House passes postal reform bill in bid to cut USPS financial losses

Legislators passed a long-awaited postal reform bill yesterday in the House of Representatives that would ease some of the employee benefit requirements that have hamstrung the U.S. Postal Service for decades in its efforts to shrink financial losses.

The bill, known as the Postal Service Reform Act of 2022 (H.R. 3076), passed with a vote of 342 to 92, marking a broad coalition of support in an era when polarized partisan debate precludes many bills from gaining traction in Congress.

Among other changes, the act would repeal a requirement that the USPS annually prepay future retirement health benefits, a 2006 regulation that USPS leaders have long complained does not apply to private corporations and makes it difficult for USPS to compete in open markets. Instead, USPS employees and retirees would obtain their medical coverage through Medicare and a new health benefits program established by the federal Office of Personnel Management. In other initiatives, the bill would allow the USPS to begin generating income by providing “certain nonpostal products and services” through agreements with state, local, or tribal governments, or with other government agencies.

The House bill now heads to the U.S. Senate, where lawmakers are drafting a parallel bill. If the Senate version passes, the two acts would be combined through a reconciliation process before heading to the White House for final approval.

The initiative comes as the USPS draws criticism for proposals to slow certain package delivery schedules and to replace its aging fleet of delivery vehicles primarily with gas-fueled instead of electric trucks. In response, Postmaster General Louis DeJoy has said the changes are necessary to cut financial losses. Just yesterday, USPS posted a loss of $1.3 billion for its fiscal first quarter—compared to a gain of $318 million for the same period last year—and blamed rising fuel costs, spiraling parcel demand, and slumping mail volumes.

Despite those tensions, the Postal Service Reform Act has the support of DeJoy himself, as well as the industry group Keep Us Posted, a coalition of industry groups such as paper manufacturers, catalog and greeting card companies, and newspaper publishers.

In remarks earlier this week at a Postal Service Board of Governors meeting, DeJoy said passage of postal reform legislation was an important ingredient of his 10-year overhaul of the agency known as the Delivering for America Plan. “We are excited about the bipartisan progress we have seen in the last couple of weeks and I especially would like to thank Chairwoman Maloney and Ranking Member Comer for their leadership over this past year in making this long overdue legislation a reality,” DeJoy said in a release. “Should the legislation pass the House this week, I am hopeful that the Senate votes on it in a timely manner.”

Likewise, Keep Us Posted is pressing Senators to keep momentum going for the bill’s progress. “The House has seized the greatest opportunity for positive, bipartisan postal policy in more than a decade, and now it’s time for the Senate to do the same,” Kevin Yoder, executive director of the Keep US Posted campaign and a former Kansas Congressman, said in a release. “The Postal Service Reform Act represents conservative yet fair fiscal policy by guaranteeing that the Postal Service will remain funded by postage, not taxpayer funding. The legislation frees the Postal Service from the 2006 requirement that it prefund retiree health care costs 75 years in advance without removing those benefits.”

#Share the good news: The bipartisan Postal Service Reform Act passed the House Tuesday with a vote of 342 to 92. #USPS #KeepUSPosted pic.twitter.com/EvkHGJG4qs

— Keep Us Posted (@USPosted) February 9, 2022