WASHINGTON (Reuters) -The U.S. House of Representatives overwhelmingly approved a bill on Tuesday to provide the Postal Service (USPS) with about $50 billion in financial relief over a decade and requiring future retirees to enroll in a government health insurance plan.
The House voted 342-92 for what House Oversight Committee chair Carolyn Maloney said would “preserve and strengthen the Postal Service for future generations.”
Senate Majority Leader Chuck Schumer said he plans to ask the Senate to approve the bill by Feb. 18. “This postal reform legislation has been over a decade in the making,” Schumer said.
USPS has reported net losses of more than $90 billion since 2007 and Tuesday reported a net loss of $1.5 billion for the quarter ending Dec. 31.
One reason is 2006 legislation mandating it pre-fund more than $120 billion in retiree healthcare and pension liabilities.
Senator Gary Peters, who chairs the committee overseeing USPS, said the bill will “help the Postal Service overcome unfair and burdensome financial requirements, provide more transparency and accountability to the American people, and continue its nearly 250-year tradition of service.”
Postmaster General Louis DeJoy in March 2021 proposed cutting $160 billion in predicted losses over the next decade, which included https://about.usps.com/what/strategic-plans/delivering-for-america/assets/USPS_Delivering-For-America.pdf#:~:text=The%20Plan%E2%80%99s%20strategic%20initiatives%20are%20designed%20to%20reverse,next%20ten%20years%20by%20achieving%20break-even%20operating%20performance financial reforms in the House bill. USPS also adopted new delivery standards in October https://www.reuters.com/world/us/slower-us-mail-standards-take-effect-friday-2021-09-29 that slow some first-class mail deliveries. DeJoy called the legislation “vital to the United States Postal Service and the American People.”
The bill eliminates requirements USPS pre-fund 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 pre-funding 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.
The White House and postal unions support the bill as does the Greeting Card Association, Hallmark and Amazon.com (NASDAQ:AMZN).
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 generally does not receive taxpayer funding but Congress gave it a $10 billion loan in 2020 to address COVID-19 expenses that it opted to forgive.
Source: Economy - investing.com
