Postal service

How Postal Service Reform Would Affect Your Mail, CA Workers

Congress on Tuesday passed the biggest overhaul of the U.S. Postal Service since 2006 to help stabilize the financially-struggling agency.

the Postal Service Reform Act abandons the requirement for the US Postal Service to prepay health care benefits for its retired employees and requires future retirees to enroll in Medicare, the federal health insurance program for the elderly.

Lawmakers estimate the change will save the agency $50 billion over the next decade.

It requires the US Postal Service to stick to a six-day delivery plan. And it allows the agency to partner with state, local and tribal governments to provide services that aren’t mail-related, including offering hunting, fishing and driving licenses.

The measure, which takes effect in January 2025, also requires the U.S. Postal Service to increase transparency about its efficiency and practices with an online dashboard, review of operational issues, and tighter oversight.

It also aims to help local newspapers by reducing mailing costs.

The measure received overwhelming bipartisan support in the US House of Representatives and Senate. President Joe Biden is expected to sign it. The US Postal Service and postal service workers’ unions also support it.

“This legislation creates more transparency, includes reforms that will save billions of dollars over 10 years, and improve day-to-day operations,” Rep. Jim Costa, D-Fresno, said in a statement after the House vote. .

Changes in health care for Postal Service retirees

The US Postal Service reported more than $206 billion in unfunded liabilities and debts starting in 2021. Much of this was due to health care costs for its retirees.

The 2022 law would repeal a 2006 mandate that the U.S. Postal Service prepay health care costs for its retired employees. The U.S. Postal Service has not made these health care payments since 2012.

By law, the U.S. Postal Service would only pay actual health care costs for current retirees who are not covered by Medicare.

About one in four retirees did not enroll in Medicare even though they were eligible, according to the House Oversight and Reform Committee whose members spearheaded the bill.

The agency has experienced 14 years of financial loss as fewer people use its services. Without intervention, U.S. Postal Service officials said the agency was on track to running out of funds for its operations by 2024.

The US Postal Service relies on stamps and deliveries for funding. It does not receive taxpayer money for its operations, unlike other government agencies.

The Congressional Budget Office, which provides analysis on spending measures proposed by Congress, provided that the act would save the government about $1 billion over the next 10 years, largely because former Postal Service employees would increase Medicare prescription drug discounts. He said the measure would increase total Medicare spending by $5.5 billion this decade.

In response to questions from Republican Senator Rick Scott of FloridaDirector of the Congressional Budget Office said the law would likely cost Medicare at least an additional $5 billion after 2031. Congressional Budget Office Director Phillip L. Swagel added that the increase in the number of enrolled in Medicare does not affect premiumsthe amount a person pays periodically for coverage, since the bill is so small.

Postal Service’s own plan slows mail delivery

The US Postal Service came under fire last year for easing shipping times as part of its decade-long strategy to stay financially afloat. It predicted that the actions in the plan — slowing delivery times, cutting its hours and relying more on ground shipping than air — would avert $160 billion in losses over the next decade.

New regulations allow some first-class mail to be delivered in up to five days, depending on where it originated in the continental United States, rather than the previous standard of three.

Most letters, packages and periodicals, such as subscription magazines, would not be affected by the change, an agency spokesperson told The Sacramento Bee in September.

The plan led the California attorney general and 19 others to file a complaint with the U.S. Postal Service’s overseer, claiming the agency failed to properly share the changes for review before they were implemented.

Postmaster General Louis DeJoy said in a statement that the Postal Service Reform Act “will have the same operational and financial impacts as the self-help measures we take at the Postal Service to provide the American people with the service of delivery he expects and deserves.”

This story was originally published March 8, 2022 00:00.

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Gillian Brassil is the congressional reporter for McClatchy’s California Publications. She covers federal policies, people, and issues impacting the Golden State from Capitol Hill. She graduated from Stanford University.