Bipartisan group of lawmakers proposes bill to lift rule putting major financial burden on USPS

A bipartisan group of lawmakers introduced a bill to ease a major financial burden on the U.S. Postal Service (USPS) by eliminating a requirement that it fund retirement benefits decades ahead of time.

The USPS Fairness Act would do away with a 2006 law that mandated the USPS to form a $72 billion fund to pay for retirement health benefits for over 50 years, a requirement that is not imposed on any other federal agency. 

The legislation was introduced in the House by Reps. Peter DeFazio (D-Ore.), Tom Reed (R-N.Y.), Carolyn Maloney (D-N.Y.), Brian Fitzpatrick (R-Pa.) and Colin Allred (D-Texas) and in the Senate by Sens. Steve Daines (R-Mont.) and Brian Schatz (D-Hawaii).

“The unreasonable prefunding mandate has threatened the survival of the USPS and placed at risk vital services for the millions who rely on it. The prefunding mandate policy is based on the absurd notion of paying for the retirement funds of people who do not yet, and may not ever, work for the Postal Service,” DeFazio said in a statement. 

The introduction of the legislation comes as President Biden faces pressure from the biggest Postal Service union to install new USPS leadership. The department was thrust into the national spotlight late in the Trump administration for changes to mail delivery that critics said would impact the collection of mail-in ballots in a way that would benefit then-President Trump. 

A similar bill to the USPS Fairness Act was passed in the House last year but languished in the GOP-controlled Senate. 

Advocates for changing the requirement say the fund has been a suck on the USPS’s finances. The department had gathered up $56.8 billion for the program to fulfill the mandate, according to the Postal Regulatory Commission report released last year, as the USPS falls deeper into a debt already worth billions. 

The USPS has said it backs repealing the mandate only as part of a deal to Medicare integration.