For starters, the Postal Service actually is operating in the black. USPS revenue exceeded operating expenses by $610 million in Fiscal Year 2016, bringing its total operating profit the past three years to $3.2 billion. Bear in mind that this is all earned revenue; by law USPS gets no tax dollars.
This impressive performance stems from two ongoing structural factors: As the economy gradually improves from the worst recession in 80 years, letter revenue is stabilizing. And as the Internet drives online shopping among Bay area residents and beyond, package revenue is rising sharply (up 16 percent in 2016), auguring well for the future.
There is red ink but it has nothing to do with the mail and everything to do with congressional politics. In 2006, a lame-duck Congress mandated that the Postal Service pre-fund future retiree health benefits.
No other public agency or private company has to do this even one year in advance; USPS must pre-fund these benefits decades into the future. That $5.8 billion annual charge not only accounts for the ‘red ink’, it disguises the actual profits postal operations have been generating for years.
