Act In a bi-partisan effort to support USPS, Senator Susan Collins (R-ME) introduced the Postal Service Emergency Assistance Act alongside Senator Dianne Feinstein (D-CA). This bill, if enacted, would provide $25 billion in emergency funding to USPS on an as-needed basis. Senators from both sides of the aisle support this legislation, including Steve Daines (R-MT), Doug Jones (D-AL), and Jon Tester (D-MT). This amount of money would specifically cover revenue losses and operational expenses resulting from COVID-19. It would also clarify the borrowing authority in the CARES Act, and would require the USPS Board of Governors to submit a plan to Congress that ensures long-term solvency of the Postal Service.
Terms and Conditions of the Postal Service Emergency Assistance Act
The main points of the Postal Service Emergency Assistance Act are as follows:
- Provide USPS with up to $25 billion in emergency COVID-19 funding, and ensure funds are used only for COVID-19-related losses and expenses
- Appropriate these funds to a newly created “Postal Service COVID-19 Emergency Fund,” and make them available until September 30, 2022
- Prior to using the funds, USPS would be required to certify in its quarterly and audited annual reports to the Postal Regulatory Commission that the funds are needed to cover revenue losses or operational expenses resulting from COVID-19 (Congress would also receive a copy of these reports)
- Require USPS to prioritize the purchase of personal protective equipment and conduct additional cleaning and sanitizing of its facilities and vehicles
- Clarify the borrowing authority provided in the CARES Act to indicate that the Treasury Secretary shall lend the funds at the request of USPS, and set the terms and conditions of the loan as those in place on September 29, 2018
- Require the new Postmaster General and the Board of Governors to transmit to Congress a plan to ensure the long-term solvency of USPS, which would be due to Congress no later than nine months after the bill’s enactment
- Require USPS to provide an update briefing to Congress no later than six months after the bill’s enactment
Pre-Funding Legislation: The Reason the Postal Service Needs Assistance in the First Place
Contrary to what many news outlets have reported, USPS isn’t in financial trouble because its prices are too low. The real reason USPS is in such financial trouble is legislation enacted back in 2006. This legislation requires USPS to pre-fund future employees’ health and retirement benefits up to 75 years in the future.
Due to this legislation, USPS was required to pays tens of billions to the US Treasury that it couldn’t afford. Simply put, these federally-mandated payments crippled the organization’s solvency. In fact, the Postal Service was profitable every year until 2007, when it first began making these pre-funding payments. In the subsequent years ever since this mandate became law, USPS has operated at a loss.
Digging the Postal Service out of its financial hole isn’t as simple as raising package prices across the board. One of the main ways to truly set USPS back on the path to financial stability is to repeal this pre-funding legislation. Until that happens, the $25 billion from Senator Collins’ bill would grant USPS enough breathing room to keep operating on a short-term basis.
How $25 Billion Would Help USPS (and Small Businesses in America)
This bill would provide COVID-related relief to USPS only if they certify they need it, instead of other bills which have offered them a blank check. In essence, this $25 billion would give USPS a safety net and a little breathing room to service the American people. At the same time, it would give new Postmaster General Louis DeJoy and the USPS Board of Governors the time they need to develop a reform plan and build consensus for long-term solutions.
In addition, this amount of money would also help individuals and small American businesses that rely on USPS every day. With this money, the Postal Service wouldn’t need to raise package prices to offset losses. As a result, individuals small businesses would continue to benefit from the affordable rates and timely delivery USPS offers. Affordable rates and reliable delivery are the cornerstones of the Postal Service’s Universal Service Obligation, which Senator Collins’ bill seeks to protect.
When she introduced the Postal Service Emergency Assistance Act, Senator Collins provided the following statement:
“The COVID-19 pandemic has changed our daily lives in fundamental ways, and the Postal Service is needed now more than ever. The agency’s dedicated employees go to work each day, facing increased risk as they continue to ensure reliable delivery of needed prescriptions, safety-net benefits, and other critical services that might otherwise be unavailable. The Postal Service Emergency Assistance Act would ensure [USPS] is able to continue fulfilling its essential mission, while also providing for responsible stewardship of taxpayer funds and laying the groundwork to put the Postal Service on a path to long-term viability. I urge my colleagues to support this bill.”
Update: Companion Legislation to Senator Collins’ Bill Introduced in House of Representatives
On August 28th, Congressman Anthony Gonzalez (R-OH) introduced companion legislation to the Postal Service Emergency Assistance Act in the House of Representatives. Like Senator Collins’ original bill, the House companion bill has bi-partisan support. Congressman Gonzalez introduced the legislation alongside Reps. Jared Golden (D-ME), Elise Stefanik (R-NY), and Vicente Gonzalez (D-TX).
“The United States Postal Service plays a vital role in the lives of all Americans. Like all other aspects of our daily lives, the USPS has been negatively impacted by the COVID-19 pandemic,” said Congressman Gonzalez. “This bipartisan legislation has strong support in the U.S. Senate and strikes the right balance of additional funding for the USPS while recognizing that the Postal Service has underlying financial challenges. In the face of the COVID-19 pandemic, it is more important than ever that we come together across the aisle to solve problems. I thank Senator Collins for her leadership on this important issue and my colleagues for working with me to push this legislation forward in the House of Representatives.”
With the Postal Service Emergency Assistance Act in the Senate and the companion bill now in the House, postal reform is closer to taking place than ever. To read the full statement on Congressman Gonzalez’ companion legislation, visit the House of Representatives website.
Want to help Save the Postal Service?
Call your Senator at (202) 224-3121 and ask them to cosponsor the Postal Service Emergency Assistance Act