The head of the U.S. Postal Service is warning that the agency could run out of money within a year if Congress does not allow it to take on additional debt, raising concerns about the future of nationwide mail delivery.

Postmaster General David Steiner said the Postal Service may struggle to meet payroll and vendor obligations by February 2027 unless lawmakers lift a long-standing borrowing cap and provide other regulatory relief. Steiner made the comments in an interview with The Associated Press ahead of planned congressional testimony later this month focused on the agency’s ongoing financial challenges.

Steiner pointed to a $15 billion borrowing limit imposed in 1990 as a major constraint on the Postal Service’s ability to manage its finances. He argued that increasing the borrowing authority would give the agency time to pursue longer-term reforms aimed at stabilizing operations.

The Postal Service operates as an independent federal entity that funds most of its operations through postage and service revenue rather than annual congressional appropriations. At the same time, it must meet statutory obligations such as delivering mail six days a week to every address in the country.

Steiner said those requirements create a unique financial structure in which the agency carries the operational responsibilities of a government service but lacks the budget flexibility available to most federal programs.

“If the public wants universal delivery every day, we can do it,” Steiner said. “But the question becomes who is going to pay for it.”

Steiner, who previously served as chief executive of a major waste management company and sat on the board of FedEx, took over leadership of the Postal Service in July. Since then, he said he has been assessing the agency’s financial outlook and potential policy changes that could improve its long-term sustainability.

One proposal involves expanding the Postal Service’s role in “last-mile” delivery, the final stage of transporting packages from distribution centers to customers’ homes. That portion of logistics is typically the most labor-intensive and costly, but it also represents a potential source of revenue if the agency partners with more shipping companies and retailers.

Financial reports show the Postal Service lost $9 billion during the 2025 fiscal year despite a modest increase in operating revenue driven partly by its Ground Advantage shipping service. The agency posted a $9.5 billion loss the previous year.

Steiner has also argued that allowing the Postal Service to raise postage rates more aggressively could address much of its financial shortfall. He said increasing the price of a first-class stamp from the current 78 cents to about 95 cents could significantly stabilize the agency’s finances.

However, rate increases must be approved by the Postal Regulatory Commission, an independent body created by Congress to oversee postal pricing and operations.

Steiner said broader structural reforms are also necessary, including changes to pension and retiree health benefit investment rules. Postal officials have long argued that current restrictions limit their ability to manage long-term liabilities.

Mail volume has also fallen dramatically over the past two decades as more Americans shift to online bill payments and digital communication. Annual mail volume has declined from roughly 220 billion pieces to about 110 billion today, eliminating tens of billions of dollars in potential revenue.

Postal leaders say those structural changes in how Americans communicate have placed growing financial pressure on the system, even as universal delivery requirements remain unchanged.

Congress previously approved reforms in 2022 that eliminated a mandate requiring the Postal Service to pre-fund retiree health benefits years in advance, a rule critics said contributed to persistent losses. But Steiner said other regulatory constraints remain in place and continue to weigh on the agency’s finances.

Lawmakers who oversee postal operations have not yet publicly responded to Steiner’s latest warning, though the issue is expected to come up during his testimony later this month. Advocacy groups have also raised concerns that the agency’s current financial trajectory could eventually lead to calls for a taxpayer bailout if structural changes are not enacted.