Postmaster General David Steiner told members of Congress on Wednesday that the United States Postal Service is facing a serious financial shortfall and needs leg islative help to continue operating under its current nationwide service requirements.
In written testimony before a Senate committee, Steiner said the Postal Service is “out of cash” and is deferring payments to employee retirement funds in order to continue operations. He warned that, without those deferrals, USPS could run out of operating funds within months.
“The Postal Service has a broken business model, and action is needed by Congress to fix it," Steiner said.
Steiner has asked Congress to consider compensating USPS for money-losing operations and mak- ing other financial and operational reforms. In March, he said the Postal Service was hiring restructuring advisers to help address its financial challenges.
One issue raised in Steiner’s testimony is whether USPS should continue delivering mail to 170 million addresses six days a week. Steiner said that service costs $3.4 billion annually, and about 70% of those delivery routes lose money. He also said about 58% of the nation’s 18,000 post offices operate at a loss.
The Postal Service has reported net losses of about $120 billion since 2007. First-class mail, historically its most profitable service, has de clined sharply as more communication has moved online. At the same time, USPS is required to maintain delivery service across the country.
USPS announced last month that it was suspending nonessential spend- ing on travel, office supplies and consultants. Steiner said in a memo that the reductions were intended “to protect core operations and ensure we can continue meeting all essential obligations.”
The Postal Service also said it would temporarily suspend employer payments into a federal pension program. Officials said the move would conserve $2.5 billion through Sept. 30 and could save as much as $15 billion through 2030.
USPS also plans to raise the price of a first-class mail stamp from 78 cents to 82 cents, effective July 12.