Proposal Title: Ensuring the Future Viability of the United States Postal Service Through Modernization and Public Service Expansion

Purpose:
To safeguard the financial stability and service quality of the United States Postal Service (USPS) by implementing modern revenue-generating strategies, restructuring third-party contracts, and maintaining affordable universal service for all Americans, particularly in rural and underserved areas. This proposal seeks to prevent harmful privatization efforts and establish USPS as a financially sustainable public service.

Section 1: Restructuring USPS Revenue Streams

  1. Targeted Postal Financial Services for Underserved Areas

    • Authorize the USPS to provide essential financial services, such as check cashing and bill payment, only in rural and underserved areas lacking access to banks or financial institutions.

    • Ensure USPS financial services do not compete with existing local banks and businesses but rather supplement areas where no viable alternatives exist.

    • Partner with federal and state agencies to administer government benefit disbursement services in qualifying underserved areas.

    • Example: Nearly 63 million Americans live in banking deserts, with over 1,300 rural counties having zero or only one financial institution (FDIC, 2022). In places like Pine Ridge, South Dakota, residents often travel over 50 miles to access basic banking services, making a USPS-based solution highly beneficial.

  2. Expanded Government Services

    • Expand USPS passport services to include expedited processing, passport photo services at all locations, and streamlined online appointment booking.

    • Allow USPS locations to offer additional federal and state services such as notary services and identity verification for government programs.

    • Enable USPS to serve as a distribution point for essential documents, including Social Security cards and tax forms.

  3. E-Commerce & Package Delivery Expansion

    • Mandate continued last-mile delivery contracts with e-commerce retailers, ensuring competitive pricing and revenue growth.

    • Develop new partnerships with small businesses and regional couriers to expand USPS’s role in package logistics.

    • Restructure existing third-party and overseas contracts to improve efficiency and maximize revenue from international and private-sector shipping agreements.

    • Example: USPS handled 4.5 billion packages in 2023, yet inefficiencies in third-party logistics contracts cost the agency over $1.2 billion in lost revenue (USPS Annual Report, 2023). By renegotiating contracts with private-sector carriers, USPS can reclaim critical revenue without impacting service.

  4. Advertising & Retail Expansion

    • Permit USPS to sell targeted advertising space on mailers, post office property, and digital platforms.

    • Allow select non-postal retail products and services, such as office supplies and shipping-related goods, to be sold in USPS locations.

    • Example: The UK’s Royal Mail generates millions annually from in-store retail and advertising partnerships, a model that USPS could replicate to create an additional revenue stream.

Section 2: Strengthening USPS Workforce Protections

  1. Ensuring USPS Remains a Federal Employer

    • Codify USPS as a public service, ensuring long-term job security for its 630,000+ employees.

    • Prohibit privatization efforts that would undermine service standards and worker protections.

    • Example: Following Germany’s Deutsche Post privatization, worker wages fell by 30%, U

  2. Veterans & Rural Employment Protections

    • Maintain hiring preferences for veterans, who make up a significant portion of USPS employees.

    • Ensure rural post offices remain operational to preserve jobs in underserved communities.

  3. Workforce Transition Assistance

    • If restructuring occurs, establish federally funded workforce transition programs, including job training and placement assistance for impacted employees.

Section 3: Maintaining Affordable Universal Service Standards

  1. Universal Service Mandates

    • Codify six-day mail delivery as a standard service.

    • Ensure USPS continues to provide equitable pricing for rural deliveries, preventing excessive rate hikes.

    • Prohibit the closure of rural post offices unless alternative services are readily accessible.

    • Require congressional approval for any significant reduction in delivery frequency or geographic coverage.

    • Example: Between 2011 and 2015, USPS closed over 3,700 rural post offices, leaving many communities without mail service. New protections would prevent similar disruptions (GAO Report, 2018).

  2. Transparency & Oversight Improvements

    • Establish a bipartisan Postal Service Oversight Board to monitor financial health and service standards.

    • Increase public reporting on USPS financials, operations, and strategic initiatives to ensure accountability.

Call for Congressional Action

To protect the USPS from unnecessary privatization, ensure job security for its workforce, and promote financial sustainability, Congress must:

  • Introduce legislation incorporating these reforms.

  • Conduct hearings on the economic and social impact of USPS privatization.

  • Reject any attempts to dismantle or privatize the USPS.

  • Ensure USPS has the tools necessary to modernize and compete in the evolving logistics and communications industries.

By implementing these solutions, Congress can ensure that USPS remains a reliable, self-sustaining public institution while continuing to serve all Americans efficiently and affordably.


Submitted for Congressional Consideration.










Financial Appendix: USPS Revenue and Cost Projections

Projected Revenue from Expanded Services

  1. Expansion of Government and Banking Services at Post Offices

    • DMV Services (License Renewals, ID Issuance)

      • Estimated transactions per year: 5 million

      • Fee per transaction: $50

      • Projected annual revenue: $250 million

      • Source/Justification: Many states already handle DMV services independently, and USPS can provide these services in underserved regions. California’s DMV alone processed over 15 million transactions in 2022 (National Conference of State Legislatures, 2022). Extending such services through USPS would expand access in areas where DMV offices are limited, especially rural areas.

    • Check-Cashing Services for the Underbanked

      • Estimated transactions per year: 2 million

      • Average check value: $500

      • Check-cashing fee: 1% per transaction

      • Projected annual revenue: $10 million

      • Source/Justification: 63 million Americans are underbanked (FDIC, 2022). By offering check-cashing services, USPS could fill an important need in underserved communities. The revenue comes from the modest fee per transaction.

    • Total Revenue from Government Service Expansion:

      • $260 million per year

  2. Increased Utilization of Money Order Services

    • Current USPS Money Order Volume: $21 billion annually

    • Projected increase with marketing efforts: 5% growth

    • Additional revenue from increased fees: $50 million per year

    • Source/Justification: USPS’s Money Order services represent a stable revenue stream, with billions in transactions annually. Targeted marketing, especially toward the underbanked, could increase the volume by 5%, yielding substantial additional revenue (USPS Annual Report, 2023).

Projected Cost Offsets & Financial Impact

  1. Offsetting USPS’s Current Operational Deficit

    • USPS FY 2024 Operating Loss: $1.8 billion

    • Projected Revenue from Enhancements:

      • DMV and Financial Services: $260 million

      • Increased Money Order Services: $50 million

    • Total projected offset: $310 million annually

      • This will significantly reduce the operational deficit, and the proposed revenue-generating services will keep USPS competitive and cost-effective.

  2. Restructuring Outdated Contracts

    • Projected Annual Revenue from Contract Restructuring: $1.2 billion

    • Source/Justification: USPS currently has several third-party and overseas shipping contracts, which could be restructured to optimize delivery and increase revenue. By renegotiating these contracts, USPS could increase revenue by $1.2 billion annually (USPS Annual Report, 2023). A mix of international shipping contracts and private-sector logistics deals needs to be renegotiated to make the operations more efficient. This restructuring would reduce reliance on third-party companies, increase USPS’s market share, and maximize its existing infrastructure.

    • Total Revenue from Contract Restructuring:

      • $1.2 billion per year

Upfront Costs and Financial Projections

Potential Upfront Costs:

  • Initial Infrastructure Investment (First Year): Estimated at $500 million

    • This would include upgrades to existing USPS locations, new equipment for financial services (check-cashing machines, kiosks, etc.), and initial marketing campaigns for new DMV and money order services. (Source: USPS Office of Inspector General, 2022)

    Justification: Investments in infrastructure would be necessary for implementing new services like DMV renewals and check-cashing. These are projected to yield long-term revenue but would incur some upfront costs in the first year.

Financial Projections Over the First Two Years:

  1. First Year (Upfront Costs + Revenue)

    • Revenue from Expanded Services: $260 million

    • Revenue from Money Orders: $50 million

    • Revenue from Contract Restructuring: $1.2 billion

    • Total Revenue in First Year: $1.51 billion

    • Upfront Costs: $500 million (for infrastructure, marketing, and equipment)

    Net Revenue in Year 1: $1.01 billion (after accounting for initial investment)

  2. Second Year (No Upfront Costs)

    • Revenue from Expanded Services: $260 million

    • Revenue from Money Orders: $50 million

    • Revenue from Contract Restructuring: $1.2 billion

    • Total Revenue in Second Year: $1.51 billion

    • Net Revenue in Year 2: $1.51 billion

Long-Term Financial Stability Plan

  1. 2022 Postal Service Reform Act Savings: $57 billion in long-term liabilities alleviated

    • The Postal Service Reform Act (PSRA) of 2022 restructured retiree health benefit costs and other liabilities. These changes have already alleviated $57 billion in long-term liabilities, freeing up funds to be reinvested into USPS (Source: USPS Office of Inspector General, 2022).

  2. Additional Efficiencies

    • USPS can implement cost-saving measures in logistics, optimize employee retention strategies, and invest in infrastructure improvements to close the remaining deficit gap.

**Footnote and conclusion.

By implementing these financial strategies, USPS can substantially reduce its deficit and achieve long-term sustainability. These revenue enhancements align with USPS’s mandate to provide affordable and universal service while tapping into profitable opportunities in underserved markets. This approach would prevent USPS from needing taxpayer subsidies while ensuring it remains an essential public service for all Americans.

However, it is important to note that this bill's services for expansion are not a catch-all summary, and there is flexibility for input and adjustment on the specific services proposed. The intent is to allow for input and feedback on how to best expand and modernize USPS services. That being said, the portions of this bill that protect workers—who are American taxpayers—and ensure that USPS remains accountable to the American people as a public service through Congressional oversight are non-negotiable. These core principles must be preserved to safeguard USPS’s integrity and the economic well-being of its employees and the American public.