As postal services such as UPS and Amazon continue to dominate the shipping industry, President Biden signed into law a new bill to “boost” the United States Postal Service (USPS). According to a USPS financial report, the service lost $4.9 billion in 2021 and a staggering $9.2 billion in 2020.
H.R. 3076, or the Postal Service Reform Act of 2022, saw bipartisan support in the Senate. The bill provides $50 billion in relief over the next ten years.
Additionally, the bill put into place measures to save the USPS large chunks of money.
Most notably, the USPS will no longer have to pre-fund retiree health benefits for 75 years, and postal retirees will need to seek government health insurance. Reuters reports that this change will save the company over $27 billion in the next decade.
With approval from the Postal Regulatory Commission, USPS will also raise its prices for both mail and parcel shipping. Their price for First-Class mail will increase by 6.5%, and stamps will cost 2 cents more on average. Shipping rates for parcels will increase by 8.5%.
A 2020 ruling by the Postal Regulatory Commission that changed the way price caps affect USPS rates made these price increases possible. Government Executive states that the 2020 ruling overhauled the price cap law created back in 2006.
When explaining why the independent agency will raise prices, Postmaster General Louis DeJoy said unequivocally, “Because we need money.”
With the help of the new bill, the USPS can reduce its debt.
“Now it’s really about improving our service, reducing our cost from waste, investing in our facilities and employees, and growing our business,” Dejoy said.
The bill did not pass Congress entirely without concern, however.
Some senators, including Sen. Rick Scott, opposed the legislation because the USPS health care burden will be transferred onto the taxpayer. When the USPS stops funding its employees’ health care, reportedly, the employees will have to switch to Medicare, which receives its funding from taxpayers.
