Antonio Griffin
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 panel this week that without congressional action, the USPS financial crisis could push the agency's cash position to negative $125.9 billion by 2035.
At a Glance
- USPS has nearly $31 billion in missed payments on retirement and other required obligations by the end of fiscal year 2025.
- Cash on hand was $8.9 billion as of May 31, 2026, far less than what is owed.
- Six-day universal delivery costs $3.4 billion annually, with seven in ten routes losing money.
- Amazon is cutting its USPS parcel volume by at least two thirds before its current contract ends.
- Emergency measures already in place are expected to preserve $2.5 billion through September.
A Breaking Point Decades in the Making
Postmaster General David Steiner appeared before the Senate Committee on Homeland Security and Governmental Affairs and did not mince words. "The bottom line is that we are out of cash," he wrote in prepared testimony. "We are borrowing from our employees' retirement funds to continue operations."
The accumulated damage is staggering. Net losses at the agency have reached roughly $120 billion since 2007, a period when the rise of email and digital communication hollowed out first-class mail volumes and wiped out the agency's most profitable revenue stream. The math has never recovered.
Even under the most optimistic scenario, one in which USPS keeps deferring payments rather than settling them, the agency's unrestricted cash position is projected to peak at $17.5 billion in fiscal year 2031 and then slide to negative $3.4 billion by 2035 as retiree health benefit payments come due and the fund set aside for them runs dry. If the agency paid everything it currently owes right now, it would be insolvent before this fiscal year ends.
Structural Constraints Congress Has Never Fixed
Steiner laid out a list of rules that prevent USPS from responding to its financial problems the way any private business would. The agency's borrowing limit has been frozen at $15 billion for more than three decades. Retirement funds can only be invested in Treasury notes. And the Postal Regulatory Commission imposes pricing restrictions that limit how aggressively the agency can raise revenue.
Then there is the delivery mandate. USPS is required to serve more than 170 million addresses six days a week, a commitment that carries an annual price tag of $3.4 billion. Seven in ten of those delivery routes lose money. Post offices are in a similar position, with roughly 58 percent of them operating at a loss.
What Steiner Is Asking Congress to Do
The requests are specific. Steiner called on lawmakers to raise the agency's borrowing authority to somewhere between $30 billion and $40 billion, a range he said is appropriate given inflation and current revenue levels. He also asked Congress to resume a previously authorized public service reimbursement and to allow USPS to diversify how it invests retirement funds.
Without those changes, he warned, the agency may have to cut delivery days, close thousands of post offices, and raise the price of a First Class stamp.
Amazon's Exit Makes Everything Worse
The timing could hardly be worse. Amazon is in the process of cutting its USPS parcel volume by at least two thirds before its current contract lapses, a move that threatens to strip the agency of billions in package revenue it has come to depend on. Package delivery had been one of the few bright spots keeping the agency's finances from collapsing sooner.
To buy some time, USPS announced last month that it had frozen non-essential spending and paused its employer-side contributions to a federal pension program. Those two steps together are expected to preserve about $2.5 billion in cash through the end of September.
Frequently Asked Questions
Why is USPS borrowing from employee retirement funds?
The agency has more in deferred obligations than it has in cash on hand. With its borrowing limit capped at $15 billion for decades and no new congressional funding, USPS has resorted to pausing pension contributions to stay operational.
What happens if Congress does nothing?
Steiner projects the agency's cash position could fall to negative $125.9 billion by 2035. More immediately, USPS could be forced to reduce delivery days, close post offices, and raise stamp prices.
How much has USPS lost since 2007?
Accumulated net losses total approximately $120 billion since 2007, driven largely by the decline of first-class mail as digital communication replaced physical letters.
What is the Amazon contract situation?
Amazon is reducing its parcel volume shipped through USPS by at least two thirds ahead of its current contract expiring. This threatens to remove a significant source of package revenue the agency has relied on in recent years.
The Road Ahead for the Postal Service
The Senate hearing makes clear that USPS is no longer managing a slow decline. It is managing a liquidity crisis with a hard deadline. Whether Congress moves quickly enough to restructure the borrowing cap, restore the public service reimbursement, or loosen investment rules will determine whether the country's mail network survives in its current form.
