Broke USPS Asks Congress for a Cash Rescue

The U.S. Postal Service is out of cash and has begun borrowing from employee retirement funds to keep the lights on. Postmaster General David Steiner told a Senate panel on Wednesday that without congressional action, the agency faces a potential collapse of the national mail and package delivery network.

At a Glance

• USPS will have nearly $31 billion in missed retirement and other required payments by the end of fiscal year 2025.
• Cash on hand stood at $8.9 billion as of May 31, 2026, far short of what the agency owes.
• Without reforms, the agency's cash position could fall to negative $125.9 billion by 2035.
• Six-day universal delivery costs $3.4 billion annually, with seven in ten routes running at a loss.
• Emergency spending freezes and paused pension contributions are expected to preserve $2.5 billion through September.

Steiner's Testimony: A System at a Breaking Point

In written testimony before the Senate Committee on Homeland Security and Governmental Affairs, Steiner was blunt. "The bottom line is that we are out of cash. We are borrowing from our employees' retirement funds to continue operations," he wrote. "The Postal Service has a broken business model and action is needed by Congress to fix it."

The math is stark. By the close of fiscal year 2025, accumulated missed payments on retirement and other required obligations will reach nearly $31 billion. The agency had only $8.9 billion in unrestricted cash as of May 31, 2026. If USPS were to settle all outstanding obligations at once, it would exhaust that cash before the fiscal year ends. Even under a base case scenario, where the agency keeps deferring payments, its cash position is projected to peak at $17.5 billion in fiscal year 2031 before turning negative at $3.4 billion by 2035, as retiree health benefit costs come due and the associated fund runs dry. The worst case projection puts the agency at negative $125.9 billion by 2035.

Structural Constraints Congress Has Not Addressed

Steiner argued that USPS cannot respond to this crisis the way a private company would, pointing to several congressionally imposed constraints. The agency's borrowing limit has been frozen at $15 billion for more than three decades. Retirement funds are legally required to be invested only in Treasury notes. USPS must deliver mail to more than 170 million addresses six days a week regardless of whether those routes are profitable. Pricing decisions are subject to oversight by the Postal Regulatory Commission.

The six-day delivery mandate alone carries an annual price tag of $3.4 billion, Steiner said, and seven in ten delivery routes operate at a loss. Post offices are in similar shape, with roughly 58 percent of locations losing money, according to Reuters.

Accumulated net losses since 2007 have reached approximately $120 billion. That period covers the rise of digital communication, which gutted first-class mail volumes and stripped away the agency's most profitable revenue stream.

What Steiner Is Asking Congress to Do

The Postmaster General laid out several requests. He called on lawmakers to raise the agency's borrowing authority to between $30 billion and $40 billion, a figure he said reflects inflation and current revenue realities. He also asked Congress to resume a congressionally authorized public service reimbursement and to allow USPS to diversify its retirement fund investments beyond Treasury notes.

Without those changes, Steiner warned, the agency may have no choice but to cut delivery days, shutter thousands of post offices, and raise the price of a First Class stamp.

Amazon Pullback Adds to Revenue Pressure

The financial picture has been complicated further by Amazon's decision to cut its USPS parcel volume by at least two thirds before its current contract expires. Package delivery had been one of the few growing revenue streams for the agency, making the loss of a major customer particularly damaging at a moment when the balance sheet is already stretched.

In response, USPS announced last month that it had frozen non-essential expenditures and paused its employer-side contributions to a federal pension program. Those two steps combined are expected to preserve $2.5 billion in cash through the end of September.

Frequently Asked Questions

Why is USPS losing money?

The agency has been losing money since at least 2007, when the shift to digital communication began eroding first-class mail volumes. Mandatory six-day delivery to more than 170 million addresses, frozen borrowing limits, and restricted investment options have compounded the problem. Accumulated net losses now total approximately $120 billion.

Could the post office actually close or cut service?

Postmaster General Steiner warned Congress directly that without legislative action, USPS may be forced to reduce delivery days, close post offices, and raise stamp prices. He did not announce any specific closures, but framed those steps as likely outcomes if the financial situation goes unaddressed.

What is USPS asking Congress for?

Steiner is requesting that lawmakers raise the agency's borrowing limit to $30 billion to $40 billion, restore a public service reimbursement, and allow USPS to invest retirement funds in assets beyond Treasury notes.

How is USPS keeping operations going right now?

The agency has frozen non-essential spending and paused its contributions to a federal pension program, measures it says will preserve $2.5 billion in cash through September. It has also been deferring required retirement payments, which now total nearly $31 billion.

What Comes Next

Congress now holds the immediate leverage. Steiner's testimony puts the financial crisis formally on the legislative calendar, but no specific bill has been announced. The clock is tight: even the agency's own base case projections show cash turning negative within a decade, and the Amazon contract loss means the revenue picture could deteriorate faster than those models assumed.