Recent USPS Financial Statement Presents Challenges

Recent USPS Financial Statement Presents Challenges
By Dan Mooney
NAPS North Central Area Vice President

The Postal Service’s FY26 Quarter 1 financial statement was released mid-February — let’s look at what it tells us. The results speak for themselves; as you read this, keep in mind the numbers. The USPS:

• ended FY22 with $23.6 billion in cash ($19.7 billion in unrestricted cash, $3.9 billion in restricted cash) and $10 billion of debt.
• planned to lose $4.5 billion in FY23. The agency had a net loss of $6.5 billion and ended FY23 with $21.6 billion in cash ($8 billion in unrestricted cash, $1.6 billion in restricted cash and $12 billion in short-term investments).
• planned to lose $6.3 billion in FY24. The agency had a net loss of $9.5 billion in FY24 and ended FY24 with $19.5 billion in cash and short-term investments.
• planned to lose $6.9 billion in FY25. The agency had a net loss of $9 billion in FY25 and ended FY25 with $15 billion in cash and short-term investments.
• plans to lose $8.1 billion in FY26. The agency estimates it will have $3.4 billion in cash and short-term investments at the end of FY26.

Now, keep in mind what Postmaster General David Steiner said this past December: “We certainly have a precarious cash position. You know, within probably 12 to 24 months, we are out of cash. It was clear to me that you couldn’t save your way to prosperity.” He added that, given the USPS’ free cash and its spending rate, “We’re basically out of cash in early 2027.”

Now, some of the highlights of the Quarter 1 financial statement, keeping in mind that, historically, Quarter 1 is our best financial quarter:

Net loss — $1.3 billion, compared to a net income SPLY (FY25) of $144 million, a $1.4 billion swing from SPLY.

Revenue — Total operating revenue is down 1.2% compared to SLPY. Remember, this is with price increases from SPLY (we cannot price raise/increase our way out of this deficit).

• First Class down 1.0%
• Marketing Mail down 2.7%
• Shipping and packages down .2%

Volume — Total volume down 9.4% (much of this equates to earned workload).

• First Class down 6.1%
• Marketing Mail down 10.9%
• Shipping and packages down 12.1% (we just built out our new network to accommodate shipping and packages).

Expenses — Total operating expenses increase of 4.6%

The USPS says it is in pursuit of further administrative and legislative reforms including:

• Changes in retiree pension funding rules for Civil Service Retirement System benefits (they have been asking for that for years)
• Diversification of pension asset investments (being able to invest in higher-return, slightly higher-risk funds instead of currently being required to invest in conservative, low-return funds)
• Raising the statutory debt ceiling (currently maxed out at the $15 billion limit)

At a February USPS Board of Governors meeting, Steiner and the board reiterated their argument that legislative and administrative reforms (previously listed), such as raising the agency’s $15 billion statutory debt limit (which is maxed out), are necessary to reverse these losses. How will Congress react when they are asked to increase our borrowing limit, after we have just lost over $18 billion the past two years, to reverse these losses?

Lastly, 1st Quarter last year, we had net income (profit) of $144 million and ended up losing $9.5 billion.

This year, we had a 1st Quarter loss of $1.3 billion.

How will we end the fiscal year with this start? Remember, the plan for FY26 was to lose $8.1 billion.

Keep an eye on the financial statements released by the Postal Service as FY26 unfolds. It looks like money will get very, very tight if things continue as planned. The push will be on to cut work hours and overhead. Follow the money; it usually tells the story!

Stay on the high road; the view and the people are much better.