Reforming the Postal Service: A Challenge That May Be Met

A bill to reform the Postal Service may pass in Congress despite past failures.

Bill to “Reform” Postal Service Changed and Gains Supporters

Back in May 2021, FedSmith published Beware Federal Employees: Mandatory Medicare First Step to Eliminating FEHB Coverage for Retirees? As the article noted, for most readers the most significant impact of the bill (HR 3076) was “the potential to increase health care premiums for federal employees and retirees enrolled in Federal Employees Health Benefits (FEHB) plans. The legislation could also turn out to be the first step in removing federal retirees from the FEHB.”

At that time, the bill was called The Postal Service Reform Act of 2021 and it had five co-sp0nsors. While the bill has the same number (HR 3076) it is now called The Postal Service Reform Act of 2022 and has 102 co-sponsors.

NARFE is an interest group that advocates for issues 0n behalf of federal employees. With regard to the latest version of HR 3076, NARFE wrote in February 2022 that “thanks to modifications to the bill, NARFE is now proud to support the Postal Service Reform Act.”

The rationale for the change of the organization’s position is:

[A]n earlier version of this bill could have unintentionally increased health insurance premiums for all non-postal federal employees and retirees. But the current version of this bill avoids that outcome.

This legislation does what previous bills could not: protect the interests of postal retirees and non-postal federal employees and retirees while also providing substantial financial relief to the Postal Service.

On February 8, this bill passed in the House by a wide margin (342-92). The bill is likely to pass the Senate in the near future.

Update: The bill passed the Senate in a 79-19 vote on March 8, 2022.

Bill Would Eliminate Postal Service Prefunding of Retiree Health Benefits

There are several significant changes for the Postal Service in the bill.

  • It would eliminate the requirement to prefund retiree health benefits for Postal Service employees. The agency projects that this change would save about $27 billion over 10 years.
  • It would require Postal Service employees to enroll in Medicare when they turn 65. Currently, about one-fourth of agency employees do not enroll in Medicare. This change would purportedly save about $22.6 billion over 10 years.
  • The bill requires the Office of Personnel Management (OPM) to establish the Postal Service Health Benefits Program within the Federal Employees Health Benefits Program under which OPM may contract with carriers to offer health benefits plans for USPS employees and retirees.
  • The bill would make delivery of mail six days a week a permanent service provided by the agency. The exceptions to this requirement are for “weeks that include a Federal holiday, in emergency situations, such as natural disasters, or in geographic areas where the Postal Service has established a policy of delivering mail fewer than six days a week as of the date of enactment of the Postal Service Reform Act of 2022.
  • The Postal Service would be authorized to work with State governments, local governments, or tribal governments to provide services such as licenses for fishing, hunting, and drivers’ licenses and to provide “property or nonpostal services to the public on behalf of such agencies for non-commercial purposes…” with some restrictions.
  • It would allow the Postal Service to purchase package-sorting equipment. As the amount of first-class mail being sent through the agency declines as people use electronic services through the internet, the number of packages being delivered is increasing.
  • Also, the bill would require the agency to develop and maintain a publicly available dashboard for tracking service performance and to report on its operations and financial condition.
  • The Postal Regulatory Commission must annually submit to the USPS a budget of its expenses. It would also be required to conduct a study to identify the causes and effects of postal inefficiencies relating to items such as large envelopes.

Bill Tries to Satisfy Variety of Vested Interests

Almost any bill of significance impacts a number of interests. Passing a bill requires addressing those interests in some way in order to obtain enough votes to pass.

In this instance, for example, Senator Rick Scott (R-FL) has urged the Senate Majority Leader “to delay consideration of the H.R. 3076, the Postal Service Reform Act of 2022, until it has been reviewed by the Congressional Budget Office (CBO) to determine the legislation’s long-term budgetary effects and negative fiscal impacts on the Medicare program.”

Other delivery companies with considerable clout have opposed sections of the bill requiring the Postal Service to set up an integrated network to deliver packages and competitive products that may keep rates low for companies like Amazon to the detriment of competitors such as Federal Express and United Parcel Service.

In addition, the Postal Service unions could probably kill the bill or hold it up and may have done so without some of the changes made in the current bill.

Various modifications in the bill may have satisfied enough of the concerns raised by these different interests so it now appears the bill is likely to pass in the Senate.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47