Postal Service Faces Financial Crisis, May Run Out of Money by February 2027

The U.S. Postal Service could exhaust its cash reserves within a year unless Congress removes a borrowing cap that's been in place since 1990. Postmaster General David Steiner warns the agency may be unable to pay workers or suppliers by February 2027 without legislative action.

America’s postal system faces a looming financial crisis that could leave it unable to pay workers or suppliers by February 2027, according to the nation’s top postal official.

Postmaster General David Steiner issued the stark warning during a recent interview with The Associated Press, explaining that the agency needs Congress to remove a borrowing restriction that has limited the Postal Service since 1990.

“How long are employees going to work and vendors going to show up if we’re not paying them?” Steiner questioned during Wednesday’s interview.

Steiner is set to appear before congressional lawmakers this month to discuss the agency’s mounting financial troubles and advocate for changes to what he describes as restrictive regulations. The borrowing ceiling currently stands at $15 billion and has remained unchanged for more than three decades.

Operating as an independent federal agency, the Postal Service relies primarily on stamp sales and service fees for funding rather than direct government appropriations. Steiner argues this creates an unfair burden, requiring universal delivery six days weekly without the financial backing other government services receive.

“We have to have a conversation with the American public,” Steiner explained. “If you want us to deliver everywhere, every day, we’ll do it. That’s not a problem. But who is going to pay for it?”

The current postmaster general, who previously served as CEO of America’s largest waste management company and sat on FedEx’s board of directors, assumed leadership of the struggling agency last July. He believes increasing the borrowing authority represents the most immediate solution lawmakers could provide.

“That will buy us the time to make the fixes we need to make, and we can sail on down the road,” he stated.

Steiner has proposed expanding revenue streams, particularly through increased last-mile delivery partnerships. This service involves transporting packages from local distribution facilities to customers’ doorsteps, representing the most labor-intensive portion of the shipping process.

Financial records show the USPS recorded $9 billion in losses during fiscal year 2025, despite generating an additional $916 million in operating revenue – a 1.2% increase largely attributed to its Ground Advantage shipping program. The previous fiscal year saw slightly higher losses at $9.5 billion.

Beyond borrowing capacity, Steiner advocates for pricing authority that would allow the agency to set stamp costs high enough to offset operational losses. He calculates that increasing first-class stamp prices from the current 78 cents to 95 cents would resolve the service’s financial difficulties. For perspective, first-class stamps cost 47 cents just ten years ago.

However, an independent oversight body created by Congress prevents such pricing adjustments, according to Steiner.

“If the Postal Regulatory Commission adopted our pricing model, problem solved,” he remarked, noting that profitable package delivery operations could then support traditional mail services.

Steiner and other postal officials have also requested reforms to pension and retirement healthcare obligations, including permission to invest funds in instruments beyond Treasury bills.

Previous postmaster generals have spent the past twenty years requesting similar regulatory and legislative changes from Congress. While lawmakers did pass the Postal Service Reform Act in 2022, eliminating requirements to prepay retiree health benefits, other operational restrictions remained in place.

The agency has watched mail volume collapse dramatically, dropping from approximately 220 billion pieces annually to roughly 110 billion today as digital communication and online bill paying have become standard.

“Take those 110 billion and put a 78-cent stamp on them. That’s $86 billion of revenue that evaporated in 15 years,” Steiner calculated. “If either FedEx or UPS lost $86 billion of revenue, they would have no revenue.”

Rather than receiving assistance, Steiner argues that regulators and Congress have instead imposed expensive new requirements on the postal system.

“I like to say we sort of got thrown overboard on a ship into the cold water, right? And instead of throwing us a life preserver, we get thrown an anchor,” he said.

Congressional representatives who oversee postal operations did not respond to requests for comment Thursday.

Steiner admitted he underestimated the severity of the agency’s cash flow problems before accepting the position last year.

“Interestingly, I’m not sure some of the people at the Postal Service realized how dramatic it was,” he acknowledged.