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HR 2382 would remove 100% prefunding requirement enacted in 2006

By Tonda Rush Director, Public Policy
National Newspaper Association

Legislation that would relieve the U.S. Postal Service of more than $50 billion in debt is nearing a critical support threshold that could finally reach the House of Representatives floor in the 116th Congress.

A bill by Rep Peter DeFazio, D-Ore., would remove a long-standing irritant to USPS that was put in place by the Postal Accountability and Enhancement Act of 2006, requiring it to fully prefund its retirees’ health benefits.

No other government agency is required to meet such a steep threshold, nor are private corporations expected to achieve 100% prefunding. Instead, government agencies are on a pay-as-you-go basis, and even large corporations rarely underwrite retirement benefits past 50% funding. But the Bush administration in 2006 wanted to add extra revenue to the federal treasury, and at the time, USPS was at its peak in mail volume. The expectation looked tough but achievable.

But in the year after postal reform, the iPhone was released. The following year, the Great Recession began. USPS made the first two payments of about $5 billion a year. Then the bottom fell out, and mail volume began to plummet. Since 2009, the prefunding requirement has been added to USPS’ balance sheet as debt, and no further contributions have been made.

Repealing the prefunding requirement has been a priority in various new postal reform legislative packages that failed to pass in the 111th to 115th Congresses. In the current 116th Congress, new postal reform bills have been promised by Congressional leaders, but no comprehensive bill has been filed.

DeFazio, with the support of USPS labor organizations, began last summer to push one simple bill that would roll back the clock and restore USPS to the benefit funding practices of the rest of the federal government. National Newspaper Association declared its support for his bill, HR 2382, at the end of the summer of 2019 and has actively sought co-sponsors.

If the legislation can achieve 290 co-sponsors, the bill is eligible for floor action under the expedited part of the House actions called the consensus calendar. As of the middle of November, the bill had 288 co-sponsors. NNA President Matt Adelman, publisher of the Douglas (Wyoming) Budget, said he believed NNA’s Congressional Action Team was pushing the bill over the finish line.

“This bill is not the full package we hoped for and we still need. But it is a step we can take now. NNA’s Board agreed we should do what we could. We’ve been actively promoting it for several weeks, and the results are clear. When community newspaper publishers roll up their sleeves, we make a difference.

“If this bill can get to the floor, we think it has a good chance of being rolled into other legislation. Although it doesn’t give USPS new operating cash, it does relieve pressure on the Postal Regulatory Commission to steeply raise postage rates so this massive ‘debt’ can be paid back. NNA opposed this requirement in 2006 and has always thought it was unfair and burdensome to expect mailers to fund benefits so much more aggressively than any other federal benefit fund is financed. We’ll be glad to get back to normal so we can work on longer term repair of the Postal Service’s universal service mandate.”

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Tonda Rush is the director of public policy and serves as general counsel to the National Newspaper Association.
Email her at tonda@nna.org