USPS at a Financial Crossroads: GAO Warns the Clock Is Ticking
The latest report from the U.S. Government Accountability Office lands with a familiar thud but a sharper edge than before: the United States Postal Service is still running an unsustainable business model, and time is no longer a vague concept stretched over decades but a very real countdown measured in just a few fiscal years. Despite a sweeping ten-year strategy launched in 2021 and substantial congressional relief delivered through the Postal Service Reform Act of 2022, the GAO concludes that the fundamentals remain stubbornly misaligned. Revenue has risen, yes, but expenses continue to rise faster, liabilities keep piling up, and the gap between what USPS is required to do and what it can realistically pay for is widening rather than narrowing.
What makes this report particularly uneasy reading is not merely the size of the losses—tens of billions of dollars since 2021—but the structural nature of the problem. The GAO lays out how USPS has done many of the “right” things in a narrow operational sense: raising prices repeatedly, redesigning transportational routes, consolidating processing centers, shifting air mail to ground, and rolling out new products like Ground Advantage. These moves have generated savings and boosted certain revenue streams, yet they have not changed the underlying equation. The universal service obligation, six-day delivery, legally constrained pricing, binding arbitration in labor disputes, and federally mandated benefit programs all combine into a cost base that behaves very differently from a private logistics company. Even with modernization, USPS is carrying a model that assumes self-sufficiency while operating under rules that almost guarantee it will fall short.
The financial warning lights are flashing brightest around long-term obligations. Unfunded pension and retiree health liabilities, alongside capped borrowing authority that is already fully used, now exceed twice USPS’s annual revenue. The GAO notes that if USPS were to fully meet all required payments toward these liabilities, it could run out of cash as early as fiscal year 2026. That detail lingers. It turns abstract balance-sheet debates into a near-term operational risk, the kind that forces abrupt decisions rather than thoughtful reform. The partial relief provided by Congress in 2022—most notably the cancellation of $57 billion in missed retiree health prefunding payments—bought time, but it did not resolve the question of who ultimately pays, and how, when those obligations come due again later this decade.
Perhaps the most pointed critique in the report is aimed not at USPS’s actions but at what it has chosen not to show. In updating its strategic plan in 2024, USPS declined to publish forward-looking financial projections. The GAO argues that without publicly available projections for revenue and expenses, there are no clear targets, no transparent way to measure progress, and no credible framework for Congress or the public to judge whether the current path leads anywhere sustainable. USPS disagrees, suggesting such projections are neither required nor useful given the uncertainty involved. The GAO’s response is blunt: uncertainty is precisely why disciplined projections matter. Without them, strategy becomes narrative rather than evidence.
Stepping back, the report reads less like a technical audit and more like a policy ultimatum. The GAO reiterates that USPS cannot fix this alone. Congress must confront questions it has long deferred: what level of postal service the nation truly requires, how much of that service should be subsidized rather than self-funded, and what a sustainable, honest approach to retiree benefits looks like in a world where mail volumes continue to decline. Avoiding those choices has been convenient, but the cost of avoidance is now compounding. The report does not predict collapse, but it makes something clear in a quiet, bureaucratic way that is arguably more unsettling: without decisive structural decisions, the current model is not just strained—it is mathematically untenable.