The U.S. Postal Service could sharply reduce its number of post offices and scale back some mail services unless Congress intervenes, Postmaster General David Steiner warned Tuesday.

Speaking at a Board of Governors meeting, Steiner said USPS expects to have plans for potential reductions ready in the first quarter of 2027. He plans to present them to government leaders as lawmakers consider whether to address the agency’s finances.

The warning came as USPS reported a [$6.5 billion net loss for fiscal 2026](https://about.usps.com/newsroom/national-releases/2026/1110-usps-reports-fiscal-year-2026-results.htm), an improvement from a $9 billion loss the previous year. Operating revenue rose 3% to $82.9 billion, but volumes continued to decline in First-Class Mail and Shipping and Packages.

“We will need to make drastic changes in the number of post offices and marketing mail service levels,” Steiner said, adding that the agency must find cash to meet its obligations.

Steiner said Congress could change retirement funding requirements and other mandates, provide money to cover those obligations or accept reduced service. He warned that the fund for retiree health benefits is expected to run out within five years.

USPS is asking lawmakers to raise its $15 billion borrowing limit, unchanged since 1992, and revise pension funding rules. It also wants more flexibility to invest retirement funds and changes to workers’ compensation claims administration.

Board Chair Amber McReynolds said the 2022 Postal Service Reform Act, which ended a requirement to pre-fund retiree health benefits decades in advance, was an important first step but did not resolve the agency’s long-term problems. “Ultimately, our fiscal cliff is here,” she said.

USPS has reduced 19 million work hours, consolidated transportation networks and raised prices. It has also halted nonessential hiring and deferred about $2.6 billion in retirement contributions this year, although those obligations will eventually come due.

Steiner took over last year after Louis DeJoy resigned amid bipartisan criticism. Before leaving, DeJoy announced plans to eliminate 10,000 jobs and confirmed USPS was working with the Department of Government Efficiency, then led by Elon Musk.

President Donald Trump has previously raised the possibility of privatizing USPS or merging it with the Commerce Department. The agency employed more than 530,000 workers nationwide last year.