House Votes to End Controversial USPS Payments for Future Retirees' Health Care
The House on Wednesday voted to end the U.S. Postal Service’s mandatory payments toward the health benefits for future retirees, advancing a measure that would eliminate a controversial requirement the cash-strapped mailing agency has defaulted on for years.
Congress first established the prefunding mandate in the 2006 Postal Accountability and Enhancement Act, the last major legislative overhaul of the Postal Service, and the requirement has hampered the agency ever since. Shortly after the law’s passage, the recession hit and mail volume began to decline precipitously. That trend has continued to this day, leaving USPS without the financial means to make the annual payments and forcing it to default on them while absorbing the losses on its balance sheet.
The Postal Service has lost money for 13 consecutive years and a majority of those losses stemmed from the prefunding requirement. In fiscal 2019, for example, 83% of the $8.8 billion the agency lost came from payments into its retiree pension fund and retiree health benefits fund. Critics of the mandate include a range of Republicans, Democrats, mailers and labor unions. They have estimated the law requires USPS to fund the benefits for retirees up to 75 years in the future, an obligation virtually no other government entities face.