USPS funding explainer

KYLE GRILLOT/AFP via Getty Images

How Is the USPS Funded?

What you need to know about the USPS budget
USPS funding explainer

KYLE GRILLOT/AFP via Getty Images

Like other industries during the global coronavirus pandemic, the United States Postal Service is facing detrimental financial losses. The Postal Service anticipates a $13 billion revenue loss directly due to the coronavirus pandemic this fiscal year and $54.3 billion in additional losses over the next 10. So where does the Postal Service look for funding? 

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The USPS receives zero tax dollars for operating expenses. Instead, the agency relies on the sale of postage, other products and services to fund its operations. 

This practice dates back to 1970, when a postal worker strike led to the adoption of the Postal Reorganization Act. As part of the Reorganization Act, the old United States Post Office Department was abolished and replaced with the new United States Postal Service, an independent agency with an official monopoly on the delivery of mail in the U.S.

In recent years, the Postal Service has lost more than $78 billion due to declining mail volumes and rising costs. Since 2000, the number of mail pieces delivered by USPS has dropped by 31.4%, from 207.9 billion pieces of mail in 2000 to 142.6 billion pieces in 2019. Still, according to a recent Pew Research poll, 91% of Americans have a favorable view of the Postal Service.

During an April congressional briefing, former Postmaster General Megan J. Brennan initially warned that without federal help, the Postal Service will “run out of cash this fiscal year,” which ends Sept. 30. USPS has since pushed back that forecasted date to March 2021.  In July, the U.S. Department of the Treasury and the Postal Service reached a deal on a loan of up to $10 billion. 

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As the future remains uncertain, look back at the history of the Postal Service in photos and facts.