US Postal Service seeks $2 billion from Congress to avoid cuts

The US Postal Service (USPS) has requested $2 billion in support and reimbursements from Congress to prevent significant cuts, according to a report on November 10 by Reuters. The head of the USPS, Postmaster General David Steiner, warned that the agency would be compelled to make substantial reductions in retail post offices and other services if lawmakers do not act. In the 12 months ending September 30, the USPS experienced a net loss of $6.5 billion, a decrease from the previous year's loss of $9 billion.

The new Democratic-led Congress, which will take office in January, must decide whether to assist the USPS. Republicans had conducted a series of hearings over the past two years to examine the Postal Service's finances. The USPS is seeking $2 billion from Congress to cover unfunded obligations. Over the past decade, the USPS has incurred a net loss of more than $120 billion.

The volume of first-class mail, which is the most profitable product for the USPS, fell to its lowest level since 1965 in the year 2022. This decline can be attributed to consumers increasingly relying on digital communication. Despite this, the USPS must continue to bear the cost of nationwide delivery. Steiner stated that drastic changes in the number of post offices and marketing mail service levels are necessary, along with exploring alternative sources of revenue to meet the agency's obligations to its employees and the American public.

Steiner also indicated that the USPS may need to slow mail delivery and has developed contingency plans by March. Earlier this year, the USPS raised the price of stamps for mailing a first-class letter from 78 cents to 82 cents as part of a 4.8% increase in mailing costs. The volume of first-class mail decreased by 2.2 billion pieces, or 5.1%, to 39.8 billion pieces during the 12 months ending September 30.

In May, the USPS temporarily suspended non-essential spending on travel, office supplies, and consultants, and it also halted employer contributions to a federal pension program. Congress provided the USPS with $57 billion in financial relief over a decade in 2022.