By Dennis Sadowski
Amid mounting expenses and declining mail volume, Postmaster General David Steiner told members of Congress the U.S. Postal Service will be broke by February unless legislative reforms are enacted or a cash infusion is received.
Steiner also said the current 78-cent first-class postage rate should rise to between 90 cents and 95 cents as soon as this July in order to help ease the financial pressures the agency faces.
Higher postage rates would help offset the cost of delivering mail six days a week to 170 million addresses nationwide and stabilize the agency’s cash flow, the postal official said, but would not solve the rising financial challenges ahead.
Saying the post office was at a “critical juncture,” Steiner warned that “in about a year from now the U.S. Postal Service will be unable to deliver the mail if we continue the status quo.”
His dire comments came March 17 during a House Subcommittee on Government Operations and the Federal Workforce hearing.
The USPS Board of Governors is expected to file a proposal for postage rate hikes in July with the Postal Regulatory Commission in the coming weeks.
Since the hearing, the governors on March 24 approved a plan that calls for raising costs to mail packages 8 percent starting April 26. The increases pertain to Priority Mail Express, Priority Mail, USPS Ground Advantage, and Parcel Select services, and not first-class mail, are affected, the postal service stressed March 25.
Officials said the adjustment, which would end Jan. 17, was needed to cover the cost of rising fuel prices, a result of the U.S./Israel-Iran war.
The plan has been submitted to the PRC for review.
Steiner, who became postmaster general last July, urged Congress to enact legislative reforms that would lift restrictions on investments and borrowing, and reduce the agency’s “disproportionately high share” of Civil Service Retirement System benefits for employees who worked for both the former U.S. Post Office Department prior to 1971 and the now 55-year-old independent U.S. Postal Service.
Such steps, he said, would buy time to determine what steps the postal agency can take to reduce costs and increase revenues.
President Donald Trump, citing the multibillion-dollar losses of the agency, has repeatedly called for privatizing mail delivery since returning to office 14 months ago. Longtime postal observers, however, say privatizing mail and package delivery would leave millions of people in far-flung areas with sporadic or even no service.
Republican Rep. Pete Sessions of Texas, subcommittee chairman, and Democratic Rep. Kweisi Mfume of Maryland, subcommittee ranking member, both said as the hearing opened that they do not want to see U.S. mail service privatized.
In calling for a first-class letter rate of up to 95 cents, Steiner said the amount would continue to be far lower than other industrial nations. A chart he provided with his testimony showed that basic domestic standard mail costs $2.72 in France, $2.50 in the United Kingdom and as much as $6.33 in Czech Republic.
Residents of Denmark paid $4.65 until the end of delivery of domestic letters on Dec. 31 because of declining mail volume.
The USPS lost $9 billion in fiscal year 2025, which ended Sept. 30. That’s on top of the $9.5 billion lost in fiscal year 2024. The agency lost another $1.3 billion during the first quarter of fiscal year 2026.
Steiner attributed the losses in part to higher compensation and benefits despite declining employment and increased mechanization of mail processing within the agency. He also said he was working across the agency to increase efficiency.
In addition, Steiner pointed to the $15 billion cap the USPS can borrow, an amount he said was set by Congress “decades ago.” Instead, the cap should be set at $30 billion to $40 billion, he said.
Steiner decried that the agency is permitted to invest retirement funds only in Treasury notes, reducing returns. “Neither private companies nor state or local governments limit their investments to Treasury notes,” he said.
Estimates from the offices of the inspector general using a “conservative” investment strategy of stock indexes and bonds, he said, would have yielded an additional $800 billion for retirement plans.
The postal executive repeatedly called on Congress to act quickly to preserve one of the country’s most vital services to residents and businesses.
“We just ask that you take away the anchor and offer us the life jackets that let us operate like a truly independent entity, free from the statutory requirements that weigh us down,” he said. “The other option is that you provide funding to compensate us for the cost of the anchor.”