The U.S. Postal Service will run out of cash within a year unless Congress lifts a decades-old cap and allows the agency to borrow more money, the new postmaster general warned in an interview.
If it doesn’t, the Postal Service might not be able to pay its employees or vendors by February 2027, with potentially dire consequences for mail delivery, Postmaster General David Steiner told The Associated Press.
“How long are employees going to work and vendors going to show up if we’re not paying 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 struggles and the need to change longstanding rules and regulations 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 independent agency that is funded mostly through postage revenue and the services it provides. Steiner said 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 benefits, such as an annual appropriation from the federal budget.
“We have to have a conversation with the American public,” Steiner said. “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 management company and a former member of the FedEx board of directors, took over the struggling Postal Service last July. He said raising the borrowing limit is the easiest thing lawmakers can do immediately to help the agency.
“That will buy us the time to make the fixes we need to make, and we can sail on down the road,” he said.
He has called for expanding the service’s revenue base, including extending its last-mile delivery service to more entities. Last-mile delivery refers to the final step of getting a package from a local distribution center to a customer’s door, the most labor-intensive part of the delivery process.
USPS’s net losses for the 2025 fiscal year totaled $9 billion, even though total operating revenue increased by $916 million or 1.2%, due largely to its Ground Advantage shipping service. Net losses in fiscal year 2024 were $9.5 billion.
Ultimately, other changes are needed, as well, Steiner said, including giving the Postal Service authority to raise postage prices high enough to cover losses. He said increasing the price of a first-class stamp to 95 cents, from today’s 78 cents, would be enough to “fix” the Postal Service’s fiscal woes. A decade ago, a first-class stamp was 47 cents, although postal officials note it’s still the lowest price in the industrialized world and covers a delivery range that’s ten times farther than in other countries.
But he said an independent agency created by Congress to oversee the Postal Service won’t allow it, he said.
“If the Postal Regulatory Commission adopted our pricing model, problem solved,” he said, adding how the package delivery side of the business could then subsidize the mail side.
Steiner and other Postal Service officials also have called for reforms to its pension and retiree health benefit obligations, including the ability to invest the money in something other than Treasury bills.
Multiple postmaster generals over the past two decades have repeatedly asked Congress or regulators to change the various rules governing the Postal Service. In 2022, Congress did pass the Postal Service Reform Act, which ended a requirement that the agency prefund its retiree health benefits, but it left other constraints intact.
Meanwhile, the Postal Service has seen annual volume plummet 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 them. That’s $86 billion of revenue that evaporated in 15 years,” he said. “If either FedEx or UPS lost $86 billion of revenue, they would have no revenue.”
But instead of helping the Postal Service, Steiner said regulators and Congress have imposed costly 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 said.
Calls on Thursday to some members of Congress who oversee the Postal Service were not immediately returned. A message was also left with Keep Us Posted, an advocacy group launched in 2021 in response to price increases and service delays. Last month, the organization warned the USPS was “headed for a taxpayer bailout” given its cash flow issues. The group urged Congress to pass legislation it says would limit rate increases to once a year, tying them to service performance, among other measures.
Steiner acknowledged he didn’t realize the depth of the Postal Service’s cash crunch until he took the postmaster general job last year.
“Interestingly, I’m not sure some of the people at the Postal Service realized how dramatic it was,” he said.
