The U.S. Postal Service is out of money. Postmaster General David Steiner told the Senate Committee on Homeland Security and Governmental Affairs on Wednesday that the USPS financial crisis has reached a breaking point, warning lawmakers that without congressional intervention the agency faces the prospect of cutting delivery days, closing post offices, and raising stamp prices.
At a Glance
- USPS will carry nearly $31 billion in deferred retirement and other required payments by the end of fiscal year 2025, against just $8.9 billion in cash on hand as of May 31, 2026.
- Without major structural reforms, the agency's unrestricted cash position could fall to negative $125.9 billion by 2035.
- Six day universal delivery costs $3.4 billion annually; seven in ten of those routes operate at a loss.
- Emergency measures already in place are expected to preserve $2.5 billion in cash through the end of September.
- Accumulated net losses since 2007 have reached roughly $120 billion.
The Numbers Behind the Crisis
Steiner's written testimony lays out a stark arithmetic. The agency owes far more than it holds. If USPS were to stop deferring payments and settle every outstanding obligation immediately, it would exhaust its cash reserves before fiscal year 2025 closes. Even in the more forgiving base case, where deferred payments continue, the agency projects its unrestricted cash peaks at $17.5 billion in fiscal year 2031, then turns negative at $3.4 billion by 2035 as retiree health benefit costs come due and the associated fund runs dry.
Steiner's testimony went further on the structural side. The agency's borrowing authority has been frozen at $15 billion for more than three decades, a ceiling Steiner said should be raised to somewhere between $30 billion and $40 billion to reflect inflation and current revenue. Retirement funds are restricted by law to Treasury note investments, limiting any possibility of returns that could offset liabilities. And the Postal Regulatory Commission imposes pricing constraints that leave USPS with less flexibility than nearly any private logistics operator.
The Delivery Obligation Dragging on Margins
Universal six day delivery is the single largest identifiable cost burden Steiner named. At $3.4 billion per year, the commitment is financially corrosive on its own terms: seven in ten delivery routes on that schedule lose money. Post offices tell a similar story. According to Reuters, roughly 58 percent of post offices are unprofitable. For an agency already borrowing against employee retirement funds to cover operations, those figures describe a business model where core service requirements compound the deficit rather than support revenue.
Steiner did not propose eliminating six day delivery in his testimony, but the implication was plain. Without relief on the structural side, the agency would have to consider cuts to delivery frequency, mass post office closures, and a First Class stamp price increase as options of last resort.
Amazon and the Revenue Cliff
The financial picture is further complicated by a looming shift in package volume. Amazon, one of USPS's largest parcel customers, has moved to cut its USPS parcel volume by at least two thirds before its current contract expires. For an agency that has leaned on package revenue to offset the collapse in first class mail volumes since 2007, that departure removes a significant cushion. The accumulated net losses of approximately $120 billion over that period reflect precisely how thoroughly the rise of digital communication gutted the agency's most profitable historical revenue stream.
Emergency Measures Already in Motion
USPS announced last month that it had frozen non-essential expenditures and paused its employer side contributions to a federal pension program. Together, those steps are projected to preserve $2.5 billion in cash through the end of September. That buys time, but Steiner was explicit in his testimony that it does not resolve the underlying problem. He called on Congress to resume a congressionally authorized public service reimbursement and to allow the agency to diversify its retirement fund investments beyond Treasury notes.
Frequently Asked Questions
Why can't USPS simply borrow more money to cover its shortfall?
The agency's borrowing authority is capped at $15 billion by law, a limit that has not changed in more than three decades. Steiner told the Senate committee that the ceiling should be raised to between $30 billion and $40 billion to reflect current economic conditions, but that requires congressional action.
What happens to First Class stamp prices if Congress does not act?
Steiner warned that USPS may be forced to raise stamp prices as one of several emergency responses if structural reforms are not enacted. The agency's pricing flexibility is already constrained by the Postal Regulatory Commission, so any significant increase would also require regulatory consideration.
How much has USPS lost since 2007?
Accumulated net losses at the agency total approximately $120 billion since 2007, driven primarily by the decline in first class mail as digital communication reduced letter volume and eroded the revenue stream that historically subsidized other services.
What is USPS's cash position right now?
As of May 31, 2026, the agency held $8.9 billion in cash. That figure is well below the nearly $31 billion in deferred retirement and other required payments the agency will have accumulated by the end of fiscal year 2025.
What Congress Decides Next
The hearing puts the USPS financial crisis squarely in legislative hands. Steiner's requests, ranging from a higher borrowing cap to investment diversification and resumed public service reimbursements, each require congressional approval. Without a package of reforms, the agency's own projections show a trajectory from a manageable cash crunch today to a nine figure negative balance within a decade. The Senate committee has the testimony; the timeline is tightening.
