USPS strikes deal with Elon Musk's DOGE team for reform help

By David Shepardson

WASHINGTON (Reuters) -U.S. Postmaster General Louis DeJoy told Congress he signed an agreement with Elon Musk's DOGE government reform team to provide assistance to the money-losing agency as it works to address "big problems."

USPS, an independent government agency with 635,000 employees that lost $9.5 billion last year, has been exempt from DOGE-directed federal employee reductions. DeJoy told Congress in a letter seen by Reuters that USPS plans to reduce its workforce by 10,000 workers in the next month through a voluntary early retirement program first announced in January. The Post Office has cut 30,000 jobs since 2021.

DeJoy said the agreement with DOGE and the General Services Administration will allow the government reform team to "assist us in identifying and achieving further efficiencies.... The DOGE team was gracious enough to ask for big problems they can help us with."

DOGE is working across government to cancel contracts and shrink agencies.

DeJoy cited a number of issues including management of retirement assets and its workers' compensation program by other government agencies, unfunded mandates and burdensome regulatory requirements.

DeJoy has led a dramatic effort to restructure the post office over the last five years -- including cutting forecasted losses from $160 billion to $80 billion over a decade -- that has used similar tactics to the DOGE team including shrinking the workforce and canceling or renegotiating contracts.

He said the Postal Regulatory Commission "is an unnecessary agency that has inflicted over $50 billion in damage to the Postal Service by administering defective pricing models and decades-old bureaucratic processes."

The Postal Regulatory Commission called DeJoy's statement false, arguing USPS had wasted $100 billion in financial assistance from Congress and the commission, losing more money and "making USPS less efficient, and collapsing service, especially for rural Americans."

Representative Gerald Connolly, top Democrat on the committee overseeing USPS, said DeJoy was allowing DOGE to "infiltrate" the agency, suggesting DOGE would "undermine it, privatize it, and then profit off Americans’ loss."

GSA and DOGE did not comment.

Last month, two media outlets reported President Donald Trump was preparing to issue an executive order to fire the Postal Service board of governors. The White House denied the plan but Trump said he was considering merging the Postal Service with the U.S. Commerce Department, a move Democrats said would violate federal law.

Musk, a billionaire top adviser to Trump, said last week he thought USPS should be privatized.

Commerce Secretary Howard Lutnick has said the Postal Service could help shrink the department's costs by providing workers to conduct the U.S. census and handle tasks performed by 20,000 Social Security employees.

The Postal Service is adopting new service standards that will save the agency at least $36 billion over 10 years.

The Postal Service has lost more than $100 billion since 2007. Last month, it reported a fourth-quarter profit of $144 million.

As electronic communications have proliferated, the agency has been hurt by an 80% decline in first-class mail volume since 1997. Volumes are now at the lowest level since 1968.

DeJoy announced last month he plans to leave after about five years on the job.

(Reporting by David Shepardson; Editing by Diane Craft and Kate Mayberry)

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