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Senate passes $107 billion overhaul of USPS, lauding mail agency’s role in pandemic response

Biden is expected to sign the Postal Service Reform Act, a cornerstone of Postmaster General Louis DeJoy’s controversial 10-year restructuring plan

(Matt Rourke/AP)

The Senate on Tuesday approved a $107 billion financial overhaul of the long-beleaguered U.S. Postal Service, providing monetary relief for the agency that leaders say will allow it to modernize and invest in efficient service.

President Biden has signaled his intent to sign the legislation, which has already cleared the House.

The Postal Service Reform Act, which passed 79 to 19, provides financial flexibility for the mail agency to take on improvements that have been debated for years. Republicans have traditionally criticized the agency as a poster child for government waste and incompetence, even as it won high marks for approval and trust from the public. During the pandemic, Democrats hailed mail workers as everyday heroes and pushed the agency as an example of the benefits of robust government services.

But the Postal Service’s role throughout the coronavirus pandemic forced lawmakers to reach a consensus on restructuring its balance sheet, with worries that the agency could not withstand another financial shock. Nearly half of all voters cast their ballots by mail during the 2020 election, and postal workers hauled packages from doorstep to doorstep amid surging e-commerce demand, allowing individuals to purchase essentials remotely and stay home during public health shutdowns.

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“The Post office usually delivers for us. Today we’re going to deliver for them,” Senate Majority Leader Charles E. Schumer (D-N.Y.) said on the chamber’s floor Tuesday.

The Postal Service has endured years of losses triggered by slumping mail volumes and a 2006 bill that required it to annually pre-fund retirees’ health-care costs. Declines in mail revenue have forced the agency to default on those health-care payments since 2011.

Tuesday’s bill gives the agency a significant reprieve, removing $57 billion in past-due postal liabilities and eliminating $50 billion in payments over the next 10 years. It requires future postal retirees to enroll in Medicare, a move that would add minuscule costs to the public health-care system but would save taxpayers $1.5 billion over the next decade.

The legislation also codifies new timely-delivery transparency requirements for the Postal Service, which has struggled with on-time service since Postmaster General Louis DeJoy took office in June 2020, and allows the agency to contract with local, state and Indigenous governments to offer basic non-mail services, such as hunting and fishing licenses.

“By passing this historic legislation, the Senate has shown the American people that we can come together, build consensus and pass meaningful reforms that will improve lives,” Sen. Gary Peters of Michigan, the bill’s lead Democratic sponsor, said in a statement. “This bill, which has been 15 years in the making, will finally help the Postal Service overcome burdensome requirements that threaten their ability to provide reliable service to the American people.”

The bill is the cornerstone of DeJoy’s 10-year restructuring plan. The mail chief has long been a foil of Biden and congressional Democrats because of his past as a Republican financier and the Postal Service’s delays ahead of the 2020 election.

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Within weeks of taking office in summer 2020, DeJoy ordered workers to slow the delivery of the mail and presided over the scrapping of 671 high-speed mail-sorting machines and public mailboxes. The removals were unrelated to DeJoy’s policies, but critics saw them as part of President Donald Trump’s strategy to delegitimize mail-in voting.

Months after the election, DeJoy announced a 10-year vision for the Postal Service that included longer delivery windows and raising postage prices to cut costs and boost revenue. The proposal calls for shuttering 18 mail sorting plants and cutting post office hours.

He has also led the Postal Service to begin purchasing up to 148,000 gas-powered mail delivery trucks, rebuffing the Biden administration’s climate goals and concerns from environmental experts that the vehicles will permanently damage the planet and pose public health risks.

Rep. Gerald E. Connolly (D-Va.), one of the House’s lead postal advocates, plans to introduce legislation in the lower chamber Wednesday morning that would prohibit the Postal Service from enacting its contract with Oshkosh Defense for the trucks, worth up to $11 billion, unless the fleet is made up of at least 75 percent electric vehicles, according to two people involved with the legislation. The bill has 68 co-sponsors.

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But DeJoy’s plan also vastly increases the Postal Service’s plans to replace failing equipment, renovate dingy post office buildings and embrace package shipping as core to the agency’s future.

DeJoy opened 48 package-specific processing plants in the run-up to the 2021 holiday season, with the Postal Service handling 13.2 billion items between Thanksgiving and the end of the year.

Since late January, those facilities have been transformed to pack and ship more than 270 million free rapid coronavirus test kits. Postal leadership and the White House have found the program so successful that they have expanded it, allowing households to request additional kits. Postal advocates have called the initiative a mold for future mail agency services.

DeJoy whipped GOP votes in person, appearing at the party’s House and Senate conferences to discuss the legislation. Some Republicans, though, remained unconvinced, calling the legislation a bailout for the Postal Service that would shift financial burdens to taxpayers and onto Medicare.

In fact, the Congressional Budget Office, Congress’s nonpartisan bookkeeper, found the bill would save taxpayers money by buffeting Medicare’s prescription drug discounts.

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“This bill doesn’t reduce costs,” said Sen. Rick Scott (R-Fla.). “It just shifts them from one unfunded government program to another underfunded government program.”

Mixed views of DeJoy in Congress made negotiations on the bill politically fraught. DeJoy is a recurring character in Democratic political fundraising emails and was even the butt of a joke on “Saturday Night Live.” Republicans have said his business savvy — DeJoy in his 20s turned his family trucking business into a global supply chain powerhouse after a scoring a major contract with the Postal Service — is the kind of private-sector experience the agency has needed.

“The Postal Service has a postmaster general right now who is absolutely committed to … making the post office more effective, more efficient, but he needs a little breathing room, as he says, and that is what we are doing here in Congress,” Sen. Rob Portman of Ohio, the lead Republican sponsor of the postal bill, said Monday on the Senate floor.

Peters and Portman led months of sprawling negotiations with Democratic and Republican House leaders, DeJoy and the Postal Service’s four powerful unions on the bill.

In May, they unveiled a more limited bill omitting more-controversial issues such as voting access, electric mail vehicles, postal banking and post office closures, lawmakers said.

What remained was a narrower package that focused on the Postal Service’s financial obligations but left unresolved the other major questions that linger about the future of the mail agency.

“It’s not a blank slate but a more blank slate,” said Porter McConnell, campaign director of the consumer rights group Take on Wall Street and co-founder of the Save the Post Office Coalition. “In no way does it settle the debate about the post office in the U.S. It buys time for a conversation about what the post office looks like.”

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