Will the USPS raise rates again? Debate swirls over financial future
Will the USPS raise rates again? Debate swirls over financial future
Trevor Hughes, USA TODAY Mon, March 16, 2026 at 2:53 PM UTC
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Six months after getting a new postmaster general, the U.S. Postal Service faces significant challenges as it tries to cut costs and stem massive losses while hand-delivering mail to virtually every address six days a week.
The service's woes come as President Donald Trump continues to attack mail-in voting, which he says is linked to "MASSIVE VOTER FRAUD." However, there is no evidence of widespread voter fraud with mail-in ballots, and voting-rights groups fear his attacks will undermine overall confidence in the postal service. Trump has previously floated the idea of privatizing the service or combining it with another federal agency.
Congress is holding a March 17 oversight hearing on the Postal Service, and postal officials are expected to ask officials to let them borrow billions of dollars to keep operating in 2027, along with protecting their power to raise rates. Unlike the military or Homeland Security, the Postal Service is supposed to cover its own costs but has frequently fallen short.
"The financials are terrible and they're losing billions," said Leo Raymond, the managing director of the Virginia-based Mailers Hub, an industry association. "Congress has to decide what the Postal Service is supposed to do in the 21st century because commercial ratepayers can no longer support all the costs of the Postal Service. The economics are changing, but no one wants to deal with it."
The Postal Service's internal inspector general has repeatedly identified what it says are financial failures within the system, including last year's spending nearly $19 million on unexpectedly higher labor costs as part of other cost-cutting measures. Last fall, the service reported an annual loss of $9 billion, which was a slight improvement over the $9.5 billion loss the year before.
For many Americans, the Postal Service is the most visible connection they have to the federal government, as its 640,000 workers fan out each day to deliver holiday cards, drop off packages and hand over prescription medications. And it remains one of the most beloved government agencies: A 2024 Pew Research Center survey found that 72% of Americans had a favorable opinion of the service, behind only the National Park Service and 10 points ahead of NASA.
The Postal Service is being squeezed by the growth of online sellers like Amazon and the declining volume of first-class mail: Since the late 1990s, first-class mail volume has dropped 80%. Unlike UPS or FedEx, the Postal Service must charge the same amount to send a letter anywhere in the United States, regardless of distance. The service receives no taxpayer funding for ongoing operating expenses.
Mail volume peaked in 2006 with 213 million pieces delivered, and dropped to about 112 million pieces in fiscal year 2024, the latest year for which data was available.
A freshly loaded mailbox in suburban Denver.
The Postal Service is overseen by a five-member Postal Regulatory Commission whose members are appointed by the president. Congress also has authority over the service, and members often intercede to halt post office closures in their districts and other proposed cost-cutting measures.
Other groups representing paper manufacturers, greeting card companies and magazine and newspaper publishers say the Postal Service should improve its first-class mail service and work to keep rates stable.
Postmaster general committed to ongoing reforms
Postal Service leaders say they're committed to continuing at least some of the reforms launched in 2021 under the "Delivering For America" plan that has seen significant first-class mail price increases paired with consolidation, and in some cases, slower mail deliveries.
Today, a first-class stamp costs 78 cents, up from 55 cents for most of 2021. Businesses that depend on mailing a large number of letters say it's unfair to charge 41% more, especially when first-class letters are now often being delivered more slowly than in previous years.
Speaking to the Postal Service's governing board last month, Postmaster General David Steiner acknowledged the challenges ahead. Steiner was a long-term board member at FedEx, and unionized postal service workers criticized his appointment as postmaster general over concerns he was too aligned with private parcel delivery services. The board appointed Steiner in May and he took the post in July.
"We don’t get to choose whether the market changes. We only choose whether we’re flexible enough to meet it. And as I have said before, we cannot cost-cut our way to prosperity," Steiner told the board.
The Postal Service has a goal of delivering first-class mail on time 88% of the time, significantly lower than its goal of 92.5% in 2023. Part of the challenge, the inspector general has previously reported, is that the postal service hasn't adequately adjusted its system to compensate for the drop in first-class mail volume while maintaining its legal obligations to deliver to every address.
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Before former Postmaster General Louis DeJoy stepped down in spring 2025, he signed an agreement with Elon Musk's Department of Government Efficiency team for a cost-cutting review.
Among the changes Steiner is exploring is whether the postal service can help Americans make returns on things like Amazon purchases, and also permit smaller businesses to contract for deliveries the way Amazon and other large retailers historically have.
Steiner, earlier this month, told reporters that the Postal Service may run out of money next year unless the agency gets approval to borrow billions more to cover expenses. Since 2007, the postal service has lost money almost every fiscal year, according to the U.S. Government Accountability Office. Losses from fiscal years 2007 through 2024 have totaled about $109 billion, the watchdog agency said.
The Postal Service declined an interview request. Steiner is scheduled to appear before the House Committee on Oversight and Government Reform on March 17.
Raymond, of the commercial industry group Mailers Hub, said he'll be watching closely to see how Steiner is received by Congress. He said DeJoy's "Delivering For America" plan wasn't widely liked in Congress, but he also acknowledged the Postal Service must reconsider how it operates when fewer people are sending first-class mail. Raymond said those changes could be anything from reducing delivery frequency to changing union contracts to allow hiring more part-time workers.
"There's a romanticized perspective of what the postal service should be, based on what it was," he said. "But the world has changed."
Union workers worry about privatization
The vast majority of the Postal Service's workers are unionized, and the American Postal Workers Union has been fighting efforts to privatize parts of the service. The union argues the service is just that: a service to the American people, not a company intended to extract every last dollar from customers.
The union said that Trump's suggestions about privatization would only enrich private investors while weakening one of the federal agencies specifically created by the Constitution.
"Such a move would raise prices, lead to service cuts, and threaten the very concept of mail and package services at one affordable price for everyone regardless of where they live – a dagger aimed at the heart of America, especially rural communities and the elderly who depend on the mail for prescriptions," the union said in a statement.
Election workers at the Washoe County (Nevada) Registrar of Voters office process ballots during the Feb. Presidential Primary Election. All 18 of the office's workers quit and had to be replaced between the 2020 election and the 2024 primary.Mail-in ballot debate and the post office's role
The ongoing financial challenges faced by the Postal Service come as Trump has repeatedly cast doubt on mail voting, a common practice across most of the country. Trump argues that mail ballots cannot be trusted, although he has not provided any evidence it's widely insecure.
"And no more crooked mail-in ballots except for illness, disability, military, or travel," Trump said during his State of the Union address in February. "None."
In January, the Postal Service alerted voters to a change in how it postmarks ballots, which affects whether they will be counted in elections. In the last presidential election, about 48 million people voted by mail, according to the States United Democracy Center, a nonpartisan voting-rights organization.
Previously, voters who mailed back their ballots on Election Day could be confident they would be postmarked immediately and then later counted, even if election workers didn't receive them for a few more days. Under the new procedures, ballots might not be postmarked for several days after being mailed, meaning they might not be counted. The Postal Service recommends mailing ballots back at least a week before the election deadline.
Tammy Patrick, the chief program officer for the nonpartisan National Association of Election Officials, said Trump's comments about mail voting muddy the waters in a way that reduces confidence in both elections and the Postal Service. Although millions of Americans vote by mail, the volume of ballots is not significant enough to have a financial impact on the postal service if Trump succeeds in banning mail voting.
"We keep hearing that there are all these problems with voting by mail, that there's all this fraud, that voters can't trust the Postal Service. But the truth of the matter is that millions of Americans for years have received their ballots from a postal worker and chosen to return them the same way," Patrick said. "People should trust that channel of voting ... but it's difficult when they're constantly being fed information that's not based on facts. The challenge is that when the president of the United States talks about it in this way, some people will question whether they can trust the Postal Service."
This article originally appeared on USA TODAY: USPS seeks more power to raise rates, take on loans to stay afloat
Source: “AOL Money”
