U.S. Postal Service leadership informed Congress that the agency is in immediate need of legislative relief to address serious financial strain. In written testimony delivered to a Senate committee, the Postmaster General said the Postal Service is effectively out of cash and is meeting payroll and other expenses by temporarily drawing on employee retirement funds.
The testimony warned that if the agency stopped deferring obligations it has been postponing, it could exhaust its operating funds within months. "The Postal Service has a broken business model and action is needed by Congress to fix it," the written statement said, urging lawmakers to compensate the service for operations that lose money and to pursue additional reforms.
Management has already taken several steps to rein in spending. The agency said last month it was suspending non-essential expenditures, including travel, office supplies and consultant engagements. A memo to officers characterized those moves as actions intended "to protect core operations and ensure we can continue meeting all essential obligations."
Leadership has previously signaled broader restructuring efforts. In March, the Postmaster General announced the hiring of restructuring advisers to help address the Postal Service's financial troubles. A central point for consideration is whether the agency should continue delivering six days a week to roughly 170 million addresses - a level of service the testimony said costs about $3.4 billion annually and carries the additional burden that 70% of those delivery routes operate at a loss.
The written testimony also highlighted that about 58% of the Postal Service's roughly 18,000 Post Offices lose money. The agency has posted cumulative net losses of approximately $120 billion since 2007, a decline driven in part by a steep fall in first-class mail volumes, its historically most profitable product, even as it maintains costly nationwide delivery operations.
To preserve liquidity, the Postal Service said it would temporarily suspend employer payments for a federal pension program and planned a postage rate increase for first-class mail stamps, raising the price from $0.78 to $0.82 effective July 12. The suspension of employer pension contributions is expected to conserve $2.5 billion through September 30 and could yield up to $15 billion through 2030.
Contextual notes - The testimony frames a series of tradeoffs the agency faces: maintaining longstanding service commitments while managing persistent deficits and shrinking mail volumes. The agency's request to Congress combines calls for direct compensation for unprofitable operations with a push for broader structural reforms.