An internal bill would ease budget constraints on the postal service

WASHINGTON (AP) — Congress would lift onerous budget requirements that helped drive the Postal Service deep into debt and require it to continue delivering mail six days a week under bipartisan legislation that approached the House approval on Tuesday.

The election-year bill, which comes at a time of many complaints about slower Postal Service, would also require the Postal Service to post online how efficiently it is delivering mail to communities. The Senate is working on similar legislation.

The Postal Service is supposed to support itself through postage sales and other services, but it has suffered 14 consecutive years of losses. Reasons include rising compensation and benefits costs for workers as well as steadily declining mail volumes, even as it delivers to 1 million additional locations each year.

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

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

Rep. Carolyn Maloney, DN.Y., chair of the House Oversight and Reform Committee, said the Postal Service “provides a service to every American, wherever they live, connecting us like no other organization does. do”.

The Postal Service is “truly one of our most valuable national assets,” but “the days of the Postal Service’s revenue-generating letters alone are not coming back,” said Rep. James Comer of Kentucky, the top Republican in this committee. He said the bill “will help him succeed in the 21st century.”

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

There has been talk over the years of cutting deliveries to five days a week, which could save more than $1 billion a year, according to the Government Accountability Office, the accounting agency of Congress. This idea proved politically toxic and was not 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 letters and packages are taking to deliver.

The measure is supported by President Joe Biden, the Postal Service, postal workers’ 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-funding entity, without taxpayer support.”

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

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

“He failed to turn a profit, he let the American people down, and anyone with a mailbox knows that,” he said.

The bill would end the requirement for the Postal Service to pre-fund health care benefits for current and retired workers for the next 75 years. This obligation, which private companies and federal agencies do not face, was imposed in 2006. This ended up being the year the Postal Service’s mail volume peaked and its financial condition steadily deteriorated. .

Facing budget pressures, the Postal Service has not made those payments since 2012. Overall, it faces outstanding obligations of $63 billion, according to its latest annual report. The bill cancels much of that debt.

Instead of these obligations, the Postal Service would pay the actual health care costs of current retirees who are not covered by Medicare, the federal health insurance program for seniors.

The legislation would also require future Postal Service retirees to enroll in Medicare, which only 1 in 4 currently do. The change would save the Postal Service money by allowing Medicare to cover much of its costs.

Proponents say eliminating the required pre-funding of retiree health care costs and changes to 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 nominated Louis DeJoy as postmaster general and Democrats accused him of slowing down the service to undermine the election. DeJoy, a major GOP donor, offered a 10-year plan to stabilize the department’s finances with measures such as additional mail slowdowns, reduced hours for some offices and possibly higher rates.

The Postal Service had a successful 2021 holiday season, delivering 97% of shipments on time for two weeks in December, according to ShipMatrix, which analyzes shipping package data. In 2020, more than a third of first class mail was late when 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 reached its peak mail volume in 2006, when it delivered 213 billion postal items. Last year, that figure was 129 billion, delivered to 163 million locations, according to Postal Service figures.

Since the Postal Service has its own financial system, it is not accounted for in the federal budget. The nonpartisan Congressional Budget Office said the bill would save the government $1 billion over the next 10 years.

This is largely because retiree prescription drug expenses under Medicare would be covered by required rebates from pharmaceutical manufacturers.