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New Draft Bill Ready to Move USPS Forward


June 20, 2016
By PrintAction Staff

A postal reform discussion draft has been crafted by the U.S. House Oversight and Government Reform (OGR) Committee, which is described as bipartisan and holding the potential to move the United States Postal Service (USPS) into the future after accumulating years of bad debt.

NPES President Thayer Long is lauding the efforts of the congress members behind the new reform push, noting the USPS has accumulated US$125 billion in unfunded future payment obligations, exhausted its borrowing capacity, and defaulted on five payments to the U.S. Treasury.

“It would be hard to overstate the importance to NPES members and the broader mailing industry of this initiative to bring the Postal Service back to solvency,” said Long, who has reviewed the draft with NPES committee members, as part of the so-called Twenty-first Century Postal Service Coalition, to provide feedback before the draft is sent forward to legislators.

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The primary highlight in the draft, from a financial standpoint, is a new health benefits program with a proposed integration of postal retiree healthcare with Medicare. A May 2016 report by Meredith Somers of Frederal News Radio, explains, “Health insurance has been the albatross around the neck of the Postal Service since 2006, when Congress required USPS to pre-fund health retiree benefits for postal workers. To date, the USPS has paid about US$18 billion into the fund, according to the Government Accountability Office, but it’s missed about US$28 billion in payments.”

In its most recent second financial quarter, the USPS recorded a US$2 billion net loss. Somers reports, during recent testimony, Postmaster General Megan Brennan said mail volume has declined by roughly 27 percent between fiscal 2007 and 2015; First-class mail, the agency’s most profitable product, has declined by 35 percent. Brennan continued to explain, according to Somers, that package volume would need to increase by 249 percent to make up for the loss in revenue from First-class mail. Brennan recently introduced a four-point plan that would save the USPS US$32 billion through fiscal 2020.

The new draft legislation, in addition to integrating postal retiree healthcare with Medicare, aims to enhance revenue and improve efficiency, as well as streamline the governance and oversight of the Postal Service.

“The discussion draft is a thoughtful and realistic starting point that includes and tries to balance key reforms needed to put the Postal Service on a course to financial solvency and long-term viability once again,” said NPES Government Affairs Director Mark Nuzzaco, who also noted ironing down details remains a critical component. “We are a long way from the finish line, but at least we have started the race.”

Read Meredith Somers’ report on the state of the USPS draft legislation.


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