Full Breakdown
USPS Financial Crisis Deepens as Agency Borrows from Retirement Funds
6/25/2026, 2:41:59 PM
Cash Shortfall and Operational Measures
U.S. Postmaster General David Steiner told a Senate committee on June 24 that the Postal Service is “out of cash,” borrowing from employee retirement plans to keep operations running. Deferring contributions to the Federal Employees Retirement System has moved the projected cash shortfall from early 2027 to fiscal 2031-2035. To stretch funds, USPS has halted non-essential spending and raised stamp prices.
Financial Background and Key Data
USPS has not turned a profit since 2006, accumulating roughly $120 billion in net losses, including a $9.5 billion deficit in FY 2025. Six-day delivery costs $3.4 billion annually; 70 % of routes and 58 % of its 18,000 post offices lose money. Deferring FERS contributions saves $2.5 billion through September 2026 and is projected to free $15 billion by 2030. Stamp rates rose 8 % in April, set to expire in January 2027, and a 5 % “forever” stamp increase to 82 cents begins July 12.
Implications for Services and Elections
The cash shortfall threatens universal mail delivery, potentially forcing service-day reductions, post-office closures, and weaker census support. USPS’s proposed rule to withhold ballots from states that do not provide absentee-voter lists has sparked lawsuits from Democratic-led states and voting-rights groups, raising constitutional concerns about the agency’s election role.
Official Statements & Responses
Steiner called the business model “broken” and urged Congress to compensate the service for money-losing operations. Acting Postal Regulatory Commission chair Robert Taub said the retirement-payment waiver offers “breathing room” if USPS cuts spending. Representatives Kweisi Mfume, Pete Sessions and James Walkinshaw asked for five-year financial projections. The Senate Democratic caucus urged USPS to drop its voter-list regulation, while nominee William Gallo said courts and Congress, not the President, should decide voting-mail policy.
Criticism & Opposition
Democratic lawmakers and voting-rights groups argue USPS lacks authority to restrict ballot delivery and that its involvement in the census is not cost-effective. Nearly two dozen states have sued over the Trump administration’s voting-mail order and USPS’s proposed regulation.
Conflicting Reports & Gaps
Earlier testimony warned of a cash crisis by early 2027, but the latest projections extend it to 2031-2035. Congress has not yet received a detailed cost-saving plan.
Verbatim Quotes
- “What we are doing right now is we're basically borrowing money from our retirement plans to fund current operations,” — David Steiner, Postmaster General
- “Continuing to default is not an alternative path that avoids this outcome, it only delays and ultimately worsens the outcome,” — David Steiner, Postmaster General
- “When we talked with your staff coming into this, what we really wanted was you to prepare for us, ‘this is where we spend our money, this is where we could reduce this, I can do on my own, and this I can do with Congress’s help,’” — Rand Paul, Senator
- “As far as I'm concerned, you have to have the courts and Congress make the decision,” — William Gallo, Postal Service governor nominee
