Amid much back-patting and self-congratulation, the House Oversight and Government Reform Committee favorably reported two bills that would make several reforms to the U.S. Postal Service.
“I just want to understand something: are we actually going to get something done?” asked Rep. Peter Welch (D-Vt.), during the June 12 markup hearing.
The Postal Service Reform Act of 2016 would ease the ailing agency’s financial burdens by addressing its unfunded liabilities, which the GAO estimated to be $78.9 billion at the end of 2015. It would encourage flexibility and innovation in products and delivery methods, keeping prices affordable while hopefully cutting costs and boosting revenue.
“This bill reflects how working in a bipartisan, collaborative manner can bring about much needed reform,” said committee Chairman Jason Chaffetz (R-Utah). “The outlook for the Postal Service is grim without the improvements contained in this bill. I hope the legislation sees quick action by the full House so the Postal Service can be one step closer to a viable, solvent future.”
It also would require Postal Service retirees who have paid into Medicare to be enrolled in Medicare in order to remain eligible for federal health insurance.
The National Active and Retired Federal Employees Association opposed the bill primarily over this issue.
“There are simple solutions to the financial problems facing the U.S. Postal Service,” NARFE President Richard G. Thissen said in a June 12 press release. “Such as eliminating the prefunding requirement outright, but this bill takes a more complicated route — forcing postal retirees and survivors who are satisfied with their current health insurance coverage to pay another $122 per month or more to keep it.”
Rep. Brenda Lawrence (D-Mich.) echoed the objections of NARFE, but in the interest of passing the legislation, withdrew an amendment that would offer retirees a 90 day opt-out period before forcing them to enroll in Medicare. She did express the intent to reintroduce the amendment on the House floor.
Health insurance has been a fiscal anchor for the Postal Service since 2006, when Congress required USPS to pre-fund health retiree benefits for postal workers.
To date, the agency has paid about $18 billion into the fund, according to the Government Accountability Office, but it’s missed about $28 billion in payments.
“This is not the only path forward,” Thissen said. “Why not allow the USPS to raise the price of postage to a more reasonable amount, instead of continuing to heavily subsidize the business of bulk mailers? Why not allow the USPS to ship alcohol or provide more financial services? Why not allow the USPS to pay its health insurance bills when they are due, and not before, by ending the burdensome prefunding requirement? Unfortunately, this bill avoids making those more difficult decisions, and instead places the full burden of balancing the Postal Service’s books on the backs of 76,000 postal retirees.”
Meanwhile, the Postal Service Financial Improvement Act was passed separately due to concerns over Congressional Budget Office scoring, according to Rep. Mark Meadows (R-N.C.). The bill would require the Postal Service’s health benefits fund to replicate the performance of the Federal Retirement Thrift Investment Board.
Currently, the Postal Service’s health fund only invests in Treasury securities, according to Rep. Stephen Lynch (D-Mass.), which yield low returns, around 1.5 percent on a 10-year investment, and only 2 percent on 30 years. Imitating the Thrift Savings Plan’s index funds, he said, would bring much higher returns.
Lynch noted that some years ago, Congress authorized the Railroad Retirement Board to do the same.
“Looking back, historically, if we had allowed this type of investment in the past, in comparing the performance of the Railroad retirement fund that was given that flexibility, the corpus of the current fund would have been increased between $5 billion and $8 billion compared to its current balance,” Lynch said.
Each of the lawmakers acknowledged that while the bills are not perfect, they are a product of compromise, and much better than taking no action at all.
“[The] House Oversight and Government Reform Committee passage of postal reform legislation is real progress in our fight to stabilize the Postal Service and give this 200-year-old American institution the tools and resources it needs not only to return to solvency, but also to thrive in the 21st century,” Sen. Tom Carper (D-Del.) said in a press release.
Rep. Elijah Cummings (D-Md.), ranking member of the committee, also weighed in, praising the cooperation from both sides of the aisle in creating and passing the bills.
“This bill is the product of intense negotiations that have been ongoing for months, and it is the culmination of broader efforts that have been underway for years,” he said. “I’m pleased that my colleagues and I were able to craft a bipartisan bill we can all support that will place the Postal Service on sustainable financial footing.”