The head of the US Postal Service told Congress on Tuesday that it could run out of money in October or November if the agency continues to make required pension and other payments to the government.
U.S. Postmaster General David Steiner told a House subcommittee that the USPS needs higher stamp prices, the ability to borrow more money, as well as more reforms from Congress.
“We are in a crisis,” Steiner told lawmakers.
He said if the service defaults on some payments like it has in recent years, it will be out of money in less than a year. “When we stretch them, we look at them more like February.
He outlined options for the loss-making agency to cut costs: end delivery six days a week, close post offices or raise first-class stamp prices to $1 or more, from the current $0.78.
The USPS is awaiting word from the consulting firm Alvarez & Marsal, which has been hired to help plan all scenarios. “When you have less than 12 months of cash, you have to look at everything,” Steiner said.
Reuters first reported in December that Steiner believed the USPS would run out of money as early as 2027. The service has posted a net loss of $118 billion since 2007 as first-class mail, its most profitable product, fell to its lowest volume since the late 1960s.
Steiner said reducing deliveries to five days a week would save the USPS about $3 billion a year, while closing small post offices in remote areas would save $840 million. But those ideas “may not be acceptable to Congress or the American public,” he said.
Republican Rep. Pete Sessions, who chaired the hearing, said he would work with the USPS to address concerns, but said he did not support raising stamp prices. “We’re going to have to make some tough decisions,” Sessions said.
Rep. Kweisi Mfume, the top Democrat on the subcommittee, said reforms were necessary. “We cannot let the US Postal Service die,” Mfume said, adding that Congress cannot “stand by and watch the Titanic sink.”
