Credit where it is due. The Postal Service Office of Inspector General reviewed the compensation, benefits, and bonus authority of 158 postal officers and executives for calendar year 2025 and found nothing to flag. No one exceeded the Executive Schedule Level 1 salary cap of $250,600. None of the eleven employees the Board designated as “critical senior executive” positions cleared 120 percent of the Vice President’s compensation, the $347,280 ceiling PAEA allows for a maximum of twelve such slots. The auditors made zero recommendations. Management, for its part, declined to comment, which in bureaucratic terms is the sound of an agency that has nothing to argue about.
A Rare Clean Bill
This is not nothing. The OIG’s CY2020 audit found a $5,833 monetary impact from noncompliance, a rounding error by federal standards but a finding nonetheless. This year there is no finding at all. The Postal Service is, in the narrow and specific sense that this audit measures, playing by its own rules. A watchdog publication built on the premise that institutions rarely get audited into a compliment owes it to its readers to say so when one does.
But an audit that measures compliance with a cap is not the same as an audit that asks whether the cap means anything. It measures whether water stayed inside the container. It does not ask what happens to the water that would have overflowed.
The Account That Never Closes
Buried in Table 2 of the report, well past the highlight box that most readers will stop at, is the answer. When an executive’s earned compensation would push them over their statutory ceiling, the Postal Service does not simply withhold it. It defers it into an interest bearing account and pays it out later, in whatever future year the executive’s total compensation happens to sit below the cap.
Deputy Postmaster General Douglas Tulino, who also holds the titles of Chief Operating Officer and Chief Human Resources Officer, a three hat arrangement that ought to raise its own eyebrows, deferred $198,650 in calendar year 2025 alone. His running balance sits at $515,462.18. Joseph Corbett is carrying a deferred balance of $538,887.66. David Steiner, the Postmaster General, has $86,695 sitting in the same holding pattern. This is not back pay owed for work not yet done. It is compensation already earned, already valued, simply held in escrow until the calendar catches up to the paycheck.
The Office of Legal Counsel blessed this arrangement back in 2013, and the Postal Service formalized it in an August 2023 pay policy. It is legal in the fullest sense of the word. It is also, functionally, a way of making a hard salary cap into a soft one. The cap does not limit what an executive is paid. It limits when.
Twelve Chairs, One Very Full Ledger
The PAEA’s critical positions exception exists for a defensible reason, the argument that the Postal Service competes for executive talent against private logistics firms that pay considerably more than the federal government ever will. Fair enough. But the mechanism built to enforce a ceiling on that competition has, in practice, become a mechanism for deferring rather than denying the money that would breach it.
Consider the company those eleven names keep. Chief Retail and Delivery Officer. Chief Logistics and Infrastructure Officer. Chief Technology Officer. Chief Information Officer. General Counsel. These are, by any measure, executive suite jobs at a nine figure operating budget, and the audit confirms their occupants are being compensated like it, just with the accounting spread across tax years instead of concentrated into one that would trip the wire.
None of this requires a conspiracy. It requires only that a statutory salary cap, once it collides with an actual executive compensation market, gets engineered around rather than enforced. The engineering happens to be perfectly legal, transparently disclosed in an annual report, and blessed by the Justice Department. That is precisely what makes it a story rather than a scandal. Scandals get investigated and end. This just continues, one interest bearing dollar at a time.
Solvency for Me, Not for Thee
Here is the number that belongs next to Table 2, and does not appear anywhere in the OIG’s report because it was outside the audit’s scope. The Postal Service closed fiscal year 2025 with a net loss of $9.0 billion under GAAP, an improvement over the $9.5 billion loss the year before only in the sense that a slower car crash is still a car crash. Controllable loss, the figure USPS itself prefers because it excludes costs management says it cannot influence, still came in at $2.7 billion, up nearly a billion dollars from the prior year. Compensation and benefits expense across the organization rose $1.7 billion year over year, the single largest driver working against the modest revenue gains from Ground Advantage and stamp price increases.
Postmaster General Steiner told the public in November that “the occasional appearance of financial progress is far outweighed by the reality of our significant systemic annual revenue and cost imbalance,” and asked Congress for changes to pension funding rules, the statutory debt ceiling, and workers’ compensation administration. He is not wrong that the agency’s finances are structurally broken. It is worth noting, in the same breath, that while the institution pleads for relief from Congress, its own compensation ledger keeps a small number of executives’ pay intact, merely rescheduled, interest accruing the whole time.
The Postal Service passed its compliance audit. It deserves to be told so plainly. But compliance with a cap that bends rather than breaks is a different achievement than the audit’s clean headline suggests, and an agency nine billion dollars in the red is not obviously the place where “we will pay you later, with interest” should be standard operating procedure for the corner office.
For more USPS OIG coverage, see Nashville’s Postal Honor System Just Failed an Audit — on four OIG reports finding that the compliance data Nashville reported to USPS headquarters bore little relationship to what auditors found on the floor — and The Pantry That Held a Federal Problem, on a joint OIG-DEA investigation that dismantled a drug distribution network running through the postal system.
