04.23.2024
Baldwin Leads Senators Calling Out USPS Leadership for Unsustainable Price Hikes and Poor Service
Senators: “USPS is continuing to implement changes that are harmful to Americans and the American businesses that rely on the service”
WASHINGTON, D.C. – As Americans learn of another rate increase for postage stamps, U.S. Senator Tammy Baldwin (D-WI) led Senators Martin Heinrich (D-NM), Ron Wyden (D-OR), Tammy Duckworth (D-IL), Dick Durbin (D-IL), Amy Klobuchar (D-MN), and Peter Welch (D-VT) in pushing for change at the U.S. Postal Service (USPS) to protect the jobs, businesses, and Americans who rely on the Postal Service. In a letter to the USPS Board of Governors, the Senators questioned Postmaster General Louis DeJoy’s leadership which has resulted in higher prices for Americans and poor service. USPS announced earlier this month that in July, the cost of First-Class Mail Forever stamps would increase to 73 cents.
In 2020, Postmaster Louis Dejoy announced the Delivering for America (DFA) plan to address the operational and financial strains the USPS was confronting. However, instead of seeing improvements to the Postal Service, the plan has resulted in diminished quality of customer service, unsustainable postage increases, and drastic declines in the postal industry, which employs nearly eight million people and produces $1.9 trillion of annual economic activity.
“We have a vested interest in seeing USPS succeed. Our constituents rely on it for their daily correspondence, bills, lifesaving medications, and sometimes, their livelihood. The U.S. Postal Service is, by law, a fundamental service provided to the people by our government,” wrote the Senators. “It has become clear that under the DFA, USPS is continuing to implement changes that are harmful to Americans and the American businesses that rely on the service. As the Board of Governors, you must step in before further harm is caused.”
Despite Congress passing bipartisan legislation and appropriating additional funds that took USPS from $9.2 billion in losses in 2020 to a one-time spike in net income to $57 billion in 2022, leadership at USPS has continued to increase postage rates. Since 2022, the price of First-Class stamps increased from 60 cents to 68 cents, with an additional 5-cent increase announced for this July. From 2022 to 2023, USPS saw the largest drop in First-Class mail in 10 years, greater even than during the COVID-19 pandemic.
The full letter is available here and below.
Dear Chairman Martinez and Members of the Board of Governors:
We write to express our concerns regarding the Delivering for America plan (DFA) and the future of the United States Postal Service (USPS). While it was a step forward to produce a transformative plan, the policies to date have led to diminished quality of customer service, unsustainable postage increases, and drastic declines in businesses whose commerce relies on USPS. USPS relies on both mail and packages for its revenues, yet since 2020, USPS has delivered 12 billion fewer pieces of mail, bringing volume to its lowest level in 40 years, while seeing no offsetting increase in package volume. We ask that the Board of Governors take decisive action to halt these changes and prevent further consequences for American families and businesses who depend on USPS to meet their needs.
Congress enacted the bipartisan Postal Service Reform Act of 2022 that saved USPS nearly $60 billion, and will continue to save USPS billions in the future. We also delivered $10 billion in direct appropriations to USPS in 2020. Primarily as a result of Congressional assistance, it appeared that from 2020 to 2022, USPS finances had improved. USPS reported a $9.2 billion loss in 2020, a $4.9 billion loss in 2021, and a one-time spike in net income to $57 billion in 2022. After the implementation of a new postage rate-setting framework that enabled much higher rate increases, we began to see the disastrous effects in 2023. Following the implementation, USPS mail volume dropped dramatically, losing 11 billion pieces of mail, and reporting a net loss of $6.5 billion in 2023. Instead of connecting the two issues, USPS blamed inflation, despite mail prices nearly doubling inflation in that time period.
The sudden loss of mail caused by Postmaster General DeJoy’s new postage rate-setting framework foreshadows a destructive and repetitive cycle for both business and regular mail users. As USPS increases rates, mailers predictably reduce their mail volume and, in turn, USPS is forced to increase rates again to replace the lost revenue from volume reduction. In 2022, USPS marketing mail revenue increased $1.4 billion and volume grew by 894 million pieces. After two rate increases in 2023, marketing mail revenue decreased by $920 million and volume fell by 7.7 billion pieces. In addition, since 2022, we have seen the price of First-Class stamps increase from 60 cents to 68 cents, and heard from our constituents about the financial burden of these increases. From 2022 to 2023, we saw the largest drop in First-Class mail in 10 years, greater even than during the COVID-19 pandemic. Together, First-Class Mail and Marketing Mail made up more than half of USPS’s total revenue for 2023. USPS financial stability will not be achieved through raising rates twice annually and threatening the potential elimination of two major areas of USPS revenue. USPS is already struggling financially; it cannot replace billions more in lost revenue.
The postal industry employs nearly 8 million people and produces $1.9 trillion of annual economic activity. It is vitally important that USPS understand the critical role it plays in helping to grow and support the American economy. For example, a marketing firm engaging in a 100,000-piece mail prospecting campaign with an anticipated one percent response rate can expect to yield 1,000 new customers. In addition, this success also results in an average of 24,000 additional pieces of mail generated. If USPS continues to increase postage rates, prompting businesses to scale back on prospecting mail, the repercussions will extend beyond the USPS and its own activities. In such a scenario, businesses risk losing customers if they can no longer rely on USPS for cost-effective mail delivery.
These rate increases, and by extension, the DFA, have failed to meet the objective and promises that Postmaster General DeJoy put forth in 2020. To make matters worse, the economic impact of these rate increases and the subsequent loss of mail volume has already resulted in a plant closure that cost nearly 500 jobs. At the time the DFA was proposed by the Postmaster General and approved by the Board of Governors, we were assured that this plan would impact the financial situation of the Postal Service for the better. Instead, we have seen closures of plants, decreased quality of service, and despite Congressional assistance, loss of USPS revenue.
We have a vested interest in seeing USPS succeed. Our constituents rely on it for their daily correspondence, bills, lifesaving medications, and sometimes, their livelihood. The U.S. Postal Service is, by law, a fundamental service provided to the people by our government. It has become clear that under the DFA, USPS is continuing to implement changes that are harmful to Americans and the American businesses that rely on the service. As the Board of Governors, you must step in before further harm is caused.
Thank you for your time and consideration of this urgent request.
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