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Swift Action Expected On Postal Reform
Swift Action Expected On Postal Reform Bill

A rare instance of bipartisan support on Capitol Hill could propel a postal reform bill swiftly through Congress this month.

“The Senate will take its first vote to move forward on this bill on Monday!” Senate Majority Leader Chuck Schumer (D-N.Y.) said via Twitter on Thursday afternoon. President Joe Biden (D) is expected to sign it.

The Postal Service Reform Act of 2022 (H.R. 3076), sponsored by Carolyn Maloney (D-N.Y.), passed 342-92 on Tuesday. All 222 House Democrats were joined by 120 Republicans to vote in favor of the bill; all 92 no votes were cast by Republicans. The Senate Oversight Committee has introduced what’s essentially an identical bill (S. 1720), sponsored by Chairman Gary Peters (D-Mich.).  “So, it’s going to happen,” Stephen Kearney, executive director of the Alliance of Nonprofit Mailers (ANM), said during a telephone interview with The NonProfit Times this week.

It’s a unique situation where United States Postal Service (USPS) employee unions and the postmaster are aligned, Kearney said. Postal unions are tightly linked to Democrats and are strong supporters of the bill because it provides relief without much pain and Republicans are supporters of Postmaster Louis DeJoy and want to see him succeed. Kearney, however, has cautioned his members not to get too euphoric about postal reform because it’s not quite a significant overhaul. The crux of the bill eases liabilities of retiree benefits but didn’t “do anything to reform the business model that everyone says is broken,” he said.

The Postal Service Reform Act would require all new postal retirees to use Medicare as their primary insurance and repeals the pre-funding requirement for projected retiree healthcare costs that was included in the 2006 Postal Enhance and Accountability Act (PAEA). About a fourth of postal retirees historically have not opted for Medicare, according to Kearney. USPS estimates it would save $22.6 billion over 10 years with the Medicare move and another $27 billion without the pre-funding requirement.

The bill saves USPS money and makes its finances look better, Kearney said, but there’s no guarantee that it will pass that benefit to mailers. Other needs take precedence, like capital needs, better service and paying employees, per the 10-year plan, Delivering For America (DFA). Meanwhile, the Postal Regulatory Commission (PRC) gave USPS new rate authority for at least five years, he said, adding that the postal service has shown that when it has rate authority, it will use it.

There are a few other “window dressing improvements” in the bill, like a study of the cost of flats and a requirement that USPS create an online dashboard on service by ZIP code or congressional district, according to Kearney. He fears that Congress will not focus on postal reform beyond what was passed.

A section of the bill that came at the urging of package shippers could have unintended consequences, Kearney said. Section 202 USPS to deliver mail and packages six days a week on a single integrated network. “It’s a nice concept but that language is not necessary because no one is trying to reduce the network or six-day delivery,” Kearney said. And it could lead to unintended consequences if certain facilities only handle packages, potentially limiting USPS from being more efficient.

Shippers want packages and letters blended together, Kearney said. Currently, about 45% of postal costs are considered “institutional” and not allocated to any particular product of mail. “That helps keep costs of packages down, therefore, rates of packages down,” he said, while placing more costs in the packages might lead to higher rates for packages that have already experienced large increases.