USPS Is Set to Run Out of Funds Within 12 Months

Why It Matters

The U.S. Postal Service (USPS) faces a financial cliff, according to a Government Accountability Office report. With cash reserves projected to run out within 12 months and cumulative losses topping $109 billion since 2007, the service's survival hinges on decisions Congress makes now. A Senate hearing scheduled for June 24, Wednesday will examine USPS business model reform as the agency simultaneously pursues rate hikes, workforce cuts, and requests for direct congressional funding—moves that could reshape how Americans access mail service.

The Big Problem

The numbers are stark. Postmaster General David Steiner warned Congress in March 2026 that USPS would exhaust its available cash within 12 months without action. The agency reported a net loss of approximately $9 billion in fiscal year 2025. This caps 19 straight years in the red, with total deficits reaching approximately $109 billion from fiscal year 2007 through 2024.

The agency has hit another wall: it has reached its statutory borrowing limit and can no longer finance ongoing deficits through additional debt. That leaves three levers—price increases, service cuts, and congressional cash.

USPS announced a 4-cent increase in First-Class Mail Forever stamps, from 78 cents to 82 cents, effective July 12, 2026. The agency also filed for an average 4.8 percent increase across market-dominant mailing products and a 3 percent increase for competitive PO Box pricing on the same date.

Postmaster General Steiner has indicated that cutting delivery days is "on the table" as a cost-reduction measure. He also publicly floated the idea of additional direct congressional funding in May 2026, framing it as a subsidy for universal mail service delivery to over 170 million addresses rather than as a "bailout." Congress had already provided more than $38 million for certain USPS programs in fiscal year 2026.

The agency also entered into an agreement with the Department of Government Efficiency to cut 10,000 workers and billions of dollars from its budget—a move that sparked significant controversy about potential privatization.

The Bottom Line

The timing reflects mounting pressure. The Government Accountability Office released a report finding that USPS has increased prices and redesigned its transportation network but has not fundamentally changed its business model since 1970. The agency has also failed to develop publicly available projections of its revenue and expenses, the GAO noted.

Several USPS reform bills are pending in Congress, though none are formally listed as associated with the hearing. Proposals range from rate caps tied to inflation and service performance standards to requirements for public notification before major service changes and restrictions on post office closures.

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