The United States Postal Service could exhaust its available cash within the next year unless Congress allows the agency to increase its borrowing authority, Postmaster General David Steiner warned.
Steiner said the Postal Service could reach a point where it cannot meet payroll or pay vendors by February 2027 if lawmakers do not act, raising concerns about potential disruptions to mail service. He discussed the situation in remarks to The Associated Press on Wednesday.
“How long are employees going to work and vendors going to show up if we’re not paying them?” Steiner said.
Steiner is expected to appear before Congress later this month to address the Postal Service’s worsening financial condition and to urge lawmakers to revise long-standing policies he believes have placed the agency at a disadvantage. Among the issues he highlighted is a borrowing limit of $15 billion that has remained unchanged since 1990.
Although the Postal Service operates as an independent federal entity, it relies primarily on revenue generated from postage and the services it provides rather than direct funding from Congress. Steiner noted that the agency is required to function like a government service — including delivering mail six days a week to every address in the country — but without the benefit of annual appropriations.
“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 is going to pay for it?”
Steiner, who previously served as chief executive of the country’s largest waste management company and also sat on the board of FedEx, assumed leadership of the Postal Service in July. He said the most immediate relief Congress could provide would be raising the agency’s borrowing limit.
“That will buy us the time to make the fixes we need to make, and we can sail on down the road,” he said.
Beyond borrowing authority, Steiner has suggested expanding the Postal Service’s sources of revenue. One proposal involves increasing the use of the agency’s “last-mile” delivery network — the final stage of transporting packages from a local distribution hub to a customer’s home — for more outside organizations and businesses.
Financial figures show the Postal Service recorded a net loss of $9 billion in fiscal year 2025, even as operating revenue rose by $916 million, or 1.2%, driven largely by its Ground Advantage shipping service. In fiscal year 2024, the agency posted a net loss of $9.5 billion.
Steiner said deeper structural changes will ultimately be necessary, including granting the Postal Service greater flexibility to raise postage rates high enough to offset its losses. According to Steiner, increasing the cost of a first-class stamp from the current 78 cents to 95 cents would be sufficient to stabilize the agency’s finances. A decade ago, the same stamp cost 47 cents. Postal officials maintain that even at higher prices, U.S. postage would remain the lowest in the industrialized world while covering delivery distances far greater than those in other countries.
However, Steiner said the Postal Regulatory Commission — an independent body created by Congress to oversee the agency — has not approved the pricing framework proposed by the Postal Service.
“If the Postal Regulatory Commission adopted our pricing model, problem solved,” he said, adding how the package delivery side of the business could then subsidize the mail side.
Postal Service leadership has also advocated for changes to the agency’s pension system and retiree health benefit obligations, including allowing those funds to be invested in assets other than Treasury bills.
Over the past two decades, several postmasters general have urged Congress and regulators to revise the rules governing the Postal Service. In 2022, lawmakers enacted the Postal Service Reform Act, which eliminated the requirement that the agency pre-fund retiree health benefits. Still, other restrictions remain in place.
At the same time, traditional mail volume has sharply declined. Annual mail volume has fallen from roughly 220 billion pieces to about 110 billion today as more Americans handle bill payments and communication online.
“Take those 110 billion and put a 78-cent stamp on them. That’s $86 billion of revenue that evaporated in 15 years,” he said. “If either FedEx or UPS lost $86 billion of revenue, they would have no revenue.”
Steiner argued that instead of easing the agency’s burdens, regulators and lawmakers have imposed additional costly requirements.
“I like to say we sort of got thrown overboard on a ship into the cold water, right? And instead of throwing us a life preserver, we get thrown an anchor,” he said.
Several members of Congress who oversee the Postal Service did not immediately respond Thursday to requests for comment. A message was also left with Keep Us Posted, an advocacy organization formed in 2021 amid concerns over postage increases and service reliability.
Last month, the group warned that the Postal Service was “headed for a taxpayer bailout” due to ongoing cash flow problems. The organization has called on Congress to pass legislation that would limit rate hikes to once a year and tie them to improvements in service performance, among other proposals.
Steiner said he did not fully appreciate the severity of the Postal Service’s financial condition until he stepped into the role last year.
“Interestingly, I’m not sure some of the people at the Postal Service realized how dramatic it was,” he said.
{Matzav.com}
