Biden signs USPS reform legislation, as agency seeks to raise mail prices

A long-awaited reform bill that is expected to save the Postal Service a total of $107 billion is now in effect.

President Joe Biden signed into law the Postal Service Reform Act on Wednesday. The House and Senate passed the bill with strong bipartisan support last month.

The legislation will eliminate a 2006 congressional mandate to pre-fund retiree health benefits, a requirement that Biden said “has stretched Postal Service finances almost to breaking point, with real-world consequences.”

“This bill recognizes the Postal Service as a public service, and we are ensuring that it can continue to serve all Americans for generations to come,” Biden said during Wednesday’s signing ceremony.

The bill will save USPS $50 billion over the next 10 years by eliminating a provision of the Postal Accountability and Improvement Act 2006 which required the USPS to pre-fund retiree health benefits long into the future.

The legislation also forgives the USPS’s obligation to make $57 billion in scheduled payments to its retiree health benefits fund.

USPS, meanwhile, is seeking approval from its regulator to raise first-class mail prices again by about 6.5%. This includes 60 cents for a first class stamp. The prices would go into effect on July 10.

“The price changes reflect a judicious implementation of the postal service pricing authority provided by the Postal Regulatory Commission”, USPS wrote in a press release.

Last summer, the agency raised the price of many of its mail products by about 6.8% and raised the price of a first-class stamp from 55 cents to 58 cents. It also increased the delivery price of magazines, newspapers and catalogs by 8.8%.

USPS increased the price of a first class stamp from 50 cents to 55 cents in January 2019, the largest price increase in the agency’s history.

Stephen Kearney, president of the Alliance of Nonprofit Mailers, said the agency’s decision to seek higher prices was “predictable”, given that the USPS has so far fully utilized the finalized new pricing flexibility. by its regulator in 2020.

“Hopefully, in the not too distant future, fee-paying mailers will benefit from Delivering for America and the Postal Reform Act of 2022. Not this year,” Kearney said.

Last fall, the agency also instituted new service standards that slowed scheduled delivery of nearly 40% of first-class mail.

While USPS on-time delivery has generally improved since the start of the COVID-19 pandemic, the agency told the Postal Regulatory Commission last month that it will take several years for the service to reach its goal of 95% on-time delivery.

“The Postal Service intends to grow to 95% over several years as the infrastructure and network changes necessary to achieve this performance are implemented,” USPS wrote to the commission.

The USPS announced last week that it delivered 87.5% of first-class mail on time between January 1 and March 25 of this year, down nearly 2% from the first quarter of the fiscal year. 2022.

The reform bill signed into law Wednesday also requires all future Postal retirees to enroll in Medicare Parts B and D. It also creates a new Postal Services Health Benefits (PSHB) program within the Federal Employees Health Benefits (FEHB) program beginning in January 2025.

At that time, all postal employees and postal retirees will be offered their health benefits acquired through the PSHB program.

The National Association of Active and Retired Federal Employees (NARFE) said analysis of the new PSHB program shows it is expected to reduce the average cost of coverage, as well as plan premiums, for PSHB and FEHB plans, which will benefit other federal registrants.

“As such, PSHB schemes should provide the same coverage to postal workers and retirees, but with lower premiums,” NARFE wrote in a fact sheet on the legislation.

Biden said the legislation will “generally streamline health care for postal workers.”

“They deliver to us in rain, snow and sleet, and we make sure the health care they need will be there for them as well,” he said.

NARFE National President Ken Thomas said in a statement that the bill ends the “over-burdensome mandate” to pre-fund future postal retiree health benefits, a requirement that NARFE has long strived to meet. ‘repeal.

“As enacted, this law preserves the choice of current Postal retirees regarding Medicare Part B enrollment and protects all Postal and Federal employees and retirees from unintended premium increases resulting from the creation of the Postal Service program. Health Benefits,” Thomas said.

The legislation requires the USPS to develop an online public dashboard that will be updated weekly with local and national service performance data.

The legislation also allows the USPS to partner with state, local, and tribal governments to offer more nonpostal services to the public.

“Imagine a trip to the post office where you can pick up your bus pass, or your hunting license or your fishing license,” Biden said.

Biden added that there are “more areas where we want to see the Postal Service lead,” including purchasing more electric vehicles as part of its next-generation delivery fleet.

“It needs to do more to modernize and electrify its vehicle fleet to reduce greenhouse gas emissions and save money. We are going to do it. I will continue to fight for these common sense improvements,” Biden said.

While the Biden administration has lobbied the USPS to make electric vehicles a top priority, he also pointed to the agency’s recent successes.

Biden said the USPS “has stepped up” to provide more than 320 million COVID tests to individuals in every state, territory and military base around the world.

“Awesome return for an unprecedented task, and it’s a continuation of the truly heroic service they’ve provided throughout this pandemic,” Biden said.

In the 2020 general election, 43% of votes cast were mail-in ballots, and it took an average of less than two days for ballots to get from voters to election officials – faster than the delivery time. fastest first class mail.

Annette Taylor, a member of the National Association of Letter Carriers who introduced the president, said the legislation recognizes the USPS as an “essential enabler of our democracy and our economy.”

“We know there’s still a long way to go to ensure long-term viability, but today is a huge step forward,” Taylor said.

American Postal Workers Union President Mark Dimondstein called the signing of the bill a “historic achievement for our union.”

“The Postal Service Reform Act marks a tremendous victory for our union, for all postal workers, our families, and for the citizens of the country who depend on robust, reliable and sustainable universal postal services,” Dimondstein said. .

The bill’s biggest supporters in Congress attended the White House signing ceremony. Senate Homeland Security and Governmental Affairs Committee Chairman Gary Peters (D-Mich.) and Ranking Member Rob Portman senses. Tom Carper (D-Del.) and Thom Tillis (RN.C.) joined Biden on stage.

Also on stage are House Oversight and Reform Committee Chair Carolyn Maloney (DN.Y.), Ranking Member James Comer (R-Ky.), Government Operations Subcommittee Chair Gerry Connolly (D-Va.), National Security Subcommittee Chairman Stephen Lynch (D-Mass.) and Rep. Brenda Lawrence (D-Mich.), a committee member and former USPS employee.

Senate Majority Leader Chuck Schumer (DN.Y.), House Speaker Nancy Pelosi (D-Calif), House Majority Leader Steny Hoyer (D-Md.) and House Whip Majority Jim Clyburn (DS.C.) also joined the president at the ceremony.

Hoyer said in a statement that the legislation provides “urgently needed reforms” for the USPS.

“This legislation will help strengthen the USPS’ financial outlook and eliminate the onerous financial obligations it must bear, primarily by integrating Medicare for employees and eliminating the requirement to pre-fund retiree health benefits. These two provisions will be key to saving the agency billions of dollars that can be reinvested in its workforce and improving its services,” Hoyer said.

Meanwhile, Biden’s final two picks to serve on the USPS Board of Governors are up for a vote in the Senate. HSGAC advanced the nominations of Dan Tangherlini, former chief of general services administration, and Derek Kan, former deputy director of the Office of Management and Budget.

While the committee unanimously approved both nominees by voice vote, Sens. Rick Scott (R-Fla.), Josh Hawley (R-Mo.) and James Lankford (R-Okla.) asked to be marked as voting “no” for Tangherlini. nomination.

The Postal Service Reform Act is the first major postal legislation to come out of Congress. House and Senate lawmakers have introduced many similar bills in recent years that never made it far in either chamber.

“What did it take? Eleven years? Twelve years,” Biden said. “That’s pretty quick, isn’t it?” »

“It seems like more,” Tillis told the president.