Bill that would repeal USPS prefund requirement passes House

The House this week passed a bill that would repeal the retiree health benefit pre-funding requirement for the U.S. Postal Service.

Current law requires USPS to prefund the entire burden of its retiree health benefits for the next 75 years in huge $5 billion-per-year increments—over a mere 10 years’ time. Since its inception, the requirement has proven to be not only expensive, but economically deadly. Postal employee organizations—and the Postal Service—have tried and failed repeatedly to get the law rolled back.

According to the American Postal Workers Union, the prefunding mandate is responsible for 92 percent of Postal Service net losses since 2007 and is a threat to the financial sustainability of the Postal Service.

On Feb. 5, the House passed the USPS Fairness Act— introduced by House Transportation and Infrastructure Committee Chair Peter DeFazio (D-Ore.)— which would undo the pre-funding requirement.

“Passing this legislation in the House is a positive step toward relieving the Postal Service of the manufactured financial crisis caused by the prefunding mandate,” APWU’s Legislative and Political Director Judy Beard said in a statement, adding, “APWU members were absolutely instrumental in educating their Representatives on this issue and obtaining support for the legislation. Without you, we would not have been able to achieve this milestone.”

DeFazio in a separate statement about the bill’s passage said, “The unreasonable pre-funding mandate has threatened the survival of the USPS and placed its vital services for the millions who rely on it at risk. The pre-funding mandate policy is based on the absurd notion of paying for the retirement funds of people who do not yet, and may not ever, work for the Postal Service. My bill will finally repeal this ludicrous policy, provide the USPS with critical financial relief and is the first step towards much-needed comprehensive reform.”

The Senate has a companion bill, and now APWU is committed to raising support for that measure.

It has called for a national call-in day of action to be held on Tuesday, February 25.

Learn more here.

Reader comments

Tue, Jul 21, 2020

Allowing the USPS to not prefund could put employee pensions in jeopardy. This could begin other companies to do the same thing which in turn put many retirements in jeopardy. This could cause a massive backlash. in the financial world and many retirees.

Tue, Apr 28, 2020 Jo Michigan

US Postal Watcher, Pennsylvania, the economics don't work out. The unsolicited ads and junk mail subsidize the "real mail," making it possible for them to keep it under $1 for First Class.

Thu, Feb 6, 2020 US Postal Watcher Pennsylvania

They drive around in their little trucks delivering unsolicited advertisements and junk mail and if you ask them to stop they say they can't. Why not privatize the unsolicited ads and junk mail and keep the real mail for the government postal workers?

Thu, Feb 6, 2020 Puregoldj Bethesda, MD

The pre-funding requirement is one of the most idiotic and irresponsible acts that Congress ever took. It appeared to have been an attempt to destroy the Postal Service so it could be privatized. As a long time stamp collector, I can tell you that the US has by far the most efficient and cost-effective postal service in the world. The pre-fund requirement makes absolutely no business sense whatsoever (have you ever heard of a private company doing this??), and has only served to financially cripple the USPS. Getting rid of it will benefit everyone who is in any way a stakeholder of the USPS -- as in any business or individual who sends or receives things in the mail.

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