The USPS was not in debt to the federal government. The federal government was in debt to the USPS. The 2006 law was meant to correct that.
At 4:35 a.m. on December 9, 2006, the 109th Congress adjourned “in a blaze of bickering,” as the Miami Herald headline put it. But before cementing its place in history as one of the least productive legislative sessions in history, the Senate did manage to wedge through a bunch of bills which would soon get President George W. Bush’s signature and become law. One of them, in the words of its sponsor Senator Susan Collins, “will ensure the continuation of universal postal service at an affordable rate.” She went on to call it “great news.”
But within a few years, it would be obvious to nearly everyone this law, called the Postal Accountability and Enhancement Act (PAEA), was killing the USPS. Today, there is virtually universal agreement among Democrats and Republicans alike that a key provision in that law, one that went virtually unmentioned at the time of its passage, was an historic oversight that saddled the USPS with tens of billions of unnecessary debt.