A bipartisan group of legislators in the House and Senate introduced legislation that would provide the Post Office with much-needed financial relief, eliminating a mandate that required him to pay retirement benefits in advance decades in advance.
The issue stems from a 2006 law that required the Post Office to create a $ 72 billion fund that would pay its employees’ retirement health benefits for more than 50 years in the future. This is not required by any other federal agency.
The “USPS Fairness Act”, introduced by Democrats and Republicans in both chambers, would end the requirement and comes when some lawmakers and the largest postal union asked President Joe Biden to quickly install a new leadership at the federal agency.
“The irrational pre-financing mandate threatened the survival of the USPS and put vital services at risk for the millions who depend on it,” said Rep. Peter DeFazio, D-Ore., One of the project’s sponsors. “The pre-capitalization mandate policy is based on the absurd notion of paying for the retirement of people who still do not work, and can never work, for the Post Office”.
A similar measure was passed by the House on a bipartisan basis almost exactly a year ago, with 309 members of Congress supporting and 106 against. The bill was received by the Senate five days later, but it did not progress and died in that Chamber.
Senators Steve Daines, R-Mont. And Brian Schatz, D-Hawaii, introduced the bill on Monday in the hope of quickly passing it in the Senate this time.
The Postal Service has so far accumulated $ 56.8 billion in its retiree health benefits fund to fulfill its mandate, according to last year’s Postal Regulatory Commission report, but it has been a struggle to get there.
In the meantime, the financial need created a major economic barrier for the Post Office, making it appear that billions of dollars in debt fell every year. Much of that negative balance only appeared in the books because of the 2006 mandate.
The Postal Service “lost $ 48.2 billion in payments required for health and pension benefits for retirees on September 30, 2018,” concluded a review of the Government Accountability Office in 2019.
The report noted that the agency’s liabilities have increased dramatically because of the mandate, showing that the postal debt has grown to more than 200 percent of its revenues since the 2006 law was passed.
“The Post Accountability Enhancement Act of 2006 did something that was absurd, draconian and no other agency or private company has ever done,” said Mark Dimondstein, president of the American Postal Workers Union. “It produced a financial crisis at the post office.”
The postal service said it supports the revocation of the pre-financing mandate, but only “as a companion” to Medicare integration, a proposal previously submitted to Congress that would combine pensioner benefits with the federal Medicare program.
“The enactment of these two provisions together would have a very significant positive impact on the financial sustainability of the Post,” said David Partenheimer, spokesman for the Postal Service.
Although the American Postal Workers Union said it is not opposed to the idea of Medicare integration, it encouraged Congress to move forward with current legislation as it stands.
The law creating the mandate was originally passed in 2006 with broad bipartisan support during a limp session of Congress, when Republicans were about to lose a majority.
Senator Susan Collins, R-Maine, faced criticism during her re-election last year for helping to refer the bill to Congress in 2006, although the legislation was passed with almost unanimous support.
Collins told NBC News that she introduced a bill a few years after the measure became law to give the Post Office more time to pay for benefits, but it was never passed.
“It eased the million dollar postal service in liabilities and aimed to ensure that retirees received the benefits they earned,” she said of the 2006 law. “It turned out to be a very aggressive schedule, so the postal service doesn’t do payments for almost a decade. “
Congressman Bill Pascrell, DN.J., voted in favor of the bill in 2006 and said in an article he wrote in 2019 that committee leaders told members of Congress “that the legislation was critical”. the law “one of the worst pieces of legislation that Congress passed in a generation,” he said.
“That the USPS is forced to pre-finance its employee pensions 50 years in the future is crazy which is the number one cause of the Post’s financial problems,” Pascrell told NBC News. The abolition of this anchor is supported by an overwhelming majority We must approve this not only to save the USPS now, but to preserve it for the next century. “
Postal supporters highlighted the economic burden it faced during the many delivery delays seen last year, with some advocates noting the need for Congress to dissolve the mandate.
Then President Donald Trump objected to providing the struggling agency with any financial relief. He received more criticism when he installed Louis DeJoy, a major Republican fundraiser, as the new general postmaster. DeJoy came to attention after making several cost-cutting changes that were scrutinized because many feared they would delay timely delivery of electoral correspondence.
In a letter to Biden last week, Pascrell said the president should fire the Postal Service Board of Governors for the delays and changes in the Postal Service that DeJoy had instituted. The new members could vote to fire DeJoy.
The White House did not respond to a request for comment when asked whether Biden supported the “USPS Fairness Act” or pressure to change the leadership of the Post.
Dimondstein said the union is pushing for the president to nominate for four vacancies for governor quickly and pointed out that there are no women or black members on the board. Also, “there are no people who are aware of the inner workings of the postal service,” he said.
“Whoever the postmaster general is, we need a strong Board of Postal Governors in terms of defining policy and direction,” he said. “And we believe this is at this president’s fingertips now to be done quickly. “