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The new reform bill eliminates the requirement that the Postal Service prefund retiree benefits and health care 50 years in advance.
UPDATE: A waiver provision that would have allowed the U.S. Postal Service to sidestep new performance standards has been removed from postal reform legislation, according to a Prospect review of the updated bill text. The provision was removed after the American Postal Workers Union sent a letter to Rep. Carolyn Maloney (D-NY), the bill’s author, saying that the union would not be able to support the bill if the language remained.
Previously, the bill allowed the Postal Service to avoid compliance with preset performance standards if it deemed them “impractical.” Union leaders saw this as a recipe for postal leadership to adjust any service standards and slow mail service, without having to pay attention to oversight from Congress or the Postal Regulatory Commission. Given Postmaster General Louis DeJoy’s interest in changing operations at the Postal Service, and the catastrophic degradation of standards over the past year, this was cause for serious concern.
Last Friday, after weeks of discussion with Maloney’s staff, APWU president Mark Dimondstein informed Maloney that the union would oppose the bill with that language in there. According to the Oversight Committee, the waiver language was removed based on that feedback.
However, as recently as the morning of May 11, the APWU believed that the language was still in the bill. The Oversight Committee was unable to contact the union about the changes, because of technical difficulties with the union’s email system.
The new text, time-stamped May 10 at 9:46 p.m., requires the Postal Service to make annual nationwide delivery targets, and post them on a public website that updates on a weekly basis, searchable by ZIP code, so the targets can be tracked. The Postal Service must also produce biannual reports to Congress and its regulator on its operations and financial outlook.
Where there was previously a section about “noncompliance with performance targets,” now there is no section, and therefore no defined penalties if the Postal Service fails to meet its performance standards. There is no real mechanism for a formal review of whether the Postal Service is hitting the targets. In addition, a “temporary floor for service standards” that would block the Postal Service from lengthening delivery times for approximately six months after the enactment of the legislation has been removed.
That raises the question of how the delivery standards will be enforced. The Postal Regulatory Commission does have oversight of the Postal Service generally, but it’s unclear what they would be able to do about missed performance standards. The Postal Service Board of Governors also has authority under current law to enforce the standards. Transparency from a public website that tracks performance in real time could also help keep the Postal Service committed to on-time delivery.
A meeting is being held on Tuesday between postal union leaders and Rep. Maloney to discuss the legislation.
Original story below:
Postal reform legislation that will soon be released by the House Oversight Committee contains a waiver provision that will allow the Postal Service to effectively set its own delivery standards, nullifying oversight from Congress, two sources tell the Prospect.
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The bill has been negotiated by House Oversight chair Carolyn Maloney (D-NY), who released a postal reform discussion draft in February. Sen. Gary Peters (D-MI), chair of the Senate Homeland Security and Governmental Affairs Committee (HSGAC), has played more of a supporting role. But the goal of both Democrats is to get a filibuster-proof majority on the bill and pass it this year, making it one of a handful of bipartisan bills being attempted this session.
One of the three pillars of the discussion draft was adding more stringent performance standards, including new reporting requirements and disclosures, plus mandates for the agency to make operational corrections if it did not meet delivery targets. But the waiver, which would allow the Postal Service to opt out of that process, was put in at the request of Republicans, sources indicate. This effectively cuts Congress and to an extent the Postal Regulatory Commission, the agency’s chief regulator, out of oversight, and gives the Postal Service a free hand to make operational changes.
“This was something they tossed to Republicans to get them on the bill,” said one source familiar with the negotiations.
Under the direction of Postmaster General Louis DeJoy, the Postal Service’s performance standards nosedived last year, particularly during the December holidays and on into this spring. A new ten-year plan DeJoy proposed in March would slow the speed of first-class mail delivery and raise postage prices. Given the Service’s recent performance, increased requirements on delivery standards were a major priority for legislation.
Nationwide service changes are subject to oversight from the Postal Regulatory Commission, and the congressional bill would add to its powers of scrutiny. But if the Postal Service can pre-empt the performance standard requirements, such oversight would amount to window dressing.
Rep. Maloney’s office has not responded to a set of questions about the postal reform bill. The release of that bill has been characterized to the Prospect as imminent.
The performance standards waiver is a precarious move for Maloney, who faces a primary challenge from her left next year, in a city that has already seen former Reps. Joe Crowley and Eliot Engel fall to left-wing opponents in the past two election cycles. “The whole situation really does embody how Maloney is not a progressive and does not fight for the changes we need,” said Rana Abdelhamid, who is challenging Maloney in next year’s primary. “She’s giving more power to someone who sabotaged the Postal Service over the past year. This is a moment about accountability, not about trying to broker a deal with someone who’s clearly failed in his main role.”
The plusses and minuses in the current postal reform bill are reminiscent of those in the Postal Accountability and Enhancement Act (PAEA), passed by a lame-duck Republican Congress in 2006. That bipartisan bill mandated six-day delivery and slowed the rate of postage increases to the rate of inflation, but it also included the notorious prefunding requirement, which forced the USPS to set aside billions of dollars annually to fund retiree benefits and health care for at least 50 years in advance. This crippled the Postal Service’s flexibility at a critical time, as e-commerce blossomed and physical mail volume dropped. Nearly all of the Postal Service’s losses since 2006 can be attributed to the prefunding requirement.
The new reform bill eliminates that half-century-of-prefunding requirement, a top priority for Democrats. It also integrates postal retirees into Medicare, which should lighten agency costs. But by adding the waiver on performance standards, it would allow the Postal Service to slow down or change mail service at any time in the future, so long as it states it cannot financially meet service standards or comes up with some other excuse.
Maloney has been laser-focused on obtaining Republican and stakeholder support for her bill. In an oversight hearing in February with both Postmaster General DeJoy and Ron Bloom, chair of the USPS Board of Governors, instead of pressing them on Postal Service operations, Maloney spent her time asking a bunch of leading questions about postal retiree integration into Medicare, getting DeJoy, Bloom, president of the American Postal Workers Union (APWU) Mark Dimondstein, and even a resident scholar of the American Enterprise Institute to endorse the measure. Despite this, the APWU would be unlikely to support the final bill if the waiver is included, according to union sources.
Other members of the committee, including Reps. Eleanor Holmes Norton (D-DC), Danny Davis (D-IL), and Hank Johnson (D-GA), asked at the hearing about eliminating the prefunding, again yielding support from the panel. It certainly appeared as if members were designated to ask particular questions that aligned with the discussion draft.
The waiver on USPS service standards plays right into Postmaster General Louis DeJoy’s hands.
However, the vast majority of members on the committee grilled DeJoy over lagging delivery standards and the effect on their constituents. Rep. Brenda Lawrence (D-MI), a former postal employee, said at the hearing, “Mandating targets for service performance is necessary to hold the agency accountable. If we do not make every effort to affirm that commitment, it would chip away at the foundation of what makes the agency so great.” DeJoy was noticeably perturbed by such statements.
Rep. John Sarbanes (D-MD) questioned why DeJoy would seek to alter postal operations in the middle of a pandemic, and then mentioned how the proposed bill would set “required targets for the postal service to meet in terms of performance and then reporting that goes with those targets.” This was before the waiver was ultimately introduced.
The PRC is in the midst of issuing an advisory opinion on the recent proposed nationwide service changes. The Postal Service has admitted in question-and-answer sessions that it did not reach out to any customers or conduct analysis of the impact of the changes on vulnerable groups, such as rural and urban populations, low-income communities, or the elderly. The PRC must release its opinion by July 20.
DeJoy is in the midst of closing 18 operational facilities, a move that the APWU has formally opposed. “We have made crystal clear to postal management that any further plant consolidations are a misguided strategy that not only disrupts the lives of postal workers but will further delay mail,” Dimondstein said in a statement.
Maloney said in March that “Louis DeJoy should not be the Postmaster General,” and has called on the Senate to confirm nominees to vacant seats on the Board of Governors. The waiver on service standards, by contrast, plays right into DeJoy’s hands.
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“I’m excited and happy that we do have leadership at a congressional level, saying it’s necessary for us to be firm in our stance,” said Abdelhamid, Maloney’s primary challenger, citing Rep. Ayanna Pressley (D-MA) and others who have called for DeJoy to be removed from the Postal Service. “Then we see Maloney doing the opposite of that.”
