In their opening statements before a House committee, Postmaster General Louis DeJoy and USPS board of governors chairman Mike Duncan said the Postal Service’s finances are in dire straits.
Both men said the USPS was nearing $11 billion in losses for 2020.
"Without dramatic change, there is simply no end in sight, and we face an impending liquidity crisis that threatens our ability to deliver on our mission to the American public," DeJoy said.
But these numbers need context: A CNN analysis of USPS financial records finds the losses are primarily due to a 2006 law that forces the USPS to pre-fund all retiree health care costs for the next 75 years.
If USPS didn't have to pre-fund these benefits, its finances would be radically different.
The agency actually makes money from mail delivery, and posted nearly $2 billion in positive cash flow between January and July of this year. (These numbers have been consistent for years.) But USPS reports large net losses on its books because of the massive burden of pre-funding retiree benefits.
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