers from repeatedly shouldering the burden of management failures.