US Congress passes $50 Bill Postal Service Bill

On Tuesday, the U.S. Senate overwhelmingly voted to provide the long-losing Postal Service (USPS), with approximately $50 billion in financial relief over a ten year period and to require future retirees of USPS to enroll in a government-sponsored health insurance plan.

The rare feat of bipartisanship in a narrowly divided Congress is seen in the 79-19 vote. It follows the approval of the U.S House of Representatives’ bill in February, and it is sent to President Joe Biden for signature.

USPS has suffered from declining mail volumes, despite having to deliver more addresses. Since 2007, USPS has posted net losses of over $90 billion. It reported a $1.5 billion quarterly net loss last month.

“This bill will ensure that this essential public service is on a path towards long-term financial sustainability,” stated Senator Gary Peters, a Democrat who is the chair of the USPS committee and is a leading sponsor of the bill.

Liz Shuler, President of AFL-CIO, who represents postal workers, stated that the bill is the culmination “15 years” of efforts to strengthen and fund the USPS.

The bill has support from Amazon.com, the Greeting Cards Association, and Hallmark, in addition to the postal unions.

Louis DeJoy, Postmaster General, stated that the legislation and operational reforms will allow “we to be able to fund our operations and continue to deliver 161 million addresses six times per week for many decades to follow.”

Some of the financial reforms included in the legislation were proposed by Dejoy. His March 2021 reform plan includes legislative financial changes. He has predicted that $160 billion could be eliminated in future losses.

The USPS also adopted new delivery standards for October. This allowed USPS to slow down some first-class mail deliveries. It was able to shift large amounts of air freight from air transport to surface transportation. This helped to reduce costs.

The 2006 law that required USPS to pre-fund over $120 billion of pension liabilities and retiree healthcare, is one reason for these large losses.

The new bill removes USPS’ requirement to pre-fund retiree benefits for current and retired employees for 75 year. This is a requirement that no federal business can meet. USPS estimates that it will reduce pre-funding liabilities and save the agency approximately $27 billion over the next 10 years.

Future retirees must enroll in Medicare. 25% of postal retirees don’t enroll in Medicare, even though they are eligible. This results in USPS paying higher premiums that other employers. The USPS estimates that the change could help it save $22.6 billion over the next 10 years.

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