A long-awaited bill to reform the U.S. Postal Service’s troubled finances could have the momentum it needs to make it to President Donald Trump’s desk after four major postal unions voiced their support for the legislation at a House Oversight and Government Reform Committee hearing Tuesday.
National Association of Letter Carriers President Fredric Rolando told the committee that his union, along with the American Postal Workers Union, the National Rural Letter Carriers Association and the National Postal Mail Handlers Union, would “totally support this bill coming out of committee.” This is the first attempt at postal reform in recent years to receive unanimous approval from the postal unions.
“I have not seen unions work so hard to try to come up with solutions anywhere than the postal unions,” Rep. Elijah Cummings (D-Md.), the committee’s ranking member, said.
Lawmakers and industry partners also demonstrated their support for the postal reform bill, which they said would put the Postal Service on a more sustainable path after years of billion-dollar losses. The current bill closely resembles a bipartisan bill that made it out of committee last year, but ultimately failed to pass before the start of the 115th Congress in January.
Rep. Mark Meadows (R-N.C.), the chairman of the government operations subcommittee, urged lawmakers to keep the momentum going on this bill, which he said was the product of compromise from all parties.
“We’re picking up where we left off, hopefully to get this across the finish line in a way that probably makes everybody both happy and sad at the same time, and that ‘s the only way you get a good, bipartisan compromise,” Meadows said.
Despite an increase in revenue, the Postal Service posted a $5.6 billion loss for fiscal 2016. Since 2006, Congress has required USPS to pre-fund retiree health benefits. In FY 2016, that meant a $5.8 billion payment that dwarfed its controllable income of $610 million.
“There will be some hell to pay, shall we say, if there isn’t change,” Robert Taub, the chairman of the Postal Regulatory Commission, told the committee.
The bill would integrate USPS’ health benefits program with Medicare and reduce what Rep. Gerry Connolly (D-Va.) described as the “untenable burden” of pre-funding postal retirees’ benefits.
“We can’t let perfect be the enemy of the good. The Postal Service as we know it is insolvent,” Connolly said. “This bill is intended to correct big mistakes, maybe with the best of intentions.”
The bill would also permit a temporary one-cent increase on postage stamps, one-half of the previous exigent postal rate increase. The PRC permitted a two-cent increase on postal rates following the 2008 recession, but reversed the rate hike in April 2016. USPS projects it will lose $2 billion this year without the two-cent rate increase.
USPS’ deteriorating financial situation has been on the Government Accountability Office’s high-risk list since 2009. Without congressional intervention, Lori Rectanus, GAO’s director of physical infrastructure issues, told the committee that it would reach a “doomsday” scenario within a matter of years.
“We’re talking about reducing pay and benefits, which could come to trouble, or we could talk about saddling the Postal Service with coming up with more money when they probably do not have that. So there’s not really a good scenario other than we’re going to run out of money,” Rectanus said.
Committee Chairman Jason Chaffetz (R-Utah) warned of a taxpayer-funded bailout if Congress failed to pass postal reform legislation.
“We don’t want to be in a situation where there has to be a bailout. We’re trying to avoid a bailout. I want people and members to understand that a failure to act will lead us down that path,” he said.
The National Active and Retired Federal Employees Association opposes the bill on the grounds that it would increase monthly Medicare costs for current postal retirees.
“Postal retirees should not now, after finishing long careers with USPS, be threatened with the loss of their health insurance entirely if they do not buy additional coverage through Medicare. This not only eliminates choice in regards to health insurance for postal retirees living on fixed incomes, but it also sets a dangerous precedent for all federal retirees,” NARFE President Richard Thissen said in a statement.