David Shepherdson
WASHINGTON, March 16 (Reuters) – The U.S. Postal Service will tell Congress on Tuesday that it faces a severe financial crisis and will run out of cash in less than a year without major reforms.
Postmaster General David Steiner will tell a House oversight subcommittee that the Postal Service needs higher stamp prices, the ability to borrow more money and other reforms, including pension funding and liability calculations, workers’ compensation and retirement fund investment strategies.
Steiner listed potential options for cutting costs: ending delivery six days a week, closing post offices or raising the price of regular stamps to $1 or more from the current $0.78.
“To ensure that we survive beyond next year, we need to increase our borrowing capacity so that we do not run out of cash,” Steiner said in written testimony seen by Reuters. “Failure to do so could lead to the end of the Postal Service as we know it now.”
Stamp prices have increased 46% since 50 cents in early 2019, but Steiner said they are still well below other countries.
USPS has a borrowing limit of $15 billion and has already reached that limit.
Reuters first reported in December that Steiner believed the USPS would run out of money as early as 2027. The service has posted a net loss of $118 billion since 2007 as first-class mail, its most profitable product, has fallen to its lowest level since the late 1960s.
Steiner said reducing delivery times to five days a week would save the Postal Service about $3 billion annually, while closing small, remote post offices would save the Postal Service $840 million. But, he said, neither idea “probably won’t be embraced by Congress or the American public.”
The Government Accountability Office will tell lawmakers on Tuesday that “addressing the USPS’s unsustainable business model is critical before the USPS could incur billions in new annual retiree health care costs in 2031.”
Steiner said that from the USPS’s peak throughput of 213 billion items in 2006 to 109 billion items in 2025, it has lost 104 billion pieces of mail, which represents a loss of $81 billion at current stamp prices. He added that since 2006, the USPS has been “thrown overboard, and we’re not being thrown to life jackets, we’re being thrown to anchors.”
USPS delivers to more than 170 million U.S. addresses 6 days a week.
In 2022, Congress provided $57 billion in financial relief to the USPS over ten years and required its future retirees to enroll in a government health insurance plan.
(Reporting by David Shepardson; Editing by Chizu Nomiyama and Pooja Desai)
