On March 17, 2026, Postmaster General David Steiner testified before the House Oversight Subcommittee on Government Operations and delivered a blunt warning: USPS could run out of cash in less than 12 months. If Congress doesn’t act, the Postal Service may not be able to pay employees or vendors by early 2027.
That’s a headline that gets your attention. But headlines don’t tell you what it actually means for your paycheck, your benefits, or your career. Let’s break it down.
What’s Actually Happening
The numbers are bad. USPS lost $9 billion in fiscal year 2025 and $9.5 billion in 2024. The first quarter of FY2026 alone saw a $1.3 billion loss. The agency has hit its $15 billion statutory borrowing cap — a limit Congress set in 1992 and has never adjusted.
The root cause isn’t mismanagement or laziness on the workroom floor. It’s structural. First-class mail volume has dropped from 213 billion pieces in 2006 to about 109 billion pieces today. That’s the Postal Service’s most profitable product cut nearly in half. As Steiner put it, no company could weather that much revenue loss.
On top of that, USPS is required to pre-fund retirement health benefits, pay into pension funds at rates OPM calculates using assumptions the Postal Service disputes, and cover workers’ compensation costs through a federal program (FECA) that doesn’t allow the cost-control measures private companies use. Those obligations total billions per year.
What Steiner Is Asking Congress For
Steiner laid out three options he called “doors.” The one he’s pushing — the “Goldilocks choice” — includes several reforms that don’t cut service or raise prices dramatically:
Raise the borrowing cap. The $15 billion limit hasn’t changed since 1992. Adjusted for inflation, it should be $30-40 billion. Increasing it buys time for longer-term fixes.
Reform pension cost calculations. USPS argues that OPM overcharges them for CSRS pension obligations by billions. Steiner says every union and stakeholder supports this reform.
Fix workers’ compensation (FECA). The Postal Service OIG estimates USPS could save over $692 million in just two years if allowed to use private-sector best practices for managing workers’ comp claims.
Allow investment of retirement funds. Currently, postal retirement funds sit in low-yield government bonds. Steiner argues that investing even a portion in a balanced portfolio could generate billions in additional returns.
He also floated raising stamp prices from 78 cents to around 95 cents, which he says would largely fix the controllable losses. Congress pushed back on that idea — Rep. Pete Sessions said a dollar stamp “does us no good.”
What’s at Risk for Employees
Your pension is safe
This is the most important thing to understand. Your FERS pension is managed by OPM, not USPS. It’s held in a federal trust fund that is legally separate from USPS operating cash. Even if the Postal Service ran out of money tomorrow, your pension is protected by federal law. The same goes for CSRS retirees.
Your TSP is untouchable
Your Thrift Savings Plan account is held under 5 U.S.C. § 8437(e) in a federal trust. USPS has zero access to it. It’s your money, period.
Payroll disruption is the real short-term risk
If USPS truly exhausts its cash reserves and Congress doesn’t act, the first thing at risk is payroll. Steiner said it directly: if employees and vendors aren’t getting paid, mail stops. This is the scenario Congress is trying to prevent, and it’s the main reason the borrowing cap increase is likely to happen — because the alternative is politically unacceptable.
Overtime and staffing changes
Regardless of what Congress does, expect USPS to keep tightening operations. The workforce has already shrunk by about 35,000 employees over the last four years. Last year’s VERA incentive saw 10,500 employees take early retirement. Steiner has not ruled out additional reductions in force, and overtime availability could tighten as management looks for savings everywhere.
Possible service changes
When asked if cutting delivery from six days to five is on the table, Steiner responded: “When you are in a crisis, everything has to be on the table.” This could affect route evaluations, staffing levels, and scheduling for carriers especially. Nothing has been decided, but it’s being discussed.
Contract negotiations
NALC formally opened contract negotiations with USPS on February 25, 2026. The current agreement expires this year. The financial pressure USPS is under will absolutely influence what management puts on the table. Don’t expect generous wage offers when the agency is telling Congress it can’t pay its bills.
What’s Likely to Happen
Congress is not going to let the Postal Service shut down. Both parties acknowledged this at the hearing. Rep. Sessions said “we’re going to have to make tough decisions,” and Rep. Mfume said “we cannot let the United States Postal Service die.”
The most likely near-term action is a borrowing cap increase. It’s the simplest legislative fix, it buys time, and it doesn’t require agreeing on the harder questions about service levels and pricing. The GAO also testified that USPS can’t fix this alone and Congress needs to act.
Longer-term reforms around pension calculations, FECA, and pricing authority will take more time but have bipartisan support in principle. The question is how fast Congress moves.
Calculate your FERS annuity across all four retirement paths, model your TSP growth, and see your exact take-home pay with current rates.
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This is a developing situation. We’ll update this page as Congress responds, new proposals emerge, or anything changes that affects your pay or benefits. Bookmark this page or check back on our blog for the latest.
Sources: PMG Steiner’s written testimony to the House Oversight Subcommittee on Government Operations (March 17, 2026), GAO testimony, and reporting from NPR, PBS, CNN, Federal News Network, and Government Executive.