Postal Service faces potential cash crisis as early as this year, Postmaster warns
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The warning highlights long-standing financial issues facing the USPS, which operates differently from most federal agencies.
The United States Postal Service could run out of cash within the next year if major changes aren’t made, according to a stark warning from Postmaster General David Steiner.
Testifying before lawmakers this week, Steiner said the agency is at a “critical juncture” and may soon struggle to pay workers and vendors if it continues operating under its current financial structure. In a written statement ahead of a House Oversight subcommittee hearing, Steiner warned that the Postal Service could be out of cash in less than 12 months.
When pressed for specifics, he told lawmakers the timeline could vary significantly. The agency might run out of money as early as October if it continues meeting all its financial obligations, including retirement benefits. Alternatively, it could stretch into early 2027 if it delays or defaults on some of those payments.
The warning highlights long-standing financial issues facing the USPS, which operates differently from most federal agencies. It does not rely on taxpayer funding for its core operations, instead generating revenue through postage and service fees while maintaining a universal delivery network across the country.
Since 2007, the agency has struggled with persistent losses, driven in part by a sharp decline in first-class mail, the Postal Service’s most profitable product, as more people and businesses shift to digital communication. Despite ongoing cost-cutting and restructuring efforts, including a multi-year plan launched in 2021, the financial outlook remains strained.
USPS reported a $9 billion net loss for fiscal year 2025 and recently posted its fourth consecutive quarterly loss, totaling $1.3 billion. Rising costs tied to worker compensation, retiree health benefits, and general operations have further deepened the deficit.
To stay afloat, the Postal Service has relied on borrowing from the U.S. Treasury and postponing certain benefit payments. However, federal law caps its borrowing at $15 billion, a limit it has already reached, leaving little room to maneuver.
Steiner told lawmakers that continuing to defer obligations is not a sustainable solution, warning that the agency could eventually struggle to maintain basic operations, including mail delivery.
As a result, USPS leadership is urging Congress to step in. Proposed changes include raising the agency’s debt limit, allowing greater flexibility to increase postage prices, and further reforming retiree benefit requirements. Officials say congressional action will likely be necessary to stabilize the Postal Service long-term.
Lawmakers from both parties acknowledged the urgency of the situation, signaling that difficult decisions may be ahead as they weigh how to preserve a service that remains essential to millions of Americans.