USPS suspended all pension contributions on 9 April 2026 and warned Congress it faces a cash crisis within 12 months, citing $9 billion in FY2025 losses.
$118 billion — the cumulative losses the U.S. Postal Service has recorded since 2007 — is a number most policymakers can cite from memory. What is harder to process is what USPS is now telling Congress directly: at the current trajectory, the agency will run out of cash entirely within 12 months.
On 9 April 2026, USPS announced the suspension of all contributions to the Federal Employees Retirement System pension plan. Simultaneously, it filed with the Postal Regulatory Commission to raise the price of a First-Class Forever stamp by 4 cents, from 73 to 77 cents. Postmaster General Louis DeJoy sent a formal warning letter to Congressional leaders the same day, making the cash horizon explicit.
USPS · postal service crisis · pension suspension
The financial picture is acute. Net loss in FY2025 reached $9 billion; FY2024 losses totalled $9.5 billion; Q1 2026 added another $1.3 billion. The FERS contribution pause is projected to save approximately $2.5 billion through 30 September 2026 — enough to stabilise near-term liquidity, but not to address the underlying revenue problem. Mail volume has collapsed from a historic peak of 213 billion pieces annually in 2006 to approximately 109 billion today, according to USPS annual reports — the lowest level since the late 1960s and less than half the peak-year volume.
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“Net loss in FY2025 reached $9 billion; FY2024 losses totalled $9.5 billion; Q1 2026 added another $1.3 billion.”
Package delivery is the single revenue line still growing. E-commerce volumes lifted USPS parcel revenue 6.2% in FY2025. The problem is that parcel margins are structurally lower than first-class mail margins, and the competitive environment has changed decisively. Amazon Logistics now handles more than 70% of its own U.S. deliveries, per Morgan Stanley research published in March 2026. USPS competes for the residual commercial parcel market at unit economics that do not support the agency's cost base.
Key Takeaways
→USPS: USPS posted net losses of $9 billion in FY2025 and $9.
→postal service crisis: USPS posted net losses of $9 billion in FY2025 and $9.
→pension suspension: USPS posted net losses of $9 billion in FY2025 and $9.
→FERS: USPS posted net losses of $9 billion in FY2025 and $9.
The pension suspension created an immediate labour response. American Postal Workers Union President Mark Dimondstein called the move "an illegal raid on workers' retirement security" in a statement issued 10 April 2026. The National Association of Letter Carriers filed a formal objection with the Office of Personnel Management the same day. Both unions have retained outside counsel to assess litigation options. Active workers' pension rights under FERS are not cancelled by the suspension under current law — but the actuarial funding gap it creates is a liability that Congress would eventually need to address through legislation or appropriation.
USPS · postal service crisis · pension suspension
The political complication is bipartisanship. Any Congressional fix requires agreement on USPS borrowing authority — the agency is currently capped at $15 billion from the Treasury. Raising or eliminating that cap requires legislation. Stamp price increases require Postal Regulatory Commission approval, with a typical 45–60 day review cycle. DeJoy's 10-Year Plan (2021–2031) has achieved some cost reductions but has not reversed the revenue trajectory, and critics on both sides of the aisle have grown impatient with incremental reform.
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Restructuring advisers engaged by USPS in early 2026 — reported by Bloomberg on 11 April — have presented Congress with scenarios ranging from a five-day delivery model to a framework similar to Germany's privatised Deutsche Post. USPS has no legal authority to reduce service unilaterally; it is mandated to provide universal six-days-a-week delivery to every U.S. address. Changing that mandate requires legislation. Congress has not passed a major USPS reform bill since 2022, when it restructured the agency's pre-funding retirement obligations.
The harder question is whether a government entity whose core product is in permanent structural decline deserves indefinite taxpayer subsidy or whether the current model has simply reached its end-of-life. That is not a question the Postal Service can answer for Congress. It is the question the Senate Commerce Committee hearing on 22 April will force lawmakers to confront.
DeJoy's letter is on the record. Cash exhaustion within 12 months. Legislation or closure.
#USPS#postal service crisis#pension suspension#FERS#Louis DeJoy#Congress federal budget#stamp price increase#mail volume decline#postal reform#federal agency finance
USPS posted net losses of $9 billion in FY2025 and $9.5 billion in FY2024. The agency has recorded cumulative losses of approximately $118 billion since 2007, according to its own annual reports.
What happens if Congress does not act?
USPS Postmaster General Louis DeJoy warned in an April 2026 letter to Congress that the agency will exhaust its cash within 12 months without an increase in borrowing authority. USPS cannot legally stop delivering mail — it is required by statute to provide universal six-days-a-week service to all U.S. addresses.
Will the stamp price go up?
USPS has filed a regulatory request to raise the price of a First-Class Forever stamp by 4 cents, from 73 cents to 77 cents. The Postal Regulatory Commission must approve any rate change; the review process typically takes 45–60 days.
Are postal workers' pensions at risk?
The FERS contribution suspension does not cancel workers' pension rights under current law, but it creates an actuarial funding gap. APWU President Mark Dimondstein called the move "an illegal raid on workers' retirement security" in an April 2026 statement, and both major postal unions have explored litigation options.
