Alliance Report

April 21, 2026

Issue 26/6

The leading voice of nonprofits on postal issues for over 45 years.

The Alliance of Nonprofit Mailers is a 501 (c)(4) nonprofit organization established by nonprofits for nonprofits.

USPS Sends FY2027 Appropriations Request to Congress

The USPS on April 20, 2026, filed its Congressional appropriations request with the Postal Regulatory Commission (PRC) for FY2027. The USPS’ request totaled $424 million and included $35 million for free mail for the blind and overseas voting; $29 million for annual revenue foregone reimbursement and $382 million for revenue foregone appropriations not paid by Congress in prior years.

The revenue foregone appropriations are for prior reconciliation amounts due to the USPS but not paid by Congress for providing reduced rate mail prior to the 1993 Revenue Foregone Reform Act, which ended federal appropriation for reduced rate mail except for free matter for the blind and overseas voting.

Notably, the USPS did not request any “public service costs” appropriation, despite recent remarks made by the Postmaster General and others at the USPS. The PMG has repeatedly referred to the public service cost appropriation, which was included in the Postal Reorganization Act (PRA) in 1970, and amounts to about $460 million per year. The USPS has not requested or received any public service reimbursement since 1982, which means a total of about $19.78 billion has not been requested by the USPS over the past 43 years. Postmaster General David Steiner recently said at the Mailers Technical Advisory Committee (MTAC) meeting and other venues that he is not sure why the USPS stopped asking for the appropriation, and implied that it could be a legislative “fix” to help the USPS financial condition. Yet, the USPS again is not making the request in its FY2027 appropriations…

PRC Grants USPS Temporary Waiver on Making Required Payments

The Postal Regulatory Commission (PRC) on April 9, 2026, issued Order No. 9504, granting the USPS a temporary conditional waiver to the requirement that the USPS pay certain minimum amounts to the U.S. Treasury for certain retiree health benefits. The temporary waiver “will expire on September 30, 2030, unless the Commission rescinds it earlier or extends it,” the PRC said.

USPS had Petitioned the PRC for such Relief. The USPS in December 2025 had filed a request with the PRC to repeal its rules that the USPS pay certain minimum amounts for certain retiree benefits. The PRC in issuing the temporary order made clear that it is still evaluating the USPS’ petition and that granting the temporary waiver does not prejudge how the PRC may rule on the USPS’ petition once its evaluation is completed.

The temporary waiver means that while in effect, the USPS would not risk forfeiture of its previously provided Retirement Obligation Rate Authority if it uses those revenues for purposes other than making certain payments associated with retirement benefits, such as funding operating expenses and capital investment.

USPS Liquidity “Crisis…” The PRC in its Order referenced statements made by the Postmaster General during his recent Congressional testimony that the USPS may be facing an imminent liquidity crisis. It said the USPS’ claims “are serious and troubling.” “They are serious and troubling because the public relies on the mails,” the PRC said, “[a] disruption of the mails would harm the public.” It also said the USPS’ claims are serious and troubling “because the Postal Service has received extraordinary financial relief from Congress and the Commission in recent years.” It detailed funds the USPS received in 2020 and 2022 from Congress, as well as the additional rate authority given the USPS starting in 2021.

“At the same time that the Postal Service has received this extraordinary financial relief from Congress and the Commission,” it said, “the Postal Service has continued to implement its Delivering for America (DFA) Plan.” “Nearly 6 years into this 10-year plan ending in 2030,” the PRC said, “the available evidence shows materially worse financial results and deteriorating service performance for the American public and businesses that rely on mails.”

The PRC said that while it continues to evaluate the USPS’ current “claims related to its financial situation, one thing is clear: the Postal Service’s current financial trajectory is not sustainable.” The PRC said its temporary waiver of the restrictions “gives the Postal Service some breathing room and flexibility to execute its contingency plans to avoid running out of cash and ceasing its service to the American public.”

The PRC addressed the USPS’ recent statements that it could run out of cash as early as 2027. “[W]hile the Postmaster General’s status quo scenario illustrates a theoretical risk,” it said, “the Postal Service’s demonstrated ability to manage cash through contingency actions, combined with its current cash position and operating cash flow, indicates that it is possible that the Postal Service could maintain its liquidity for some time.” The PRC took note of the USPS’ statements in financial documents that “[i]f [its] operations do not generate the liquidity [it] require[s], [it] may be forced to reduce, delay, or cancel investments in technology, facilities, and/or transportation and mail processing equipment . . . .” It said the USPS’ “continued capital spending and interest in increasing its capital spending suggest that the Postal Service might have sufficient funds to invest in capital projects without facing an imminent risk of lacking sufficient liquidity to pay its operating expenses, such as paying employees and suppliers. ”

The PRC said that “acting at this time affords the Postal Service several months to consider whether and to what extent to use the Temporary Conditional Waiver and to incorporate the availability of the Temporary Conditional Waiver into its planning.”

USPS Wastes No Time… On the same day the PRC Order was published, the USPS posted an article announcing that effective April 10, 2026, it will temporarily suspend its payments to the Federal Employees Retirement System (FERS).

“There will not be any immediate detrimental impact to our current or future retirees if normal FERS cost payments are temporarily withheld,” said USPS Chief Financial Officer Luke Grossmann. “The risk to the Postal Service and the American public from insufficient liquidity for postal operations dramatically outweighs any longer-term risk to the pension funds from not making the currently due payments,” he said, noting the USPS “will continue to transmit to OPM employees’ contributions to FERS and will also continue to transmit employer automatic and matching contributions and employee contributions to the Thrift Savings Plan.” “It must be noted that our pension systems remain much better funded than other agencies,” Grossman said.

The USPS “pays about $200 million every other week to OPM for the FERS annuity. Suspension of payments, effective April 10, will free about $2.5 billion in the current fiscal year,” it noted.

PRC Rejects USPS’ UAA Cost Methodology Proposal

The Postal Regulatory Commission (PRC) on March 30, 2026, rejected the USPS’ proposal to change the cost methodology for presort mail to included Undeliverable-as-Addressed (UAA) mail costs determined by a specific formula. If approved, the USPS’ proposed changes would have reduced presort discounts for First-Class Mail and Marketing Mail in the future.

The PRC rejected the USPS proposal (without prejudice) for lack of sufficient data to support its position. The USPS could at a later date re-submit the proposal if it conducts updated studies that produce the UAA data the PRC felt is needed to justify the USPS position, but it would take the USPS some time to do so.

USPS Executive Retirements & Appointments

The USPS has announced the pending (end of April) retirement of Sharon Owens, USPS Vice President, Pricing & Costing; retirement of Dr. Joshua Colin, USPS Chief Performance Officer and Executive Vice President; and appointment of Pete Routsolias as Chief Logistics Officer and Executive Vice President (formerly Sr. Vice President of Logistics). In addition, long-time postal manager Randy Workman, most recently working in the USPS’ Operations Integration and Performance Excellence team, announced he will be retiring on May 1, 2026, and Dale Kennedy, USPS Manager, Product Classification, is likely retiring in July 2026.

USPS Publishes 2025 Household Mail Study

The USPS on April 1, 2026, published the 2025 Household Mail Study, its annual study that examines the types and volumes of mail sent and received by U.S. households, tracks trends in mail usage over time, and compares mail usage across household demographic characteristics. “The report examines these trends in the context of changes and developments in the markets in which the U.S. Postal Service operates: correspondence, transactions, advertising, periodicals, and package deliveries,” it notes.

“The Household Mail Survey, conducted each year since 1987, collects information about households’ use of mail and how usage changes over time,” the USPS said, noting the HMS consists of two surveys of households – a “preliminary recruitment survey which gathers information about household demographics as well as information about methods the household uses to pay and receive bills and statements, household attitudes toward mail advertising, and other information related to their use of the mail,” and a “mail diary in which households report the volumes and types of mail they received and sent during a given week.”

Some highlights from the 2025 study:

About 80% of mail received by households are sent by non-households (businesses and organizations)
Over the past ten years, per-household volumes of correspondence mail declined 31%, transaction mail declined 51%, advertising mail declined 40%, and periodicals mail declined 45%.
Packages increased 29% from 2015 to 2025. Packages still declined from 2020 to 2025, albeit by the smallest percentage at 12%.
Advertising mail accounted for 62% of all household mail in 2025
64% of advertising mail sent to existing customers is read by the recipients, and for 25% of this mail, the recipient says they are very likely to respond to the mailing. Reading and response rates are lower for prospective customers – those that do not have a past relationship with the mailer – but they are still an indication that direct mail continues to be an effective way for businesses to expand their customer base.
Commercial Marketing Mail received by households declined by 24% over the past five years while Nonprofit Marketing Mail declined by 20%.
Social organizations, “including charities and political groups,” were the third largest industry sending Marketing Mail.
Younger households saw the largest decline in receipt of Marketing Mail over the past five years
Households reported that they were very likely to respond to 19% of Nonprofit Marketing Mail pieces, 15% of First-Class advertising pieces, and 12% of Commercial Marketing Mail pieces.

Into the Postal Weeds…

For those who live in the “postal weeds,” and are looking for news on mail entry, preparation, discounts, incentives, and more, this column in the Alliance Report will be right up your alley! We won’t go all the way into the weeds…but we will offer up highlights on useful resources and mailing standard changes.

July Price Change – USPS Webinar Posted. The USPS has posted its April 17, 2026, webinar on the proposed price changes for July 2026 at https://postalpro.usps.com/node/15108.

Parcel Dimension Compliance. The USPS on March 31, 2026, published final rules in the Federal Register expanding the current requirements to include accurate parcel dimensions in a manifest, effective July 12, 2026. The USPS said the July 12 changes will be the first phase of the implementation, when the USPS will require accurate parcel dimensions in the manifest, and it will “evaluate data, review customer activity, identify thresholds, and implement and test trusted systems accuracy.” The USPS will not assess the Dimension Noncompliance fee for omitting or inaccurate reporting the dimensions until Phase Two, which it said is tentatively scheduled for early 2027. In the interim, however, the USPS will continue to charge the Dimension Noncompliance fee for parcels that exceed 1 cubic foot or 22 inches in length if the parcel’s dimensions are omitted or inaccurate in the manifest. The USPS said before it implements Phase 2, it will establish and communicate protocols to the industry. The USPS on April 8, 2026, published new compliance rules on PostalPro.

Alliance Report 26-06, April 21, 2026