Title: USPS's Financial Condition Struggles Under an Unsustainable Business Model Description: The U.S. Postal Service is a quintessentially American institution. But during the last 20 years or so, USPS has struggled financially with rising costs and declining revenues from mail volumes. What's the current status of USPS financial health and what's being done about it? We learn more from GAO's Dave Morroni. Related Work: GAO-26-107336, U.S. Postal Service: Action Needed to Fix Unsustainable Business Model Released: December 2025 {Music} [Dave Marroni:] USPS and Congress really need to act soon to resolve the fundamental issues that make USPS's business model unsustainable. [Holly Hobbs:] Welcome to GAO's Watchdog Report. Your source for fact-based, nonpartisan news and information from the U.S. Government Accountability Office. I'm your host, Holly Hobbs. The U.S. Postal Service is one of the best-known agencies in the federal government. It's a quintessentially American institution that dates back to 1775. But during the last 20 years or so, USPS has struggled financially with rising costs and declining revenues from mail volumes. So what's the current status of USPS financial health and what's being done about it? We'll find out more from GAO's Dave Morroni, who has a new report out on this issue. Thanks for joining us. [Dave Marroni:] Happy to be here. [Holly Hobbs:] So, Dave, what is going on with the Postal Service's financial condition? [Dave Marroni:] So the Postal Service is in poor financial condition and it has been for a very long time. It has been losing billions of dollars for many years, $22 billion since FY 21. And that's as mail volume continues to decline. So, it's in really poor shape. [Holly Hobbs:] It can't just be mail volume. What else is contributing to these financial losses? [Dave Marroni:] So it is rising expenses. Compensation for postal workers continues to grow. Other expenses continue to rise with inflation. It also has really large debt and unfunded liabilities for things like pensions and retiree health benefits. And those continue to grow as well. [Holly Hobbs:] So what all is the Postal Service doing about this? [Dave Marroni:] So USPS has been trying to take action. Since 2021, it's had a 10-year strategy to really transform how it does business, to try and increase its revenues through things like increasing the cost of stamps, reducing expenses by changing its processing and transportation networks. And it's even asked Congress to take action, which Congress did in 2022, to provide some financial relief. So it is trying to transform. [Holly Hobbs:] So have those efforts worked? [Dave Marroni:] So it's been a real mixed bag. There has been some progress. USPS has been able to increase some of its revenue and reduce some expenses. But the fundamental problem is still there. Its expenses continue to exceed its revenue. It continues to lose billions of dollars. And its unfunded liabilities and debts are still growing. So the bottom line its business model is still unsustainable even after this strategy. So, something needs to change and soon. [Holly Hobbs:] Are there other options for USPS? [Dave Marroni:] There are a lot of options. Wide range. We talked to a number of stakeholders in the postal world and things USPS could do could keep on going with its current strategy, but make some adjustments. It could take actions, maybe like consolidate mail delivery to centralized locations. Congress could take actions by reducing requirements for how much service USPS has to provide, appropriating money to USPS. Right now, USPS is supposed to be financially self-sustaining. It doesn't get taxpayer money, by and large. But there is no silver bullet here. Each of these options has some significant tradeoffs to it. So it's not an easy path, but some fundamental choices do need to be made. [Holly Hobbs:] Is there something unique about USPS that has put it in a situation that other federal agencies aren't in? [Dave Marroni:] So USPS is very unique. It is an independent establishment of the executive branch. And so its business model is it does not get money from Congress, except for some very limited things. Its revenue that it gets from delivering mail, selling packages, other services they provide are supposed to be enough to pay for its expenses. So that's very different from other agencies. It's supposed to operate more like a business. {MUSIC} [Holly Hobbs:] So the U.S. Postal Service has been working to improve its financial condition. But even so, it continues to struggle with increasing costs and declining revenues. So, Dave, what more do we think the Postal Service should be doing to address its financial condition? [Dave Marroni:] So it should continue to take whatever actions it can within its control to right the ship. And as part of that, it does have its 10-year strategy. It recently updated that strategy, which is a good step. But when it did, it didn't include financial protections for where it expects to be in the future, how it'll increase its revenues, how it will reduce its expenses. Those are really important to have those type of projections, to have targets to show your progress and communicate how you doing to Congress and to the public. So, USPS really should have those in place, and we're recommending that they do that. [Holly Hobbs:] So that's what they can do. But some of the challenges we've discussed are outside of USPS control. Did we ask Congress to take any action? [Dave Marroni:] So we've previously asked Congress to consider some fundamental issues when it comes to the Postal Service, because it is outside of USPS control--things like the level of postal service that the nation requires. What are the service levels that USPS is going to have to provide? The extent to which USPS should continue to be financially self-sustaining. Are there some areas where it makes sense for Congress to provide some funding? And is the structure of USPS right now--as an independent, almost business-like entity--does that continue to make sense? These are all fundamental issues that go to the heart of USPS's business model. Congress did take some actions in response to our suggestions back in 2022 as part of the Postal Service Reform Act, but we think more action is needed and soon. So, we are reiterating these suggestions to Congress in this report. [Holly Hobbs:] Last question. What's the bottom line of this report? [Dave Marroni:] Bottom line is USPS continues to be in poor financial condition despite all the recent efforts by the Postal Service and Congress. Time is short to get this right. So USPS and Congress really need to act soon to resolve the fundamental issues that make USPS's business model unsustainable. [Holly Hobbs:] That was Dave Marroni talking about our new report on the U.S. Postal Service's financial condition. Thanks for your time, Dave. [Dave Marroni:] Thank you. [Holly Hobbs:] And thank you for listening to the Watchdog Report. To hear more podcasts, subscribe to us on Apple Podcasts, Spotify, or wherever you listen. And make sure to leave a rating and review to let others know about the work we're doing. For more from the congressional watchdog, the U.S. Government Accountability Office, visit us at GAO.gov.