The US Postal Service expects to run out of money within a year without help from Congress, the postmaster general said
Written by USAN HAIGH
The US Postal Service will run out of money within a year unless Congress lifts a decades-old cap and allows the agency to borrow more money, the new postmaster general warned in an interview.
If it doesn’t happen, the Postal Service may not be able to pay its employees or vendors by February 2027, which could have serious consequences for mail delivery, Postmaster General David Steiner told The Associated Press.
“How long will the workers work and the vendors show up if we don’t pay them?” Steiner said this in an interview on Wednesday.
The postmaster general is scheduled to testify before Congress later this month about the Postal Service’s financial problems and the need to change longstanding rules and regulations that he considers burdensome. He pointed to an estimated $15 billion in loans that have been in place since 1990.
The Postal Service is an independent agency that is funded largely by postage and the services it provides. Steiner said it has all the responsibilities of a government agency, such as delivering mail six days a week to all addresses, but no benefits, such as an annual budget from the state budget.
“We have to have a conversation with the American public,” Steiner said. “If you want us to deliver everywhere, every day, we’ll do it. That’s not a problem. But who’s going to pay for it?”
Steiner, the former CEO of the nation’s largest waste management company and a former FedEx board member, took over the struggling Postal Service last July. He said raising the borrowing limit is the easiest thing they can do immediately to help the organization.
“That will buy us time to make the repairs we need to make, and we can go on the road,” he said.
He called for the service’s revenue base to be expanded, including extending its last-mile delivery service to more businesses. Last mile delivery refers to the final step of getting a package from a local distribution center to the customer’s door, the most labor-intensive part of the delivery process.
USPS net loss for fiscal year 2025 reached $9 billion, or operating income increased by $916 million or 1.2%, due largely to its Ground Advantage shipping service. The total loss for fiscal year 2024 was $9.5 billion.
Ultimately, other changes are needed, too, Steiner said, including giving the Postal Service the authority to raise postage rates high enough to cover the losses. He said raising the price of a first-class stamp to 95 cents, from 78 cents today, would be enough to “solve” the Post Office’s financial problems. Ten years ago, a first-class stamp was 47 cents.
But he said the independent agency created by Congress to oversee the Postal Service wouldn’t allow it, he said.
“If the Postal Regulatory Commission accepts our pricing model, the problem is solved,” he said, adding how the package delivery side of the business can support the postal side.
Steiner and other Post Office officials have also called for changes to their pension obligations and retiree health benefits, including the ability to invest in something other than Treasury bills.
Many postmaster generals over the past two decades have repeatedly asked Congress or regulators to change various laws governing the Postal Service. In 2022, Congress passed the Postal Service Reform Act, which eliminated the requirement that the agency pay its retiree health benefits, but left other issues intact.
Meanwhile, the Postal Service has seen annual volume drop from 220 billion pieces to about 110 billion today as more people pay bills and communicate online.
“Take that $110 billion and put a 78 cent stamp on it. That’s $86 billion in revenue that evaporated over 15 years,” he said. “If FedEx or UPS lost $86 billion in revenue, they would have no revenue.”
But instead of helping the Postal Service, Steiner said regulators and Congress imposed an expensive mandate.
“I like to say that we were thrown overboard on a ship in cold water, right? And instead of being thrown a life preserver, we are being thrown an anchor,” he said.
Calls Thursday to other members of Congress who run the Postal Service were not immediately returned.
Steiner admitted he didn’t realize the depth of the Postal Service’s cash crunch until he took a regular postmaster job last year.
“Interestingly, I’m not sure that other people at the Post Office saw how amazing it was,” he said.
