Postal service

US Postal Service Primer: Answers to key questions about reform issues

What the primer includes

This primer explains how the United States Postal Service (USPS) works and why it needs to be reformed, and discusses some options for addressing reform issues. GAO provides answers to questions about USPS fundamentals and postal reform issues in a concise, easy-to-understand format. These responses are based largely on previous GAO work.

This introduction highlights key issues to help Congress consider the future of the USPS, including consideration of the level of postal services the nation needs, the extent to which the USPS should be self-supporting and the most appropriate institutional structure for the USPS that best supports the changes. . USPS’ financial viability has been on the GAO’s high-risk list since 2009. USPS has made efforts to reduce costs and adjust its operations to accommodate declining mail volumes. However, the savings from these efforts have diminished in recent years. The USPS must meet several legal requirements and has a wide variety of stakeholders (see figure). It will be difficult to reach compromise and agreement among stakeholders on further changes. Worsening financial problems for the USPS could jeopardize its mission to provide universal postal service, as well as the well-being of its retirees and the repayment of its debt. Since 2010, the GAO has stated that if the USPS is to reduce costs, congressional leadership and action is critical to restoring the USPS to financial viability.

Major Stakeholders of the United States Postal Service (USPS)

Why GAO developed this introduction

USPS is the world’s largest postal service, delivering approximately 49% of all mail sent globally and playing a vital role in the nation’s communications and commerce. Congress designed USPS as a stand-alone entity that, like a business, would cover its operating costs primarily with revenue from the sale of certain products and services. However, beginning in fiscal year 2007, USPS’s expenses began to exceed its revenues. This resulted in total net losses of $87 billion from fiscal years 2007 through 2020, and $188 billion in unfunded liabilities and debt at the end of fiscal 2020.

The GAO created this primer to help explain why the USPS’ financial situation has deteriorated so dramatically and to discuss some options for remedying the situation. GAO has developed the key issues it addresses here by reviewing relevant GAO reports to identify and summarize key findings and issues for Congressional consideration. GAO also reviewed USPS documentation, including cost and revenue reports, to update information from past work, as appropriate.