House bill would ease budget strains on Postal Service

The House is close to approving a bipartisan bill that would lift onerous budget requirements that have helped push the Postal Service deeply into debt

Via AP news wire
Tuesday 08 February 2022 21:11 GMT
Congress Postal Service
Congress Postal Service (Copyright 2021 The Associated Press. All rights reserved.)

Congress would lift onerous budget requirements that have helped push the Postal Service deeply into debt and would require it to continue delivering mail six days per week under bipartisan legislation that approached House approval Tuesday.

The election-year bill, coming at a time of widespread complaints about slower mail service, would also require the Postal Service to display online how efficiently it delivers mail to communities. The Senate is working on similar legislation.

The Postal Service is supposed to sustain itself with postage sales and other services, but has suffered 14 straight years of losses. The reasons include growing workers' compensation and benefit costs plus steady declines in mail volume, even as it delivers to 1 million additional locations every year.

Postal Service officials have said that without congressional action, it would run out of cash by 2024, echoing similar warnings from its leaders in recent years. It has estimated it will lose $160 billion over the coming decade.

Those pressures have brought the two parties together for a measure aimed at helping the Postal Service, its employees, businesses that use it and disgruntled voters who rely on it for delivery of prescription drugs, checks and other packages.

Rep. Carolyn Maloney D-N.Y., chairwoman of the House Oversight and Reform Committee, said the Postal Service “provides service to every American, no matter where they live, binding us together in a way no other organization does.”

The Postal Service is “truly one of our prized national assets," but “the days of letters alone driving Postal Service revenue are not coming back,” said Rep. James Comer of Kentucky, top Republican on that committee. He said the bill will “help it succeed into the 21st century.”

Over the years, some lawmakers have wanted to impose tougher requirements for faster service by the Postal Service, while others have favored privatizing some of its services. The compromise omits controversial proposals.

There has been talk over the years of reducing deliveries to five days per week, which could save more than $1 billion annually, according to the Government Accountability Office, the accounting agency of Congress. That idea has proven politically toxic and has not been pursued.

The bill would also require the Postal Service to set up an online “dashboard” that would be searchable by zip code to show how long it takes letters and packages to be delivered.

The measure is supported by President Joe Biden the Postal Service, postal worker unions and industries that use the service and others.

A Postal Service statement said the bill would reduce its projected deficits and “allow the organization to continue to operate as a self-funded entity, without taxpayer support.”

Mark Dimondstein, president of the American Postal Workers Union, called the bill “outstanding” in an interview.

One of the bill's few critics was Rep. Darrell Issa, R-Calif., who said its changes didn't go far enough. He said the measure erases debt that would ultimately be shifted to taxpayers.

“It has failed to make a profit, it has failed the American people, and everyone who has a mailbox knows it,” he said.

The bill would end a requirement that the Postal Service finance, in advance, health care benefits for current and retired workers for the next 75 years. That obligation, which private companies and federal agencies do not face, was imposed in 2006. That ended up being the year that the Postal Service's mail volume peaked and its financial fortunes steadily worsened.

Facing budget pressures, the Postal Service hasn't made those payments since 2012. Overall it faces unpaid obligations of $63 billion, according to its most recent annual report. The bill forgives much of that debt.

Instead of those obligations, the Postal Service would pay current retirees' actual health care costs that are not covered by Medicare, the federal health insurance program for older people.

The legislation would also require future Postal Service retirees to enroll in Medicare, which only about 1 in 4 does now. The shift would save the Postal Service money by having Medicare cover much of its costs.

Proponents say eliminating the required pre-funding of retiree health care costs and the changes in workers’ health care coverage would save tens of billions of dollars over the next decade.

Criticism of the Postal Service peaked in 2020, when President Donald Trump appointed Louis DeJoy as postmaster general and Democrats accused him of slowing service to undermine the election. DeJoy, a major GOP donor, has proposed a 10-year plan to stabilize the service's finances with steps such as additional mail slowdowns, cutting some offices' hours and perhaps higher rates.

The Postal Service had a successful 2021 holiday season, delivering 97% of shipments on time during two weeks in December, according to ShipMatrix, which analyzes shipping package data. In 2020 more than a third of first-class mail was late by the time Christmas arrived.

The service has also been criticized for not moving fast enough to replace its mail-delivery fleet with electric vehicles.

The Postal Service hit its peak of mail volume in 2006, when it delivered 213 billion pieces of mail. Last year that figure was 129 billion, delivered to 163 million places, according to Postal Service figures.

Since the Postal Service has its own finance system, it is not counted as part of the federal budget. The nonpartisan Congressional Budget Office said the bill would save the government $1 billion over the next 10 years.

That is largely because retirees' prescription drug expenses under Medicare would be covered by required discounts from pharmaceutical makers.

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