The president is looking to privatize the USPS
Home deliveries could soon undergo a major transformation if President Donald Trump moves forward with his plan to overhaul the US Postal Service.
Reports indicate that Trump is exploring the idea of privatizing the USPS in an effort to “save money,” a move that economists are warning could have disastrous consequences if it goes through.
For decades, the USPS has been a lifeline for millions of Americans, particularly in rural areas. Beyond handling traditional mail, it has provided critical delivery services for everything from online orders and groceries to essential items like prescription medications, checks, and even election ballots. The potential changes could have a far-reaching impact on these vital services, leaving many wondering what the future holds.
The US Postal Service plays a crucial role in delivering to communities that major delivery companies like UPS, FedEx, and Amazon often bypass due to high fuel costs, labor issues, and long distances.
Unlike these private companies, the USPS is legally required to serve every zip code in the US at affordable rates, absorbing the bulk of operating costs. However, President Trump is considering a drastic shift by weakening the Postal Service with his privatization plans—changes that could significantly impact customers.
In a recent statement on February 21, Trump said, “We want to have a post office that works well and doesn’t lose massive amounts of money … It’s just a tremendous loser for this country. Tremendous amounts of money are being lost. We think we can do something that will be very good.” He has also suggested that privatizing the USPS “is not the worst idea.”
According to The Washington Post, Trump has even hinted at dismantling the Postal Service’s 11-member leadership board and transferring control to the Commerce Department—moving the USPS one step closer to privatization.
What would privatizing the USPS mean?
If President Trump signs an executive order to privatize the USPS, the burden of its soaring operational costs would likely fall on residents in rural areas—88% of the land the USPS serves. Interestingly, these rural areas are largely made up of Trump supporters, with 62% of voters in these regions casting ballots for him, according to The Independent. However, the move would still need approval from Congress, and the White House has denied that an executive order is currently being prepared.
How would it change deliveries for residents?
Economists and postal workers warn that privatization could radically alter the way Americans receive deliveries. According to the National Rural Letter Carriers’ Association (NRLCA), it could lead to a situation where access to mail delivery is based on discretion, leaving some communities without service.
Currently, the USPS is required by law to deliver to every address, taking on the “last mile” deliveries to homes that private companies often skip. If the service becomes privatized, however, residents might face higher fees for these deliveries, and packages could take longer to reach their destinations.
Another report suggests that privatization could lead to the elimination or drastic reduction of the universal delivery service to every American address. This could mean fewer delivery days per week or a shift away from door-to-door service, with deliveries instead going to more central locations, according to CNN.
Don Maston, president of the National Rural Letter Carriers’ Association (NRLCA), voiced strong opposition to the potential changes in a public letter. He warned that privatization would threaten the integrity of the USPS, stating, “Any attempt to weaken or privatize the USPS is an attack on the backbone of American communities — a move that will leave our rural citizens, our union members, and our common values exposed to the impulses of profit-driven interests.”
How could privatization of the USPS save money?
The USPS has long been plagued by financial struggles, having lost a staggering $11 billion over the past two years. The agency attributes these losses to factors outside its control, such as unfunded pension liabilities for retirees and non-cash workers’ compensation adjustments. Despite these challenges, the USPS reported a modest $144 million in net income for the last quarter of 2024, marking its first profitable quarter since 2022. This increase in income was largely due to a rise in package deliveries driven by online shopping, as well as a decline in first-class mail.
However, the USPS is still burdened by a significant financial strain due to its large number of retirees—more than 700,000—who rely on pension benefits. This number far exceeds the 500,000 active employees in the system.
The Postal Reorganization Act of 1971 made the USPS an independent, self-funded agency, which has played a key role in shaping its financial structure.
What do economists say about the idea?
Monique Morrissey, a senior economist at the Economic Policy Institute, suggests that the USPS’s financial struggles are primarily due to its high costs when compared to the competition in the broader delivery sector. However, she believes that the Trump administration will likely abandon any privatization efforts once it realizes the political backlash it could provoke, particularly among Republican voters in rural areas.
Morrissey explained, “Members of Congress from rural states are very aware of how much local commerce depends on the Postal Service. If consumers were forced to pay the true cost of postage, it wouldn’t be cost-effective, and small businesses would be forced to relocate.” She warned that such a shift would be “catastrophic” for rural communities.
In fact, she added that it could lead to a “death spiral” in many rural areas, where the real cost of delivering mail to isolated, wooded locations is exponentially higher than what consumers currently pay for a stamp—up to 100 times more expensive.
Morrissey argued that there’s “no real good reason” to privatize the USPS, suggesting that the service could be better maintained if high retiree costs were factored out, leaving the agency in a more sustainable position.
