Regulation

Postal Reform Close, But Prices To Rise

Mark Hrywna Monday | March 14th, 2022

Postal reform legislation gained U.S. Senate approval by a wide margin last week, setting up President Joe Biden to quickly sign the measure.

The Postal Service Reform Act of 2022 (H.R. 3076) passed last month by a vote of 342-92 in the House of Representatives. Sponsored by Carolyn Maloney (D-N.Y.), the measure gained approval from all 222 Democrats and 120 Republicans. Following House approval of the postal reform bill in February, Sen. Rick Scott (R-Fla.) objected, blocking the bill because of an apparent technicality.

The Senate approved its version (S. 1720) by a vote of 79-19 on March 8. The Senate’s 48 Democrats were joined by the two Independents and 29 Republicans in voting for the measure, sponsored by Chairman Gary Peters (D-Mich.), chairman of the Homeland Security and Government Affairs Committee.

The Postal Service Reform Act is expected to save USPS $22.6 billion over 10 years by requiring new postal retirees to use Medicare as their primary insurance. Another $27 billion would be saved by the repeal of a pre-funding requirement for projected retiree healthcare costs that was included in the 2006 Postal Enhance and Accountability Act (PAEA). In addition to bipartisan support, the legislation had the backing of the National Association of Letter Carriers (NALC).

New Consumer Price Index (CPI) data released last week is likely to push mailing rates higher than first envisioned. The Alliance of Nonprofit Mailers (ANM) estimates the average caps for each class of mail will increase between 6.789% and 8.789%. Actual increases will vary according to how USPS distributes the increase across rate cells and an organization’s mix of mail, according to Stephen Kearney, ANM’s executive director.

“If USPS uses all the authority, it will lead to a second round of increases in less than a year,” Kearney said in an email to members on Friday. The ANM is advocating that the USPS defer at least some of the authorized rate increases given that it has $24 billion in cash, received a $10 billion grant for COVID relief last year, and will benefit from $107 billion in relief from the Postal Reform Act of 2022.

USPS is expected to file in April with the Postal Regulatory Commission (PRC), no later than the next CPI release on April 12, according to Kearney, and plans to use six months of CPI authority to raise rates again in January.