USPS staves off immediate cash crisis, but warns of continuing financial woes

The Postal Service has pushed back an immediate cash crisis by delaying payments to employee retirement plans, but Postmaster General David Steiner warned lawmakers that USPS’ long-term financial problems are far from solved.

USPS’s latest projections show it’s no longer on track to run out of money in early 2027. That’s largely because earlier this year, the mail agency suspended payments to the Federal Employees Retirement System (FERS) to conserve money.

USPS’ projections, included in congressional testimony Wednesday, show the agency will now face a cash crisis some time between fiscal 2031 and 2035.

But Steiner warned the agency is still “out of cash,” and far from being financially healthy or sustainable.

“What we are doing right now is we’re basically borrowing money from our retirement plans to fund current operations,” Steiner told 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.”

USPS hasn’t turned a profit since 2006. A 10-year reform plan proposed by former Postmaster General Louis DeJoy sought to “revive” USPS and “break-even” by fiscal 2024, but the agency fell well short of those goals. USPS recently reported a net loss of $2 billion in the second quarter of fiscal 2026 after ending fiscal 2025 with a $9.5 billion loss.

The agency has taken a series of extraordinary measures to avoid running out of cash, including the deferral of employer contributions to FERS, which covers federal and postal employees who started working after January 1987.

“Continuing to default is not an alternative path that avoids this outcome, it only delays and ultimately worsens the outcome,” Steiner testified.

USPS last month also restricted nonessential spending. The measures impact hiring, travel, training and other areas of spending.

However, lawmakers have expressed skepticism about providing USPS with further assistance after passing 2022 reform legislation that saved the agency $107 billion.

During Wednesday’s hearing, HSGAC Chairman Rand Paul (R-Ky.) and other senators pressed Steiner for more details on what could help improve USPS’s financial position.

“When we talked with your staff coming into this, what we really wanted was you to prepare for us, ‘this is where we spend our money, this is where we could reduce this, I can do on my own, and this I can do with Congress’s help,’” Paul said. “That’s what I would do if I were in charge.”

Steiner said USPS had “brought in the preeminent restructuring firm in the world” to examine options for the financially strained agency. In early March, Steiner told Reuters that USPS had hired the consulting firm Alvarez & Marsal.

“Let’s assume that we aren’t going to get any help – what are we going to do?” Steiner said on Wednesday regarding the study. “They’re in the process of putting that report together.”

But he said becoming profitable without Congressional help would require cuts to USPS services.

“There’s only one way you can become profitable here, and that’s address the labor costs,” he said. “And so we would have to go in and look at how we can change days of service, reduce the level of services, and we would have to shut down a massive number of post offices.”

The USPS has also drafted possible legislative reforms, outlined in an internal document titled “Accelerating Progress: Elements of Postal Reform.”  The lists include a range of proposals, including eliminating the Postal Service’s regulator in a move to give USPS more freedom to raise prices and make deals with private sector companies.

But lawmakers pressed Steiner for more details on USPS financial projections and what he would officially recommend to reform USPS finances.

“Getting timely analysis is critical for Congress to act on your request and understand the impacts of possible reforms on the services provided to our constituents,” Sen. Maggie Hassan (D-N.H.) told Steiner.

Hassan asked him whether USPS would meet a Friday deadline for responding to a request from House lawmakers to get detailed five-year financial projections and data on multiple cost cutting measures.

“Yes, I think we can meet Friday’s deadline,” Steiner responded.

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