On March 8, the Senate passed the Postal Service Reform Act, joining the House of Representatives, which cleared the bill in February. And while there is a lot of talk about bipartisan cooperation in getting the measure passed and hype about what it means to the U.S. Postal Service, the bill has skirted the toughest and most important issues in postal reform.
The chief feature of the act is to wipe away $57 billion in defaulted debt that the Postal Service has failed to pay for its Retiree Health Benefits Fund since 2011. Unlike a state or local government, business or individual, the service faced no consequences for the default.
In hindsight the assessments, once widely agreed upon as part of the 2006 Postal Accountability and Enhancement Act, were far too high. But they were based on a basic principle: The Postal Service should set aside and invest some funds to meet large, looming retirement health care obligations. The service is now free of that requirement. Future postal retirees, however, will have to sign up for Medicare coverage to ensure retiree health benefits, and will incur higher costs.
