WASHINGTON – A sweeping overhaul of the U.S. Postal Service meant to shore up the popular but beleaguered agency's financial future and cement six-days-a-week mail delivery was signed into law Wednesday by President Joe Biden.
The legislation cleared Congress last month after fully a dozen years of discussion that took on a new sense of urgency amid widespread complaints about mail service delays. Officials had repeatedly warned that without congressional action, the Postal Service would run out of cash by 2024.
“The Postal Service is central to our economy and essential to rural America,” Biden said. He added that mailmen and women deliver 4 million prescriptions per day, along with letters, consumer goods and even live animals, “often to parts of the country that private carriers can't or won't or aren't required to reach.”
The final legislation achieved rare, bipartisan support by scrapping some of the more controversial proposals and settling on core ways to save the service. Delivering the mail is among the most popular things the government does, with 91% of Americans having a favorable opinion of the Postal Service, according to a Pew Research Center poll released in 2020.
The bill signing came the same day the Postal Service announced it plans to raise rates effective July 10. Under the proposal submitted to the Postal Regulatory Commission, the cost of a first-class Forever stamp would increase by 2 cents to 60 cents.
The Postal Service said the increase, which is less than the annual rate of inflation, will help the agency implement Postmaster General Louis DeJoy’s 10-year plan to stabilize agency finances.
Lawmakers from both parties attended the signing ceremony and the mood was jovial, a big improvement from Kansas Republican Sen. Jerry Moran previously saying the service was in a “death spiral” that was particularly hard on rural Americans.
The Postal Service Reform Act lifts budget requirements that have contributed to the agency's red ink, and spells out that mail must be delivered six days a week, except for federal holidays, natural disasters and some other situations.
Postage sales and other services were supposed to sustain the Postal Service, but it has suffered 14 straight years of losses. Growing worker compensation and benefit costs, plus steady declines in mail volume, have exacerbated losses, even as the service delivers to 1 million additional locations every year.
The new law ends a requirement that the Postal Service finance workers’ health care benefits ahead of time for the next 75 years — an obligation that private companies and federal agencies do not face. Biden said that rule had “stretched the Postal Service's finances almost to the breaking point."
Now, future retirees will enroll in Medicare, while other health plans and the Postal Service cover only current retirees’ actual health care costs that aren’t paid for by the federal health insurance program for older people,
“In recent years we saw how unfair policies forced this treasured institution to cut costs and delayed the delivery of medication, financial documents and other critical mail,” Michigan Democratic Sen. Gary Peters, who helped write the legislation, said in a statement. “These long overdue reforms will undo these burdensome financial requirements.”
To measure the agency's progress in improving its service, the law requires it to set up an online dashboard that would be searchable by ZIP code to show how long it takes to deliver letters and packages.
Dropped from the package as it neared actual legislation were efforts to cut back mail delivery. Also set aside — for now — were other proposals that have been floated over the years to change operations, including to privatize some services.
Criticism of the Postal Service peaked in 2020, amid the COVID-19 crisis and ahead of the presidential election, as cutbacks delayed service at a time when millions of Americans were relying on mail-in ballots during the pandemic. Then-President Donald Trump acknowledged he was trying to financially pinch the service to limit its processing ability for an expected surge of mail-in ballots, which he worried could cost him the election he eventually lost.
Dominated by Trump appointees, the agency’s board of governors had tapped DeJoy, a major GOP donor, as postmaster general. He proposed a 10-year plan to stabilize the service’s finances with steps like additional mail slowdowns, cuts in some offices’ hours and perhaps higher rates.
Biden said Wednesday that more needs to be done to reform the Postal Service, including investing in an electrified vehicle fleet that could save money while helping combat climate change. The House Committee on Oversight and Reform is examining a Postal Service contract to replace its huge fleet of mail-delivery trucks with a mix of gas and electric vehicles, which the Environmental Protection Agency and Democratic lawmakers argue has too few electric vehicles.
“Today we enshrine into law our recognition that the Postal Service is fundamental to our economy, to our democracy, to our health and the very sense of who we are as a nation," Biden said.