Your Post Office Could Close - USPS Warns of Cuts and Price Hikes

The United States Postal Service (USPS) has been plagued by ongoing financial fitness issues, and now the Postmaster General is warning of potential consequences unless Congress takes action. The USPS is largely self-funded, but is requesting annual funding from Congress to help the agency meet its financial obligations and avoid a cash crisis.

Postmaster General David Steiner warned that if Congress doesn't financially support the USPS, the agency might have to explore cost-cutting measures such as raising prices and closing thousands of post offices.

What Postmaster General David Steiner said

Steiner explained that the USPS would be requesting a "relatively modest appropriation" from Congress, noting that the investment made in the USPS would likely be a temporary one. The request came on the heels of a third quarter in which the USPS reported a $2.5 billion net loss that further adds to the agency's ongoing financial crisis, despite the quarter being a financial improvement over previous quarters.

Steiner explained that legislation passed by a Senate committee to add dozens of new ZIP codes may cost the USPS $800 million. He added that without Congress taking action, "our plans would certainly have to entail changes that will impact service like taking a look at our service levels and closing thousands of unprofitable post offices, as well as raising prices."

The financial picture behind potential USPS changes

This isn't the first time Steiner has warned about the USPS's dire financial straits. In June 2026, Steiner explained that the USPS would run out of cash in less than a year unless Congress allowed the agency to borrow more money and increase postage prices.

"At our current rate, we'll be out of cash in less than 12 months," he said. "So in about a year from now, the postal service would be unable to deliver the mail."

The USPS lost $9 billion in the last fiscal year; in 2024, it lost $9.5 billion. The USPS also reported a $1.3 billion loss in the first quarter of 2026.

Expensive routes and the USPS financial losses

Several factors are leading to such steep financial losses. The USPS has a universal service obligation, meaning the agency is required to provide mail services to all Americans at the same price. Though rural and hard-to-reach destinations may cost the USPS more in expenses, the USPS can't charge more for providing mail to those areas.

Currently, the USPS delivers to 170 million addresses six days a week. Doing so costs the agency $3.4 billion per year. According to Steiner, 70% of the routes lose money, and about 58% of the USPS's 18,000 post offices lose money.

Declining mail volume and the USPS financial losses

The declining volume of mail has also contributed to the financial losses that the USPS has experienced for years. As the country has largely shifted to the use of digital communication like email and online bill pay, the use of first-class mail, the most profitable product for the USPS, has declined.

In March, the USPS hired restructuring advisers to help find solutions to the financial losses. Facing liquidity challenges, the USPS suspended some employer retirement contributions in April 2026 to help conserve money through the end of the fiscal year.

Steiner's request for postage rate increases

Steiner explained that postage price increases have helped boost mail revenue even as the volume has declined, contributing to a total revenue increase for the agency. He requested that Congress permit the USPS to implement price increases in January 2027 instead of waiting until July 2027.

In January 2026, the Postal Regulatory Commission ruled that the USPS could only raise mail prices once per year. That restriction started in March and remains in effect through September 30, 2030, and is why Steiner must get Congressional approval for the increase. Previously, the Commission had eased the restriction as the USPS recovered from the pandemic, and the USPS generally raised prices each January and July.

According to Steiner, implementing a postage rate increase in January 2027 could generate between $600 and $800 million in cash.

Steiner's request for financial support

Steiner is also asking Congress to temporarily financially support the USPS. "As we reduce costs and improve revenue, we believe we will become more profitable, and that appropriation could be reduced," he said.

Steiner hasn't specified the amount of funding he's seeking. However, the National Association of Postal Supervisors reports that the USPS has authority to request up to $460 million from Congress each year in the form of a public service reimbursement. The USPS hasn't requested or received a public service reimbursement since 1982.

Bottom line

If the USPS were to run out of cash, it might jeopardize the mailing and shipping industry. Since Amazon and UPS pay the USPS to deliver packages to rural destinations, a USPS service disruption might significantly impact rural customers. If the USPS does close non-profitable offices, these would likely be smaller, rural offices, which could again impact rural customers. Small businesses might also face challenges in shipping goods to customers because of the mailing industry disruption.

Congress hasn't yet responded to the request, but the USPS's efforts to get ahead financially are a topic that's worth monitoring, especially for small business owners and rural residents.

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