Why It Matters

The United States Postal Service (USPS) faces an existential cash crisis. At a Senate hearing on June 24, Postmaster General David Steiner warned the agency could run out of cash as soon as September without congressional intervention. The Trump administration backs aggressive restructuring, but Democrats are pushing back against a controversial voting rule that the agency proposed under a presidential order.

The Big Picture

Steiner's testimony marked a dramatic shift in USPS leadership's approach to the agency's financial crisis. The Postal Service has lost more than $117 billion since 2007. It posted a projected loss of $1.95 billion in the second quarter of 2026 alone, marking its fifth consecutive quarterly loss. The agency has experienced 19 consecutive years of operating losses.

The crisis stems from several factors. First class mail is down 34 percent since 2014, yet the Postal Service grew its career workforce by 9 percent over the same period. Labor comprises about 80 percent of USPS costs, compared to closer to 60 percent at the United Parcel Service (UPS).

The 2022 Bipartisan Postal Services Reform Act shifted $107 billion away from the USPS, and the agency has lost another $26 billion since that law passed. USPS has maxed out all $15 billion it can borrow from the Treasury, while stamp prices are rising from 78 cents to 82 cents.

Steiner took over as Postmaster General on July 15, 2025, after serving as CEO of Waste Management, Inc. from 2004 to 2016. His predecessor at USPS, Louis DeJoy, insisted USPS could fix itself without Congress. Steiner is taking the opposite approach, asking lawmakers for help.

What They're Saying

At the hearing chaired by Sen. Rand Paul (R-KY), the core dispute centered on whether USPS can survive without major congressional action, and whether the agency should be implementing a controversial voting rule that Democrats oppose.

Steiner told lawmakers bluntly: "We are out of cash." He added: "I'm here to tell America that we can do anything they desire, but we can't afford to do everything they desire without more help."

The most contentious exchange involved mail-in voting. In March, President Trump signed an executive order directing USPS to only deliver mail-in ballots to voters on lists created and controlled by the federal government. The agency published a proposed rule on June 2, implementing this directive.

Ranking member Gary Peters (D-MI) pressed Steiner on whether USPS would still deliver mail-in ballots to a state if it refused to turn its absentee voter list over to the federal government. Steiner confirmed the agency would not. Peters led the entire Democratic caucus to insist that USPS abandon this new voting-by-mail rule. Peters had previously led passage of the 2022 reform law that increased transparency around postal delivery performance and codified the six-day delivery service. He argued the new voting rule conflicted with the agency's core mission.

Sen. Paul focused on operational inefficiency. He noted that when a private company's volume falls, it reduces labor costs. When USPS volume fell, it added employees and made costs more expensive.

Steiner called for Congress to revise laws to let USPS borrow more money and reform its retirement plans. He asked lawmakers to consider reviving public service reimbursement payments to the postal service. The Postal Regulatory Commission gave USPS flexibility on rate authority, providing an additional 2.4 billion dollars this year. But Steiner said it was not enough.

The agency has also agreed to cut more than 10,000 workers as part of an agreement with DOGE, the Department of Government Efficiency. The Postal Service temporarily suspended its normal contributions to employee retirement plans in order to preserve cash reserves.

Political Stakes

Steiner's testimony puts the Trump administration in a bind. The president wants aggressive USPS restructuring, yet the agency's financial crisis now requires congressional action that could face Democratic resistance. The voting rule has already drawn legal challenges. A federal judge in Massachusetts blocked the mail-in ballot proposal on June 25, the day after the hearing.

For Steiner, the stakes are high. He must deliver cost cuts demanded by Trump while keeping the agency operational. His credibility depends on whether the agency can avoid a cash crisis.

For Democrats, the hearing exposed a fundamental conflict. Peters and his caucus want USPS to survive financially, but they oppose using voting rules as leverage.

For the public, the stakes are universal service. The Postal Service is the only carrier that delivers to every single address in America. For-profit competitors do not attempt to meet this requirement. If USPS collapses, rural areas and low-income communities could lose mail service entirely.

The Other Side

Some analysts argue USPS doesn't have a revenue problem; it has a spending problem. A Government Executive op-ed contended that without holding USPS accountable, any financial relief from Congress will just be a band-aid on a gaping wound, setting the stage for a massive taxpayer bailout. The op-ed argued USPS could break even and improve profitability over the next five years if it cuts costs by just 2 percent annually.

The Washington Times published an op-ed calling for USPS to focus on core competencies and last-mile delivery, while outsourcing functions currently performed in-house. It argued that union contracts block modernization, automation, accountability, and downsizing. The Wall Street Journal's editorial board answered calls for public investment in USPS with a blunt "No thanks."

What's Next

Congress faces pressure to act before September, when Steiner warned the agency could run out of cash. The House and Senate will need to decide whether to increase USPS borrowing authority, reform retirement obligations, or provide direct subsidies.

The voting rule faces an uncertain future after the federal judge's block. Democrats will likely push back against any new voting-related directives. Republicans must decide whether to pursue voting restrictions or focus solely on financial restructuring.

The Government Accountability Office published a report titled "Urgent Action Needed to Fix Unsustainable Business Model" detailing the agency's structural problems. Congress will likely reference this report in upcoming deliberations.

Steiner is expected to testify before the House as well, continuing to make the case for congressional intervention. The agency's next quarterly loss report will be closely watched as a signal of whether the crisis is accelerating.

The Bottom Line

USPS is betting Congress will act before cash runs out, but the voting rule fight has poisoned the well for bipartisan cooperation.

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