Postmaster General Tells Congress USPS Is Raiding Retirement Funds to Stay Open, Calls the Business Model Broken

Postmaster General David Steiner went before the Senate Homeland Security and Governmental Affairs Committee on Wednesday and put the situation in blunter terms than any agency head typically uses about their own shop.

"What we are doing right now is we're basically borrowing money from our retirement plans to fund current operations," Steiner told lawmakers, according to NPR. "I'm not particularly comfortable with that. I promise you our employees are not particularly comfortable with that. You all shouldn't be comfortable with that. None of us should be comfortable with that. To me, that's why we have to have this discussion of how we fix this broken business model."

Steiner is a sitting Postmaster General describing his own agency's finances as a broken business model on the record, under oath, to Congress. A cash crisis at USPS may now come sometime between 2031 and 2034, according to the agency's latest projections — but that window was purchased by deferring costs that will come due later.

What Actually Changed

The Postal Regulatory Commission, an independent federal agency, waived USPS's required minimum retirement payments through fiscal year 2030. Acting Chair Robert Taub put the value of that cushion at roughly $15 billion, according to written testimony he submitted to a House Oversight subcommittee. His framing: the move offers "breathing room" provided the Postal Service makes judicious decisions about its expenditures starting now.

Steiner also signed a multi-year deal to handle last-mile delivery for DHL eCommerce and cut non-essential spending across the agency, per NPR and Iowa Public Radio reporting.

None of those moves change the underlying revenue problem. USPS is a self-funded federal agency with no direct tax dollars, depending on stamp and service fees while the volume of physical mail continues its long structural decline.

The Numbers Are Bad

USPS reported a net loss of $2 billion in the second quarter of this fiscal year, according to NPR. That follows a $9 billion loss for all of last fiscal year.

On the revenue side, two price increases are either in effect or pending. A temporary 8% surcharge that began in late April to cover fuel costs is set to expire in mid-January. A permanent 5% increase on the first-class "forever" stamp brings it to 82 cents, taking effect July 12. That will be the eighth stamp price increase in five years, per NPR.

The increases generate some revenue, but they also accelerate mail volume decline. Every time stamps get more expensive, more customers and businesses shift communications elsewhere.

The Case for Congress Doing Nothing (and Why It Doesn't Hold)

The strongest argument for the status quo is that USPS has been "almost insolvent" for years and keeps muddling through. Defenders of the current drift argue that the agency's universal service obligation — delivering to every address six days a week — is a public good that the market won't replicate, and that the $15 billion retirement waiver proves Congress and regulators can intervene creatively when needed.

That argument has real weight. USPS does serve rural and low-income communities that private carriers either avoid or charge significantly more to reach. FedEx and UPS have no legal obligation to deliver an 82-cent letter to a ranch in Montana.

But deferring retirement obligations is not a fix. It shifts the liability forward. Workers are still earning pension benefits; the agency is just not paying for them yet. When the waiver expires after 2030 and those payments come due simultaneously with already-accumulated losses, the crisis will be larger, not smaller. Steiner himself acknowledged this plainly to the committee.

What Steiner Is Asking For

Steiner has called on Congress to revise the borrowing limits that cap how much USPS can borrow from the Treasury, and to reform the retirement plan structure, according to Iowa Public Radio and WXXI News. There are also calls for reconsidering whether the six-day mail delivery mandate is financially sustainable — a significant admission from the head of an agency whose entire identity is built around that mandate.

Key lawmakers on the House Oversight Committee have not moved ahead with changes yet. Instead, Reps. Kweisi Mfume (D-MD), Pete Sessions (R-TX), and James Walkinshaw (D-VA) wrote to Steiner this month asking for five-year financial and service projections before any reforms advance. "To implement reforms that would improve the Postal Service's long-term financial stability, Congress must be equipped with clear data detailing the anticipated financial effects of the proposals you provided us with in your recent testimony," they wrote.

What Happens Next

The July 12 forever-stamp price hike to 82 cents is the nearest concrete marker. After that, the next hard deadline is fiscal year 2030, when the Postal Regulatory Commission's retirement-payment waiver expires and USPS will need either new legislative relief or a structurally different business. Steiner's Senate testimony Wednesday was framed as a call for Congress to act before that window closes. Key House Oversight lawmakers have made clear they want more data first.