USPS warns of post office closures and service cuts unless Congress acts

The U.S. Postal Service has told Congress it will begin presenting detailed plans for post office closures and scaled-back mail services unless lawmakers act on the agency's finances — the clearest deadline yet in a funding crisis that has drained more than $120 billion since 2007.

At a Board of Governors meeting, Postmaster General David Steiner announced a $6.5 billion net loss for the fiscal year. While that is an improvement on the prior year's $9 billion loss, Steiner said the continued drain is now forcing the agency's hand.

We will need to make drastic changes in the number of post offices and marketing mail service levels. And we will need to look at other areas to generate the cash we need to meet our obligations to our employees and to the American public.— David Steiner, Postmaster General

The scale of the problem is visible in the agency's own operating data. Seventy percent of USPS delivery routes lose money. Roughly 58 percent of its approximately 18,000 post offices are unprofitable. Delivering to 170 million addresses six days a week costs the agency $3.4 billion a year, according to Steiner.

USPS is calling for reforms to its retirement funding structure. Steiner framed the choice for lawmakers as binary: either remove the retirement mandates that prevent the agency from operating as a self-sustaining business, or provide additional funding to cover the deficit. Without one or the other, he said, substantial service cuts are unavoidable.

The bottom line is that we are out of cash. We are borrowing from our employees' retirement funds to continue operations. The Postal Service has a broken business model and action is needed by Congress to fix it.— David Steiner, Postmaster General

USPS Governor Amber McReynolds put the urgency in starker terms.

Ultimately, our fiscal cliff is here. The board continues to make uncomfortable default decisions, and we do not want to continue to operate in an unsustainable position as we have.— Amber McReynolds, USPS Governor

The agency has bought itself some time through emergency measures. A temporary price hike in April to offset rising fuel costs and a multi-year deal with DHL have extended the agency's projected solvency from a feared 2027 collapse to at least 2031, according to Newsweek. First-class mail on-time performance also improved for the year — a bright spot Steiner acknowledged even as he warned it does not resolve the structural problem.

The losses trace back to a single underlying shift: first-class mail, once the agency's biggest revenue source, has fallen sharply since the rise of digital communications. USPS has reported cumulative net losses of around $120 billion since 2007.

Last year, Steiner's predecessor Louis DeJoy struck a deal with the Department of Government Efficiency to eliminate 10,000 USPS jobs, a move credited with contributing to the reduced losses reported Tuesday. The cuts drew sharp criticism from labor unions and congressional Democrats. Representative Gerald Connolly said the move would have 'catastrophic consequences for all Americans,' according to Newsweek.

President Donald Trump has previously floated privatizing the Postal Service or merging it with the Department of Commerce. The American Postal Workers Union conducted a survey of its members, who rejected privatization by a margin of 34 percent.

Plans to privatize the Post Office are about enriching Wall Street and not serving Main Street. Evidence shows that selling off the USPS would lead to higher prices for postal services as well as higher prices for shipping packages at FedEx and UPS.— Mark Dimondstein, President, American Postal Workers Union

Steiner has framed the stakes in economic terms beyond the mail itself, describing USPS as 'the core of a nearly $2 trillion ecosystem, supporting almost 8 million jobs, and providing critical infrastructure that reaches every address in the country.' The agency is now looking to the new Congress — which takes office in January — for its next move, with detailed contingency options expected if no legislative action materializes.

Why it matters — Without congressional action before early 2027, millions of Americans could face fewer local post offices and slower mail delivery — and the agency underpinning an estimated $2 trillion economic ecosystem has said it is already borrowing from employee retirement funds to stay open.

Reported by newsweek.com, politico.com, reuters.com, federalnewsnetwork.com