The legal obligation that explains why the USPS cannot stop losing money

Every address in the country, from a Manhattan high-rise to a ranch at the end of a gravel road in Wyoming, is entitled to the same delivery frequency and the same postage price for a first-class letter. The United States Postal Service (USPS) serves close to 169 million addresses, generally six days a week, whether or not any given route makes money. That is not a business choice. It is a legal command, and it is the starting point for understanding why an agency that lost $9 billion last year cannot simply stop serving the routes that lose the most.

A law that requires service, not profit

The obligation traces to 39 U.S.C. § 101, the section of federal law that has defined the USPS’s mission since the Postal Reorganization Act of 1970. It states that the agency “shall provide prompt, reliable, and efficient services to patrons in all areas and shall render postal services to all communities,” and that the costs of providing that service “shall not be apportioned to impair the overall value of such service to the people.”

A 2022 amendment added a further requirement that delivery occur at least six days a week almost everywhere. The same section requires the USPS to give rural areas and small towns “a maximum degree of effective and regular postal services,” even where the local post office “is not self-sustaining.”

Then comes the line that does the real work: “No small post office shall be closed solely for operating at a deficit.”

Why a rural USPS route losing money cannot simply close

That statutory language is reinforced by procedure. Under 39 U.S.C. § 404, closing or consolidating any post office requires a community study, public notice, written findings on the record, and a right of appeal to the independent Postal Regulatory Commission, a process that can take months and that community groups have used repeatedly to block or delay closures.

When the USPS floated closing thousands of small offices in 2011, congressional pressure forced it to suspend the plan and settle for reduced hours instead, preserving the buildings while trimming their cost. Rates work the same way: postage for a first-class letter or a Priority Mail package is set nationally, not by distance. That means a parcel bound for a remote Alaska village costs the sender the same as one crossing a single city block, regardless of what it actually costs the USPS to get it there.

The 2006 mandate that manufactured a deficit

The financial crisis most Americans associate with mail actually has a more specific legal origin. The Postal Accountability and Enhancement Act of 2006 required the USPS to pre-fund its retiree health benefits 75 years into the future, paying an average of roughly $5.5 billion a year into a dedicated fund between 2007 and 2016. It was an obligation imposed on no other federal agency or private company in the country. The USPS’s own inspector general later found that $54.8 billion of the agency’s $62.4 billion in losses between 2007 and 2016 came directly from that pre-funding requirement, not from declining mail volume.

Congress finally repealed the mandate in the Postal Service Reform Act of 2022, which also integrated postal retirees into Medicare. President Biden signed it after it passed the House 342 to 92 and the Senate 79 to 19, and the Postal Service’s inspector general estimated the changes would save the agency tens of billions of dollars over the following decade.

Reform proposals still colliding with the same law

Repealing the pre-funding mandate did not fix the finances. The USPS reported a net loss of $9 billion in fiscal 2025 and another $1.3 billion in the first quarter of fiscal 2026. The losses were driven by rising workers’ compensation costs, falling mail volume, and a package-delivery market now crowded with private competitors.

Postmaster General David Steiner has asked Congress to raise the agency’s $15 billion statutory borrowing limit and has pushed the Postal Regulatory Commission to lift price caps on market-dominant mail, while continuing the “Delivering for America” modernization plan begun under his predecessor, Louis DeJoy.

Critics on both sides of the aisle blame that plan for the continued losses. Former Rep. Kevin Yoder, now executive director of the mailer group Keep US Posted, said in a statement that it should be “marked ’return to sender.’” Separately, the Trump administration explored dissolving the service’s independent Board of Governors and folding the agency into the Commerce Department in early 2025, a move that bipartisan lawmakers argued would violate the 1970 reorganization law’s guarantee of independence. It has not been carried out.

Every proposal on the table, whether it is a higher borrowing limit, looser rate caps, a private takeover of last-mile delivery, or a full merger into a cabinet department, still has to reckon with the same sentence sitting in the U.S. Code: the USPS exists to serve every address, not to turn a profit on each one. Congress wrote that obligation, and only Congress can rewrite it.