Trump Suggests USPS Cut Retirement, Health Benefits in $46B Savings Package

President Trump proposed overhauling the U.S. Postal Service in his fiscal 2018 budget released Tuesday, calling for a slew of changes that would save the agency $46 billion over 10 years.

Trump followed on President Obama’s tactic of submitting postal reform details through his budget, as well as proposals currently making their way through Congress. While lawmakers have sought to maintain delivery standards, however, Trump would allow USPS to “reduce mail delivery frequency where there is a business case for doing so.” That proposal would likely face pushback in Congress, especially from lawmakers representing rural areas, and even postal management has dropped its proposal to eliminate mail delivery on Saturdays.

The White House suggested USPS bring its retirement benefits in line with the same changes proposed for the rest of the federal workforce, which would save the agency $33 billion over the next decade. The Postal Service would also save $1 billion under Trump’s plan by increasing employees’ contributions toward their health and life insurance.

Similar to reform legislation in Congress, Trump suggested USPS increase collaboration with state and local governments, reduce to-the-door mail delivery “where appropriate,” change its governance structure and create postal-specific assumptions about the demographics of the USPS workforce to prevent possible overpayment into the agency’s Federal Employees Retirement System account. The proposal said the Postal Service should have more flexibility in setting its prices, something postal management has also advocated.

While several of the provisions mirrored Obama’s last proposal for postal reform, the former administration estimated it would save $10 billion less. The House Oversight and Government Reform Committee passed its own, bipartisan postal overhaul bill in March. The Congressional Budget Office estimated the measure would create $2.2 billion in savings.

While Congress has attempted unsuccessfully for years to act on postal reform, the latest iteration is the first to have support from both parties and virtually all stakeholders. Rep. Jason Chaffetz, R-Utah, who authored the bill, has said he went to the White House in February to discuss overhauling the mailing agency. 

Dave Partenheimer, a USPS spokesman, said the agency appreciated Trump including postal reform proposals in his budget, calling them necessary to "meet its obligations in a financially sustainable manner." 

"The Postal Service looks forward to continuing to work with the Administration and with Congress to enact postal reform legislation," Partenheimer said. 

This story was updated with comment from the Postal Service.