Senate Passes Postal Service Reform Act

On Tuesday, March 8th, the US Senate officially passed the Postal Service Reform Act with a 79-19 vote in favor of the bill. Previously, the House passed postal reform legislation with heavy bipartisan support, as well. However, when that bill moved onto the Senate the first time in February, the Senate postponed voting due to a clerical error. Now, both the House and the Senate have voted in favor of postal reform legislation, which places the United States Postal Service one (big) step closer to financial recovery.

What is in the Postal Service Reform Act?

As passed by both the House and the Senate, the Postal Service Reform Act:

• Eliminates the unfair, outdated, and burdensome retiree health benefit pre-funding requirement (which is the real reason USPS has lost billions each year since this mandate took effect)
• Integrates USPS retiree health benefits program with Medicare in a manner fully consistent with private sector best practices
• Formalizes the Postal Service’s obligation to deliver mail and packages six days per week
• Includes accountability, transparency and reporting requirements

With the Senate Passing the Bill, USPS Moves Closer to Financial Recovery

Intent to steer USPS back to financial sustainability, Postmaster General Louis DeJoy developed a 10-year plan not long after he assumed his role as the head of the Postal Service in 2020. A big—if not the biggest—proponent of DeJoy’s plan was to eliminate the onerous pre-funding mandate and to integrate postal employees’ health benefits with Medicare. These two points, DeJoy argued, were crucial to pulling USPS out of its financial trouble and placing the organization on the path to financial health.

To corroborate DeJoy’s hypothesis, the Congressional Budget Office concluded in a cost estimate they ran that the Postal Service Reform Act will save the federal government $1.5 billion over 10 years.

Upon the Senate passing the bill, DeJoy offered praise and shared his positive outlook for the future of the Postal Service. He said the following:

“With the legislative financial reforms achieved today, combined with our own self-led operational reforms, we will be able to self-fund our operations and continue to deliver to 161 million addresses six days per-week for many decades to come. I thank the Senate and our Committee leadership that broke the 10-year logjam which has long constrained the finances of the Postal Service. The Postal Service serves every Americans every day and so it’s only right that our future is now collectively assured by members of all political parties.”

Postal Reform Bill Moves onto President Biden

Now that the Senate and House have both passed the legislation with bipartisan support, the bill moves onto President Biden’s desk. President Biden has long been an advocate of progressive postal reform, and even previously endorsed electrifying the Postal Service’s entire fleet of delivery vehicles. Lawmakers on both sides of the aisle widely expect him to sign the Postal Service Reform Act into law in an expedient manner.