Stamp costs could top $1 under urgent USPS proposal

WASHINGTON - The U.S. Postal Service is warning lawmakers that it is heading toward a major financial shortfall and could run out of money within a year if Congress does not approve significant changes.

Postmaster General David Steiner is scheduled to testify Tuesday before a House Oversight subcommittee, where he will outline the agency’s financial struggles and urge lawmakers to approve a series of reforms. 

Postmaster General could ask to raise stamp prices to $1

Big picture view:

According to his prepared remarks, seen by Reuters,  the Postal Service needs authority to raise stamp prices, expand its borrowing limit and revise several financial policies.

Among the changes Steiner will present as possible cost-cutting measures include eliminating Saturday mail delivery, closing certain post offices or significantly increasing postage prices. The price of a first-class stamp could rise to $1 or more, up from the current 78 cents, according to Reuters.

In July, stamp prices increased to 78 cents from 73 cents.

What they're saying:

"In order to ensure our survival beyond next year, we need ⁠to increase our borrowing capacity so that we don't run out of cash," Steiner's written testimony ​reportedly said. "The failure to do this could lead to the end of the Postal Service ​as we know it now."

US Postal Service could run out of cash this year

The backstory:

The U.S. Postal Service said it will run out of cash within a year unless Congress lifts a decades-old cap and allows the agency to borrow more money, the new postmaster general warned in an interview earlier this month. 

If it doesn't, the Postal Service might not be able to pay its employees or vendors by February 2027, with potentially dire consequences for mail delivery, Steiner told The Associated Press.

EARLIER: USPS raises stamp prices again — What to know

"How long are employees going to work and vendors going to show up if we're not paying them?" Steiner said in the interview.

Steiner, a former CEO of the nation’s largest waste management company and a former member of the FedEx board of directors, took over the struggling Postal Service last July. He said raising the borrowing limit is the easiest thing lawmakers can do immediately to help the agency.

"That will buy us the time to make the fixes we need to make, and we can sail on down the road," he said.

USPS’s net losses for the 2025 fiscal year totaled $9 billion, even though total operating revenue increased by $916 million or 1.2%, due largely to its Ground Advantage shipping service. Net losses in fiscal year 2024 were $9.5 billion.

Ultimately, other changes are needed, as well, Steiner said, including giving the Postal Service authority to raise postage prices high enough to cover losses. He said increasing the price of a first-class stamp to 95 cents, from today's 78 cents, would be enough to "fix" the Postal Service's fiscal woes. 

A decade ago, a first-class stamp was 47 cents, although postal officials note it's still the lowest price in the industrialized world and covers a delivery range that's ten times farther than in other countries.

"As changes in the mailing and shipping marketplace continue, these price adjustments are needed to achieve the financial stability sought by the organization’s Delivering for America 10-year plan," USPS said in an April news release. "USPS prices remain among the most affordable in the world."

But he said an independent agency created by Congress to oversee the Postal Service won't allow it, he said.

"If the Postal Regulatory Commission adopted our pricing model, problem solved," he said, adding how the package delivery side of the business could then subsidize the mail side.

Multiple postmaster generals over the past two decades have repeatedly asked Congress or regulators to change the various rules governing the Postal Service. In 2022, Congress did pass the Postal Service Reform Act, which ended a requirement that the agency prefund its retiree health benefits, but it left other constraints intact.

Meanwhile, the Postal Service has seen annual volume plummet from about 220 billion pieces to about 110 billion today as more people pay bills and communicate online.

"Take those 110 billion and put a 78-cent stamp on them. That's $86 billion of revenue that evaporated in 15 years," he said. "If either FedEx or UPS lost $86 billion of revenue, they would have no revenue."