WASHINGTON, D.C.: The new postmaster general of the U.S. Postal Service had warned in an interview that, unless Congress lifts a decades-old cap and allows the agency to borrow more money, it will go broke in a year.

Postmaster General David Steiner told The Associated Press that if it doesn't get the funds, the Postal Service may not be able to pay its employees or vendors by February 2027, jeopardising mail delivery services.

"How long are employees going to work and vendors going to show up if we're not paying them?" Steiner said in this week's interview.

The postmaster general is expected to testify before Congress later this month about the Postal Service's financial problems and the need to revise rules and regulations that he says are too restrictive. He specifically pointed to the US$15 billion borrowing cap that has been in place since 1990.

The Postal Service operates as an independent agency and is funded largely through postage and the services it provides. Steiner said the agency carries many of the obligations of a government institution — such as delivering mail six days a week to every address — but receives none of the advantages, including funding through the federal budget.

Steiner, who previously served as CEO of the country's largest waste management company and was a member of the FedEx board of directors, took charge of the struggling Postal Service last July. He said raising the borrowing limit would be the simplest step lawmakers could take right away to help the agency.

"That will give us time to make the changes we need and keep moving forward," he said.

He has also proposed expanding the Postal Service's revenue sources, including expanding its last-mile delivery services. Last-mile delivery refers to the final stage of transporting a package from a local distribution center to a customer's doorstep, which is the most labor-intensive part of the process.

For the 2025 fiscal year, the Postal Service reported net losses of $9 billion, even though operating revenue rose by $916 million, or 1.2 percent, largely due to its Ground Advantage shipping service. The agency had reported a net loss of $9.5 billion in fiscal year 2024.

Steiner said further reforms are needed, including giving the Postal Service authority to raise postage prices enough to offset losses. He said increasing the price of a first-class stamp to 95 cents — up from the current 78 cents — could help resolve the agency's financial difficulties. A decade ago, a first-class stamp cost 47 cents. Postal officials note that the price remains the lowest among industrialized nations and covers delivery distances up to ten times those in many other countries.

However, Steiner said an independent body created by Congress to oversee the Postal Service does not permit such increases.

He and other Postal Service officials have also urged changes to the agency's pension and retiree health benefit obligations, including allowing those funds to be invested in options other than Treasury bills.