Postal reform bill light on actual reform

OPINION:

The Senate is considering a House-passed postal reform bill this week that is light on reform and heavy on accounting gimmicks. 
 
It’s been about 15 years since Congress last passed legislation to reform the Postal Service, and it’s safe to say the problems have not been resolved. But legislation now before Congress not only won’t solve the problems, but it will also make things worse.  
 
Congress can be excused for some of the shortcomings of the last attempt at reform – the Postal Accountability and Enhancement Act. When President George W. Bush signed the legislation in December 2006, we were still writing letters, checks were still “in the mail,” and no one knew the Internet was about to lay waste to the Postal Service’s cash cows.  
 
But first-class mail, the Postal Service’s most profitable product and one that is monopoly protected lost half its volume over the next decade, and the Postal Service piled up more than $60 billion in losses in that time and $92 billion overall since 2007.  
 
The Postal Service’s package delivery business blossomed, especially after the pandemic turned March 2020 into a Christmas-style rush that lasted nearly two years. But packages are not as profitable – some of the world’s most efficient companies are competitors – and the Postal Service has struggled to assess its costs and price these products appropriately.  
 
Before Trump put a stop to it, the Postal Service was spending $3.46 per package to deliver for Amazon but charging only $2. One study found that sending a 2-pound package rush delivery from New York to Miami costs more than twice as much with Fed-Ex and UPS as it did with the Postal Service. If you’re off by that much, you’re not pricing it right.  
 
Rather than address that, rather than force the Postal Service to properly account for what it spends on packages and other competitive products vs. what it spends on the monopoly-protected services it is constitutionally required to provide, lawmakers want to set up even more workarounds.  
 
Supporters of the new legislation, the Postal Service Reform Act of 2021, blame the Postal Service’s problems on the requirement that it pre-fund benefits and say it can be fixed by simply dumping all postal retirees into Medicare.  
 
But all companies – and the Postal Service wants to be thought of as an independent quasi-private business – must set aside resources to meet pension and retiree health expenses. And the Postal Service hasn’t actually made a payment to fund its benefits since 2010. 
 
Moreover, Medicare itself is not in good shape – it is projected to become insolvent in 2026. Adding in these new people – the Postal Service is the government’s largest employer outside the military with 600,000 workers – not only will put a $60 billion-per-year hit on Medicare, but it will also require postal retirees to buy insurance they rightfully thought they already had paid for.  
 
The plan calls for the Postal Service to pay only for wrap-around coverage for items such as vision, dental and hearing that are not covered by traditional Medicare. Postal retirees will be required to enroll and pay for Medicare Part A for their regular insurance, even though they’ve been paying into a retiree health care plan their entire time as employees.  
 
So this rips off both the taxpayers, who now foot the bill for a pension program that employees already had paid for and workers, who must buy insurance to replace the insurance they’ve already bought.  
 
Louis DeJoy, the logistics magnate whom President Trump appointed to rescue the Postal Service, has proposed and enacted a series of reforms to make mail delivery more efficient. Democrats took him to task during the 2020 election for supposedly cutting resources that could be used to return mail-in ballots, and they’ve lobbied for his dismissal almost since he was confirmed. Now, he proposes to slow delivery by moving mail over trucks rather than planes, which means the Postal Service would save, but red America would be slower to get its mail. 
 
Democrats are ready to sign off on this. In fact, they tried to rush the vote through the US Senate earlier this month, but Sen. Rick Scott, R-Fla., stopped them. Mr. Scott, who is not on the committee of jurisdiction over postal issues in the Senate, was getting his first detailed look at the legislation, and he did not like what he saw.  
 
The keys to reform are known. The Postal Service must account for what it spends on monopoly products and what it spends otherwise, and any legislation that doesn’t stress that as the way out of this is a gimmick that Sen. Scott and others would be wise to avoid. 

• Brian McNicoll, a freelance writer based in Alexandria, Va., is a former senior writer for The Heritage Foundation and former director of communications for the House Committee on Oversight and Government Reform.