Lawmakers aim to dissolve ‘draconian’ law that placed a heavy financial burden on the postal service



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A bipartisan group of lawmakers in the House and Senate introduced a bill that would provide the Postal Service with much-needed financial relief by removing a mandate that required it to prepay retirement benefits decades in advance.

The problem stems from a 2006 law that required the Postal Service to create a $ 72 billion fund that would pay for the retirement health benefits of its employees for more than 50 years. This is not required by any other federal agency.

The USPS Fairness Act, introduced by Democrats and Republicans in both chambers, would remove the requirement and come as some lawmakers and the largest postal services union have called on President Joe Biden to quickly install a new leadership in the city. federal agency.

“The unreasonable pre-funding mandate has threatened the survival of the USPS and endangered vital services for the millions of people who depend on it,” said Representative Peter DeFazio, D-Ore., One of the project’s sponsors. of law. “The policy of the pre-funding mandate is based on the absurd notion of paying the retirement funds of people who are not yet working and who may never work for the postal service.”

A similar measure was passed by the House on a bipartisan basis almost exactly a year ago, with 309 members of Congress in favor and 106 against. The bill was received by the Senate five days later, but it never advanced and died in that chamber.

Senators Steve Daines, R-Mont., And Brian Schatz, D-Hawaii, introduced the bill on Monday in hopes of getting it through the Senate quickly this time around.

The Postal Service has so far raised $ 56.8 billion in its retiree health benefits fund to fulfill its mandate, according to the Postal Regulatory Commission report last year, but it has been difficult to ‘achieve it.

A U.S. Postal Service worker wearing gloves and a face shield pushes a cart past trucks in Crockett, Calif., August 17, 2020.David Paul Morris / Bloomberg via Getty Images

In the meantime, financial needs have created a major economic drag on the postal service, making it feel like it is running into billions of dollars in debt every year. Much of this negative balance only appeared on the books because of the 2006 mandate.

The Postal Service “missed $ 48.2 billion in required payments for health and pension benefits for postal retirees as of September 30, 2018,” a 2019 Government Accountability Office review found.

The report noted that the agency’s responsibilities had increased significantly as a result of the tenure, showing that the postal service’s debt had grown to more than 200 percent of its revenue since the 2006 law was passed.

“The Post Accountability Enhancement Act of 2006 did something absurd, draconian and no other agency or private company ever had to do,” said Mark Dimondstein, president of the American Postal Workers Union. “It created a financial crisis in the post.”

The Postal Service said it supported the repeal of the pre-funding mandate, but only “as a companion” to integrating Medicare, a proposal previously launched in Congress that would merge retiree benefits with the federal Medicare program.

“Enacting these two provisions together would have a very significant positive impact on the financial viability of the postal service,” said David Partenheimer, a spokesperson for the postal service.

Although the American Postal Workers Union has said it does not oppose the idea of ​​integrating Medicare, it has encouraged Congress to move forward with the current legislation as is.

The law creating the mandate was originally passed in 2006 with broad bipartisan support during a lame session of Congress, as Republicans were on the verge of losing their majority.

Senator Susan Collins, R-Maine, was criticized during her re-election last year for helping push the bill through Congress in 2006, though the legislation was passed with near unanimous support.

Collins told NBC News she introduced a bill a few years after the measure took effect to give the Postal Service more time to pay for the benefits, but it was never passed.

“It relieved the Postal Service of millions of dollars in debt and it was intended to ensure that retirees get the benefits they were earning,” she said of the 2006 law. It turned out to be too aggressive a schedule, which is why the Postal Service hasn’t made payments for almost a decade. “

Rep. Bill Pascrell, DN.J., voted for the bill in 2006, and said in an editorial he wrote in 2019 that committee heads told members of Congress “that legislation is essential “. It turned out, however, that the law “was one of the worst laws passed by Congress in a generation,” he said.

“For the USPS to be forced to pre-fund its employees’ pensions 50 years into the future is folly that is the No. 1 cause of the Post’s financial woes,” Pascrell told NBC News. The abolition of this anchor is supported by an overwhelming majority in Congress. We must pass it not only to save USPS now, but also to preserve it for the next century. “

Supporters of the Postal Service highlighted the economic burden it faced during the many delivery delays seen over the past year, with some supporters pointing to the need for Congress to dissolve the mandate.

Postmaster General Louis DeJoy testifies during a House Oversight and Reform Committee hearing on the Postal Service on Capitol Hill.Tom Williams / AP File

Then-President Donald Trump opposed giving the ailing agency financial relief. He earned further criticism when he installed Louis DeJoy, a prominent Republican fundraiser, as the new post office manager. DeJoy caught fire after making numerous cost-cutting changes that came under scrutiny as many feared delaying the delivery of election mail in a timely manner.

In a letter to Biden last week, Pascrell said the president should fire the Postal Service Board of Governors for the mail delays and changes to the Postal Service instituted by DeJoy. New members could then vote to fire DeJoy.

The White House did not respond to a request for comment when asked if Biden supported the “USPS Fairness Act” or the push to change the direction of the Postal Service.

Dimondstein said the union was pushing for the president to quickly make nominations for four open governor positions and stressed that there were no women or black members on the board. There are also no people who have no knowledge of the inner workings of the postal service, he said.

“Whoever the Postmaster is, we need a strong Post Council to set policy and direction,” he said. “And we believe that it is now within the grasp of this president to do it quickly.”

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