'We Are In A Crisis': US Postal Services Says It Could Run Out Of Money In Just Six Months

(MENAFN- Live Mint) The head of the U.S. Postal Service told Congress on Tuesday it could run out of money in October or November if the agency continues to make required retirement and other payments to the government.

U.S. Postmaster General David Steiner told a House Oversight subcommittee that USPS needs higher stamp prices, the ability to borrow more money as well as other reforms from Congress.

“We’re in a crisis,” Steiner told lawmakers.

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He said if the service defaults on some payments as it has in recent years, it will be out of money in less than a year. “If we stretch those out we’re looking at more like February.”

He laid out options for the loss-making agency to cut costs: ending six-day-a-week deliveries, closing post offices or raising first-class mail stamp prices to $1 or more, up from the current $0.78.

USPS is awaiting a report from consulting firm Alvarez & Marsal, which was hired to help with planning for all scenarios. “When you have less than 12 months of cash available, you have to look at everything,” Steiner said.

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Reuters first reported in December that Steiner believed USPS will run out of money as soon as ​early 2027. The service has reported net losses of $118 billion since 2007 as first-class mail, its most profitable product, ‌has ⁠fallen to its lowest volume since the late 1960s.

Steiner said reducing deliveries to five days a week would save USPS about $3 billion a year, while closing small post offices in remote areas would save $840 million. But those ideas “may not be palatable to Congress or the American public,” he said.

Republican Representative Pete Sessions, who chaired the hearing, said he would work with USPS to address concerns but said he does not support raising stamp prices. “We’re going to have to make tough decisions,” Sessions said.

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Representative Kweisi Mfume, the top Democrat on the subcommittee, said reforms were needed. “We cannot let the U.S. Postal Service die,” Mfume said, adding Congress cannot “do nothing and watch the Titanic sink.”

Key Takeaways

The USPS is facing severe financial challenges, projecting a cash shortage by late 2023. Proposed solutions include increasing stamp prices and reducing delivery frequency to cut costs. Congress must act to implement necessary reforms to prevent the collapse of the postal service.

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