headline: USPS will run out of cash by February 2027, postmaster general warns slug: 2026-03-05-usps-will-run-out-of-cash-by-february…

  • The U.S. Postal Service will exhaust its cash reserves by February 2027 unless Congress lifts a $15 billion borrowing cap that has been i…
  • The warning exposes a structural funding crisis at the self-funded federal agency, which posted $9 billion in net losses in fiscal year 2…
  • “How long are employees going to work and vendors going to show up if we’re not paying them?” Steiner said.
  • The Postal Service is an independent agency funded primarily through postage revenue and the services it provides. It must deliver mail s…

The U.S. Postal Service will exhaust its cash reserves by February 2027 unless Congress lifts a $15 billion borrowing cap that has been in place since 1990, Postmaster General David Steiner warned in an interview with the Associated Press on Wednesday. Without relief, Steiner said, the agency may be unable to pay employees or vendors — a failure he said would have potentially dire consequences for mail delivery to every American address. Steiner is scheduled to testify before Congress later this month.

The warning exposes a structural funding crisis at the self-funded federal agency, which posted $9 billion in net losses in fiscal year 2025 while mail volume has fallen by half over 15 years and Congress has imposed costly service mandates without corresponding financial relief.

“How long are employees going to work and vendors going to show up if we’re not paying them?” Steiner said.

A revenue collapse outpaced by mandates

The Postal Service is an independent agency funded primarily through postage revenue and the services it provides. It must deliver mail six days a week to every address in the country but receives no annual appropriation from the federal budget.

USPS total operating revenue rose $916 million — a 1.2% increase in fiscal year 2025 — driven largely by its Ground Advantage shipping service, according to figures Steiner cited. But that gain was overwhelmed by expenses. Net losses reached $9 billion in fiscal year 2025 and $9.5 billion in fiscal year 2024.

Annual mail volume has fallen from approximately 220 billion pieces to about 110 billion today, as more people pay bills and communicate online, Steiner said.

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

Steiner said lifting the borrowing cap is the most immediate step lawmakers can take to stabilize the agency.

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

Stamp prices and regulatory friction

Steiner has called for raising the price of a first-class stamp from its current 78 cents to 95 cents, a move he said would resolve the agency’s financial problems. A decade ago, a first-class stamp cost 47 cents.

But the Postal Regulatory Commission — an independent body created by Congress to oversee the agency — has not authorized price increases large enough to close the gap, Steiner said.

“If the Postal Regulatory Commission adopted our pricing model, problem solved,” he said, adding that revenue from package delivery could then subsidize the mail side of the business.

Steiner also called for allowing the Postal Service to invest its pension and retiree health benefit reserves in assets other than Treasury bills, and for expanding the agency’s last-mile delivery service to more customers as a revenue source.

Congressional history and advocacy pressure

Congress passed the Postal Service Reform Act in 2022, ending a longstanding requirement that the agency prefund its retiree health benefits — a change multiple postmaster generals had sought over more than two decades. Other regulatory constraints, including the borrowing cap, remained.

Keep Us Posted, an advocacy group launched in 2021, warned last month that the Postal Service was “headed for a taxpayer bailout” given its cash flow issues. The group has urged Congress to pass legislation limiting rate increases to once a year and tying them to service performance.

Steiner — a former chief executive of the nation’s largest waste management company and a former member of the FedEx board of directors — took over the agency last July. He said he did not fully grasp the depth of the financial problems until he assumed the role.

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