WASHINGTON — The Senate passed the most significant overhaul of the troubled U.S. Postal Service in 16 years, with the goal of putting the agency on a sound financial footing after years of losses.
The vote was 79-19 on the bill, which has already passed the House. The legislation now heads to President Joe Biden, who is expected to sign it into law.
Authored by House Oversight Committee Chairwoman Carolyn Maloney of New York and top Republican James Comer of Kentucky, the bill represents the largest bipartisan achievement of this Congress after the $550 billion infrastructure bill last fall. As the White House struggles to pass Biden’s core economic agenda, the USPS bill’s passage gives the president a win.
At its core, the bill addresses retiree costs that have hobbled the USPS balance sheet since the last postal overhaul in 2006. The service is required to pre-fund future retiree health care costs 75 years in advance and has defaulted on that obligation for a decade. The bill would eliminate the requirement and transition employees to Medicare. The bill’s supporters estimate the changes will save the USPS $50 billion over 10 years.
In response to complaints about widespread delays, the bill requires the Postal Service to create an online dashboard to publicize delivery data. It also requires six days of service each week, preventing USPS management from eliminating Saturday mail delivery.
The changes would save the government about $1.5 billion according to the Congressional Budget Office, and, over the next decade, add about $5 billion in costs to Medicare.
An independent and mostly self-financed agency of the U.S. government, USPS has posted annual operating losses since 2007, in part because of the pre-funding requirement. A 51% decline in first-class mail in the last two decades because of the rise of electronic communication and bill paying has only been partly balanced by a massive rise in labor-intensive package delivery from e-commerce.
Opponents of the bill, led by Sen. Rick Scott, were able to hold up a vote in the Senate for several weeks using procedural maneuvers. Scott argued that putting a Postal workers on Medicare would weaken the program, which needs financial reforms ahead of a 2026 insolvency, and that it needs more debate.
“I support doing something to reform the Postal Service but it cannot come at the expense of American taxpayers,” the Florida Republican said. “This bill doesn’t reduce costs, it just shifts them from one unfunded government program to another.”
Proponents said that the bill is not a bailout, but rather is necessary to save a vital public institution.
“We need to save our Postal Service, in the next few years I believe it will go insolvent,” Republican Sen. Rob Portman of Ohio said. “This is not a bailout, in fact there is no appropriation in here.”
A broad coalition of businesses that rely on the USPS — including traditional retailers, Amazon.com Inc., magazine publishers, and the greeting card and paper industries — and postal unions have lobbied for years for the legislation.
In fiscal 2021, the USPS reported a net loss of $4.9 billion under generally accepted accounting principles compared to a loss of $9.2 billion a year earlier.
Postmaster General Louis DeJoy has implemented cost-cutting and measures and price increases in an attempt to improve the service’s balance sheet. The price of first-class stamps rose to 58 cents from 55 cents even as guaranteed delivery times were extended from a maximum of three days to five days.
While some progressives have pushed for the USPS to provide a range of banking services to compete with commercial banks to boost revenue, that proposal was not included in the bill. Instead, the measure permits the USPS to offer state and local government services in addition to the passport services it now provides.
