the US Postal Service The new Postmaster General warned in an interview that he will run out of cash within a year unless Congress lifts a decades-old cap and allows the agency to borrow more money.
If that doesn’t happen, the Postal Service may not be able to pay its employees or suppliers by February 2027, with potentially serious consequences for mail delivery. Postmaster General David Steiner He told the Associated Press.
“How long will employees work and vendors show up if we don’t pay them?” Steiner said in an interview on Wednesday.
The Postmaster General is scheduled to testify before Congress later this month about the Postal Service’s financial difficulties and the need to change long-standing rules and regulations that he considers burdensome. He pointed to the $15 billion borrowing limit that has been in place since 1990.
The Postal Service is an independent agency that is funded mostly by mail revenues and the services they provide. It has all the burdens of a government agency, such as having to deliver mail six days a week to every address, but none of the advantages, such as an annual appropriation from the federal budget, Steiner said.
“We have to have a conversation with the American public,” Steiner said. “If you want us to deliver everywhere, every day, we will 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. Raising the borrowing limit is the easiest thing lawmakers can do immediately to help the agency, he said.
“It will buy us time to make the repairs we need to make, and we can move on down the road,” he added.
He called for Expanding the service revenue baseIncluding its extension Last mile delivery service To more entities. Last-mile delivery refers to the final step of getting a package from the local distribution center to the customer’s door, and is the most labor-intensive part of the delivery process.
USPS’s net loss for fiscal 2025 was $9 billion, although total operating revenue increased by $916 million, or 1.2%, largely due to its Ground Advantage shipping service. Net losses in fiscal year 2024 amounted to $9.5 billion.
Ultimately, other changes are needed as well, Steiner said, including giving the Postal Service the authority to raise mail rates enough to cover losses. He said increasing the price of a first-class stamp to 95 cents, from 78 cents today, would be enough to “fix” the Postal Service’s financial problems. A decade ago, a first-class stamp cost 47 cents.
But he said an independent agency created by Congress to oversee the Postal Service would not allow that.
“If the Postal Regulatory Commission adopts our pricing model, the problem will be solved,” he said, adding how the package delivery side of the company could support the mail side.
Steiner and other Postal Service officials also called for reforms to pension obligations and retiree health benefits, including the ability to invest money in something other than Treasury bonds.
Several postmaster generals over the past two decades have repeatedly asked Congress or regulatory agencies to change various rules governing the Postal Service. In 2022, Congress passed the Postal Service Reform Act, which ended the requirement that the agency prefund retiree health benefits, but left other restrictions intact.
Meanwhile, the Postal Service has seen annual volume decline dramatically from about 220 billion pieces to about 110 billion today as more people pay bills and communicate online.
“Take those 110 billion and put a 78-cent stamp on it,” he said. “That means $86 billion in revenue that has evaporated in 15 years.” “If FedEx or UPS lost $86 billion in revenue, they wouldn’t have any revenue.”
But instead of helping the Postal Service, Steiner said regulators and Congress imposed costly mandates.
“I would say we’re kind of thrown overboard on a ship in cold water, right? Instead of them throwing us a lifeline, we’re thrown with an anchor,” he said.
Calls made Thursday to some members of Congress who oversee the Postal Service were not immediately returned.
Steiner admitted that he did not realize the depth of the Postal Service’s cash crunch until he took over as postmaster last year.
“It’s interesting that I’m not sure some people in the Postal Service realized how dramatic it was,” he said.