The Post Office Says It Will Run Out of Money by 2027

USPS Warns of Cash Crisis Ahead

The U.S. Postal Service just delivered some bad news about itself.

Postmaster General David Steiner announced in December 2025 that the agency could run out of cash as early as 2027 if nothing changes.

USPS lost $9 billion last year, its biggest customer might walk away, and Congress has tied its hands on borrowing.

The agency that reaches every American address six days a week is now racing against a clock it may not be able to beat.

$118 Billion Gone Since 2007

The Postal Service has lost money almost every year for nearly two decades.

According to the Government Accountability Office, net losses have totaled $118 billion since 2007. The main reason is simple: people stopped mailing letters.

First-class mail, the agency’s most profitable product, has dropped to its lowest volume since 1967.

Email, online bill pay, and digital communication replaced what was once a cash cow.

Fiscal 2025 Brought $9 Billion Loss

The agency posted a $9 billion net loss in fiscal 2025, significantly higher than the nearly $7 billion it had expected.

Rising compensation costs drove much of the increase, including $167 million in early retirement incentives paid to more than 10,000 employees.

USPS now has about 625,000 workers, and employee pay and benefits account for roughly 76% of all operating expenses.

Borrowing Capped at $15 Billion

USPS can only borrow money from the Treasury Department, and Congress set the limit at $15 billion back in 1991. The agency hit that ceiling years ago and cannot take on more debt without congressional approval.

Board Chair Amber McReynolds said the cap desperately needs updating to reflect current financial needs, but so far lawmakers have not acted.

Steiner Took Charge in July

David Steiner became the 76th Postmaster General on July 15, 2025, after Louis DeJoy resigned in March. Steiner previously ran Waste Management for 12 years and sat on the FedEx board.

In his first interview as head of USPS, he warned the agency has a “precarious cash position” and said cost-cutting alone will not save it.

His message was blunt: “We do not have the luxury of time.”

The Last-Mile Auction Plan

Steiner’s biggest bet is opening up the Postal Service’s delivery network to more customers.

Starting in late January or early February 2026, USPS will auction access to more than 18,000 local delivery locations.

The idea is to let retailers and logistics companies bid for same-day and next-day shipping capacity.

USPS currently uses only about half of its last-mile capacity and hopes the plan could add billions in annual revenue.

Amazon Brings in $6 Billion

Amazon is by far the Postal Service’s largest customer.

The company generated more than $6 billion in revenue for USPS in 2025 and accounts for about 7.5% of total sales.

USPS delivers 1.7 billion Amazon packages every year, mostly to addresses that would cost Amazon more money to reach on its own.

The partnership has worked for both sides for more than 30 years.

Amazon Might Build Its Own Network

Those 30 years could be ending. Amazon’s contract expires in October 2026, and negotiations have stalled.

The company wanted a four-year extension with favorable rates, but USPS announced the competitive auction instead.

Amazon called the move “surprising” after nearly a year of talks and is now evaluating whether to expand its own delivery network and walk away entirely.

Delivering to Every Address Costs Money

Federal law requires USPS to deliver to every American address at least six days a week.

That means more than 170 million homes, businesses, and P.O. boxes, including remote rural areas where private carriers refuse to go.

This universal service obligation is expensive.

USPS cannot close small post offices just because they lose money, and it cannot drop delivery days without congressional permission.

2022 Reform Was Not Enough

Congress passed the Postal Service Reform Act in 2022, providing about $57 billion in financial relief.

The law canceled a requirement that USPS pre-fund decades of retiree health benefits, which had been draining billions annually.

But the relief was mostly on paper.

It did not put cash in the bank, and losses have continued every quarter since. The GAO warned that USPS likely cannot fix its finances on its own.

Without Help, Service Could Collapse

If USPS runs out of cash, the consequences would hit every corner of the country.

The agency handles 44% of the world’s mail and supports a $1.9 trillion mailing industry that employs nearly 8 million people.

Rural communities, seniors who receive medication by mail, and small businesses that depend on affordable shipping would all feel the pain.

Congress and the White House will have to decide whether to let that happen or step in with a rescue.

This article was created with AI assistance and human editing.

Read more from this brand:

• Amazon May End 30-Year Partnership With USPS and Build Its Own Postal Service
• 69% of Americans Oppose the Biggest National Park Cuts Ever
• Two Republicans Want Muslims Deported. A Muslim Man Just Saved Lives in the Attack They Cited.