This week, the House of Representatives voted to advance postal reform legislation by 342 to 92.

That Democrats and Republicans
alike could vote, in an election year, no less, for H.R. 3076 is praiseworthy.
Postal reform is rare; only two significant postal reform bills have been enacted
in the past half-century. Moreover, this usually drab issue has become
exceedingly political in recent years, with Democrats accusing former President
Donald Trump and Postmaster General Louis DeJoy of trying to wreck the United
States Postal Service (USPS) to stop voting by mail.

But on digging into the bill itself one can see why it was easy for legislators to support: H.R. 3076 focuses mostly on uncontroversial, incremental reforms. (Table 1).

Table 1. H.R. 3076, Postal Service Reform Act (as passed by the
House of Representatives)

There is little in the legislation that will quicken the pulse of the public. H.R. 3076 will force the USPS to report publicly more data on its on-time delivery performance (sections 201 and 207). This is overdue, and something I argued for a couple years ago. And maybe those Americans who still read paper copies of local rural newspapers will appreciate the bill’s quintupling of the postage subsidy to publishers.

Most of the bill’s provisions are directed toward eye-glazing, administrative matters, such as altering the way the Postal Regulatory Commission submits its budget, how mail costs are attributed to different classes and subclasses of mail, and weeding out inefficiencies in the USPS’s delivery of oversized envelopes (“flats”).

The bill’s lone big enchilada is its proposals to take more than $100 billion in USPS worker compensation costs off the USPS’ books over the next decade. The bill would do this through three means: (1) abolishing the statutory requirement that the agency prefund its current employees’ retiree healthcare costs, as it does with their pensions, (2) requiring more current USPS employees to enroll in a new USPS federal health plan, and (3) making future USPS workers enroll in Medicare upon retirement. A Congressional Budget Office score tabulates the bill will save the government $1.5 billion over 10 years, which indicates these policies mostly shift costs from USPS to taxpayers, which does not comport with USPS’s statutory charge to be self-supporting.

Both unions and Postmaster General
Louis DeJoy have advocated these changes, which will reduce the red ink the
agency books in its financial statements. (Both would prefer the relentless
media reports about the agency running deficits to go away.)

Concerningly, the bill’s Section 202 would demand the USPS “maintain an integrated network for the delivery of market-dominant and competitive products” and to deliver “at least six days a week.” Translated into non-legalese, this provision would force the USPS to maintain enough people, sorting machines, etc. to deliver both paper mail and parcels regardless of demand. This seems imprudent seeing as the future demand for paper mail and parcels is anything but clear. The former has plunged 40 percent over the past 15 years, and the USPS regularly warns that parcel volumes will plunge should big shippers (like Amazon) divert volume to other delivery channels. Section 202 also might make it harder to accurately price postage as the costs of this “integrated network” may not be readily attributable to any particular class of mail or parcel. (A few years ago, I found the USPS fails to attribute more than 40 percent of its costs to any particular products.)

Reportedly, the Senate soon will vote on the legislation, perhaps as early as next week. Whether it will amend the legislation or pass the House bill as written is unclear.

Regardless, the legislation might be remembered as a missed opportunity. Matters of obvious concern, such as the recent high postage rate increases and the myriad media reports of mail theft go unaddressed. And this is to say nothing of the most fundamental public policy question: For what purposes do we need a Postal Service for in the 21st century?

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