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 committee Wednesday. Without a congressional overhaul of the agency's business model, USPS warns its finances will spiral into a collapse of the national mail and package network.

At a Glance

• USPS had roughly $8.9 billion in cash on hand as of May 31, 2026, against nearly $31 billion in deferred retirement and other required payments due by the end of fiscal year 2025.
• If the agency stopped deferring payments and settled all obligations now, it would run dry before fiscal year 2025 closes.
• Projections show cash turning negative at $3.4 billion by 2035 even under the base case scenario, and reaching negative $125.9 billion without any structural changes.
• Universal six-day delivery costs $3.4 billion annually; seven in ten delivery routes on that schedule operate at a loss.
• USPS has accumulated approximately $120 billion in net losses since 2007.

Steiner's Testimony: A Breaking Point

In written testimony before the Senate Committee on Homeland Security and Governmental Affairs, Steiner was direct: "The bottom line is that we are out of cash. We are borrowing from our employees' retirement funds to continue operations." He described the agency's business model as fundamentally broken and said Congress must act to repair it.

The numbers behind that assessment are stark. By the close of fiscal year 2025, USPS will have accumulated nearly $31 billion in missed payments on retirement and other required obligations. That figure dwarfs the $8.9 billion the agency held in unrestricted cash as of late May 2026. Pay everything owed at once, and USPS runs out of money before the fiscal year ends.

Even under the more optimistic base case, where the agency continues deferring payments, the outlook deteriorates steadily. USPS projects its unrestricted cash position peaks at $17.5 billion in fiscal year 2031, then turns negative at $3.4 billion by 2035 as retiree health benefit payments come due and the associated fund is exhausted. The worst-case trajectory puts the agency at negative $125.9 billion by 2035.

Structural Constraints That Tie the Agency's Hands

Steiner laid out several statutory restrictions he said prevent USPS from responding the way a private company could. The agency's borrowing limit has been frozen at $15 billion for more than three decades. Steiner argued that figure should be $30 to $40 billion when adjusted for inflation and current revenue levels. Retirement funds are required by law to be invested exclusively in Treasury notes, preventing diversification of returns. Pricing authority is constrained by the Postal Regulatory Commission rather than set by market conditions.

The obligation to deliver to more than 170 million addresses six days a week sits at the center of the cost problem. That commitment carries an annual price tag of $3.4 billion, and Steiner noted that seven in ten of those routes lose money. Post offices compound the drag: reporting by Reuters puts roughly 58 percent of them operating at a loss.

What Steiner Is Asking Congress to Do

Steiner's requests to lawmakers fall into three broad categories. First, raise the statutory borrowing ceiling to the $30 to $40 billion range he believes the agency's scale warrants. Second, resume the congressionally authorized public service reimbursement that compensates USPS for providing universal service at below-market cost. Third, allow the agency to diversify its retirement fund investments beyond Treasury notes.

Without those steps, Steiner warned, USPS may have no choice but to cut delivery days, shutter thousands of post offices, and raise the price of a First Class stamp. The warnings carry real weight: the agency announced last month that it had already frozen non-essential expenditures and paused employer-side contributions to a federal pension program, moves projected to preserve $2.5 billion in cash through the end of September.

The Revenue Side: Amazon and the Long Decline

The fiscal crisis did not arrive overnight. USPS has posted cumulative net losses of approximately $120 billion since 2007, a span in which the growth of digital communication hollowed out first-class mail, historically the agency's most profitable revenue stream. Package delivery filled some of that gap, but that cushion is now compressing.

Amazon has moved to cut its USPS parcel volume by at least two thirds before its current contract lapses, a shift that threatens to strip away billions in package revenue the agency had come to depend on. The combination of a shrinking mail base, a retreating major package customer, and fixed statutory obligations has put the agency in a position where emergency measures alone cannot close the gap.

Frequently Asked Questions

Why can't USPS simply raise its prices to cover the shortfall?

Postal pricing is subject to oversight by the Postal Regulatory Commission, which limits how quickly and by how much rates can change. Steiner cited this constraint as one of several statutory restrictions that prevent the agency from acting with the financial flexibility a private company would have.

What happens to mail delivery if Congress does not act?

Steiner warned that without legislative relief, USPS could be forced to reduce delivery days, close thousands of post offices, and raise the cost of a First Class stamp. The agency's own projections show its cash position going deeply negative by 2035 even under optimistic assumptions.

Why does USPS have such large retirement fund obligations?

A 2006 law required the agency to prefund retiree health benefits decades in advance, a requirement that no other federal agency or major private employer faces. That mandate generated large annual charges that USPS has repeatedly deferred rather than paid, compounding the liability over time.

How much cash does USPS actually have right now?

As of May 31, 2026, the agency held approximately $8.9 billion in cash. That figure is less than a third of the nearly $31 billion in deferred obligations that have accumulated through the end of fiscal year 2025.

What Comes Next

The Senate Committee on Homeland Security and Governmental Affairs now holds the immediate legislative path forward. Steiner's testimony makes clear that stopgap measures, frozen spending and deferred pension contributions, buy months, not years. The deeper question before Congress is whether to restructure the statutory framework that governs how USPS borrows, invests, prices its services, and fulfills its universal service mandate. The agency's own numbers suggest that window is narrowing fast.