The U.S. Postal Service told a Senate committee on Wednesday that it is out of cash and needs Congress to overhaul its business model or risk a collapse of the nation's mail and package delivery network.
In written testimony before the Senate Committee on Homeland Security and Governmental Affairs, Postmaster General and CEO David Steiner said the agency's finances have reached a breaking point. "The bottom line is that we are out of cash. We are borrowing from our employees' retirement funds to continue operations," he wrote, adding: "The Postal Service has a broken business model and action is needed by Congress to fix it."
By the end of fiscal year 2025, the agency will have nearly $31 billion in missed payments on retirement and other required obligations. This is much more than the $8.9 billion in cash it had on hand as of May 31, 2026. If USPS stopped delaying payments and paid everything it owes, it would run out of cash by the end of this fiscal year. Without major changes, its cash position could fall to negative $125.9 billion by 2035.
Even in the base case scenario — in which the agency continues deferring payments — USPS projects its unrestricted cash position peaks at $17.5 billion in fiscal year 2031 before turning negative at $3.4 billion by 2035, as retiree health benefit payments come due and the associated fund is depleted.
David Steiner outlined several structural constraints he said prevent the agency from responding to its financial crisis the way a private company would. These include a borrowing limit frozen at $15 billion for more than three decades, a requirement that retirement funds be invested only in Treasury notes, an obligation to deliver to more than 170 million addresses six days a week, and pricing restrictions imposed by the Postal Regulatory Commission. Steiner cited the financial drag of universal six-day delivery, noting the commitment carries an annual price tag of $3.4 billion and that seven in ten of those routes operate at a loss. Post offices are similarly underwater, with roughly 58% losing money, according to Reuters.
As a near-term fix, David Steiner called on Congress to raise the agency's borrowing authority, which he said should be $30 to $40 billion based on inflation and current revenue. He also asked lawmakers to resume a congressionally authorized public service reimbursement and allow USPS to diversify its retirement investments. Without action, he warned, the agency may be forced to cut delivery days, close thousands of post offices, and raise the price of a First-Class stamp.
The agency has been contending with a potential loss of billions in package revenue after Amazon $AMZN moved to cut its USPS parcel volume by at least two thirds before i current contract lapses. Accumulated net losses at the agency have reached approximately $120 billion since 2007, a period during which the rise of digital communication gutted first-class mail volumes and eroded the agency's most profitable revenue stream.
Among the emergency measures already underway, the agency announced last month that it had frozen non-essential expenditures and paused its employer-side contributions to a federal pension program — steps that together are expected to preserve $2.5 billion in cash through the end of September.