“The Postal Service is at a critical juncture. At our current rate, we’ll be out of money in less than 12 months,” he testified in a March 17 House Committee on Oversight and Reform subcommittee hearing.

That may not sound like a big deal. Government agencies run out of money each year, and every January and February, they go hat-in-hand to Congress and ask for funding. Usually, they get it, and when Congress fails to deliver the dollars, agencies close for a bit or their staff work without pay until legislators enact a spending law.

The U.S. Postal Service is different. USPS is one of 17 government corporations that pay for themselves by earning revenue through the sales of goods and services. The agency sells around $80 billion in postage each year, mostly to large companies offering credit cards (e.g., Capital One) or selling goods (e.g., Walmart).

When the Post Office runs out of cash in the first half of 2026, Steiner explained, “the Postal Service would be unable to deliver the mail.” A USPS shutdown would mean Americans would suddenly have to go without the 2 billion catalogs, periodicals, jury summons, bills, prescriptions, and packages brought by the postman each week. The Post Office cannot borrow money to stay open. It has tapped out its $15 billion credit line from the Treasury Department, and it is not authorized to borrow money from private lenders.

The Postal Service’s looming liquidity crisis is not unexpected. In fact, it has been predicted for nearly two decades and has become increasingly obvious to anyone paying close attention.

Way back in 2007, then-Postmaster General John Potter told Congress the agency’s “business model remains broken. … With the diversion of messages and transactions to the internet from the mail, we can no longer depend on printed volume growing at a rate sufficient to produce the revenue needed to cover the costs of an ever-expanding delivery network.”

Potter’s comments were sparked by the sudden drop in first-class mail, the Post Office’s most lucrative product. Not long after he testified, the Great Recession began, and mail volume plunged as the economy cratered. The big companies that previously put billions of mail pieces in the USPS’s hands moved more of their correspondence and advertising online. Mail volume plunged from 213 billion mail pieces in 2008 to 112 billion mail pieces in 2025.

For the most part, legislators ignored the developing crisis. Reimagining and redesigning the Post Office for the 21st century is no easy task and inevitably will upset postal worker unions, mailers, and just about everyone else who enjoys the current system.

For several years, the USPS tried to replace this lost revenue by moving into the parcel delivery business. Legislators were mostly happy to indulge in the fantasy that the USPS could survive by delivering more packages. Never mind that doing so meant the agency would have to compete against savvy private sector competitors, such as UPS, FedEx, and DHL.

The COVID-19 crisis proved a temporary boon. Online shopping skyrocketed, and the USPS raked in billions delivering everything from cereal to sex toys. Congress ponied up $10 billion in general aid for the agency and another $3 billion to goad it to purchase electric vehicles. President Joe Biden also signed a 2022 law that shifted more than $100 billion in USPS retired workers’ healthcare costs onto Medicare.

But the USPS’s reprieve ended once the pandemic receded. The agency lost $6.5 billion in 2023, $9.5 billion in 2024, and $9 billion in 2025. The Post Office also has $166 billion in unfunded pension and retiree health benefits, according to David Marroni of the Government Accountability Office, who joined Steiner in testifying before the House Subcommittee on Government Operations.

The very same day Congress was hearing this grim testimony, the Wall Street Journal reported additional bad news for the Post Office. Amazon, one of the USPS’s largest customers, intends to “sharply cut the number of packages it ships through the U.S. Postal Service, a move that could cost the agency billions of dollars in much-needed revenue.” “The USPS will handle 20% fewer parcels from Amazon starting this autumn.”

The legislators who attended the nearly two-and-a-half-hour hearing asked a lot of questions about cost-cutting and floated various ideas to reduce the USPS’s costs, including reducing its more than 620,000 employees. Other legislators complained about delivery delays and rising postage rates.

Conspicuously absent was an in-depth conversation about a fundamental matter: What do Americans want from the USPS in the 21st century, and how should the country pay for it?

BILL MAHER PRESSES ELISSA SLOTKIN OVER DEMOCRATIC STAND AGAINST IRAN WAR

Passing postal reform legislation is inherently difficult. It has happened only a couple of times in the past half-century. Getting a bill passed this year will be exceedingly difficult due to the short legislative calendar. Representatives and senators alike will want to spend time this summer and much of the autumn back in their home states campaigning for reelection.

A year ago, this magazine cautioned, “Things that cannot go on forever don’t, and unless something drastic is done soon, the two-century-old Postal Service will run out of cash and shut down, and taxpayers could be left footing a bailout.” This statement was true then and becomes all the more so with each passing week. 

Kevin R. Kosar (@kevinrkosar) is a senior fellow at the American Enterprise Institute and edits UnderstandingCongress.org.