The largely self-funded Postal Service is asking for “modest” annual funding from Congress, at least in the short term, to help the agency pay its bills.
USPS told lawmakers that it would run out of cash in early 2027, if it kept meeting all of its financial obligations. But the agency now expects to avoid a cash crisis for another few years by suspending its contributions to one of its employee retirement plans.
Agency leaders warn these extraordinary measures are just buying USPS more time to deal with what they consider a broken business model.
Postmaster General David Steiner said last Friday that USPS will seek a “relatively modest appropriation” from Congress, adding that those funds would “create a large return for the American economy.”
“We don’t think that the investment made in the Postal Service will need to be a permanent investment, but a temporary one,” Steiner said at a quarterly meeting of the USPS Board of Governors.
USPS reported a $2.5 billion net loss for the third quarter of fiscal 2026 – an improvement from the $3.1 billion net loss it saw for the same period last year.
If Congress doesn’t act on a legislative package for USPS this year, Steiner said the mail agency will consider lowering service standards, raising prices and closing thousands of “unprofitable” post offices. Without help from Congress, Steiner said USPS would be forced to carry out these cost-cutting measures, but wouldn’t proceed with these plans before January 2027.
“The only thing that will doom the Postal Service is not making a choice,” Steiner said.
If Congress goes along with plans to partially fund USPS, Steiner suggested lawmakers periodically adjust annual appropriations to account for inflation and other factors.
“As we reduce costs and improve revenue, we believe we will become more profitable, and the appropriation could be reduced,” Steiner said.
USPS officials have yet to quantify the amount of funding they’re seeking from Congress. But 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.” The agency hasn’t requested or received any public service reimbursement since 1982.
The Postal Service is largely self-funded through its revenue, but does already 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.
If USPS does run out of cash, Steiner warned that it would jeopardize a nearly $2 trillion mailing and shipping industry that supports about 78 million jobs. 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 these companies deem unprofitable.
“We would prefer that rather than considering harming the Postal Service, that Congress consider making an investment in the Postal Service, which after all, is making an investment in America,” Steiner said.
Steiner told members of the House Oversight and Government Reform Committee in March that USPS would 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.
Postal officials told the Office of Personnel Management in April that it will hold off paying its contributions to the Federal Employees Retirement System (FERS), which covers federal and postal employees who started working after January 1987.
Steiner told the Senate Homeland Security and Governmental Affairs Committee in June that with these extraordinary measures, USPS is now expected to run out of cash sometime between 2031 and 2034.
It’s not clear if lawmakers will make postal reform a legislative priority ahead of this year’s midterm elections.
Congress passed long-awaited reform legislation in April 2022 that saved USPS $107 billion in total costs. USPS warned lawmakers that it was on the verge of running out of cash at the height of the COVID-19 pandemic, and received $10 billion in pandemic relief funds.
Several House Republicans who played a critical role in passing the Postal Service Reform Act have told Steiner they are skeptical of providing further financial assistance to USPS.
USPS, in a wish list of possible legislative reforms, also proposed eliminating its regulatory agency — a move that would give USPS greater freedom to raise mail prices and strike deals with private-sector companies.
The Postal Regulatory Commission ruled earlier this year that USPS can only raise mail prices once a year through Sept. 30, 2030.USPS raised the price of a first-class Forever stamp to 82 cents in July. Steiner said USPS is looking to raise stamp prices once again in January 2027.
Steiner said USPS is “constantly handcuffed by the PRC when it comes to taking the most logical steps in revenue management and pricing,” and that USPS will lose $700 million in annual revenue because of this limit on price hikes.
