Congress has passed the Postal Service Reform Act of 2021, bipartisan legislation lawmakers said would help the U.S. Postal Service save money, balance its budget, and improve service.
The measure, which passed Tuesday by a 342-92 vote, is seen by many as a critical reform that would repeal the pre-funding mandate – a rule passed in 2006 that crippled the Postal Service’s financial independence.
The pre-funding requirement has accounted for $152.8 billion of its $206.4 billion in liabilities. The legislation would clear $57 billion of that amount and save the agency another $50 billion over the next decade.
Importantly, lawmakers said the bill would help to modernize the Postal Service, ensure faster and more dependable deliveries, increase oversight and accountability, protect rural newspapers, and ensure the stability of this critical American institution.
“The U.S. Postal Service didn’t care that my grandmother was a Black woman who didn’t have much and lived in a rural area,” said Florida Democratic Rep. Val Demings. “They never failed to deliver. The U.S. Postal service is the oldest, most reliable, most trusted institution in this country. Countless Americans, including 90 percent of veterans, get their medicine through the mail.”
Demings noted that the bill would require future Postal Service retirees, who have been paying into Medicare their entire careers, enrolling in Medicare. Currently, roughly a quarter of postal retirees do not enroll in Medicare even though they are eligible.
“This means the Postal Service is stuck paying far higher premiums than any other public or private sector employer,” she said.
The Postal Service estimates it could save approximately $22.6 billion over ten years by closely integrating Medicare.
The bill also eliminates the requirement that the Postal Service pre-fund retiree health benefits for all current and retired employees for 75 years in the future.
The Postal Service estimates this provision would drastically reduce its pre-funding liability and allow it to save roughly $27 billion over 10 years.
Additionally, the legislation requires the Postal Service to develop a public-facing, online dashboard with national and local level service performance data updated each week to provide additional transparency and promote compliance with on-time delivery of mail.
The measure also requires the Postal Service to deliver mail and packages at least six days per week across an integrated network.
It allows postal officials to enter into agreements with state, local, and tribal governments to provide non-commercial property and services that enhance value, does not detract from core postal services, and provide a reasonable contribution to Postal Service institutional costs.
Sen. Gary Peters (D-Mich.), who sponsored the Senate version of the bill and chairs the Homeland Security and Governmental Affairs Committee, said his chamber would move quickly on the legislation.
“I have worked hand in hand with the bipartisan leaders of my committee and the House Oversight and Reform Committee to craft this bipartisan bill,” Peters said in a statement. “[The bill] will help the Postal Service overcome unfair and burdensome financial requirements, provide more transparency and accountability to the American people, and continue its nearly 250-year tradition of service to every community in our nation.”