Eliminates the need to prefund benefits, saving the Post Office $50 billion
Washington – After years of work and plenty of squabbling over details, Congress has finally passed a bipartisan plan to ensure the future of the Post Office.
The plan, called the Postal Service Reform Act of 2022, overwhelmingly passed the Senate on March 8 by a vote of 79-19. The bill now heads to President Biden’s desk where he is expected to sign it, since it previously passed the House by a vote of 342-92.
The bill was a culmination of 15 years of work. Back in 2006, Republicans passed the Postal Accountability and Enhancement Act, forcing the postal service to pre-fund retirement benefits, something that no other government agency was forced to do. This forced the Post Office to use up extra income that could have gone toward modernizing the system to fund retirement benefits that wouldn’t be used for decades to come. The mandate was described by American Postal Workers Union (APWU) President Mark Dimondstein as strangling the Post Office financially.
PRE-FUNDING MANDATE ELIMINATED
Under the 2022 plan, the pre-funding mandate has been eliminated. There is also a commitment to a six-day mail service, increased transparency within the Post Office, and it maximizes the Post Offices’ ability to participate in Medicare, a program that Postal Workers have contributed $34 billion. The elimination of the pre-funding mandate is expected to save USPS about $50 billion over the next ten years.
The bill also forgives USPS’ obligation to pay $57 billion in scheduled payments to its retiree health benefits fund. The agency has defaulted on these payments since 2012 but has also carried the payments on their budget, creating an even larger budget issue for USPS. Now all future postal retirees will be enrolled in Medicare part B and D. The union says this is a win-win situation as it lowers costs for retirees and decreases what USPS has to pay in healthcare costs. Dimondstein told the Federal News Network that about 80 percent of retirees are already enrolled in Medicare Part B so the transition should not affect too many members.
‘A MONUMENTAL VICTORY’
“The passage of this legislation, on a strong bipartisan basis, is a monumental victory for postal workers, the wider postal community, and the communities we are proud to serve,” said Dimondstein. “This legislation strengthens the public Postal Service, a national treasure that has connected us for over 250 years.
“I want to congratulate and thank all the NALC members who lobbied their members of Congress to win passage in the Senate and the House. Thanks to your support, dedication and action, bipartisan postal reform, that was 12 years in the making, has finally passed in both chambers,” he added in a follow-up tweet.
Moving forward, the Post Office faces stiff competition from other delivery services like Amazon, UPS, and Fed Ex, but what makes USPS different is that they serve every American, from those living on a farm in the Midwest to someone in a high rise in New York City. This makes it extremely important that the service continues to succeed.
The bill would also allow the agency to work with local, state, and tribal governments to offer non-postal services like issuing hunting or fishing licenses. This was supported by the union who noted that in some areas it can be 60, 70, or 80 miles to the nearest state government office, but there is a post office in their local town that can handle filing the paperwork.
Senators representing rural areas have also said that the declining financial situation at the Post Office has impacted rural service. “Over the past decade, the Postal Service has slowly — and sometimes quickly — eliminated services. And in the elimination of services, it created what I’d call a death spiral — shorter hours, fewer post offices, mail processing facilities further away and fewer of them,” Kansas Republican Senator Jerry Moran said. “The Postal Service is an indispensable piece of infrastructure that can reach nearly every address in America, and I am pleased we are one step closer to getting this critical reform across the finish line.”
IMPORTANCE DURING THE PANDEMIC
Having a strong postal service became evident during the pandemic. As people moved away from being in the office and going to stores, people not only relied on the Post Office for deliveries from online orders, but they also relied on the post office to deliver medicine and even ballots for the 2020 election.
“During this pandemic, we relied heavily on postal workers to deliver everything, from medication to election ballots to Social Security and pandemic relief checks, and as usual, the USPS did not disappoint,” said AFL-CIO President Liz Shuler.
“This legislation ensures the USPS is financially stable, ends the destructive pre-funding retiree health care benefits mandate, and guarantees six-day delivery reforms that are desperately needed to keep this beloved institution running with the same efficiency we have all come to depend on. As the bill moves forward to President Biden’s desk, we know that the future of postal workers and our USPS is bright.”
(Information from Brian Young, of UCOMM Blog; and Mark Gruenberg, of PAI union news service.)