“This positive trend undermines the doom-and-gloom scenarios postal critics cite — and it shows the folly of reducing services to Americans, as the postmaster general seeks to do,” said Fredric Rolando, president of the National Association of Letter Carriers.

Postal officials said they were able to curb the losses by cutting back the hours at many post offices, reducing staff through attrition and consolidating about half of the service’s processing plants. But the agency said these actions were not enough to reduce its huge debt.

Patrick R. Donahoe, the postmaster general, said Congress should pass a postal overhaul bill that will give the service the flexibility it needs.

“We need comprehensive legislation to provide the Postal Service with a workable business model for today’s marketplace,” Mr. Donahoe said at a morning briefing on the service’s finances for its board of governors.

The Postal Service said it continued to suffer from a 2006 Congressional mandate that requires it to pay $5.5 billion annually into a health fund for its future retirees. The agency defaulted on two payments last year for the first time and said it would not be able to make payments into the fund this year because of its worsening finances. The Postal Service and postal worker unions said Congress needed to fix the requirement by lowering the amount of the payments and stretching out the length of time needed to pay it.

The service also said the continuing shift to electronic communication, including online bill paying and e-mail, was affecting its bottom line. To offset the losses in this area, postal officials have asked Congress for the authority to enter into new lines of business, like beer and wine delivery, from which it is currently prohibited. The Senate passed a postal overhaul last year, but a House version never made it out of committee. Congress has not set a timetable for work on a new bill.

Mickey D. Barnett, chairman of the Postal Service board of governors, said that in the absence of Congressional action the board has asked agency officials to take several steps to deal with the continuing losses.