One problem that underlies the crisis in the U.S. Postal Service was the creation of the U.S. Postal Service itself in 1971 under President Nixon. Until then, we had the United States Post Office Department, which was a cabinet-level department of the federal government.
The Post Office Department was based on the idea that handling the mail was a government service. By contrast, the U.S. Postal Service is considered a government corporation, a business. If it is a business, it has been saddled with obligations that prevent it from making a profit.
In 2006, Congress mandated the Postal Service pre-fund several decades of future retiree benefits in advance. According to the American Postal Workers Union, this pre-load requirement has caused an annual loss of over $5 billion for the Postal Service. The National Association of Letter Carriers estimates that the pre-funding requirement has been responsible for 84% of the Postal Service’s losses over the last 14 years. The NALC has said that the pre-funding policy has made it difficult to invest in improvements in service.