The U.S. Postal Service will run out of money inside a 12 months until Congress lifts a decades-old cap and permits the company to borrow extra money, the brand new postmaster basic warned in an interview.
If it doesn’t, the Postal Service won’t be capable of pay its staff or distributors by February 2027, with probably dire penalties for mail supply, Postmaster Normal David Steiner advised The Related Press.
“How long are employees going to work and vendors going to show up if we’re not paying them?” Steiner stated in an interview on Wednesday.
The postmaster basic is scheduled to testify earlier than Congress later this month concerning the Postal Service’s monetary struggles and the necessity to change longstanding guidelines and laws that he considers burdensome. He singled out the $15 billion cap on borrowing that has been in place since 1990.
The Postal Service is an unbiased company that’s funded principally by means of postage income and the companies it gives. Steiner stated it has all of the burdens of a authorities company, reminiscent of having to ship mail six days per week to each tackle, however none of the advantages, reminiscent of an annual appropriation from the federal price range.
“We have to have a conversation with the American public,” Steiner stated. “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, a former CEO of the nation’s largest waste administration firm and a former member of the FedEx board of administrators, took over the struggling Postal Service final July. He stated elevating the borrowing restrict is the simplest factor lawmakers can do instantly to assist the company.
“That will buy us the time to make the fixes we need to make, and we can sail on down the road,” he stated.
He has referred to as for increasing the service’s income base, together with extending its last-mile supply service to extra entities. Final-mile supply refers back to the ultimate step of getting a package deal from a neighborhood distribution middle to a buyer’s door, probably the most labor-intensive a part of the supply course of.
USPS’s internet losses for the 2025 fiscal 12 months totaled $9 billion, though whole working income elevated by $916 million or 1.2%, due largely to its Floor Benefit delivery service. Web losses in fiscal 12 months 2024 had been $9.5 billion.
Finally, different adjustments are wanted, as nicely, Steiner stated, together with giving the Postal Service authority to lift postage costs excessive sufficient to cowl losses. He stated growing the value of a first-class stamp to 95 cents, from at the moment’s 78 cents, can be sufficient to “fix” the Postal Service’s fiscal woes. A decade in the past, a first-class stamp was 47 cents, though postal officers observe it’s nonetheless the bottom worth within the industrialized world and covers a supply vary that’s ten occasions farther than in different international locations.
However he stated an unbiased company created by Congress to supervise the Postal Service received’t enable it, he stated.
“If the Postal Regulatory Commission adopted our pricing model, problem solved,” he stated, including how the package deal supply facet of the enterprise may then subsidize the mail facet.
Steiner and different Postal Service officers even have referred to as for reforms to its pension and retiree well being profit obligations, together with the power to take a position the cash in one thing aside from Treasury payments.
A number of postmaster generals over the previous twenty years have repeatedly requested Congress or regulators to vary the varied guidelines governing the Postal Service. In 2022, Congress did go the Postal Service Reform Act, which ended a requirement that the company prefund its retiree well being advantages, but it surely left different constraints intact.
In the meantime, the Postal Service has seen annual quantity plummet from about 220 billion items to about 110 billion at the moment as extra individuals pay payments and talk on-line.
“Take those 110 billion and put a 78-cent stamp on them. That’s $86 billion of revenue that evaporated in 15 years,” he stated. “If either FedEx or UPS lost $86 billion of revenue, they would have no revenue.”
However as a substitute of serving to the Postal Service, Steiner stated regulators and Congress have imposed expensive mandates.
“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 stated.
Calls on Thursday to some members of Congress who oversee the Postal Service weren’t instantly returned. A message was additionally left with Hold Us Posted, an advocacy group launched in 2021 in response to cost will increase and repair delays. Final month, the group warned the USPS was “headed for a taxpayer bailout” given its money circulation points. The group urged Congress to go laws it says would restrict price will increase to yearly, tying them to service efficiency, amongst different measures.
Steiner acknowledged he didn’t understand the depth of the Postal Service’s money crunch till he took the postmaster basic job final 12 months.
“Interestingly, I’m not sure some of the people at the Postal Service realized how dramatic it was,” he stated.
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