President Biden Signs the Postal Service Reform Act Into Law — What's Next for USPS?

After swimming in mounting debt, the USPS is getting a financial break. Presiden Biden officially signed the Postal Service Reform Act into law. What does the Act entail?

Robin Hill-Gray - Author

Apr. 7 2022, Updated 11:31 a.m. ET

U.S. Postal Service worker
Source: Getty Images

The United States Postal Service has been in a crisis for quite some time. Its financial woes have proven to be a critical issue that impacts the business and threatens how the American people receive their mail.

The financial issues also impact how postal employees are paid and their healthcare benefits.

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Although there have been efforts to save the USPS, they haven't been sufficient enough. However, the Postal Service Reform Act should give the USPS the economic support it needs — and now that it has officially been signed into law by President Joe Biden people are curious about its ramifications.

So, what will the Postal Service Reform Act actually do?

President Biden
Source: Getty Images

Biden speaks on the ongoing supply chain issues

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What's the Postal Service Reform Act of 2022?

For the past 15 years, the Postal Service has made numerous attempts to persuade Congress to fix the service's balance sheets. As introduced, the act focuses on the financial and operational functions of the USPS.

According to the Act, it “requires the Office of Personnel Management to establish the Postal Service Health Benefits Program for USPS employees and retirees and provides for coordinated enrollment of retirees under this program and Medicare.”

The bill also seeks to repeal the 2006 mandate that the USPS will prepay retirement health benefits every year.

This mandate has accounted for $152.8 billion of its liabilities debt of $206.4 billion. The ruling on Feb. 8 subtracts $57 billion and will save $50 billion of the U.S. Postal Service’s money over the next 10 years. In 2020, it was the 14th consecutive year that the U.S. Postal Service wasn't able to turn a profit.

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U.S.P.S packaging
Source: Getty Images

Priority mail box ready to be sent out

The new law will also hold the USPS to a delivery standard.

This legislation provides a bit of financial hope since politicians think that without Congress making a move, the agency could diminish its cash completely by 2024. The bill also will mandate that the USPS provides delivery data that customers can access and it mandates that the USPS keeps up with a delivery standard of 6 days a week.

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The delivery standard is part of the new “transparency and reporting requirements” to ensure that performance is at its highest.

The USPS will be required to provide a semi-annual report to Congress on the progress of the law's implementation. The legislation also mandates a review of competitive and non-competitive product costs.

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U.S. Postal service
Source: Getty Images

Postal worker heads on his route

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There has been strong bipartisan support for postal service reform.

The Biden administration released a statement on Feb. 7 in which it echoed its support of the reform act and said that “the Administration supports efforts to strengthen the United States Postal Service, including by providing Postal employees with the dignity, fair pay, and employer-provided benefits they have earned.”

According to the administration’s statement, an individual Postal Service Health Benefits Program (PSHBP) would be created within the previous Federal Employees Health Benefits Program (FEHBP).

The change aims to provide sufficient healthcare to employees without creating excess debt. The act has 27 co-sponsors that include 14 Republicans — a sufficient amount to potentially block a filibuster. Senator Majority Leader Charles Schumer said that a vote on legislation would occur by the end of next week. According to The Washington Post, Rep. Carolyn B. Maloney said, “It's a reform bill that will save taxpayers’ dollars while at the same time making the operation of the post office more financially stable and sustainable."

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The President of the American Postal Workers Union, Mark Dimondstein, said that he was pleased that the bill has bipartisan support, although he thinks that it’s only “half the battle.”

He said, “The American Postal Workers Union fully supports the legislation. We think it’s good for the postal public. We think it’s good for the public Postal Service, and we think it’s good for postal workers.”


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