(This article appeared in the March/April 2026 issue of The American Postal Worker magazine)
This article is based on commentary by Postal Board of Governor Roman Martinez published in Bloomberg.
The Postal Service’s financial struggles are not simply a result of declining mail volumes in the digital age, they are also tied to congressional restrictions preventing the Postal Service from operating as the independent business it was designed to be, according to recent analysis conducted by former Postal Board of Governor Roman Martinez of a report published by the Offi ce of the Inspector General (OIG).
Since 2007, the Postal Service has accumulated more than $100 billion in recurring losses. While changes in mail volume contribute to these losses, congressional mandates that constrain the Postal Service’s operations have accounted for the majority of its financial woes.
In fiscal year (FY) 2025 alone, more than 70% of USPS losses resulted from factors outside of its control, including limited access to traditional financing and restrictive investment requirements for pensions and retiree health care, highlighting the need for financial reform.
The complications began with the Postal Reorganization Act of 1970, which transformed the service into an independent agency with a dual mandate: deliver mail to every address in America while remaining financially self-sustaining. But decades of legislative restrictions have made fulfilling that mission increasingly difficult.
Limited Access to Traditional Financing
Unlike private companies, the Postal Service cannot access traditional credit or capital markets. Its only line of credit comes from the Federal Financing Bank, and Congress set a $15 billion debt limit in 1991 that remains unchanged today, despite infl ation. That capacity is now exhausted. Adjusted for inflation, that limit would exceed $30 billion in current dollars.
Without access to financing, the agency faces challenges implementing its restructuring plan and covering $20 billion in expenses while processing approximately 350 million pieces of mail and packages daily.
Restrictions on Pensions, Retiree Health Care Investments
Another obstacle is how the Postal Service is required to fund pension and retiree health care obligations. The current law requires pension and retiree health benefit funds to be invested solely in Treasury debt. Martinez, citing the OIG report, says that if those funds had been invested in a traditional portfolio like other independent agencies, such as Amtrak or the Tennessee Valley Authority, are allowed to do, they would have shown an $800 billion surplus instead of a $100 billion defi cit at the end of FY 2022.
Additionally, when the Postal Service became independent in 1970, responsibility for funding pensions of employees who worked for the old Post Offi ce Department was unfairly distributed, according to the OIG. This created an annual payment mandate from the Offi ce of Personnel Management to reduce the pension fund deficit.
Correcting this payment mandate could generate a $95 billion surplus that, if transferred in the current fi scal year, could extend the life of the depleting retiree health benefits fund from approximately fi ve years to over 25 years.
The Need for Financial Reform
The 2022 Postal Service Reform Act, which the APWU helped draft, lobby, and pass, eliminated the mandate to prefund 75 years of future retiree health benefits within a ten-year period, providing much-needed relief. But there are still important legislative reforms addressing liquidity, pension fund investment, and operational and regulatory fl exibility needed to ensure the agency’s survival. ■
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