USPS Partners with Elon Musk’s Department of Government Efficiency to Cut Costs

The United States Postal Service (USPS) is embarking on a major new initiative to reduce costs and streamline operations by working with Elon Musk’s Department of Government Efficiency (DOGE). This move builds upon the reforms initiated by outgoing Postmaster General Louis DeJoy, who has been focused on transforming the Postal Service since his appointment in 2020 through the ambitious—and often controversial—Delivering for America strategy.

The Agreement with DOGE

In a letter to House and Senate committee leaders overseeing the USPS, DeJoy announced that he had signed an agreement with the General Services Administration and DOGE representatives to help identify additional cost-saving measures. The USPS faces several financial and operational hurdles that this partnership aims to address, including:

• Retirement Fund Mismanagement: The self-funded retirement system has been plagued by actuarial miscalculations and mismanagement within the Office of Personnel Management (OPM) and the Treasury Department, costing USPS billions annually.
• Workers’ Compensation Costs: The Department of Labor-administered Workers’ Compensation Program has led to approximately $400 million in excessive charges each year.
• Unfunded Mandates: Legislative requirements have imposed additional financial burdens on USPS, costing billions.
• Regulatory Overhead: DeJoy criticized the Postal Regulatory Commission (PRC), calling it an unnecessary agency that has inflicted $50 billion in damages by enforcing outdated pricing models and bureaucratic processes.

Concerns Over Privatization and Political Influence

Not everyone is convinced this partnership is a step in the right direction. Rep. Gerald E. Connolly, the ranking member on the House Committee on Oversight and Government Reform, warned that DeJoy’s proposals could lead to the privatization and politicization of USPS. Eliminating the PRC, in particular, would remove critical oversight, potentially making it easier for the government to steer USPS policies for political gain.

“This capitulation will have catastrophic consequences for all Americans—especially those in rural and hard-to-reach areas—who rely on the Postal Service every day for mail, medications, ballots, and more,” Connolly stated. “Reliable mail delivery can’t just be reserved for MAGA supporters and Tesla owners.”

Postal Unions Push Back

Postal unions are already sounding the alarm over potential job cuts and workplace changes. The American Postal Workers Union (APWU) has stated that it is on “full alert” and is prepared to take immediate legal action if DOGE seeks access to employees’ personal or private information. The union has also vowed to fight for contractual protections and workers’ rights amid concerns about job losses and reduced benefits.

What Changes Could Be Coming?

According to Paul Stiedler, a USPS expert and author of a Fedweek article titled The US Postal Service is a DOGE Delight, there are several potential cost-saving reforms that DOGE may push for, including:

• Pension Investment Reform: Instead of keeping $250 billion in pension assets tied up in government bonds, USPS could diversify investments for better returns.
• Scaling Back Package Delivery: Focusing primarily on mail services rather than competing with private carriers for package delivery.
• Shifting Retirement Plans: Transitioning from traditional pension plans to defined contribution plans for new employees to reduce long-term liabilities.

Stiedler emphasized that now is the time for reform, urging USPS leadership and employees to embrace efficiency measures that would make the agency leaner, more respected, and better equipped to serve the public.

USPS Shows Signs of Recovery

Despite concerns, DeJoy insists that the Delivering for America Plan is starting to pay off. He highlighted that in the first quarter of 2025, USPS turned a $1 billion profit, marking a significant milestone in the effort to stabilize the agency’s finances.

Final Thoughts

The collaboration between USPS and Elon Musk’s Department of Government Efficiency represents a bold attempt to tackle long-standing financial and operational issues. However, critics fear that the proposed reforms may lead to privatization, job losses, and reduced service quality—especially for rural Americans. The coming months will reveal whether this initiative is a path to modernization or a precursor to dismantling a crucial public service.

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