Postal Service may be forced to stop deliveries by 2027 amid cash crisis

The U.S. Postal Service may be forced to stop deliveries next year if current trends continue, according to the postmaster general.

Postmaster General David Steiner told lawmakers this week that the Postal Service was on track to run out of cash to pay employees and vendors unless major changes were made, reported NPR.

"I am not sure that the American public is aware that the Postal Service is at a critical juncture," Steiner said in a written statement. "I know that I wasn't aware of the extent of it before I took on this role, but at our current run rate and if we continue to pay our required obligations in the same manner as we have done in recent years, then we will be out of cash in less than 12 months."

USPS relies on stamps and service fees, rather than tax dollars, to deliver mail six days a week to every address in the U.S., but the agency has been operating at a loss almost every fiscal year since 2007 as paperless billing and digital communication cut into first-class mail, its most profitable product.

"I like to say that in the time since peak 2006 mail volume, the Postal Service was thrown overboard and instead of tossing us a life jacket, we were thrown an anchor," said Steiner, who joined USPS in July.

USPS has been able to borrow money from the U.S. Treasury to continue delivering mail and has been able to hold off on paying some pension obligations, but the agency cannot take on additional debt under a 1992 federal law capping its borrowing at $15 billion.

Defaulting on benefit obligations is not a long-term solution, Steiner told Congress, and he has asked lawmakers to increase the agency's debt limit and raise postage prices beyond current limits, as well as consider reforms to retiree benefit obligations.

Congress did away with a requirement in 2022 for USPS to prepay future retiree health benefits and canceled about $57 billion in overdue prefunding payments, and that was the only fiscal year in two decades the service did not show a budget shortfall.