Postal reform passes in House, marking USPS milestone

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Bipartisan support and White House backing has lawmakers and stakeholders optimistic they can finally gain full passage and provide financial relief to the mailing agency.

The House on Tuesday Feb. 8 passed 342-92 a significant reform of the U.S. Postal Service that would eliminate much of its debt and restructure some of its operations, opening the door to the first overhaul of the mailing agency in 15 years and providing it major financial relief after more than a decade of billion-dollar losses.  

The 2021 Postal Reform Act (H.R. 3076) won sweeping bipartisan support, a notable victory for lawmakers on both sides of the aisle who have for more than 10 years sought to deliver the core elements of the bill for USPS. Congress last passed major postal reform in 2006, though the agency’s finances collapsed shortly thereafter and lawmakers have struggled to address the situation ever since. The new measure now heads to the Senate, where it already has broad bipartisan support and a vote is expected in short order. 

The bill gained unanimous support when the House Oversight and Reform Committee approved it in May, but had languished without action for months. A renewed push in recent weeks led to a breakthrough allowing for Tuesday’s vote, with lawmakers waiting only for a fiscal assessment of the measure by the Congressional Budget Office. That score, released on Friday, found the measure would save the government $1.5 billion over the next 10 years. Lawmakers have estimated it will save the Postal Service $50 billion over the same period. 

The bill would make sweeping changes to USPS operations, though its scope is slightly pared back compared to previous failed attempts at postal reform. The core of the bill will shift more postal retirees to Medicare for their health care and require most postal workers to select postal-specific health care plans. It would take onerous payments toward health care benefits for future retirees off the agency’s balance sheets. Postmaster General Louis DeJoy has endorsed the bill and said its core components were essential to eliminating projected losses over the next decade as part of his 10-year business plan

DeJoy was on Capitol Hill on Tuesday to help provide a final push for the bill’s passage. 

The measure would allow USPS to provide non-postal services, including for state governments and other federal agencies. It also includes a six-day delivery mandate, which DeJoy has already said he plans to maintain. Postal management would face a new requirement to update the White House, Congress and its regulator every six months on its financial state, volume, implementation of changes, investments into its network and performance. It would also have to create new annual performance targets with a public website for tracking results.

“The Postal Service Reform Act has been years in the making, and I'm proud to say that it is bipartisan,” said Rep. Carolyn Maloney, D-N.Y., who chairs the House Oversight and Reform Committee and wrote the legislation. “It is abundantly clear that this bill is good for both the postal service and the American people.”

While Republicans largely supported the measure Tuesday, Democrats won their support only after significant negotiation. The minority party only offered its endorsement after successfully fighting to remove a provision Democrats had originally included to restrict USPS from altering its service standards. DeJoy is in the midst of implementing his business plan, which has included slowing down delivery for some mail. In 2020, Congress on a bipartisan basis approved a $10 billion grant to USPS to offset some of its pandemic-related losses. 

Bipartisan support has not stopped previous postal reform efforts from repeatedly fizzling out over the last decade, including a 2012 measure that cleared the Senate. Advocates for the current legislation, however, have optimistically noted the bill has support of both parties, postal leadership, the White House, large mailers and postal unions. The group that advocates on behalf of former postal workers, the National Active and Retired Federal Employees Association, has historically opposed efforts to shift USPS retirees to Medicare, but endorsed the current bill after changes over the requirements. 

“The administration supports efforts to strengthen the U.S. Postal Service, including by providing postal employees with the dignity, fair pay, and employer-provided benefits they have earned,” the White House said in a statement of support for the bill. “The administration is committed to ensuring that the Postal Service delivers the highest quality, most reliable service possible to every American. This legislation would advance these goals in several ways.”

The American Postal Workers Union has mobilized its 200,000 members to encourage lawmakers to support the bill, said Mark Dimondstein, the group’s president. Dimondstein called the measure a “skinny bill,” saying it only dealt with some of the Postal Service’s most pressing issues. 

Support for the bill was not universal. Rep. Darrell Issa, R-Calif., who unsuccessfully attempted to shepherd postal reform into law during his time leading the House Oversight and Government Reform Committee, said the measure failed to fully address the Postal Service’s financial woes. 

“It doesn’t go far enough,” Issa said on the House floor. “This is not sufficient reform.”

Sen. Gary Peters, D-Mich., who chairs the Homeland Security and Governmental Affairs Committee and authored the companion legislation in the Senate, sounded an optimistic note for the bill's fate in his chamber. 

"Given the significant, bipartisan support for the same bill in the Senate, I expect to move quickly to vote on these critical reforms that will help ensure the Postal Service’s long-term success," Peters said. 

Democrats have been much less vocal in their criticisms of DeJoy in recent months and, through his appointments to the Postal Service’s Board of Governors, President Biden has indicated he will not seek to oust the postmaster general. DeJoy briefly drew the ire of Republicans, who had allied with him and fully endorsed his 10-year reform plan, by launching a limited pilot program for financial services. While they collaborated to deliver 500 million at-home COVID-19 test kits to Americans across the country, the Biden administration and USPS have clashed recently over DeJoy’s plans to replace nearly the entire postal fleet with non-electric vehicles. 

In a sign of its dire need for assistance, the Postal Service announced it lost $1.5 billion in the first quarter of fiscal 2022. The period between Oct. 1 and Dec. 31 is typically its most profitable time of the year, but inflation and other issues drove up costs while revenue declined as mail volume continued to fall. In the same period last year, USPS saw a profit of $318 million. 

The Postal Service brought in $21.3 billion in the quarter, down about 1% from the same period in fiscal 2021. Volume dropped by more than 4%, but significant price increases helped to offset those declines. USPS delivered 13.2 billion mail pieces and packages during the holiday season, but overall package volume declined by nearly 10% following last year’s pandemic-inspired spike. 

"Despite the record package volume during the holiday season, the overall surge in e-commerce has begun to subside," said USPS Chief Financial Officer Joseph Corbett. "This shift in market trends, along with the continued declines in mail volumes, our increasing costs, and general economic conditions creating inflationary pressure, highlight the ongoing financial challenges that the Postal Service faces.”

USPS met its reduced service standards at a higher rate, delivering 92% of First-Class mail within its slower windows compared to just 78% in the same period last year. 

Postal officials said on Tuesday the negative financial numbers highlighted the need for congressional action and the reform bill, coupled with DeJoy’s other reforms, would get USPS out of the red. 

“These reforms will help ensure that the Postal Service can operate in a financially sustainable manner,” DeJoy said.

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