US Senate passes reform bill to rescue US Postal Service

The US Senate has passed a major postal reform bill designed to rescue the US Postal Service from its current financial crisis, by 62 votes to 37. The 21st Century Postal Service Act (S.1789) includes measures to reform USPS pension and healthcare financing arrangements, with $11bn in surplus pension funds to be used by the Postal Service to buy employees out of their contracts, or encourage eligible workers to retire.

Senators said this key provision would allow the Postal Service to reduce its workforce by around 18%, eliminating 100,000 roles.

Other important measures in the bill will see a two-year moratorium on changing weekly delivery frequency from six-day to five-day to save operating costs as USPS looks to reduce its multi-billion dollar annual losses in the face of ongoing declines in mail volumes.

US Senators voted on around 38 amendments over the past two days, and today saw provisions added that will preserve doorstep delivery of mail for those households that currently have it, while among measures that were defeated were attempts to limit the political influence of unions.

But, an amendment that would have required USPS to stick to its current mail service standards – protecting First Class Mail overnight delivery – was defeated.

House

The bill S.1789 now waits for a deal with the House of Representatives, which is awaiting a floor debate on its own rival bill, to hammer out some kind of compromise between the Senate and House proposals.

A proposed amendment to dump the Senate bill in favour of a measure similar to the House bill was rejected in a vote in the Senate yesterday.

Republican Senator Susan Collins, one of the leaders of the Senate bill passed today, said this afternoon: “I talked earlier today to Congressman Issa to encourage him to move the House version of postal reform, which is very different to our approach, to the Senate floor as quickly as possible so we can get to conference.”

Amendments added in yesterday’s debate on bill S.1789 add extra review requirements and further regulatory scrutiny on the process of closing post offices and mail processing facilities, and could prevent rural post offices from being closed for 12 months.

Today’s voting rejected an attempt by West Virginia Senator Joe Manchin to prevent the Postal Service closing any of the 3,700 post offices it proposes to shut.

But, the voting today also declared a “sense of the Senate” measure – not mandatory for USPS to follow, though laying out the feeling of lawmakers – not to close any mail plants or post offices until S.1789 is finally added to the statute books.

Senators are concerned that USPS could start closing facilities as early as next month, as the Postal Service’s self-imposed moratorium on closures ends on 15 May.

“Vital Step”

This evening the US mailing industry welcomed the passage of S.1789, calling it a “vital step” in saving the US Postal Service.

Art Sackler, coordinator of the Coalition for a 21st Century Postal Service, a group of major USPS customers, said: “The bill will help restore some financial stability to the Postal Service by returning overpayments that the agency has made into federal pension funds, and reform its retiree health prefunding to a more realistic level.

“The mailing industry is grateful to the Senators who supported it and especially to Senators Joe Lieberman, Susan Collins, Tom Carper and Scott Brown, and their staffs who worked tirelessly to keep this bill on track,” Sackler added: “It’s now critical that the House follow suit quickly, or we risk a shutdown of the Postal Service and an ensuing economic calamity.”