PHILADELPHIA — On Friday, President Donald Trump suggested the possibility of placing the U.S. Postal Service (USPS) under the jurisdiction of the Commerce Department. This would mark a significant shift, as the USPS has functioned independently since the year 1970. Trump expressed his desire for a more efficient postal service that mitigates its ongoing financial losses. “We want to have a post office that works well and doesn’t lose massive amounts of money,” he stated. “We’re thinking about doing that. And it’ll be a form of a merger, but it’ll remain the Postal Service, and I think it’ll operate a lot better.”
These comments were made during the inauguration of Commerce Secretary Howard Lutnick, wherein Trump highlighted this proposed move as a measure to combat the $78 billion-a-year postal service’s financial difficulties, which have intensified due to dwindling first-class mail volume. “He’s got a great business instinct, which is what we need, and we’re looking at it, and we think we can turn it around,” the President remarked regarding Lutnick. Trump described the current situation of the USPS as a severe financial burden for the nation, indicating the significant losses incurred by the agency.
A brief overview of the USPS’s background reveals that the organization was established during the Second Continental Congress in Philadelphia in 1775, when Benjamin Franklin became its inaugural postmaster general. In 1872, it was designated an executive branch department. However, the tides changed following an extensive postal strike in 1970 that revolved around wage and benefit issues. Consequently, President Richard Nixon enacted the Postal Reorganization Act, transforming the Post Office into an independent, self-sustaining entity known as the USPS.
As the USPS has battled economic hardship, discussions about potential privatization—spurred by Trump and others—have surfaced repeatedly. The reformation in 1970 also granted USPS employees raises and collective bargaining rights, supporting the ascension of many Americans, particularly from minority backgrounds, into stable middle-class lifestyles. Today, approximately 640,000 individuals work for the USPS, managing the delivery of mail, medications, election ballots, and parcels across a diverse range of locales in the country, from urban centers to remote regions. They remained operational throughout the coronavirus pandemic, during which the American Postal Workers Union reported over 200 fatalities among postal workers.
Currently, Postmaster General Louis DeJoy, appointed during Trump’s initial term in 2020, oversees the USPS. His leadership has been marked by various adversity, particularly the pandemic and spikes in mail-in ballots, alongside efforts to curtail losses through service cuts. DeJoy had introduced a long-term plan to rejuvenate the postal service; however, he recently expressed plans to step down and has prompted the Postal Service Board of Governors to begin the search for his replacement.
The USPS Board consists of up to nine members, handpicked by the president and confirmed by the Senate. There is a stipulation that no more than five members can belong to the same political party. Currently, the board’s chair is Amber F. McReynolds, an ex-election administrator from Colorado, while the vice chair, Derek Kan, served in Trump’s initial administration. President Joe Biden appointed both, leaving three board positions unfilled due to the Senate’s inaction on Biden’s nominees. Biden has placed four of the current governors, with Trump appointing two, and the board retains the authority to appoint and dismiss the postmaster general, which includes the deputy.
In terms of financial management, the USPS operates on a largely self-sustaining budget, primarily funded by customer fees totaling an annual budget of approximately $78.5 billion. The agency receives a modest annual appropriation from Congress for free and reduced-rate services, approximately $50 million for fiscal year 2023. Despite this, the USPS faced challenges attributed to decreased first-class mail revenue and rising retirement costs, leading to an accumulated loss of $87 billion from 2007 to 2020. Recently, DeJoy highlighted the need for modernization as part of a 10-year strategy to stabilize financial circumstances, warning customers to anticipate “uncomfortable” rate increases.
Critics, including various Congress members, have voiced concerns that the postal service’s consolidation efforts have resulted in reduced service quality and that further consolidations may particularly hinder rural mail delivery. Trump’s criticism of the USPS has been consistent since his presidency began; during 2020, he threatened to obstruct COVID-19 relief funding unless significant increases in package rates for major customers like Amazon were implemented. Moreover, Trump’s contemplation of privatizing the USPS has emerged, reflecting on the competition the service faces from entities like Amazon, UPS, and FedEx. “It’s an idea a lot of people have had for a long time. We’re looking at it,” he remarked.
