The U.S. Postal Service has lost about $2.5 billion since the early 1980s delivering goods to Alaska’s remote villages. The program, called the Alaska Bypass, was created in part to help curb the otherwise high cost of shipping groceries to Alaska Natives. Critics say the savings are not passed on to customers and are pressing for a lower postal subsidy.

HOOPER BAY, Alaska — In the soggy, unforgiving tundra on the shores of the Bering Sea, Royala Bell defrosts a rack of beef ribs for dinner in a kitchen that doubles as a bedroom for six of her seven children.

A dead owl lies on the floor, ready for her husband, Carlton, to defeather it for a headdress. Fish dry on a line out back, for the larder in winter. On a small counter are some of the groceries the Bells consume from the Lower 48: Sailor Boy Pilot Bread, potatoes, Kool-Aid, Aunt Jemima pancake mix and a can of Coca-Cola.

The U.S. Postal Service paid to ship the items on a turboprop bush plane to this small settlement of Yupik Indians on Alaska’s western edge. The Bells brought them home on the back of their all-terrain vehicle from Hooper Bay’s only grocery store. The 12-pack of Coke alone cost the Postal Service $21 to get here.

Under a federal program exclusive to Alaska, the Postal Service is responsible for shipping more than 100 million pounds a year of apples, frozen meat, dog food, diapers and countless other consumer items to off-road villages in the sparsely populated outposts known as the bush. Over three decades acting as freight forwarder, the agency has lost $2.5 billion.

In many ways, the Alaska Bypass, as it’s called, keeps Hooper Bay and 100 other isolated villages in rural Alaska afloat. But groceries do not come cheap for Royala Bell, 43, and her neighbors, most of whom, like her family, survive on food stamps and federal subsidies.

“I think the food is too, too high,” the slight Yupik woman said of the prices at the Alaska Commercial store here, stretching her hands wide like an accordion. “It takes about $200 for a little tiny amount of groceries.”

Rural Alaskans are not the only ones paying a steep price. The system cost the Postal Service $77.5 million last year, agency officials said, with ordinary stamp-buying customers covering the tab, while a long line of commercial interests here benefited, from the airline and shipping industries to rural grocery chains.

Retailers pay the Postal Service about half of what it would cost them to ship the goods commercially; the subsidy allows them to charge a hefty markup on a can of Coke, for example, in some cases 30 percent or more. The agency, by law, must pay private air carriers well above market rates in the only corner of the country where airline prices are still regulated.

In the name of families such as the Bells, the late senator Ted Stevens (R-Alaska) pushed an earmark through Congress 33 years ago aimed at helping his constituents back home. But today, the Postal Service is going broke. On Capitol Hill, this is the kind of federal spending lawmakers in Washington have said they will swear off in a time of austerity.

Despite critics’ efforts, the Alaska Bypass has been untouchable. Few in Congress understand it. Tinkering with it would rankle politicians from other rural states who fear this could be the first step toward scaling back mail delivery to other far-flung places. And even with one of the Senate’s top power brokers gone, in Washington the legislative muscle of this most remote state remains ironclad.

When he created the program in the early 1980s, Stevens said it would not only subsidize “affordable” necessities for rural Alaska, but passenger and commercial cargo service in a state with more runways than roads.

More: U.S. Postal Service losing tens of millions annually subsidizing shipments to Alaska – The Washington Post.