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On March 22, Senators Tom Carper (D-DE), Jerry Moran (R-KS), Heide Heitkamp (D-ND), and Claire McCaskill (D-MO) introduced the bipartisan Postal Service Reform Act of 2018, titled “Improving Postal Operations, Service, and Transparency.” The legislation is a comprehensive reform bill that would put the Postal Service on firm financial footing by providing much needed financial relief. The legislation maintains universal service while preserving 6-day mail delivery, as well as allowing the Postal Service to introduce new non-postal products and services like the delivery of beer, wine, and distilled spirits. The legislation also includes service standards reforms to protect postal customers in rural areas by maintaining the current service standards for 2 years.
The National Rural Letter Carriers’ Association (NRLCA) thanks the Senators for their bipartisan effort to advance postal reform legislation in the Senate. The NRLCA will continue to advocate for the rural craft and the postal needs of rural America, and we will work with Senators from both sides of the aisle to ensure a viable Postal Service for the 21st Century.
The Postal Service is vital to the economy, especially in rural areas. It is the lynchpin of a $1.4 trillion mailing industry that employs more than 7 million people nationwide. However, the onerous pre-funding requirement has severely strained USPS finances; representing approximately 87% of the financial losses since pre-funding began. Over the last two years, however, its operating finances have improved thanks in large part to an e-commerce boom, but not enough to offset the missed pre-funding payments. These missed payments have caused the Postal Service to consider cutting vital services, and have kept it from being able to invest in much needed infrastructure and new vehicles. This legislation provides some of the mechanisms that will help avoid such cuts and enable the Postal Service to make significant investments in those areas.
Specifically, the bill:
- Increases Sustainability
The Postal Service Reform Act eliminates the existing statutory payment schedule, cancels any outstanding payments, and amortizes payments over 40 years. The bill would also create a new Postal Service Health Benefits Program (PSHBP) within FEHBP, implemented and administered by OPM, for all Postal employees and annuitants and require all Medicare-eligible postal annuitants and employees enrolled in the PSHBP to also enroll in Medicare, including parts A, B and D. This is essential for protecting the American taxpayer from a future bailout and for protecting the employees’ benefits in retirement.
- Improves and Stabilizes Postal Service and Operations
The price of postage is decreased pursuant to federal court orders last Congress. This eliminates the positive revenue stream from the 2014 exigent rate case. As the result of a compromise among the Postal community, the bill restores half of the temporary rate increase while freezing any further rate increases until a new rate system can be finalized by the Postal Regulatory Commission.
- Prioritizes the Postal Customer with Service Improvements & Protections
The bill includes strong service reforms that put the Postal customer first by improving mail service performance across the country—especially in rural America—while also requiring transparency and enforcement to ensure the Postal Service’s accountability. Service performance would also be stabilized by preserving current service standards for at least 2-years.
- Innovates and Modernizes Existing Postal Business Model and Increases Transparency
The bill also allows the Postal Service to introduce new non-postal products and services, ship beer, wine and distilled spirits, and partner with state and local governments in offering government services.