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By Tom Sanders
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The U.S. Postal Service is in severe financial disarray and will be forced to make drastic cuts unless Congress intervenes to save it, the agency has warned.
In a statement released on Tuesday, USPS reported losses of $6.5 billion over the course of the fiscal year. Although the figure is an improvement on last year’s loss of $9 billion, the continued financial drain is starting to have a serious effect on the agency’s ability to operate.
“We will need to make drastic changes in the number of post offices and marketing mail service levels,” said Postmaster General David Steiner. “And we will need to look at other areas to generate the cash we need to meet our obligations to our employees and to the American public.”
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Steiner said the scale of the problem requires immediate Congressional action, “as the uncontrollable costs of our retirement plans continue to create an untenable situation for our employees.”
Congress has two options to consider, he added: Either remove the retirement mandates that prevent the agency from running as a self-sustaining business, or provide the additional funding to allow it to overcome the financial deficit.
If neither of these options are considered, both Congress and the American public will have to accept substantial cuts to its services, Steiner warned.
“The USPS is the core of a nearly $2 trillion ecosystem, supporting almost 8 million jobs, and providing critical infrastructure that reaches every address in the country,” he said. “Any financial support to cover the shortfall would be an investment in one of the central pillars of the U.S. economy.”
Financial Black Hole
Steiner previously appealed to lawmakers for additional funding back in June, warning the House that the agency could run out of funds within months unless action is taken.
"The bottom line is that we are out of cash. We are borrowing from our employees’ retirement funds to continue operations," he told the Senate during a committee hearing. "The Postal Service has a broken business model and action is needed by Congress to fix it."
USPS has been reporting net losses of around $120 billion since 2007, after its biggest money-maker, first-class mail, saw a sharp decrease in usage following the shift to digital communications.
The Postal Service delivers to 170 million addresses six days a week, costing the agency $3.4 billion a year, Steiner said. Seventy percent of routes lose money, and around 58 percent of its 18,000 post offices are also unprofitable.
Last year saw Steiner’s predecessor, Louis DeJoy, strike a deal with the Department of Government Efficiency (DOGE) to eliminate 10,000 jobs at the Postal Service in an attempt to trim down the agency’s deficit; a move that likely had a significant impact on the reduced losses reported by USPS on Tuesday. The move, however, was sharply criticized by labor unions and congressional Democrats, with House Representative Gerald Connolly stating the move would have “catastrophic consequences for all Americans.”
Next Steps
Steiner’s comments come three months after he previously warned lawmakers that postal deliveries may halt in 2027 due to a lack of funds. However, following a series of emergency measures, including a temporary price hike in April to cover rising fuel costs and a multi-year deal with DHL, the agency is now suspected to stay afloat until at least 2031.
“Ultimately, our fiscal cliff is here,” USPS Governor Amber McReynolds told Politico. “The board continues to make uncomfortable default decisions, and we do not want to continue to operate in an unsustainable position as we have.”
The USPS will now look to the new Democrat-controlled Congress for next steps when the new intake assumes their seats in January.
President Donald Trump has previously floated the idea of either privatizing the Postal Service or merging it with the Department of Commerce. However, the move has been strongly opposed by workers, with a survey by the American Postal Workers Union showing those surveyed rejecting privatization by a margin of 34 percent.
“Plans to privatize the Post Office are about enriching Wall Street and not serving Main Street,” said APWU President Mark Dimondstein. “Evidence shows that selling off the USPS would lead to higher prices for postal services as well as higher prices for shipping packages at FedEx and UPS.”
Contact Newsweek editors on this story: Ben Kelly and Emma Lee-Sang
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