While federal agencies receive annual congressional appropriations to fund retiree pensions and health care benefits, the Postal Service is supposed to cover the costs through revenue, and receives no direct tax dollars, under the Postal Reorganization Act, passed by Congress in 1971, which made the Postal Service an independent, self-financing agency.
“Members of Congress in rural states are very aware of the fact that commerce is dependent on the Postal Service and if they [consumers] really had to pay their share of postage, it wouldn’t be cost-effective and small businesses would just move out of the state,” Morrissey said.
Dismantling the Postal Service for “the sake of profits not only threatens the integrity of a cherished institution, it could also radically change the way Americans receive deliveries, determining who does, and does not get service,” the group’s leaders said.
These costs and competition in the delivery sector, are two of the main reasons why the Postal Service is losing money, says Monique Morrissey, a senior economist at the Economic Policy Institute think tank.
In hard-to-reach parts of the country, delivery is often accomplished by the Postal Service instead of large corporations like UPS, FedEx or Amazon due to high fuel costs, labor intensity and increased distances.
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