U.S. Postal Service Primer: Updated Answers to Key Questions About Reform Issues

What GAO Found

The U.S. Postal Service (USPS) plays a critical role in the nation's communications and commerce. Federal law requires USPS to "provide adequate and efficient postal services at fair and reasonable rates and fees" and to "serve as nearly as practicable the entire population of the United States." USPS has long been expected to fulfill those requirements while being financially self-sufficient by covering its expenses with revenue from the sale of its products and services.

However, USPS's financial viability has been on GAO's High Risk List since 2009 due to its poor financial condition, which has been driven in part by declining mail volumes and rising costs. USPS has lost money every fiscal year since 2007. Its net losses have totaled approximately $118 billion from fiscal years 2007 through 2025. Its productivity also has declined-a trend that has contributed to its cost pressures. USPS has been able to continue operating by increasing its debt and unfunded liabilities. At the end of fiscal year 2024, USPS's unfunded liabilities and debt totaled 206 percent of its annual revenue, compared with 82 percent in fiscal year 2007. USPS's key costs are related to employee compensation and benefits, which represented about 76 percent of USPS's total operating expenses in fiscal year 2024.

In March 2021, USPS introduced Delivering for America, a 10-year strategic plan intended to modernize its network and products to bring about financial sustainability. The strategic plan includes significant changes to many aspects of USPS operations, including its processing, transportation, and delivery networks. USPS has implemented a range of cost-cutting and revenue-enhancing measures as part of Delivering for America, but additional strategies are constrained by statutory, regulatory, contractual, and political issues. While some key stakeholders have expressed support for Delivering for America's goals and strategies, some have expressed concerns that USPS's implementation of the plan (1) has not achieved projected cost savings and (2) has lowered service performance in some areas.

Additionally, the Postal Service Reform Act of 2022 (PSRA) was signed into law on April 6, 2022. PSRA is the first major legislative change to USPS since Congress passed the Postal Accountability Enhancement Act (PAEA) in 2006. PSRA provisions had immediate and long-term effects on USPS's finances and operations, such as repealing the requirement for USPS to prefund retiree health benefits and codifying 6-day-a-week mail delivery. Nevertheless, USPS's business model will remain unsustainable without Congress making difficult, fundamental policy decisions.

Why GAO Did This Study

This primer updates GAO's 2021 Primer on Postal Issues (GAO-21-479SP). Since GAO issued the original primer, USPS began implementing its 10-year strategic plan, Delivering for America, and Congress passed the Postal Service Reform Act of 2022. In addition, USPS released an updated plan in 2024, which summarized progress made over the preceding 3 years and the evolution of its major strategies.

This primer will help readers familiarize themselves with key issues confronting USPS by providing straightforward answers to common questions. It also identifies topics for Congress to consider when determining the future of USPS. For readers interested in a more detailed discussion, a list of related GAO products is included at the end of each section.