USPS Junk Mail: Would Banning It Bankrupt the Postal Service?

The Postal Service has lost money in eighteen of the last nineteen years. The latest installment came on May 8, when USPS announced a $2 billion net loss for the second quarter of fiscal year 2026. The lone exception, fiscal 2022, came from a one-time accounting change, not a turnaround.

A couple days later, Anduril founder Palmer Luckey took to X to demand USPS ban junk mail outright. " Junk mail is the majority of mail, 100 million trees per year. Enough!"

The predictable defense came back fast. Marketing Mail keeps USPS afloat. Ban it and you kill the Postal Service.

Both lines have something wrong with them. The more interesting story is the one the argument is helping everyone avoid.

Strip the politics away and a real question is left underneath. Would banning junk mail bankrupt the U. S. Postal Service?

One of the most common defenses of Marketing Mail (the formal name for what shows up at your house as junk) is that USPS depends on the revenue to stay solvent. There are other defenses too. The privacy argument tied to small-business advertising. The labor argument tied to mail-handler jobs. The "$4 billion is still helping" argument that takes the math seriously. We will get to those.

Start with the solvency claim, because it is the one the Postal Regulatory Commission publishes the data to test every year.

Three things the louder voices in this debate get right, before we get to the part they’re missing:

Junk mail really is the majority of mail.

The USPS Office of Inspector General classifies First-Class and Marketing Mail together as roughly half of postal revenue. At the household level the imbalance is sharper.

In 2011, USPS’s Household Diary Study found that about 57% of household-received mail was Marketing Mail. Today, after fifteen years of First-Class Mail volume collapsing faster than Marketing Mail volume, the share of household mail that’s advertising has climbed to roughly two-thirds.

Your mailbox feels like nothing but ads because, compositionally, it’s closer to true than it has ever been.

The mailbox monopoly is a strange piece of infrastructure.

Under 18 U. S. C. § 1725, your physical mailbox is reserved exclusively for the U. S. Postal Service. You can’t put your own outgoing mail in there for a neighbor to pick up. A neighbor can’t drop you a note in it.

Only USPS or its carriers are legally permitted to access it. The United States is one of the few countries that still has this rule on the books. Most of the European Union liberalized it years ago.

The opt-out gap is real.

Spam phone calls have the Do Not Call Registry. Spam emails are governed by CAN-SPAM. There is no federal Do Not Mail registry, and no political appetite to create one.

The largest industry-run alternatives (DMAchoice, OptOutPrescreen, Catalog Choice) each cover a slice. Combining them into actual mailbox relief requires time, persistence, and patience for sender-by-sender follow-up.

For one specific kind of junk mail, the gap is by design. USPS’s Every Door Direct Mail product, launched in 2011, is addressed to " Postal Customer" rather than to a name. That structurally rules out opt-out, and EDDM is now responsible for a meaningful share of household junk mail volume.

A few specific claims in the current cycle are worth calibrating before the math lands:

Luckey’s direction is right. The numbers he’s reaching for are too soft to carry an argument this big. If we’re going to remake the postal system, the case should be built from data that survives daylight.

Every year, the Postal Regulatory Commission publishes a Cost & Revenue Analysis report. It breaks each mail class into three numbers: revenue (what it brought in), attributable cost (what it cost to process and deliver), and contribution (revenue minus cost, the part that flows back to cover the agency’s overhead).

For the most recent fully audited fiscal year (FY2023), the numbers look like this:

The $15 billion is gross revenue. The $4 billion is net contribution. Anyone reasoning from the gross is reasoning from the wrong number.

USPS lost about $9 billion last fiscal year. Marketing Mail’s $4 billion closes less than half the gap. Double the contribution, send another 58 billion pieces of junk mail, and the agency still does not break even. Remove it entirely and the loss grows toward $13 billion.

Either direction, the structural deficit is much bigger than the Marketing Mail line.

Two further details from the same PRC dataset weaken the " Marketing Mail keeps USPS afloat" framing.

First-Class Mail contributes $13.1 billion against $24.8 billion in revenue. That is more than three times Marketing Mail’s contribution on only 64% more revenue. First-Class is the load-bearing class, and it is the one in volume freefall.

The PRC has also flagged three Marketing Mail sub-products as non-compensatory: Flats (catalogs), Carrier Route (saturation mail), and Parcels each fail to cover their own attributable costs. USPS actively loses money delivering the catalogs you most resent.

But isn’t $4 billion better than nothing?

The strongest version of the pro-junk-mail argument is the one that takes the math seriously. If banning Marketing Mail widens the loss from $9 billion to $13 billion, the argument goes, then junk mail is helping. Bad for households, sure. But it’s reducing the bleed at the institution that delivers our ballots and our prescriptions.

The argument is not crazy. It is also not free.

The $4 billion contribution is not a gift from advertisers to USPS. It is paid for by the 169 million American households whose mailboxes are sold, every day, to whoever bids for them. Some of what those bidders send is harmless. A lot of it is not.

Direct-mail solicitations are one of the documented channels for elder financial fraud. The FTC’s Consumer Sentinel database tracks mail-based fraud separately from phone and online channels, and senior victims are systematically over-represented in the mail channel. Prescreened credit card and insurance offers, mailed without the recipient’s request, are a primary documented vector for identity theft when discarded improperly. That is precisely why federal law (the Fair Credit Reporting Act) requires an opt-out infrastructure for prescreening, even though it requires nothing of the kind for general direct mail.

Add the privacy cost. The data-broker industry that powers most direct-mail targeting is built on personal information that households did not knowingly consent to sell. Marketing Mail is the visible output of an invisible market in personal data.

Add the environmental footprint. The exact "100 million trees" figure does not survive scrutiny, but the underlying claim does. Producing, transporting, and disposing of mail the recipient discards unread carries a real material cost. Households absorb that cost; the advertisers do not.

Set against those, "$4 billion in reduced USPS losses" is a strange thing to call a subsidy. It is not a public choice made transparently. It is a private cost imposed on every household in America to fund a public agency that no one has asked Congress to fund directly.

If we wanted to subsidize USPS by $4 billion a year, we could appropriate $4 billion a year. The fact that we haven’t is not an accident. The fact that we instead route the subsidy through 169 million mailboxes is what makes the deal politically convenient. It is also what makes it ethically uncomfortable.

There are several real ways to close the gap, all already on the table for postal reform.

Five-day delivery.

USPS analysis going back to 2008 estimates eliminating Saturday delivery would save $3–5 billion a year. Congress blocks this every year by attaching a six-day-delivery rider to USPS appropriations. Lifting the rider would close most of the gap on its own.

Raising stamp prices.

Postmaster General David Steiner publicly stated in March that raising the First-Class stamp from 78 cents to 95 cents would generate $2–3 billion a year in additional revenue, enough to fix the fiscal picture in his words. The Postal Regulatory Commission’s current rate cap rules don’t allow it. Changing the rules is a regulatory decision.

Closing the smallest rural post offices.

USPS operates about 31,000 retail facilities; the smallest ~10% don’t cover their costs. Older USPS estimates put the savings at $500 million to $1.4 billion annually. Local political opposition is intense and reliable.

Renegotiating the workshare structure.

The PRC has been telling USPS for years to raise prices on the non-compensatory Marketing Mail products (Flats, Carrier Route, Parcels) that don’t cover their own attributable costs. That’s another $1–2 billion in potential. The bulk-mail lobby has fought it every cycle.

Any two of these close the gap. None is politically comfortable. All of them are smaller, more focused conversations than " would banning junk mail bankrupt USPS." That question has an answer: no.

Here is what is actually going on.

USPS lost $9 billion last fiscal year. It is on pace for a similar loss this year. Marketing Mail’s $4 billion contribution is real, but mathematically it does not change the trajectory. If Marketing Mail doubled tomorrow, USPS would still be losing money.

The binding constraints are bigger, slower to move, and politically more expensive than any debate about advertising mail.

• Workers’ compensation expense rose $3.3 billion in FY2024 alone.
• Retiree health and pension amortization (the legacy of Congress’s 2006 prefunding mandate) adds billions of non-controllable expense each year.
• Delivery point density is collapsing. USPS now delivers to about 169 million addresses six days a week, up from roughly 130 million two decades ago, while carrying about half the total mail volume. Every address gets a daily visit whether or not there is anything to put in it.

The Treasury borrowing cap is the part of this story that gets misread most often.

The cap has sat at $15 billion since 1990. That figure is the implicit ceiling Congress has placed on how much rolling debt it is willing to let USPS carry to cover ongoing losses. USPS has been pressed against that ceiling for years.

Read another way, the federal government has been quietly accepting roughly $15 billion in cumulative USPS borrowing capacity as the cost of keeping the institution running. Annual losses in the $9 billion range fit inside that envelope, barely. Annual losses at $13 billion do not. Whether to raise the cap, cut the loss, or change the mission is the actual postal conversation. Whether catalogs help shave a few billion off the loss is downstream of it.

Which is why the junk mail debate is doing work for everyone in it.

As long as one side is shouting " ban it" and the other is shouting " you’ll bankrupt USPS," nobody has to talk about retiree obligations, the six-day delivery mandate, the workforce age curve, or what a 21st-century universal-service network should actually look like. Marketing Mail becomes a stand-in for the conversation that nobody wants to have.

The underlying mismatch is older than Marketing Mail and bigger than any single revenue line. Congress wrote the Postal Reorganization Act in 1970 to make USPS run like a business, then attached statutory obligations (universal service, six-day delivery, uniform pricing, no taxpayer funding) that no real business would accept. The institution we have today is the result of trying to satisfy both sides of that contradiction at once.

Operating losses are the symptom. The contradiction is the disease.

Serious reform proposals are now on the table. Five-day delivery. Workshare repricing. Closing the smallest non-compensatory post offices. More structural versions too. Alexander Muse’s recent " Federal Mail Exchange" proposal would restructure USPS as a clearinghouse that auctions delivery to certified private contractors, with a guaranteed mail floor and subsidies made visible on the budget line. PaperKarma agrees with the direction of that argument. The consumer-control surface improves when delivery becomes competitive, when chain of custody becomes auditable, and when the rural subsidy stops being silently bundled into every first-class envelope.

Whether to ban junk mail is not that conversation. On either side, it is the conversation Washington has when it does not want to have the other one.

Whether Congress ever bans junk mail is a separate question, and the safe bet is " not anytime soon." The direct marketing lobby is one of the better-funded interests in Washington, and the Mail Moves America coalition has defeated every state-level Do Not Mail bill for the past two decades.

You don’t have to wait for them. The household-level response to a household-level problem is straightforward. It just isn’t fragmented:

One honest caveat. PaperKarma works on mail that’s addressed to you personally, which is the vast majority of what we’d call junk mail. The exception is EDDM, the unaddressed saturation mail USPS specifically designed without an opt-out mechanism.

That gap is one we can’t fix at the household level, and it’s exactly why the policy debate matters. For everything else, you don’t need Washington to act. You just need to start.

The debate about banning junk mail is worth having. It’s not, however, the debate between you and your mailbox. That’s a separate problem, and it has a working answer today.