Does USPS Make Money? (All You Need to Know)

When we buy postage or supplies from USPS, we are paying into something much larger than our individual Post Office. The USPS is a massive, sprawling agency with hundreds of distribution centers and hundreds of thousands of employees in every state.

That being said, you may wonder- does USPS make money? Does this agency turn a profit or have they been headed in the wrong direction financially? I have the answer you seek, so keep reading!

Does USPS Make Money In 2022?

While the United States Postal Service reported $77 billion in revenue for 2021, which was an increase of 5.3 percent from the previous year, the agency still reported a $4.9 billion net loss overall. This was the 15th year in a row the USPS reported a net loss, though those numbers are trending downward in 2022.

To learn more about how USPS is funded, if the agency is in debt and in financial trouble, and even whether the USPS is truly self-sustaining, keep going. I’ve got everything you need to know!

How Is USPS Funded?

The US Postal Service is fully funded by postage, supplies, and service sales, which have drooped in recent years.

This is due to society’s greater reliance on technological means of communication, as well as the 2020 COVID-19 pandemic, which stalled many physical mailings even further.

However, in March 2022, Congress did pass a relief package of $50 billion for the USPS.

The money will be released to the USPS over the next decade, coinciding with Postmaster General Louis DeJoy’s 10-year Delivering for America plan.

Indeed, it was a rare moment of public funds being used for this independent agency, but one that comes as the USPS is turning over a new leaf financially.

How Much Money Does USPS Get From the Government?

The United States Postal Service, for the most part, receives zero taxpayer dollars for its operation.

That’s because while it is connected to the Executive branch of government (the same as the President), it’s considered an independent agency.

Basically, the President has no direct control over who is appointed Postmaster General (though he or she can pick the board members who nominate and vote for the role).

However, as mentioned above, times are really tough for the USPS, with the agency coming dangerously close to running out of cash.

So, in late winter 2022, Congress passed a bill that would give the Postal Service $50 billion in aid over the next 10 years.

Is the US Postal Service in Financial Trouble?

Is the US Postal Service in Financial Trouble? USPS

The USPS has been in financial trouble since 2006. Before then, USPS was posting billions of dollars in profit, so what changed?

Well, in n 2006, Congress passed a bill that put USPS on the hook for future retirees’ health benefits.

This was worth 75 years of healthcare and pensions, to be collected over the course of 10 years.

Immediately, the Postal Service began to show signs of financial strain. In the first year alone, USPS reported a loss of $5 billion, and it’s been a downward spiral for the organization since.

In fact, the USPS was near the breaking point when Postmaster General Louis DeJoy unveiled his 10-year plan, Delivering for America, in 2021.

This plan included higher prices both permanently (First-Class Letter and Package) and temporarily (Priority Mail shipping, during the Winter Holiday season).

Also, and most controversially, the plan called for a slowdown of First-Class mail- where once it maxed out at a three-day delivery window, now it could take up to six days.

Additionally, it called for the end of pre-funding retirees’ health and pension benefits – a bill that passed and was signed into law by President Joe Biden in April 2022.

While the plan was unpopular with some lawmakers and analysts, it is already showing signs of working.

In fact, by the end of 2021, the USPS’s net losses were half what they had been the previous year.

As well, Chief Financial Officer Joe Corbett said he expects USPS to “break-even by 2023 or 2024.

So, while times have been tough for the USPS, it does appear that better days are ahead.

When Was the Last Time USPS Made a Profit?

The last time the USPS made a profit was from 2003 to 2006 when the agency reported $9.1 billion in profits.

This was before George W. Bush, and the Republican-majority Congress passed the mandate that stipulated the USPS had to prepay on retirees’ healthcare and pension.

This was in addition to existing retiree’s healthcare and pension, which resulted in a $5 billion net loss for 2007.

The total amount the USPS had to put aside was something like $11.1 billion.

Is the USPS Self-Sustaining?

For the years 2003 to 2006, the US Postal Service was self-sustaining, but after 2006, things took a steady downturn.

Plainly, the burden of having to set aside money for future retirees’ healthcare and pensions was too much for the USPS to bear.

Fortunately, though, General DeJoy’s 10-year plan, and Congress’s rolling back of the 2006 law, have made it possible for the USPS to see its way toward self-sustenance once again.

To know more, you can also see our posts on USPS statistics, USPS vs DHL, and USPS vs FedEx.

Conclusion

The United States Postal Service does not make money like it used to, recording 15 straight years of net losses.

However, with Postmaster General Louis DeJoy’s 10-year Delivering for American plan, including the recent passing of a law that rolls back a pre-funding mandate, USPS could see profits in 2025 and beyond.

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Florence Howard

Florence Howard has been freelance writing for over a decade, and has a vocational background in retail, tech, and marketing. Outside of work, she enjoys listening to rock and metal, and playing with her dog and cat.

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