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The U.S. Postal Service on Tuesday will inform Congress that it is going through a severe monetary disaster and is on tempo to expire of money in lower than a 12 months with out vital reforms.
Postmaster Normal David Steiner testified earlier than a Home Oversight subcommittee and informed lawmakers that the USPS wants increased stamp costs and the power to borrow more cash together with different reforms – together with modifications to pension funding and liabilities calculations, staff’ compensation and retirement fund funding methods.
Steiner has put ahead attainable choices for reducing prices, together with ending six-day-a-week deliveries, closing put up workplaces or elevating first-class mail stamp costs from the present 78 cents to $1 or extra.
“With a view to survive past the following 12 months, we have to improve our borrowing capability in order that we do not run out of money,” Steiner stated in ready testimony. “The failure to do that might result in the top of the Postal Service as we all know it now.”
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USPS Postmaster Normal David Steiner will ask Congress for reforms and funding to keep away from a monetary disaster on the Postal Service. (Bess Adler/Bloomberg by way of Getty Pictures)
Stamp costs have risen 46% since early 19, after they have been 50 cents. Steiner argues that these costs are nonetheless far decrease than postage prices in different international locations.
USPS has additionally reached its present borrowing cap of $15 billion, precluding the company from taking out further loans.
Reuters beforehand reported in December that Steiner thought the USPS was on monitor to expire of cash as quickly as early 2027 amid mounting losses.
USPS has reported internet losses of $118 billion since 2007 as volumes of its most worthwhile product, first-class mail, fell to the bottom stage for the reason that late Nineteen Sixties.
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USPS bundle volumes have declined steadily in latest a long time. (Andrew Harrer/Bloomberg by way of Getty Pictures)
Steiner stated that if USPS have been to cut back deliveries to 5 days every week, it might save the company about $3 billion per 12 months, whereas closing small put up workplaces in distant areas would save about $840 million.
Nonetheless, Steiner cautioned that each of these choices “might not be palatable to Congress or the American public.”
USPS presently delivers to greater than 170 million U.S. addresses on a six-day-a-week schedule.
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USPS faces mounting pension prices along with its operational headwinds. (Luke Sharrett/Bloomberg by way of Getty Pictures)
The Authorities Accountability Workplace (GAO) is ready to inform lawmakers on Tuesday that it’s important to “deal with USPS’s unsustainable enterprise mannequin earlier than will probably be answerable for billions in new annual bills for retiree healthcare, seemingly in 2031.”
USPS’ peak postage quantity was 213 billion items of mail in 2006, whereas that determine has fallen by greater than half to 104 billion items of mail in 2025.
Steiner famous that at present stamp costs, that interprets to a lack of $81 billion. He added that within the years since 2006, USPS “was thrown overboard and as a substitute of tossing us a life jacket, we have been thrown an anchor.”
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Congress in 2022 supplied USPS with $57 billion in monetary aid over a decade and required the company’s future retirees to enroll in a authorities medical insurance plan.
Reuters contributed to this report.
