There has been one law nipping at the heels of the U.S. Postal Service for the past 15 years. It requires USPS to put money toward retiree health benefits some 50 years ahead of schedule.
The mandate has the Postal Service funding benefits for workers it has yet to hire. And the burden has contributed to budget challenges as the USPS cuts staff and reduces post office hours. Montana has frequently been on the short list for cuts.
Now, after years of postal workers lobbying Congress to deliver relief, it appears lawmakers might give their stamp of approval to removing the pre-funding requirement. This week, U.S. Sens Steve Daines, a Montana Republican and Brian Schatz, a Hawaii Democrat, reintroduced a bill to end the pre-funded benefits mandate, which has existed since 2006.
“Congress mandated that the Postal Service pay for future retiree’s health benefits way into the future, before people that work here are even born. And that’s where most of our losses are from,” explained Julie Quilliam, president of the Montana chapter of the National Association of Letter Carriers. “So they have, I believe, $33 billion banked already for that. It’s a huge thing. They just stopped paying it, but they have to write it off and it looks like we have losses.”
Julie Quilliam holds a sign as a group of postal workers and carriers union members gather at 24th Street West and Central Avenue to protest the changes to the U.S. Postal Service on Thursday, August 6, 2020.
The bill has been introduced before, but stalled for lack of support in both the House and Senate. This time there are versions of the bill in both branches and Democratic control of Congress makes passage more likely. Democrats have been supporters of removing the mandate. No other federal agency pre-funds health benefits decades into the future.
USPS stopped paying into the benefits a decade ago and instead recorded what it wasn’t paid as a financial loss. There are more to the financial woes of USPS than pre-funding benefits. Mail volume has declined as more business is done electronically. The flat rates USPS charges for delivery everywhere don’t reflect the actual cost of delivering the mail. But the mandate is a significant financial challenge for USPS.
Introducing the bill, Daines noted that USPS is crucial in Montana particularly in rural communities where pharmacies are non-existent and medicine by mail is crucial for seniors and veterans.
“My bipartisan bill will help the Postal Service stay in business providing world-class delivery of our mail every day, while also ensuring its employees maintain their benefits,” he said in a press release.
The Postal Service went into the COVID-19 pandemic on shaky ground. In April, then-Postmaster General Megan Brennan warned that net operating losses during the pandemic would increase by $22 million through fall of 2021. USPS was in a stare down with then-President Donald Trump over a $10 billion loan the Postal Service said it needed to maintain service. Trump conditioned releasing the money on USPS raising rates on Amazon and other mail-order retail businesses. He later relented.
By July, USPS was under the new leadership of Postmaster General Louis DeJoy, a previous competitor of USPS who issued new policies that caused mail delays. A large Republican fundraiser, DeJoy drew criticism from people concerned the delays would harm voting by mail. In addition to the mail delays, USPS also removed blue postal letter boxes across the country, including in Montana, and also dismantled mail sorting machines at some services, including Missoula.
Dejoy dismissed the accusations he was tipping the scales in favor of Trump as “wholly off base,” which is what he told the USPS Board of Governors at an August audio-streamed meeting.
Congress came through with the $10 billion for the Postal Service through COVID-19 relief legislation. But service challenges remain.
USPS performance data shows only 71% of first-class mail arriving on time in the West at the end of December. Magazines were arriving on time only 58% of the time. A month after Christmas, people were still getting gifts in the mail.
Friday, the USPS website alerted customers that mail delays were because of “unprecedented volume increases and limited employee availability due to the impacts of COVID-19.”
Congressional Democrats are starting to coalesce around getting the DeJoy and the Trump-appointed USPS Board of Governors to resign.