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Senate passes postal reform bill in bid to overhaul agency’s finances

Biden expected to sign legislation as DeJoy cheers conversion of retiree health benefit funding structure to federal Medicare program.

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The U.S. Postal Service could soon begin to scrub some of the red ink off of its accounting books, after the U.S. Senate yesterday approved a bill to reform requirements on how the money-losing agency pays its employee health and retirement benefits.

The bill, which is formally known as the Postal Service Reform Act of 2022 (H.R. 3076), won easy passage by a bipartisan vote of 79 to 19 and is now headed to the White House, where President Biden is expected to sign it into law. That broad support follows a similar record in the House, where lawmakers lined up to support it with a 342 to 92 vote, marking a striking show of unity in an era of stark political divides in Washington.


Leadership at the USPS cheered the news, saying the move was a vital step toward returning the agency to financial independence. “With the legislative financial reforms achieved today, combined with our own self-led operational reforms, we will be able to self-fund our operations and continue to deliver to 161 million addresses six days per-week for many decades to come,” Postmaster General and CEO Louis DeJoy said in a release. “I thank the Senate and our Committee leadership that broke the 10-year logjam which has long constrained the finances of the Postal Service. The Postal Service serves every American every day and so it’s only right that our future is now collectively assured by members of all political parties.”

According to DeJoy, the bill will formalize the service’s obligation to deliver mail and packages six days per week and eliminate the “unfair, outdated, and burdensome” retiree health benefit prefunding requirement by integrating the USPS retiree health benefit program with the federal Medicare program.

Additional support for the bill’s provisions came from Keep Us Posted, an industry advocacy group says it supports the bill because it “helps to fix financial issues at USPS, as well as alternatives to current and future efforts to slow the mail and increase postage rates.”

According to Keep Us Posted, the new bill frees the Postal Service from a 2006 law requiring it to prefund billions of dollars in retiree health benefits 75 years in advance, instead integrating future retirees into Medicare, into which postal employees have already paid. That change will generate nearly $50 billion in savings and improve future fiscal stability for USPS, the group said.

“The U.S. Postal Service is the only courier that can and must deliver mail and packages to every address in America, and Congress has just ensured that it can keep delivering well into the future,” Kevin Yoder, the executive director of Keep US Posted and a former U.S. congressman (R-Kan.), said in a release. “While the Postal Service Reform Act takes a fiscally conservative approach to keep USPS funded by postage instead of a taxpayer bailout, it will also reduce the need for sweeping rate increases like the ones we have seen recently. The legislation’s modernization of the USPS delivery network will keep it going the last mile six days each week, with added requirements to ensure better transparency and accountability.”

Despite those improvements, Yoder also said that more work is still required. “Additional action is needed to ensure that the benefits of the legislation are recognized by the Postal Regulatory Commission in setting an accurate rate cap for mail products,” Yoder said. “Congress should also be prepared to consider additional legislation to keep ensuring the USPS can prosper in a dynamic economy and respond to challenges in the future. Passing meaningful postal legislation should not be a once in a generation event.”
 

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