USPS Chief Warns Postal Service Is Running Out of Cash, Urges Congress to Act
Postmaster General David Steiner delivered a stark warning to lawmakers on Wednesday, telling Congress that the United States Postal Service is facing a financial crisis and may soon be unable to sustain operations without significant reforms and federal assistance.
Appearing before a Senate committee, Steiner argued that the Postal Service’s longstanding financial challenges have reached a critical point and called on Congress to intervene to stabilize the agency’s future.
In prepared testimony, Steiner painted a troubling picture of USPS finances, saying the organization is relying on extraordinary measures simply to remain operational.
“The bottom line is that we are out of cash. We are borrowing from our employees’ retirement funds to continue operations,” Steiner’s written testimony before a Senate committee said, warning it could run out of operating funds in months if it stopped deferring obligations.
Steiner said the agency’s difficulties stem from deeper structural issues that lawmakers must address.
“The Postal Service has a broken business model, and action is needed by Congress to fix it,” he emphasized.
Among the changes he is seeking, Steiner urged Congress to reimburse USPS for services that consistently lose money and to pursue additional reforms aimed at restoring long-term financial stability.
The Postal Service has already begun taking steps to confront its mounting fiscal problems. Earlier this year, Steiner announced that USPS had retained restructuring advisers to help evaluate options for addressing the agency’s worsening financial condition.
One of the central questions facing the organization, according to Steiner, is whether it can continue maintaining six-day-per-week delivery service to approximately 170 million addresses nationwide. He noted that the current system costs roughly $3.4 billion each year and that nearly 70 percent of delivery routes operate at a loss. He also pointed out that about 58 percent of the nation’s 18,000 post offices are unprofitable.
The financial pressures have been building for years. Since 2007, the Postal Service has accumulated approximately $120 billion in losses. Much of that decline has been driven by the steep reduction in first-class mail volume, historically the agency’s most lucrative product, as consumers and businesses increasingly rely on digital communication while USPS continues to maintain its extensive nationwide delivery network.
Last month, the Postal Service announced a series of cost-cutting measures, including a pause on nonessential expenditures related to travel, office supplies, and consulting services.
In a memo distributed to postal officials, Steiner said the spending restrictions were necessary “to protect core operations and ensure we can continue meeting all essential obligations.”
The agency has also taken steps to conserve cash by temporarily suspending certain employer contributions to a federal pension program. In addition, USPS plans to increase the price of a first-class postage stamp from 78 cents to 82 cents beginning July 12.
Postal officials estimate that delaying pension contributions will preserve approximately $2.5 billion through the end of the current fiscal year on September 30. Over a longer period, the move could generate savings of as much as $15 billion through 2030.
Steiner’s testimony highlighted the urgency of the situation, placing renewed pressure on Congress to decide whether to pursue major changes to the Postal Service’s business model or risk further financial deterioration at one of the nation’s oldest and most widely used public institutions.
{Matzav.com}
