In testimony to Congress last month, David Steiner, the postmaster general, delivered a dire warning. Without drastic measures, he said, the U.S. Postal Service could run out of cash in less than a year.
He called on lawmakers to consider significant changes to save money, like allowing the service to increase prices, decrease delivery days and rethink revenue-losing routes.
On Thursday, the Postal Service proposed increasing the cost of stamps by 5 percent, and said that it would temporarily suspend some payments to a government retirement fund.
The push for belt-tightening comes after the Postal Service’s most profitable product, first-class mail, has been in decline for about two decades. In fiscal years 2024 and 2025, the service incurred net losses of $9.5 billion and $9 billion — roughly 10 percent of its operating budget.
Despite attempts in recent years to reform the Postal Service, the agency’s business model has not changed significantly since 1970, when Congress converted it from a cabinet-level department funded by taxpayers to a self-financed, independent agency.
“The core issue here is the existing U.S.P.S. business model, where it’s supposed to be financially self-supporting based on providing postal services, just doesn’t work today,” said David Marroni, a Postal Service expert at the Government Accountability Office.
The agency dominates the market in delivering letters, but faces fierce competition on package delivery from private companies like FedEx, U.P.S. and Amazon. Even as letter volume has gone down, Americans still rely on the Postal Service to deliver critical mail, such as prescription drugs, official documents and election ballots.
In an interview, Mr. Steiner said the future of the Postal Service was in the hands of Congress and the American people. “We can do whatever you want us to do,” he said. “We’ve been doing it for 250 years. But who’s going to pay for it? We cannot continue to do the things that lose us money on a very consistent basis.”
Here are some changes the agency is proposing.
Decreasing Service
The Postal Service is required to uphold its “universal service obligation” to deliver to everyone in the United States at a reasonable price. In 2022, Congress added a six-day-a-week delivery requirement.
That commitment has cost the agency money: more than $6.5 billion a year, the Postal Regulatory Commission estimated in 2025. Seven out of 10 U.S.P.S. delivery routes are “financially underwater,” Mr. Steiner told Congress last month.
The Postal Service estimates that reducing delivery from six days to five days a week would save between $2.9 to $3.5 billion a year. Closing small post offices and unprofitable routes could save about $1 billion.
Such a change could hit rural communities particularly hard, as private carriers have less of a financial incentive to provide delivery to those areas.
At the recent hearing with Mr. Steiner, lawmakers were loath to endorse service cuts, especially to rural Americans. Representative Pete Sessions, Republican of Texas and a leading postal reform advocate, said that he came from “a great big rural district, and I care about everybody.”
“Americans in every part of this country rely upon and really deserve prompt, reliable and efficient mail services,” said Representative Kweisi Mfume, a Maryland Democrat who has committed to working closely with Mr. Sessions on postal reform.
He added: “We cannot lose the postal service as we know it.”
Increasing prices
The Postal Service cannot change pricing on its own. It must get approval from an independent regulatory commission, which limits the agency’s ability to raise prices.
On Monday, the commission approved a temporary surcharge of 8 percent on packages, in light of rising fuel and transportation costs. It is set to take effect later this month.
Three days later, the Postal Service went back to the Postal Regulatory Commission and requested a 5 percent increase on postage prices. That would raise the price of popular products, such as first-class mail “forever” stamps, which would cost 82 cents, up from 78 cents.
That is still below Mr. Steiner’s proposal, which would increase the price to just under a dollar.
That idea was not met with enthusiasm by lawmakers. Experts have noted that price increases could lead to even fewer people using mail.
Mr. Steiner called for price limits to be loosened, comparing the United States with industrialized countries that have much higher postage costs, such as $1.33 in Germany and $4.65 in Denmark for the equivalent of first-class mail.
Removing financial limits
Many of the Postal Service’s budget challenges could be alleviated if Congress loosens restrictions on how the agency allocates and invests its retirement funds and adjusts the agency’s borrowing limit, Mr. Steiner said.
For example, the Postal Service is only allowed to invest its retirement funds in Treasury notes. The Postal Service’s Office of Inspector General estimated in 2023 that U.S.P.S. retirement funds would have been worth approximately $800 billion more if they had been able to be invested in a mix of 60 percent stocks and 40 percent Treasury bonds.
Since 1992, Congress capped the agency’s borrowing at $15 billion, and it has been at that limit since late 2024.
Some lawmakers appear to be open to adjusting the debt limit. “We’re going to have to find a way, as we all know, inevitably, to look at restructuring that debt limit,” Mr. Mfume, the Maryland Democrat, said at the oversight hearing.
While such solutions would not directly solve the agency’s systemic challenges, they would give it more financial wiggle room.
On Thursday, the Postal Service announced that it would temporarily suspend some payments to a government retirement fund, a move it said was necessary to ensure that the agency had enough cash to operate through next February. That move is expected to free up about $2.5 billion this fiscal year.
Adam Sella covers breaking news for The Times in Washington.
The post The Postal Service Is in Trouble. Here’s How It Could Affect Your Mail. appeared first on New York Times.
