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New Bill Scraps Mandate Forcing USPS to Prefund Pensions Decades in Advance

The Bush-era mandate has been blamed for the mail agency’s financial woes.

Letter carrier Steve Guerra loads his truck with the day's deliverables at the Roxbury Post Office in Nubian Square in Boston, Massachusetts, on December 1, 2020.

A bipartisan, bicameral group of lawmakers introduced legislation this week that would scrap an onerous 2006 mandate requiring the U.S. Postal Service to prefund retiree benefits decades in advance, an obligation that’s been blamed for the beloved mail agency’s financial woes — which Republicans have readily used to justify recent attacks on the institution.

The USPS Fairness Act, an earlier version of which cleared the House last February, would “repeal the requirement that the United States Postal Service prepay future retirement benefits,” a rollback supported by the 200,000-member American Postal Workers Union (APWU) and other organizations representing mail carriers.

“The bipartisan USPS Fairness Act is one of the first steps toward returning the Postal Service to solid financial footing, and I urge Congress to quickly pass this critical legislation,” said APWU president Mark Dimondstein.

Approved by a Republican-controlled Congress and signed into law by former President George W. Bush in 2006, the Postal Accountability and Enhancement Act “required the Postal Service to create a $72 billion fund that would pay for its employees’ retirement health benefits for more than 50 years into the future,” NBC News explained Tuesday.

“This is not required [of] any other federal agency,” NBC noted.

Rep. Peter DeFazio (D-Ore.), the lead House sponsor of the USPS Fairness Act, said in a statement Monday that “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,” said DeFazio. “I’m hopeful that, under a Biden administration, we can finally repeal this ludicrous policy, provide the USPS with critical financial relief, and take the first step towards much-needed comprehensive reform.”

The legislation’s leading Democratic sponsor in the Senate, Sen. Brian Schatz of Hawaii, echoed that message, declaring that “there is no reason we should be requiring the USPS to prefund its future health and retirement benefits.”

“It’s an unnecessary burden that is jeopardizing its financial health,” said Schatz. “This is an easy fix that will dramatically improve USPS’s finances and ensure mail delivery can continue uninterrupted.”

The renewed push for repeal of the prefunding mandate comes as President Joe Biden is facing growing calls to act quickly to stop Postmaster General Louis DeJoy from inflicting any more damage on the USPS, whose services slowed dramatically after the Republican megadonor took over and began implementing sweeping changes last year.

Two Democratic members of Congress — Reps. Bill Pascrell (D-N.J.) and Tim Ryan (D-Ohio) — are publicly urging Biden to terminate every member of the Postal Service Board of Governors and appoint replacements who are dedicated to preserving and strengthening the USPS as an essential public service.

“Through the devastating arson of the Trump regime, the USPS Board of Governors sat silent,” Pascrell wrote in a letter to Biden last week. “Their dereliction cannot now be forgotten. Therefore, I urge you to fire the entire Board of Governors and nominate a new slate of leaders to begin the hard work of rebuilding our Postal Service for the next century.”

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