The U.S. Postal Service on Tuesday will tell Congress that it’s facing a serious financial crisis and is on pace to run out of cash in less than a year without significant reforms.
Postmaster General David Steiner testified before a House Oversight subcommittee and told lawmakers that the USPS needs higher stamp prices and the ability to borrow more money along with other reforms – including changes to pension funding and liabilities calculations, workers’ compensation and retirement fund investment strategies.
Steiner has put forward possible options for cutting costs, including ending six-day-a-week deliveries, closing post offices or raising first-class mail stamp prices from the current 78 cents to $1 or more.
“In order to survive beyond the next year, we need to increase our borrowing capacity so that we don’t run out of cash,” Steiner said in prepared testimony. “The failure to do this could lead to the end of the Postal Service as we know it now.”
POSTAL SERVICE CAN’T BE SUED FOR INTENTIONALLY NOT DELIVERING MAIL, SUPREME COURT RULES IN 5-4 SPLIT
Stamp prices have risen 46% since early 19, when they were 50 cents. Steiner argues that those prices are still far lower than postage costs in other countries.
USPS has also reached its current borrowing cap of $15 billion, precluding the agency from taking out additional loans.
Reuters previously reported in December that Steiner thought the USPS was on track to run out of money as soon as early 2027 amid mounting losses.
USPS has reported net losses of $118 billion since 2007 as volumes of its most profitable product, first-class mail, fell to the lowest level since the late 1960s.
POSTMASTER GENERAL LOUIS DEJOY STEPPING DOWN AMID US POSTAL SERVICE FINANCIAL TURMOIL
Steiner said that if USPS were to reduce deliveries to five days a week, it would save the agency about $3 billion per year, while closing small post offices in remote areas would save about $840 million.
However, Steiner cautioned that both of those options “may not be palatable to Congress or the American public.”
USPS currently delivers to more than 170 million U.S. addresses on a six-day-a-week schedule.
USPS COULD SLOW SERVICE IN CERTAIN AREAS AS IT SEEKS TO CUT COSTS
The Government Accountability Office (GAO) is set to tell lawmakers on Tuesday that it’s critical to “address USPS’s unsustainable business model before it will be responsible for billions in new annual expenses for retiree healthcare, likely in 2031.”
USPS’ peak postage volume was 213 billion pieces of mail in 2006, while that figure has fallen by more than half to 104 billion pieces of mail in 2025.
Steiner noted that at current stamp prices, that translates to a loss of $81 billion. He added that in the years since 2006, USPS “was thrown overboard and instead of tossing us a life jacket, we were thrown an anchor.”
Congress in 2022 provided USPS with $57 billion in financial relief over a decade and required the agency’s future retirees to enroll in a government health insurance plan.
Reuters contributed to this report.
Read the full article here
