The Postal Service Reform Act of 2017
A Positive Step Forward
02/07/2017 - On Feb. 7, a hearing was held before the full House Committee on Oversight and Government Reform on the Postal Service Reform Act of 2017 (H.R. 756). The legislation, introduced on Jan. 31, is sponsored by the Oversight Committee’s Chairman Jason Chaffetz (R-UT) and Ranking Member Elijah Cummings (D-MD) as well as Representatives Mark Meadows (R-NC), Gerry Connolly (D-VA), Dennis Ross (R-FL) and Stephen Lynch (D-MA). H.R.756 is very similar, but an improved version, to the postal reform legislation passed out of the committee in May 2016.
The bill addresses two serious key issues of concern: the pre-funding mandate and increasing postage revenue. Judging by the criteria that this bill will move the Postal Service towards solid financial footing, and should not place any undue burden on active members and retirees, the APWU joins its sister postal unions in encouraging the adoption of H.R. 756.
“This legislation is a necessary step to solving the disastrous pre-funding mandate that is dragging down the Postal Service,” said APWU President Mark Dimondstein. “Postal reform has been a great concern to postal workers, the four postal unions, the USPS, commercial mailers and the American people for a long time. We are encouraged by the bipartisan effort to fix the financial problems currently facing the USPS while preserving good union jobs and public postal services.”
H.R. 756 addresses the pre-funding mandate through “Medicare integration” within the Federal Employee Health Benefits Program (FEHB). It would place Medicare-eligible postal workers in Medicare Parts A and B. At this time, approximately 80 percent of Medicare-eligible postal workers and retirees are voluntarily enrolled into Medicare A and B. Many APWU members say that having a FEHB plan and Medicare saves them money in the long run. In addition to expanding Medicare’s role as a primary payer, FEHB plans would be given access to discounted prescription drugs through an Employer Group Waiver Plan with Medicare Part D.
The bill achieves the following goals of the union:
- The program remains part of the Federal Employees Health Benefits Program;
- Medicare integration is part of the comprehensive reform bill, not a stand-alone measure;
- Prescription drug coverage results in no additional costs to employees and retirees;
- The Postal Accountability and Enhancement Act’s (PAEA) required payments to pre-fund future postal retiree health care will be virtually eliminated by Medicare integration because it will create a huge reduction in the current unfunded liability costs.
Whether or not they enrolled, postal employees have long subsidized Medicare, paying over $30 billion in Medicare taxes since 1983. Postal employees, retirees and the Postal Service can realize the benefit of those contributions through Medicare integration. The APWU believes, although not perfect, this bill provides a workable route to achieve a robust future for America’s Postal Service.
Postal Rate Increases
The bill restores and makes permanent half of the exigent rate increase (postal rate increase) which expired in April 2016. This would result in increased postal revenue of approximately $1 billion annually. The APWU firmly supports a responsible rate increase to adequately cover costs and support the postal network.
Legislation in House Committee
During the hearing, National Association of Letter Carriers President Fredric Rolando testified on behalf of the four postal unions (the APWU, with the National Postal Mail Handlers Union and Nation Rural Letter Carriers’ Association, contributed with full input to the offered testimony).
“Since 2012, [the USPS] has not been able to make the payments [for the pre-funding mandate] at all – though the expenses associated with the missed payments have continued to be recognized, driving the misleading impression that the Postal Service is failing operationally,” Rolando said. “All four postal unions urge the Committee to adopt this legislation as quickly as possible. We pledge to work with all of you and our broad coalition of mailing industry partners to make this legislation a reality.”
Also under consideration by the Oversight Committee is a postal companion bill (H.R. 760), introduced by Rep. Stephen Lynch, allowing the Postal Service to invest retiree health funds. Investing a portion of the tens of billions of dollars in the Postal Service Retirement Health Benefits Fund in a Thrift Savings Plan-like vehicle can help the fund keep pace with growing health care costs.
Within the next few weeks, H.R. 756 is expected to be “marked up in committee,” where the bill can be amended and advanced to the full House of Representatives. As the legislation continues to be revised and works its way through Congress, the APWU will stay engaged in the process with lawmakers and staff to improve the bill every step of the way. As Congressman Connolly remarked at today’s postal hearing, “Until a bill has passed and been sent to the president for signature, it’s always a work in progress.”
“In these uncertain times and contentious political climate, we are heartened by the bipartisan support behind responsible postal reform,” said Legislative & Political Director Judy Beard.
The APWU continues discussions with congressional representatives on improvements to the bill. By doing so, we continue to keep the door open to possible allies and are growing bipartisan support for comprehensive postal reform. Stay informed about the progress of H.R. 756! Sign up for legislative updates and check the Legislative & Political Department’s webpage regularly.