You may be curious as to how USPS continues to operate, while having expenses that are higher than revenue. The answer is complicated, but in general, USPS has used three main strategies to maintain enough cash to remain operational. 

1. USPS has not made all the payments related to retirement benefits for its active and retired employees. This has helped USPS retain cash, but these obligations will need to be funded.
2. It has taken other steps to preserve its cash on hand, including limiting capital investments for many years, deferring maintenance, and borrowing money from the Department of the Treasury.
3. It has received appropriations, including a $10 billion appropriation in 2021 from the Coronavirus Aid, Relief, and Security (CARES) Act and $3 billion from the Inflation Reduction Act (IRA) of 2022 related to purchasing electric vehicles and related infrastructure.

Although it has been operating at a net loss for years, USPS’s financial condition may worsen over the next year or two. Recently, USPS has taken steps to maintain its liquidity and has asked Congress to pass three legislative initiatives: (1) increase its borrowing authority, (2) reform and resume the public service reimbursement appropriation, and (3) allow it to invest its retirement assets in a diversified portfolio.

For more detailed information on the financial history of the Postal Service, see our report on this topic. 

We also have a report that provides a list of potential solutions for closing the gap between USPS revenues and expenses.