WASHINGTON — The U.S. Postal Service is preparing to shrink its retail network and scale back marketing mail service unless Congress moves to fix the agency's finances, Postmaster General David Steiner told the Board of Governors on Tuesday. The warning came as the agency reported a $6.5 billion net loss for fiscal 2026 — an improvement over the $9 billion loss posted the year before, but still a staggering sum that officials say leaves the mail service in a precarious position. "We will need to make drastic changes in the number of post offices and marketing mail service levels," Steiner said during the board meeting. "And we will need to look at other areas to generate the cash we need to meet our obligations to our employees and to the American public." Steiner said the agency is also pressing lawmakers for legislative action to establish "a better and more durable business model" for the Postal Service. He indicated that fully developed plans for the potential service reductions would be ready in the first quarter of 2027 and presented to government leaders as Congress weighs whether to intervene. The Postal Service has long been hobbled by a 2006 law requiring it to pre-fund retiree health benefits decades in advance — a burden no other federal agency or private company carries. Critics on the right have argued for years that the agency's monopoly on first-class mail and its bloated administrative structure have made it ill-equipped to compete in a modern delivery market dominated by UPS, FedEx and Amazon. Steiner's remarks signal that the agency intends to force the issue rather than wait for a legislative fix that has eluded Congress for years. The threat of closing post offices carries particular weight in rural communities, where the local branch often serves as a civic hub and a lifeline for prescription deliveries, Social Security checks and small-business shipping. Marketing mail — the bulk advertising mail that many households discard unread — represents a significant revenue stream for the agency. Reducing service levels there could ripple through the direct-mail advertising industry and further erode the Postal Service's volume-based business model. The agency's financial picture has improved modestly, but officials made clear that cost-cutting alone will not close the gap. Without congressional action, Steiner warned, the Postal Service will be forced to make hard choices about which communities keep their post offices and which mail products remain viable. Lawmakers now face a familiar choice: pass a comprehensive postal reform package, or watch the agency take unilateral steps that could reshape mail delivery across the country. Steiner's timeline puts the pressure squarely on the new Congress to act before the first quarter of 2027.