Postal Service Plans Price Increases and Service Cuts to Shore Up Finances

WASHINGTON — The Postal Service unveiled a 10-year strategic plan on Tuesday that would raise prices and lengthen promised delivery times, among other measures, in an effort to recoup $160 billion in projected losses over the next decade.

The announcement, which comes as the beleaguered agency is already reeling under nationwide delivery delays and falling use of traditional mail, drew immediate condemnation from Democrats in Congress, who would have to pass legislation to carry out some parts of the proposal. Speaker Nancy Pelosi of California instead vowed to advance an infrastructure bill “to ensure that the Postal Service has the resources needed to serve the American people in a timely and effective manner.”

Among other things, the plan would reduce post office hours, consolidate locations, limit the use of planes to deliver the mail and loosen the delivery standard for first-class mail from within three days in the continental United States to within five days, an effort to meet the agency’s 95 percent target for on-time delivery. In a news conference, Kristin Seaver, an executive vice president at the Postal Service, maintained that 70 percent of first-class mail would continue to be delivered in one to three days.

The postmaster general, Louis DeJoy, a Trump megadonor and former logistics executive who has faced criticism over his handling of the agency, argued that the steps were necessary given the Postal Service’s worsening financial situation. The agency, which is supposed to be self-sustaining, has lost $87 billion in the past 14 fiscal years and is projected to lose another $9.7 billion in fiscal year 2021 alone.

“We have to start the conversation with we’re losing $10 billion a year,” Mr. DeJoy said in an interview on Tuesday, “and that’s going to continue to go up unless we do something.”

“We are hopeful that this is taken for what it is, a positive story, and everybody, let’s get on board,” he added. “And I think, you know, there’s different aspects within each side of the aisle over there that this plan has good stuff for.”

But if anything, the release of the plan appeared to intensify opposition to Mr. DeJoy’s leadership among Democrats, who had already blamed him for delivery slowdowns that coincided with operational changes last summer. They had also accused him of sabotaging the Postal Service as President Donald J. Trump promoted unfounded claims of vote-by-mail fraud before the 2020 election.

On Tuesday, Representative Bill Pascrell Jr., Democrat of New Jersey, renewed a call for the sitting members of the agency’s Board of Governors to be fired and for Mr. DeJoy to be “escorted to the street where his bags are waiting for him.” The plan should be a “dead letter” for the agency, he added.

Ms. Pelosi said Mr. DeJoy’s “cutbacks” would undermine the agency’s mission, “resulting in serious delays and degradation of service for millions.”

The Postal Service said that relying more on ground transportation would make delivery more reliable. But the result would be, for some, slower mail.

Among the most contentious provisions were price increases for the agency’s services. In its plan, the Postal Service said it expected to find $44 billion in revenue over the next 10 years through regulatory changes, including pricing flexibility. Mr. DeJoy said he could not offer details about the increases.

The single largest opportunity for savings under the plan lies in lawmakers’ hands. Congress has mandated that the agency must prefund 75 years’ worth of its retiree health benefits. In the strategic proposal, the Postal Service estimates that it could recoup $58 billion by eliminating the prefunding requirement and introducing Medicare integration, which would align the agency’s retiree health benefit plans with those of many private sector employers and state and local governments.

Mr. DeJoy and Ron A. Bloom, the chairman of the Board of Governors, would not offer an explanation of how the Postal Service might recoup the expected $58 billion without legislative and administrative action. Instead, Mr. Bloom maintained, “We’re going to make this happen.” Mr. DeJoy said the agency has had “good conversations” with members of Congress on both sides of the aisle.

“If people choose to make this about politics, then they can,” Mr. Bloom said. “And it’s Washington, so it won’t surprise anyone if that happens from some time to time.

“But you know, you have a bipartisan Board of Governors. You had a rigorous process to choose the P.M.G.,” he added, referring to the postmaster general. “You have what I think is a plan that demonstrates what we’ve been saying for a while, which is we want to grow and revitalize this institution.”

Postal legislation has languished in Congress, but Democrats expressed interest in pushing ahead. Senator Gary Peters, the top Democrat on the Homeland Security and Governmental Affairs Committee, expressed concerns about several elements in the Postal Service plan but expressed support for postal legislation more generally.

Postal Service insiders said the plan was mixed. It promises potential for growth and an investment in new vehicles, along with post offices that meet community needs. But other elements are cause for concern, they said.

“If they’re talking about, you know, service excellence, that to us it’s a contradiction to then have mail take longer to get to point A and point B or to reduce hours in retail units,” said Mark Dimondstein, the president of the American Postal Workers Union. “So we certainly oppose and have deep concerns about those part of the plans.”

At least some of the elements of the plan will require an advisory opinion from the Postal Regulatory Commission before they can be enacted, said Michael Plunkett, the president of the Association for Postal Commerce. He called it a “tall order” that consumers would accept higher prices from the Postal Service, along with reduced service.

Mr. Plunkett said the plan made clear the Postal Service was aiming to bolster its package services, which have made up a growing share of its business. But he said the lack of effort to retain mail volume was disappointing.

“On the mail side, they seem to just accept the fact that mail is going away,” Mr. Plunkett said.

Asked about his ties to Mr. Trump and those who might disapprove of the plan as a result of those connections, Mr. DeJoy brushed off any criticism.

“I’m here representing the Postal Service,” he said, adding, “I don’t pay attention to that.”