Helped by pausing payments to worker retirement funds, the U.S. Postal Service is no longer on track to run out of money and stop deliveries next year, Postmaster General David Steiner confirmed to Congress on Wednesday.
But with people and businesses still sending a lot less mail compared to decades ago, the self-funded federal agency remains close to a financial cliff as it struggles to continue delivering mail six days a week to just about every address in the country.
A cash crisis at USPS may now come sometime between 2031 and 2034, according to the agency’s latest projections.
“What we are doing right now is we’re basically borrowing money from our retirement plans to fund current operations,” Steiner told lawmakers at a hearing before the Senate Homeland Security and Governmental Affairs Committee. “I’m not particularly comfortable with that. I promise you our employees are not particularly comfortable with that. You all shouldn’t be comfortable with that. None of us should be comfortable with that. To me, that’s why we have to have this discussion of how we fix this broken business model.”
How USPS has been dealing with the cash crunch
Steiner’s comments come more than three months after he warned lawmakers that deliveries may have to end by February 2027.
Since then, the Postal Service has restricted non-essential spending and signed a multi-year deal to complete the last mile of DHL eCommerce’s package deliveries in the United States.
Customers may have noticed temporary 8% price hikes that USPS started in late April to help cover rising fuel costs. Those are set to expire in mid-January. A longer-term, 5% bump to the price of a first-class “forever” stamp to 82 cents is set to begin July 12. It will be the eighth increase over the past five years.
The Postal Regulatory Commission, an independent federal agency that oversees the Postal Service, has also provided a cushion of around $15 billion by waiving USPS’ required minimum retirement payments through fiscal year 2030.
“The Commission’s action offers some ‘breathing room’ and extends the time period before the Postal Service’s ‘reported insolvency’ and the stated crises of stopping mail delivery to at least another several years provided the Postal Service makes judicious decisions about its expenditures starting now,” Robert Taub, the commission’s acting chair, said this month in written testimony to a House Oversight subcommittee.
Still, USPS — which relies on stamp and service fees, not tax dollars, to keep running — continues to face ongoing money troubles. In May, it reported a net loss of $2 billion in this fiscal year’s second quarter, after losing $9 billion last fiscal year.
Steiner has called for Congress to help by revising laws to let USPS borrow more money and reform its retirement plans. And there are calls for more fundamental changes, including reconsidering whether the legal mandate for six-day mail delivery is financially sustainable.
Some key lawmakers on the House Oversight Committee have asked Steiner to provide more information, including five-year financial and service projections, before moving ahead with any changes.
“To implement reforms that would improve the Postal Service’s long-term financial stability, Congress must be equipped with clear data detailing the anticipated financial effects of the proposals you provided us with in your recent testimony,” wrote Reps. Kweisi Mfume, a Maryland Democrat, Pete Sessions, a Texas Republican, and James Walkinshaw, a Virginia Democrat, this month in a letter to Steiner.
Trump officials have put USPS in political hot water
Amid these financial challenges, USPS is also dealing with controversial roles the Trump administration has pushed it into for the upcoming census and midterm election.
This month, USPS letter carriers began knocking on doors in parts of Huntsville, Ala., and Spartanburg, S.C., to conduct interviews for a field test of the 2030 census. The move by Trump officials has drawn skepticism from many census advocates, who cite a 2011 study by the Government Accountability Office that found having postal workers do census interviews “would not be cost-effective.”
And in response to a contested executive order by President Trump that calls for restricting voting by mail, USPS recently proposed using information from state election officials to create lists of approved mail voters.
Asked Wednesday by Sen. Gary Peters, a Democrat from Michigan, whether the Postal Service would mail the ballots of a state that refuses to turn over its absentee voter list to the federal government, Steiner replied: “Under our proposed regulation, no. We would tell the state that we need the manifest.”
Along with the Trump administration, USPS — which Congress set up to be independent of a president’s administration — is facing multiple lawsuits by Democrats, close to two dozen Democratic-led states and voting rights groups over Trump’s voting order. They argue that the Constitution gives power to state legislatures and Congress — not the president — to set federal election rules, and USPS has no authority to refuse to deliver ballots to voters because they’re not on a list.
On Tuesday, the entire Senate Democratic caucus wrote to USPS officials to call for the agency to abandon its proposed regulation and “return to its core mission of providing universal postal services to every American.”
At their Senate confirmation hearing last week, two of Trump’s Postal Service governor nominees — Jeffrey Brodsky and William Gallo — avoided directly answering whether USPS should have a role in deciding who gets to vote by mail, as called for by Trump’s order.
“As far as I’m concerned, you have to have the courts and Congress make the decision,” Gallo said.
Editor’s note: USPS is a financial supporter of NPR.
Edited by Benjamin Swasey
