The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Gabriel Rubin

WASHINGTON, Feb 24 (Reuters Breakingviews) - Simple back-of-the-envelope math illustrates why an extreme U.S. mail makeover would be a bad idea. With Postmaster General Louis DeJoy stepping down nearly halfway through his 10-year term, President Donald Trump plans to take control of the 250-year-old letter-delivery system, making it a possible target for more radical cost cutting or even a prelude to privatization. Much like national parks, fighting disease and space exploration, however, the public-good benefits far outweigh the monetary costs.

The U.S. Postal Service is a quasi-governmental agency older than the United States itself. It also happens to be one of the most popular in the country, with a 72% favorable rating among Americans surveyed by Pew Research Center last year.

Although DeJoy has hacked away at the $80 billion annual budget, funded largely by shipping some 340 million pieces of mail and packages a year, there are limitations to running it like a company while keeping it widely, and affordably, available. In fact, Congress declared in 1958 that the postal service is “clearly not a business enterprise conducted for profit,” but rather a way to keep the country connected. The foundational mandate makes it easier to accept last year’s $9.5 billion loss.

About 80% of the red ink is attributable to pension obligations and non-cash workers’ compensation expenses. DeJoy’s long-term cleanup plan made admirable progress anyway, slashing expected 10-year losses to $65 billion from $160 billion, including by securing congressional permission to remove onerous pre-funding requirements for retirees. Improved logistics and reduced working hours also helped offset declining mail volume.

There is undoubtedly more to be done, but unprofitable rural routes, far-flung post offices and curbs on hiking prices are harder-to-overcome obstacles. Members of Congress, including Trump allies, have pushed back on any such plans given the essential service that mail carriers provide to their constituents. Private operators like UPS UPS.N and FedEx FDX.N typically don’t cover anywhere near as much ground, leaving public mail trucks to trundle down dirt roads delivering birthday cards and prescriptions.

Those are positive externalities, in the economic vernacular, that make postal costs worthwhile even if they leave the bottom line lacking. The U.S. Postal Service clearly is doing something right. The only agency to receive greater approbation on the Pew poll was the National Park Service. Close behind were NASA and the Centers for Disease Control and Prevention. Trump is already tempting fate by swinging his axe at those highly regarded institutions. The logic behind feeding mail into the shredder is equally paper thin.

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CONTEXT NEWS

The Trump administration is planning to fire the U.S. Postal Service’s board and move it under control of the Department of Commerce, the Washington Post reported on February 20, citing unnamed sources.

Trump said in December 2024 that Postal Service privatization was “not the worst idea I’ve ever heard,” adding that “we’re looking” at it.

Postmaster General Louis DeJoy, who is in the fourth year of a decade-long cost-cutting plan, told his board on February 18 that he planned to step down soon. The agency’s nine-member board, whose appointees are chosen by the president and confirmed by the Senate, has four vacancies.

The postal service lost $9.5 billion in 2024, largely due to pension liabilities and a mandate to deliver mail throughout the United States six days a week.

(Editing by Jeffrey Goldfarb and Pranav Kiran)

((For previous columns by the author, Reuters customers can click on RUBIN/gabriel.rubin@thomsonreuters.com))