Senate committee approves postal reform bill, USPS records another quarterly loss


A Postal Service overhaul bill that changes the agency's business structure and benefits system was approved Thursday by the Senate Homeland Security and Governmental Affairs Committee, shortly before the agency announced it suffered another multi-million dollar quarterly loss.

The bill (S.1486), which had been delayed several times since it was introduced in August 2013, would create a special Postal Service healthcare plan under the Federal Employees Health Benefits Program that would cover all postal employees and retirees.

The new plan would require Medicare-eligible retires to enroll in Medicare parts A, B and D to cover hospital stays, doctor's visits and prescription drug coverage, which would help the Postal Service reduce the billions of dollars in pre-funding payments the agency pays every year for future retirees.

The bill would also allow the agency to move to five day delivery if mail delivery volume falls below 140 billion pieces annually.

It would also give the Postal Service the power to create a new pricing system in 2017. The Postal Regulatory Commission would be granted the authority to veto the pricing system. USPS would be allowed to raise rates based on inflation in 2015 and 2016, but not create a new price structure.

The rate increase provision came out negotiations from the original bill which would have allowed USPS to determine its own rates without any oversight from the PRC.

The committee approved the bill just before the Postal Service announced a quarterly loss of $354 million in the first quarter of fiscal 2014, an amount that pales in comparison to last year's first quarter when the agency lost $1.3 billion.

But that doesn't mean the Postal Service doesn't still need help, Postmaster General Patrick Donahoe said on a call with reporters Friday. USPS has sustained a loss in 19 of the last 21 quarters.

"Any idea that we've turned the corner financially, unfortunately, at this point is not really clear thinking," Donahoe said. "We've got to get the legislation through and then get ourselves debt-free and we'll be in much better shape for the future."

The Postal Service has been able to grow revenue by capitalizing on opportunities in shipping and package services and has reduced operating costs, Donahoe said, but losses continue to mount due to the persistent decline of First-Class Mail, and the agency's inflexible business and governance models.

For more:
- go to page for S.1486
- go to the USPS statement

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