The U.S. Postal Service delivered a stark warning to Congress, saying its financial situation has become so severe it is relying on deferred retirement obligations to its employees to continue operating. Testifying before the Senate Homeland Security and Governmental Affairs Committee, Postmaster General David Steiner said the agency’s business model is broken and requires congressional action to remain sustainable.

The warning comes after years of mounting losses. According to Steiner, USPS has accumulated roughly $120 billion in net losses since 2007 as traditional first-class mail volumes have steadily declined in the digital age. Despite those changes, the agency is still required to maintain an expansive nationwide delivery network that reaches approximately 170 million addresses.

Steiner highlighted several costly obligations weighing on the Postal Service. Delivering mail six days a week costs about $3.4 billion annually, and roughly 70% of those routes lose money. Additionally, about 58% of the nation’s 18,000 post offices operate at a loss.

To conserve cash, USPS has already suspended nonessential spending on travel, office supplies, and consultants. The agency also plans to raise the price of a first-class stamp from 78 cents to 82 cents on July 12th, while still seeking reforms from Congress.

The Postal Service occupies a unique position in American life because it is expected to provide the same level of service whether someone lives in downtown Chicago or a remote rural community hundreds of miles from the nearest city. Unlike a private delivery company, USPS cannot simply abandon unprofitable routes or close large portions of its network when costs rise…

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These expectations under their current model of operations call into question the level of service Americans expect, as well as how much they’re willing to pay to maintain it. While Steiner’s plea for help is alarming, this is hardly the first time the severity of the Postal Service’s situation has made headlines.

The question now is what Congress should do, if anything. Specifically, if they should provide additional support, allow operational changes, or require the agency to continue absorbing losses in order to preserve universal service. Any large reform could affect everything from mail delivery frequency and post office availability to shipping costs for businesses that rely on USPS to reach customers.

Rural communities would likely face some of the biggest consequences due to their heavy dependence on the Postal Service for mail, packages, medications, and government communications. With the agency warning that its current approach is no longer sustainable, lawmakers may soon have to decide whether to fundamentally reshape the Postal Service or find new ways to fund the obligations it has carried for generations.

If Congress ultimately decides the Postal Service can no longer absorb billions of dollars in annual losses, something will have to change. That could mean higher postage prices, reduced delivery schedules, consolidation of post offices, or changes to service in less populated areas where routes are the most expensive to maintain.

Small businesses that rely on USPS for affordable shipping could face higher operating costs, while rural communities may have the most to lose if lawmakers target unprofitable routes for reform. Improving efficiency no longer appears to be a plausible pathway, as USPS leadership has repeatedly warned that the agency’s current model is not financially sustainable.

Congress has some big decisions on the horizon that will influence whether Americans continue receiving the same level of mail service they've come to expect or whether that service becomes more expensive, less frequent, or both.

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