US Postal Service: A Constitutional Relic Bleeding Billions
I grew up in Stamford, Connecticut, in the 1970s, when the mailman — and it was always a man — showed up at the same time every day, six days a week, rain or ice or sweltering August heat. He knew your name. Packages arrived intact. The system worked. That was then. Half a century later, the United States Postal Service has evolved into a $9-billion-a-year money pit that loses more cash annually than most countries spend on their entire defense budgets, while offering service quality that makes the DMV look like a well-oiled machine. The gap between what USPS costs and what it delivers — in every sense of that word — has become one of the most glaring examples of government monopoly running on inertia rather than merit.
The constitutional foundation is genuine but narrow. The Framers authorized Congress in Article I, Section 8 to establish post offices and post roads, and the Postal Reorganization Act of 1970 converted that mandate into the modern USPS — an independent agency expected to fund itself through postage revenue while remaining subject to sweeping federal directives. It was, and remains, the government equivalent of telling someone to swim competitively while strapping a concrete life preserver to their back.
That self-funding promise has never been honored. The USPS operates under a universal service obligation requiring uniform pricing and six-day delivery to every address in America, regardless of how remote or irrational the route. First-class mail volume has collapsed from its 2006 peak of 213 billion pieces to roughly 109 billion in fiscal year 2025, a decline representing approximately $81 billion in vanished revenue at current stamp prices. USPS reported a net loss of $9.0 billion in FY2025 on $80.5 billion in revenue. The GAO has tallied $118 billion in cumulative net losses since 2007. When a government-mandated entity must subsidize money-losing routes while blocking competition, red ink is the design, not the exception.
The crisis is no longer theoretical. In March 2026, Postmaster General David Steiner testified before a House Oversight subcommittee with language rarely heard from a federal agency head: “I am not sure that the American public is aware that the Postal Service is at a critical juncture.” He warned Congress that USPS could exhaust its operating cash by October 2026 if it continues meeting all obligations, or by February 2027 if it defers some benefit payments — a practice it has relied on for years. He called for lifting the borrowing cap, allowing higher stamp prices, and reforming the outdated retiree benefit structure. His summary was blunt: “If our employees and vendors don’t get paid, it’s highly likely that the mail will stop.”
The timing coincides with a potentially catastrophic commercial rupture. Amazon, the USPS’s largest customer, generates more than $6 billion annually for the agency — roughly 7.5 percent of total revenue — and its contract expires Sept. 30, 2026. Negotiations collapsed after USPS moved toward a competitive auction model that would force Amazon to compete against other carriers for last-mile access. Amazon has signaled it may expand its own delivery network instead. The Brookings Institution calculates that maintaining universal service likely requires between $6 billion and $10 billion in annual congressional appropriations. Congress has shown no appetite to write that check.
The dysfunction runs deeper than the balance sheet. The phrase “going postal” entered the American lexicon in December 1993 after a decade of workplace violence that claimed more than 40 lives at postal facilities between 1970 and 1997. GAO investigators examining USPS workplace culture documented a “broken and dangerous relationship between bosses and workers” — authoritarian management, chronic grievances, and a bureaucracy so rigid that successful reform pilots consistently vanished into institutional quicksand. The culture has moderated since those years. The structural inertia has not.
Service quality confirms the picture. The USPS delivered 88.89 percent of first-class mail on time in fiscal year 2025 and called that an improvement. Missing more than 11 percent of delivery commitments while losing $9 billion a year would end any private firm. In my practice advising family offices and private capital clients, “USPS efficiency” serves as shorthand for the institutional lethargy no competitive business could survive. Private carriers exit unprofitable routes, reprice dynamically, and invest in automation without a government backstop. USPS manages its losses through congressional appropriations and creative accounting.
The Founders gave us post roads. They did not authorize perpetual deficits. Congress should lift the borrowing cap only in exchange for concrete structural concessions: sunset universal service obligation elements that no longer serve the public, authorize dynamic pricing for competitive products, and mandate outsourcing of non-core functions to private carriers. The Delivering for America plan‘s network optimization should be accelerated with private bids for processing centers, mirroring the airline and railroad deregulations that produced demonstrably better outcomes for consumers.
Congress should also authorize a four-day delivery week. Steiner told lawmakers in March 2026 that cutting delivery days is on the table as the agency confronts its liquidity crisis. The GAO has estimated that eliminating Saturday delivery alone would save $1.4 billion to $1.8 billion annually; USPS’s own modeling put a five-day reduction closer to $3 billion. Dropping to four days — eliminating Friday and Saturday street delivery for letter mail while preserving package runs on high-volume days — would likely produce $4 billion to $5 billion in annual savings. Americans accept four-day banking windows and four-day school weeks in rural districts. The argument that the federal government must deliver paper envelopes six days a week in a world where 85 percent of bill payments are digital is nostalgia dressed as public policy. The unions will object. That is not a reason to leave $4 billion on the floor.
Full privatization of the parcel business, while preserving a slimmed-down letter-delivery function with targeted subsidies for genuinely isolated rural communities, is the logical endpoint. It would attract private capital, impose real accountability, and end the cycle of taxpayer exposure dressed up as public service.
The Pony Express yielded to railroads. Dial-up yielded to broadband. Every transition was resisted by defenders of the incumbent model and embraced, eventually, by the people who needed to move goods and information. The USPS does not have to disappear, but it does have to change. Handing its competitive functions to private enterprise would liberate the postal mission from a cost structure designed for a world that no longer exists. The institutional nostalgia keeping this agency on life support is not a governing philosophy. It is a very expensive comfort blanket.
Jay Rogers is a financial professional with more than 30 years of experience in private equity, private credit, hedge funds, and wealth management. He has a BS from Northeastern University and has completed postgraduate studies at UCLA, UPENN, and Harvard. He writes about issues in finance, constitutional law, national security, human nature, and public policy.
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