Congressional Committee Approves USPS Pension Reform Bill

Published April 23, 2017

In March, the U.S. House Oversight and Government Reform Committee approved a bill changing how the U.S. Postal Service (USPS) must fund pension payments for its government employees.

House Resolution 756 would relax pension funding requirements on the quasi-government agency, allowing USPS to partially reduce unfunded liabilities by putting employees into Medicare instead of paying for employees’ health care through USPS’ pension program.

At the time of this article’s publication, HR 756 has not yet been scheduled to be voted on by the full House.

Currently, USPS owes current and retired employees about $5.8 billion in health care and pension benefits.

The bill would also preauthorize future rate increases for consumer services, to help reduce USPS’ deficits. In fiscal year 2016, USPS’ total expenses exceeded revenue by $5.6 billion, up from $5.1 billion the prior fiscal year.

Tinkering Around the Edges

Michi Iljazi, vice president of the Taxpayers Protection Alliance, says lawmakers must stop tinkering with USPS and “deliver” on real reforms to the sinking government operation.

“It is important to note that the USPS continues to lose money, posting a $5 billion loss last year,” Iljazi said. “This was on top of the tens of billions of dollars’ worth of losses over the last decade. Meaningful postal reform efforts have eluded legislative attempts, and the time has come for Congress and the USPS to deliver—no pun intended.”

Calls for Fundamental Reforms

Richard Geddes, an associate professor at Cornell University’s Department of Policy Analysis and Management, says real postal reforms would allow USPS to adapt to what consumers want.

“We need fundamental commercial reforms of the U.S. Postal Service itself,” Geddes said. “Hopefully, this would make the Postal Service more adapted, or allow it to adapt, to the electronic marketplace and the new world of electronic communications.”

Survival of the Fittest

Geddes says exposing USPS to market forces would improve the agency’s durability in a rapidly changing world.

“The communications marketplace has changed dramatically, and postal services around the world have deregulated and freed up their post to allow them to adapt more quickly,” Geddes said. “It is a fundamentally commercial service, and it is my view that we should structure the postal service as a commercial entity.”