By David Shepardson
WASHINGTON, March 16 (Reuters) – The U.S. Postal Service will tell Congress on Tuesday it faces a serious financial crisis and will run out of cash in less than a year in the absence of significant reforms.
Postmaster General David Steiner will tell a House Oversight subcommittee that USPS needs higher stamp prices, the ability to borrow more money as well as other reforms, including on pension funding and liabilities calculations, workers’ compensation and retirement fund investment strategies.
Steiner laid out potential options to cut costs: ending six-day-a-week deliveries, closing post offices or raising first-class mail stamp prices to $1 or more, up from the current $0.78.
“In order to ensure our survival beyond next year, we need to increase our borrowing capacity so that we don’t run out of cash,” Steiner’s written testimony seen by Reuters said. “The failure to do this could lead to the end of the Postal Service as we know it now.”
Stamp prices are up 46% since early 2019, when they were 50 cents, but Steiner says they are still far lower than in other countries.
USPS has a borrowing cap of $15 billion and has already hit the limit.
Reuters first reported in December that Steiner believed USPS will run out of money as soon as early 2027. The service has reported net losses of $118 billion since 2007 as first-class mail, its most profitable product, has fallen to its lowest volume since the late 1960s.
Steiner said reducing deliveries to five days a week would save USPS about $3 billion a year, while closing small post offices in remote areas would save $840 million. But, he said, either idea “may not be palatable to Congress or the American public.”
The Government Accountability Office will tell lawmakers on Tuesday that it is critical to “address USPS’s unsustainable business model before it will be responsible for billions in new annual expenses for retiree health care, likely in 2031.”
From USPS’s peak volume of 213 billion pieces in 2006 to 109 billion pieces in 2025, it lost 104 billion pieces of mail, which at current stamp prices translates to a loss of $81 billion, Steiner said, adding that since 2006 USPS “was thrown overboard and instead of tossing us a life jacket, we were thrown an anchor.”
USPS delivers to more than 170 million U.S. addresses six days a week.
In 2022, Congress provided USPS with $57 billion in financial relief over a decade and required its future retirees to enroll in a government health insurance plan.
(Reporting by David Shepardson; Editing by Chizu Nomiyama and Pooja Desai)
