The Postal Service is floating the possibility of Congress stepping in to provide more financial assistance to keep the largely self-funded agency from running out of cash early next year.
Postmaster General David Steiner said USPS hasn’t officially pitched the idea to Congress, but it’s an option lawmakers should consider to get the agency on firmer financial footing. Steiner said USPS will spend the next month refining its wish-list of legislative proposals before sharing it with Congress.
Steiner told members of the House Oversight Committee in March that USPS will run out of cash in early 2027, as long as it continues to pay its bills on time. But USPS is relying on some emergency measures to conserve cash.
“To the credit of Congress, they’re not looking for short-term band-aids, but for long-term solutions,” Steiner said Friday at a public meeting of the USPS Board of Governors.
Several Republican lawmakers panned the idea of Congress coming to the Postal Service’s aid once again, after it passed a long-awaited postal reform bill in April 2022 that erased $107 billion in the agency’s financial liabilities.
“Everything that you’re talking about today, we did five years ago,” Committee Chairman James Comer (R-Ky.) told Steiner at the March 17 hearing.
Congress also gave USPS $10 billion in emergency aid in 2020, the last time USPS warned it was running out of cash. Lawmakers also gave USPS $3 billion in the Inflation Reduction Act to purchase a majority-electric fleet of delivery vehicles.
Steiner said lawmakers could go down one of two paths to assist USPS. One option would be for Congress to eliminate “mandates that ensure the Postal Service loses money.” Under this plan, Congress would give USPS greater flexibility to close unprofitable post offices, slash days of delivery and reduce service standards. If lawmakers go down this path, USPS would also seek greater authority to raise mail prices.
“We could go a long way towards becoming profitable. But the American public would see reduced levels of service and higher rates,” Steiner said.
Steiner told House lawmakers that cutting delivery days, closing post offices and laying off employees are all “on the table” once USPS is on the brink of insolvency.
Alternatively, Steiner said Congress could provide USPS with more robust funding as part of the annual appropriations process. According to the National Association of Postal Supervisors, USPS is authorized to request up to $460 million from Congress each year as “public service reimbursement.” But the agency hasn’t requested or received any public service reimbursement since 1982.
USPS is largely self-funded through its revenue, but does receive modest funding from Congress to administer a program that allows people who are legally blind to send and receive certain items in the mail for free. Congress gave USPS more than $38 million to carry out this program in fiscal 2026.
Steiner said these funds wouldn’t be a “bailout” for USPS, but would subsidize its increasingly costly mission of delivering mail and packages to 163 million addresses six days a week.
“It is merely the payment by Congress in return for the Postal Service doing what no other business would do,” he said.
Steiner said this public service reimbursement exists to “partially offset the costs related to our costly mandates.” USPS delivers to tens of millions more addresses than it did in 1971, but mail volume has fallen by 50%.
“The math is pretty simple: Revenues and savings cannot offset the costs associated with the universal service obligation under the current business model. It is simply unsustainable,” Steiner said.
Before 1971, Congress fully funded the U.S. Post Office, which was then a Cabinet-level agency, and set its postage rates. But the Postal Reorganization Act rebranded the agency as the Postal Service and tasked the new agency with covering its own costs.
USPS has slashed total work hours and transportation costs as part of a 10-year reform plan. But the agency, which is midway through this plan, has fallen short of its “break-even” goal. Steiner said that USPS “cannot cost-cut our way to prosperity.”
USPS reported a $2 billion net loss for the second quarter of fiscal 2026 — an improvement from the $3.3 billion net loss it saw for the same period last year. USPS Chief Financial Officer Luke Grossmann said all of the agency’s products saw year-over-year declines in volume this quarter. USPS saw a 4.5% increase in package revenue, despite a 1.4% decrease in volume.
“Management actions alone are not enough to solve our financial predicament, Grossmann said.
By asking Congress to play an active role in reshaping its business model, USPS leadership is taking a different approach than Steiner’s predecessor, former Postmaster General Louis DeJoy. After Congress passed the 2022 Postal Service Reform Act, DeJoy insisted the agency could address its long-term financial problems on its own, as long as its regulatory agency and Congress didn’t interfere.
“My hope is our regulator, the Congress gets out of our way, because this is a crisis,” DeJoy told House lawmakers in May 2023.
If USPS runs out of cash, Steiner warned that the consequences would be far-reaching beyond its own customers and 640,000-employee workforce. Companies like Amazon and UPS compete with USPS in package delivery, but also serve as some of its biggest customers — paying the agency to deliver packages to often rural destinations that are unprofitable. If USPS went under, Steiner said it would jeopardize a nearly $2 trillion mailing and shipping industry that supports about 78 million jobs.
“It is an economic engine powering an entire ecosystem of American jobs, livelihoods, businesses large and small, economic success stories, and tax revenues,” he said.
USPS Governor Ron Stroman, who previously served as the deputy postmaster general, said recent improvements in on-time delivery have been “significant.”
“I think we all expect those improvements to continue,” Stroman said.
USPS delivered 87.26% of first-class mail on time this quarter, an improvement over the 82.55% of mail it delivered on time during the same period last year.
USPS is asking Congress to increase its maxed-out $15 billion borrowing limit with the Treasury Department. It’s also asking the Office of Personnel Management to recalculate its contributions to the Civil Service Retirement System, a defined-pension plan for federal and postal employees and retirees who joined before January 1987. USPS, its inspector general’s office and the National Association of Letter Carriers claim the agency has overpaid into the CSRS fund.
USPS told OPM last month that it will hold off paying its contributions to the Federal Employees Retirement System (FERS), a move that’s expected to conserve cash in the near term. FERS covers federal and postal employees who started working after January 1987.
In addition, USPS is looking for great flexibility in its pension investment options. USPS, by law, can only invest its retiree and pension funds in low-risk, low-reward Treasury bonds. USPS Governor Dan Tangherlini, a former head of the General Services Administration, said USPS retirement plans are among the best-financed of any in the federal government, but remain underfunded because of this limitation.
A report last year from the inspector general’s office found that if USPS had been able to invest those funds in a portfolio of 60% stocks and 40% bonds, it would currently have an $800 billion surplus.
“With that kind of money, letter carriers could have flying cars,” Tangherlini said.
Copyright
© 2026 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.
