US Postal Service tells Congress it needs help, running out of cash

By David Shepardson

WASHINGTON, June ‌24 (Reuters) - U.S. Postmaster ​General ​David Steiner told Congress on Wednesday that the financially struggling agency has a broken business model and needs help from ‌lawmakers to turn around its operations.

"The bottom line is that ⁠we are out of cash. We are borrowing from our employees’ retirement funds to ‌continue operations," Steiner's written testimony ‌before a U.S. Senate committee said, warning it could run out of operating funds in months if it stopped deferring obligations. "The Postal ​Service has a broken business model and action is needed by Congress to fix it."

Steiner wants Congress to compensate it for money-losing operations ⁠and make other reforms. In March, Steiner said the Postal Service was hiring restructuring advisers to help ​address its financial troubles.

One key question is whether USPS should continue to deliver to 170 million addresses six days ​a week, which costs $3.4 billion annually -- ‌and 70% of those routes lose money, Steiner said. About 58% of its 18,000 Post Offices also lose money.

The ⁠Postal Service has reported net losses of about $120 billion since 2007, as first-class mail, its most profitable product, has fallen sharply with the shift to digital ⁠communication even as the agency must maintain costly nationwide delivery operations.

USPS said last month ​it was suspending non-essential spending on travel, office supplies and consultants. Steiner told officers in a memo the moves were "to protect core operations and ensure we can ‌continue meeting all essential obligations."

Last month, the Postal Service said it would temporarily suspend employer payments for a ‌federal pension program and plans to raise the price of first-class mail stamps ⁠to 82 cents from 78 ‌cents, effective July 12.

Suspending ​employee pension contributions will conserve $2.5 billion through September 30 and potentially $15 billion through 2030.

(Reporting by David Shepardson; Editing by ‌Chizu Nomiyama )

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