Despite double-digit growth in its package delivery during last year’s holiday season, the U.S. Postal Service posted a $200 million net loss for the first quarter of fiscal 2017.

USPS reported $522 million in controllable income in what is usually its strongest quarter, but marks a significant decrease from the $1.3 billion in controllable income it posted in the same period for fiscal 2016.

Postal officials attributed some of its losses to the reversal of the 2-cent exigent postal rate increase, which the Postal Regulatory Commission repealed in April 2016. USPS estimates it would have earned $570 million in additional revenue this quarter had the rate remained.

However, the Postal Service experienced a nearly 15 percent increase in package volume compared to last year’s first quarter, which accounted for $701 million in revenue. USPS Chief Financial Officer Joeseph Corbett said its growth package delivery continues to be a “bright spot” in the Postal Service’s financial situation.

Postmaster General Megan Brennan told reporters on Thursday she expects a postal reform bill, recently introduced in the House Oversight and Government Reform Committee, to pass during this Congress. The cornerstone of the legislation is Medicare integration for postal retiree health plans. Brennan told lawmakers on Tuesday that the bill, if passed, would save USPS $26 billion over the next five years.

“To us, it’s a question of fairness. that the Postal Service should be treated like any other self-funded entity,” Brennan said. Since 2012, USPS has defaulted on nearly $33.9 billion in mandated payments to pre-fund retiree health benefits.

The bill closely resembles another piece of legislation that made it out of committee last year, but ultimately failed to receive a full House vote before the start of the new Congress this January. Brennan said she’s confident in the broad, bipartisan support this bill has.

“We spent the better part of the past two years trying to build consensus around core provisions of a bill that would be capable of gaining broad support,” Brennan said. “We believe this reform bill, as proposed, is capable of generating that broad support.”

The postmaster general also expressed relief that the Office of Management and Budget listed the Postal Service as an exemption to President Donald Trump’s 90-day hiring freeze on the federal civilian workforce.

“Clearly, the Postal Service serves an essential function, and we had discussions with the White House, and as you saw ultimately OMB came out with their exclusions that included the Postal Service,” Brennan said.

Fredric Rolando, president of the National Association of Letter Carriers, also voiced his support for the postal reform legislation during Tuesday’s committee hearing. In a statement Thursday, he said the bill’s Medicare integration requirement would significantly improve USPS’ financial outlook.

“The pre-funding issue can be readily addressed if Congress acts on practical, targeted postal reform. There is a strong consensus within a coalition consisting of the Postal Service, postal unions, business groups and key legislators for a reform package that all stakeholders can buy into.”

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