Consumer rights

Senate passes $107 billion overhaul of USPS, sending bill to Biden for expected approval

The Postal Service Reform Act, which passed by a vote of 79 to 19, provides financial flexibility for the postal agency to undertake improvements that have been debated for years. Republicans have traditionally criticized the agency as a poster child for government waste and incompetence, even though it has earned high marks for public approval and trust. During the pandemic, Democrats hailed postal workers as everyday heroes and held up the agency as an example of the benefits of robust government services.

But the Postal Service’s role throughout the coronavirus pandemic has forced lawmakers to reach a consensus on restructuring its balance sheet, fearing the agency may not be able to weather another financial shock. Nearly half of all voters voted by mail in the 2020 election, and postal workers carried packages door-to-door amid growing demand for e-commerce, allowing people to buy essential goods at distancing and staying home during public health shutdowns.

“La Poste generally delivers for us. Today we are going to deliver for them,” Senate Majority Leader Charles E. Schumer (DN.Y.) said on the floor of the House on Tuesday.

The Postal Service has endured years of losses caused by plummeting mail volumes and a 2006 bill that required it to pre-fund health care costs for retirees each year. Falling mail revenue has forced the agency to default on those health care payments since 2011.

Tuesday’s bill gives the agency a significant reprieve, removing $57 billion in outstanding postal debt and eliminating $50 billion in payments over the next 10 years. It requires future postal retirees to enroll in Medicare, a move that would add tiny costs to the public health care system but save taxpayers $1.5 billion over the next decade.

The legislation also codifies new transparency requirements for prompt delivery for the Postal Service, which has struggled to deliver on-time service since Postmaster General Louis DeJoy took office in June 2020, and allows the agency to contract with local, state and indigenous governments to provide basic services. non-postal services, such as hunting and fishing permits.

“By passing this landmark legislation, the Senate has shown the American people that we can come together, build consensus, and pass meaningful reforms that will improve lives,” said Sen. Gary Peters of Michigan, the bill’s lead Democratic sponsor. , in a press release. “This 15-year-old bill will finally help the Postal Service overcome the onerous demands that threaten its ability to provide reliable service to the American people.”

The bill is the cornerstone of DeJoy’s 10-year restructuring plan. The mail chief has long been a foil to Biden and congressional Democrats due to his background as a Republican financier and Postal Service delays ahead of the 2020 election.

Weeks after taking office in the summer of 2020, DeJoy ordered workers to slow mail delivery and presided over the scrapping of 671 high-speed mail sorting machines and street letter boxes. The deletions were unrelated to DeJoy’s policies, but critics saw them as part of President Donald Trump’s strategy to delegitimize mail-in voting.

Months after the election, DeJoy announced a 10-year vision for the Postal Service that included longer delivery windows and increased postage rates to reduce costs and increase revenue. The proposal provides for the closure of 18 mail sorting centers and the reduction of post office opening hours.

Rep. Gerald E. Connolly (D-Va.), a top House postal advocate, plans to introduce a bill in the lower house Wednesday morning that would bar the Postal Service from enacting its contract with Oshkosh Defense for trucks, worth $11 billion, unless the fleet is made up of at least 75% electric vehicles, according to two people involved in the legislation. The bill has 68 co-sponsors.

But DeJoy’s plan also dramatically increases the Postal Service’s plans to replace failing equipment, renovate dingy post office buildings and embrace parcel shipping as a central part of the agency’s future.

DeJoy opened 48 package-specific fulfillment plants heading into the 2021 holiday season, with the Postal Service processing 13.2 billion items between Thanksgiving and the end of the year.

Since late January, these facilities have been transformed to package and ship more than 270 million free coronavirus rapid test kits. The Post Office and the White House found the program so effective that they expanded it, allowing households to request additional kits. Postal advocates called the initiative a mold for future postal agency services.

DeJoy whipped GOP votes in person, appearing at party conferences in the House and Senate to discuss legislation. Some Republicans, however, remained skeptical, calling the legislation a bailout for the Postal Service that would shift financial burdens onto taxpayers and onto Medicare.

In fact, the Congressional Budget Office, the nonpartisan accountant of Congress, found that the bill would save taxpayers money by shaking up Medicare prescription drug discounts.

“This bill does not cut costs,” said Sen. Rick Scott (R-Fla.). “It just moves them from one unfunded government program to another underfunded government program.”

DeJoy’s mixed views in Congress made negotiations over the bill politically tense. DeJoy is a recurring character in Democratic political fundraising emails and was even the butt of a joke on “Saturday Night Live.” Republicans said his business acumen — DeJoy in his 20s turned his family trucking business into a global supply chain powerhouse after landing a major Postal Service contract — is the type of industry experience private that the agency needs.

“The Postal Service currently has a Postmaster General who is absolutely committed to … making the Post Office more effective, more efficient, but he needs a little breathing room, as he says, and that is what we are doing here in Congress,” Sen. Rob Portman of Ohio, the primary Republican sponsor of the postal bill, told the Senate on Monday.

Peters and Portman conducted months of sprawling negotiations with House Democratic and Republican leaders, DeJoy and the four powerful Postal Service unions over the bill.

In May, they unveiled a more limited bill omitting more contentious issues such as voting access, electric mail vehicles, postal banks and post office closures, lawmakers said.

What remained was a narrower package that focused on the Postal Service’s financial obligations but left unanswered the other major remaining questions about the future of the Postal Agency.

“It’s not a blank slate but a cleaner slate,” said Porter McConnell, campaign manager for consumer rights group Take on Wall Street and co-founder of the Save the Post Office Coalition. “It doesn’t settle the post office debate in the United States. It buys time for a conversation about what the post office looks like.”