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US Senate Approves $50 Billion Postal Service Relief Bill


Republican Sen. Rob Portman speaks during a news conference after the Senate passed a bill to reform the U.S. Postal Service, on Capitol Hill, in Washington, March 8, 2022.

The U.S. Senate voted 79-19 on Tuesday for a bill that would provide the Postal Service (USPS) with about $50 billion in financial relief over a decade and require its future retirees to enroll in a government health insurance plan.

The action, after the U.S. House of Representatives overwhelmingly approved the measure in early February, sends the bill to President Joe Biden for his signature. USPS has reported net losses of more than $90 billion since 2007, and on Tuesday reported a net loss of $1.5 billion for the quarter ending Dec. 31.

USPS has been struggling with diminishing mail volumes even as it must deliver to a growing number of U.S. addresses.

"It has to be done because the Postal Service's business model just doesn't work," said Senator Rob Portman, a Republican and one the bill's primary sponsors. "Having to deliver more and more packages and fewer and fewer more profitable first-class mail pieces to more and more addresses."

AFL-CIO President Liz Shuler, whose union represents postal workers, said the bill was the culmination of "15 years of efforts to fund and strengthen USPS."

Democratic Senate Leader Chuck Schumer said the legislation provides "the Postal Service a much-needed reset and puts the agency "on a path to solvency."

Postmaster General Louis DeJoy in March 2021 proposed some of the financial reforms in the legislation, which he said could eliminate $160 billion in predicted losses over the next decade. USPS also adopted new delivery standards in October that slow some first-class mail deliveries. DeJoy has called the legislation "vital to the United States Postal Service and the American People."

One reason for the large losses is 2006 legislation mandating USPS prefund more than $120 billion in retiree health care and pension liabilities.

The bill eliminates requirements USPS prefund retiree health benefits for current and retired employees for 75 years, a requirement no business or other federal entity faces. USPS projects it would sharply reduce its prefunding liability and save it roughly $27 billion over 10 years.

It requires future retirees to enroll in Medicare. About 25% of postal retirees do not enroll in Medicare even though they are eligible, which results in USPS paying higher premiums than other employers. USPS estimates the change could save it about $22.6 billion over 10 years.

Postal unions support the bill as does the Greeting Card Association, Hallmark and Amazon.com.

The bill requires USPS to maintain six-day-a-week mail deliveries and develop an online weekly performance data dashboard by ZIP code, and expands special rates for local newspaper distribution.

USPS has said the legislative changes will largely eliminate an estimated $57 billion in liabilities over the next 10 years, without reducing the benefits received by employees or retirees.

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