Congress Just Voted to Overhaul the Post Office. Here's What That Means for Mail Service
Mail service is slower now than in the 1970s. A $107 billion bailout by Congress probably won't fix that.
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ExpertisePersonal Finance, Government and Policy, Consumer Affairs
The Senate on Tuesday evening passed the Postal Service Reform Act, a massive $107 billion bailout of the post office that sailed through the House of Representatives in early February.
The bill, which cleared the Senate 79 to 19, now heads to President Joe Biden, who has indicated he intends to sign it into law.
You've probably noticed fewer mailboxes in your neighborhood, delays in your mail delivery and higher prices for postage. That's because the post office is facing long-standing financial losses exacerbated by COVID-related staffing shortages and outdated technology.
This bill is intended to shore up the post office's money woes, overhaul employees' retirement health benefits and develop an online dashboard with local and national delivery time data.
But critics say it won't stop planned price hikes or speed up service delays.
Here's what you need to know about the Postal Service Reform Act, the problems plaguing the post office and how they could impact your mail service.
The post office's ongoing problems
COVID-19 has only compounded issues with the Postal Service fueled by declining mail use and outdated technology. In addition, the sharp increase in e-commerce deliveries fueled by the pandemic has been met with major staffing shortages.
According to the US Government Accountability Office, the Postal Service lost $87 billion between 2006 and 2020. In a report released in February, between Oct. 1 and Dec. 31, 2021, the agency took an adjusted loss of approximately $1.3 billion.
Without congressional intervention, the USPS says it would have run out of operational capital by fiscal year 2023 and funds for retiree health benefits by 2030.
Democratic lawmakers have also accused Postmaster General Louis DeJoy, who was appointed by then-President Donald Trump, of intentionally undermining mail service ahead of the 2020 presidential election to help discredit mail-in ballots. DeJoy denies the allegations.
The Postal Service Reform Act
The bipartisan bill is intended to fortify the post office's problematic finances and services, which were thrown into the spotlight during the 2020 presidential election, when the USPS attempted to scale back delivery as a record number of voters cast their ballots by mail.
Maryland Sen. Ben Cardin, chair of the Senate Small Business and Entrepreneurship Committee, said in a statement Tuesday that the reform act will "help to ensure that the Postal Service continues to fulfill its universal service mission and make the investments necessary to enhance network efficiency, introduce new products and services, and restore excellent service for all Americans."
Trimming mail delivery to five or even three days a week has been raised as a cost-cutting measure for at least a decade. The new law would require mail service to continue six days a week. And it would establish a performance dashboard giving real-time status updates on conditions at mailing facilities and on-time metrics for different categories of mail.
Notably, it would also repeal a costly requirement that makes the service prepay employees' retirement health benefits -- an uncommon practice that "unfairly and unnecessarily burdens the Postal Service," according to the White House.
USPS retirees would instead enroll in Medicare, saving the agency tens of billions of dollars over the next decade.
The bill also allows the Postal Service to offload some duties -- like issuing passports and hunting and fishing licenses -- to local, state and tribal governments.
Perhaps most essentially, the legislation would wipe clean $57 billion of the agency's debt and save it another $50 billion over the next decade.
Amazon, Hallmark, Publishers Clearing House and many other corporations have supported the legislation, as have unions like the National Association of Letter Carriers and the American Postal Workers Union.
Postmaster General DeJoy made passage of the Postal Service Reform Act a major part of his 10-year plan to restructure the ailing service.
Flaws in the bill
Shifting postal workers' retirement health benefits to Medicare could save the USPS about $5.6 billion through 2031, according to the Congressional Budget Office. But it would add $5.5 billion in Medicare costs, and probably more down the line, NPR reported.
In addition, House Democrats pushed for provisions protecting mail-in voting in the bill, mandating electric mail trucks and restrictions on political donations by the postmaster general and the Postal Service's board of governors.
In a February opinion piece for The Hill, Paul Steidler, a senior fellow at the Lexington Institute, a conservative think tank, ticked off a half-dozen problems with the Postal Service Reform Act -- including that it fails to ensure that the USPS is self-supporting and doesn't require the agency spell out its expenditures.
Rep. Darrell Issa, a Republican from California, has pushed for Postal Service reforms for years. But in February, he announced he couldn't support the current legislation.
"It doesn't go far enough," Issa said on the House floor. "This is not sufficient reform."
The Postal Service's plan to save money
Shortly after taking office in June 2020, DeJoy announced a controversial 10-year strategy to overhaul the 230-year-old agency, addressing its mounting financial crisis and chipping away at its multibillion-dollar debt.
DeJoy also proposed investments in postal facilities, equipment and infrastructure to help the USPS compete with private package-delivery companies like UPS, FedEx and Amazon.
Higher prices and mail delays remain
But DeJoy's Delivering for America plan also includes austerity measures, like decommissioning hundreds of high-speed mail-sorting machines, eliminating overtime, banning additional trips to deliver the mail and removing sidewalk mailboxes that get less than 25 stamped mail pieces per day.
The Postal Service has already raised the price of stamps, while slowing service and reducing hours at post offices across the country.
The slowdown in October followed an August price hike, with a first-class stamp rising from 55 to 58 cents, and another (temporary) hike to the cost of shipping a parcel during the 2021 holiday season. The independent Postal Regulatory Commission said there won't be another increase until this summer, but regular price hikes will likely come twice a year starting in 2023.
In a July 2021 advisory opinion, the PRC expressed concern that the proposed price and service changes had not been pilot-tested. The commission also said the savings from the service won't lead to "much improvement" in the service's dire financial situation.
Some lawmakers have also criticized DeJoy's agenda: Rep. Gerald E. Connolly, a Democrat from Virginia who chairs the subcommittee responsible for postal issues, called it "a draconian plan that guarantees the death spiral of the United States Postal Service."
Who is hit hardest by mail slowdowns?
The Postal Service's strategy is expected to slow target delivery times for first-class mail and periodicals by about 30% nationwide.
For some, it will be an inconvenience, but for others -- including seniors who rely on prescription deliveries, small businesses that mail invoices and anyone who pays bills through the mail -- further delays could be devastating.
Sen. Gary Peters, a Democrat from Michigan and the sponsor of the Senate's version of the postal reform act, warned against DeJoy's agenda in a March 2021 statement.
"Cuts to service standards for first-class mail, limiting hours at local post offices and making it more difficult for people to access postal products would adversely impact USPS customers across the nation, including in rural and underserved communities," Peters said.
Who runs the US Postal Service?
While most Americans think of the postmaster general as the head of the post office, the Postal Service is really overseen by a board of governors, consisting of up to nine members appointed by the president and approved by the Senate.
Board members serve seven-year terms and no more than five of the nine members may belong to the same political party.
The board of governors appoints the postmaster general for an indefinite term and they are the only ones who can remove him or her from office.
Concerns about Postmaster General Louis DeJoy
The Postal Service board of governors, all selected by Trump, appointed DeJoy postmaster general on May 6, 2020, making him the first nominee in two decades with no prior postal experience.
As a former deputy finance chair for the Republican National Committee and local finance chair for the 2020 Republican National Convention, DeJoy has close ties to the GOP and Trump.
While the president cannot "fire" the postmaster general, Biden has already installed three new board members: former Deputy Postmaster General Ron Stroman and former American Postal Workers Union General Counsel Anton Hajjar, both Democrats, and Amber McReynolds, head of The National Vote at Home Institute, a nonpartisan nonprofit focused on expanding postal voting in the US.
Back in November, Biden nominated candidates to replace two outgoing members, John Barger and board chair Ron Bloom, a Trump appointee and former Obama administration official who is finishing up a one-year holdover term.
Biden's picks are Daniel Tangherlini, administrator of the United States General Services Administration, and Derek Kan, deputy director of the Office of Management and Budget. But in four months, the Senate has yet to consider either nominee.
Should they be confirmed, Biden appointees would hold a five-to-four majority and have the power to remove DeJoy.
"It's up to the board to make a determination about leadership," Psaki said in November, "but we have continued concerns about the postmaster general's leadership."