How Long Has The Postal Service Been Losing Money

New York (CNN Business)Even by 2022 standards, the United States Communication Service is having a terrible yr. With election day less than a month inaccurate, concerns are mounting that the USPS lacks the bandwidth to process the likely historic number of postal service-in ballots.

But, paradoxically, business for the US Postal Service is booming. The agency netted a prescribed cash flow of almost $2 billion in the nine months ending June 30. The authority has been hard cash-flow-positive for the last three years, partly because of increased package deliveries and steady rates of first class delivery.

How is it, then, that the country's about popular government agency is earning millions of dollars, while also facing one of the greatest financial crises in its history? The answer to the United States Postal Service fiscal oddities can be derived back to a single source: Congress.

The USPS is not like strange government agencies

Established in 1775 to promote the free exchange of ideas across the colonies, the One States Communication Service is among the country's oldest government institutions -- and yet information technology operates with few of the business enterprise benefits of organism a bureau, while still bearing many of the costs.

For one, unlike other government agencies, the USPS is not allowed to receive taxpayer funding, and rather must depend on tax income from stamps and bundle deliveries to back itself.

On time delivery of first-class mail, which contains ballots, plummets

And different private courier services much as UPS and FedEx, the US Postal Service does not get to curing its own prices or excise unprofitable routes. Instead, United States Congress sets the postage rate and stipulates that the postal service delivers to all homes in U.S.A-- including a remote community in the Grand Canyon, where the mail service is delivered by scuff.

These uncomparable rules help bear on the USPS as a public service, rather than a occupation.

"UPS and FedEx depend on the Mail service to go where they don't want to go," said Oregon Emblematical Peter DeFazio, author of a USPS reform bill. "If you wanted to run it as a business, you'd rid of the least useful routes, you'd cut out all of arcadian routes. There's atomic number 102 substitute for the Communication Service for often of the country."

Still, this combination makes for a difficult model: the USPS is depicted object to law-makers oversight of another federal agencies, but does non get any taxpayer revenue; information technology competes with confidential messenger services like-minded a turn a profit-seeking party, but cannot set its own schedule.

A 2006 law makes the USPS' problems worse

Scorn these unique requirements, the USPS continued to net positive cash flows, and was actually lucrative until 2006 -- at which place Congress passed the Postal Accountability and Enhancement Act during a lame-douse session.

Under this law, the USPS was requisite to pre-fund 75 years worth of retiree wellness care benefits in the span of roughly 10 days.

"There's no other entity on Earth that does anything like that," DeFazio said. "When I talk about it, people say IT's utterly absurd."

Sol far, the USPS has paid $20.9 one thousand million but it's also deferred on some $47.2 billion as of September 2022. Tranquil, those delayed payments tranquil depend as an expense -- meaningful that regardless of the means's financial successes finished the last few eld, its balance sheets will retain to report large losses.

DeJoy: Trump 'incorrect' that USPS isn't equipped to handle mail-in voting

The Communication Service's debt "is a direct result of the mandate that it must ... pre-fund the retired person health plan," the USPS Inspector General wrote in 2022.

Some policymakers see a chance for reform without resorting to the controversial cost-cutting measures from Postmaster General Louis DeJoy. One such answer is a planned beak from DeFazio that would do away with the retirement pre-financial support requirement.

Others object to the very idea of the US Postal Service funding itself with its own revenue.

"We don't tell [the Section of Defense] to go sell weapons to make tax income to serve the American people," California Voice Ro Khanna said. "We don't sound out that about our health service, or the National Institute of Health. So why should we bear a different standard for the communication service?"

-- Chris Isidore contributed to this report