Postal service

What we know about the new USPS law

  • President Joe Biden is expected to sign the Postal Service Reform Act on Wednesday afternoon.
  • The USPS’s strained finances are tied to laws that limit how it spends its money and the services it can provide.
  • People using USPS may not see a difference immediately, but the law will help stabilize USPS finances.

WASHINGTON – President Joe Biden signed the Postal Service Reform Act 2022 Wednesday, providing the agency with a much-needed financial overhaul.

“It’s no exaggeration to say that the Postal Service is essential as it always has been, as it always is today,” Biden said in remarks before signing the bill.

The Postal Service has remained financially underwater due to legislation passed decades ago limiting how it spends its money and what services it could provide. The USPS reform bill will give the agency that flexibility back.

The bill easily passed Congress with rare bipartisan support, receiving a 79-19 vote in the Senate on Tuesday night, after the House passed it last month by a 342-92 vote.

Here’s everything you need to know about the Postal Reform Bill that now has the force of law.

USPS finances under pressure

To understand the need for the Postal Service Reform Act, it is important to first understand why the U.S. Postal Service needs reform in the first place.

“The Postal Service is deeply in debt,” said James O’Rourke, professor of management at the University of Notre Dame. “They have an $80 billion long-term debt agreement and their operating revenue is only about $18.5 billion a year. Although that’s a slight increase from to last year and the year before, profits are now at very thin margins and over the past five years they have consistently lost money.”

The agency’s financial difficulties date back decades.

When the Postal Reorganization Act of 1970 took effect, it required the Postal Service to serve all Americans while breaking even.

“It basically introduced an identity crisis that has had very real consequences for USPS operations ever since: is it a business or is it a service?” said Porter McConnell, co-founder of the Save the Post Office Coalition.

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Decades later, in 2006, the Postal Accountability and Improvement Act was passed, which required the USPS to set aside money for future retiree health benefits and limited the services the agency could offer in the future to those it already offered.

The Postal Service was supposed to save $5 billion for the first 10 years of the program, which was on a 50-year schedule. But in 2012 it started payment default. He said at the time that without default, the agency would not be able to pay its employees, suppliers or deliver the mail. Since the law was passed, the USPS has experienced an increase in net revenue losses for more than a decade.

“Whether intentional or not, both policies had the effect of emptying Postal Service coffers almost immediately and sparking calls for reform,” McConnell said.

O’Rourke said that given the cost of doing business and the Postal Service’s current debt, the agency could “go bankrupt” within a year without further action.

What does the Postal Service Reform Act contain?

The reform legislation aims to address some of these issues.

Under the law, the mandate that required the Postal Service to contribute to future retiree health benefits will be dropped. Instead, retired postal workers will need to enroll in Medicare.

In addition, the USPS must maintain a public dashboard of tracking service performance and will report regularly on its “operations and financial condition.” according to a summary of the invoice. It will also be able to create “non-postal services” in partnership with state and local government, such as fishing licenses and subway passes, McConnell said.

More on the invoice::Bill OK’d by House would ease the budgetary constraints of the Postal Service. Measure is supported by Louis DeJoy.

The bill will save the Postal Service nearly $50 billion over the next decade, according to Michigan Sen. Gary Peters, chairman of the Homeland Security and Governmental Affairs Committee.

“This 15-year-old bill will finally help the Postal Service overcome burdensome demands that threaten its ability to provide reliable service to the American people,” Peters, a Democrat, said in a statement. Statement of March 8.

Yet some say the bill does not go far enough. McConnell, who called the law “a skinny bill by any standard,” said some things the bill could have added include postal banking, funds to make postal trucks electric with charging stations charging stations, census outreach and grocery delivery.

“This bill buys us time to have a conversation about the future of the post office,” McConnell said. “The urgent conversation we turn to now is what should the future of the post look like?”

What does this mean for customers?

Although people using the postal service may not immediately notice the difference, over time the agency’s financial stability will begin to make a difference.

“The vast majority of the USPS budget shortfall can be attributed to the prefund mandate that the bill eliminates,” McConnell said. “Eliminating it removes the biggest excuse for the service cuts and price hikes Postal customers have suffered since Louis DeJoy became Postmaster General. We’ve seen the logic of austerity lead to decision making short-sighted, and that leads to slower, more expensive mail for all of us.”

Regarding mail-in votes for future elections, O’Rourke said that since there was no real evidence of widespread mail-in voter fraud, mail-in voting is more a legislative matter of State a postal service issue.

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“I have full confidence that the Postal Service can handle an election, can handle three or 4 million ballots,” O’Rourke said. “They proved they could do it last time out.

“They deliver between 10 and 12 billion (mail) items over Christmas,” he added. “The election is a day at the beach for these guys.”