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Industry Corner: Postal Reform Legislation Introduced in the Senate

April 02, 2018
This article is authored by Anita Pursley, Senior Manager of Industry Affairs 

On March 22, 2018, Senators Tom Carper (D-Del), Heidi Heitkamp (D-ND), Claire McCaskill (D-MO) and Jerry Moran (R-KS), introduced The Postal Service Reform Act of 2018: Improving Postal Operations, Service and Transparency to stabilize, preserve and improve the Postal Service™ – an essential part of our nation’s infrastructure and economy.

According to the accompanying summary, the bill is based off H.R. 756, with additional service protections needed by rural members. H.R. 756, which had a large contingent of mailing industry support, is the House bill that passed out of committee in March of 2017 but failed to progress any further.

Of interest, The Postal Service Reform Act of 2018:

  • Eliminates the existing statutory Retiree Health Benefits payment schedule, cancels any outstanding payments, and amortizes payments over a 40-year period.
  • Restores half of the exigent surcharge, or 2.15%, while freezing any further rate increases until the Postal Regulatory Commission (PRC) finalizes a new rate system.
  • Establishes a revised health benefit plan for postal employees and annuitants that would require them to participate in Medicare parts A, B, and D before they could enroll in a USPS® health plan.
  • Requires the PRC, along with the USPS and the Office of the Inspector General, to conduct a study of the reasons for “underwater” categories (Periodicals and Standard Mail flats) and to quantify the impact of any operational decisions of the Postal Service on the direct and indirect costs attributable to underwater products. The study must determine whether any operational decisions of the Postal Service have caused any direct or indirect costs to be inappropriately attributed to these products.
  • Includes strong service reforms that put the postal customer first by improving mail service performance across the country, especially in rural America.
  • Permits the Postal Service to introduce new non-postal products and services, ship beer, wine and distilled spirits, and partner with state and local governments in offering government services.

Whether this bill is considered a companion bill to the House bill is yet to be determined. Additionally, it is unclear whether the bill will be taken up by the Senate committee of jurisdiction, Homeland Security and Governmental Affairs. But one thing is certain – any meaningful reform is not likely to be soon or easy to achieve, so stay tuned for updates from BCC Software.

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