Fedweek

US Postmaster Louis DeJoy testifies on Capitol Hill, August 2020.

A renewed push for changes in Postal Service operations is expected soon, the latest in efforts stretching across many years attempting to address the agency’s long-standing financial problems.

Hearings are scheduled for next week in the House Oversight and Reform Committee even though specifics of the new initiative have not yet been announced. Initial reports suggest that a centerpiece will be a reduction in on-time delivery standards for first class mail through cost-saving steps such as cutting back shipments by air in favor of ground shipment, plus a request the postal rate-setting board for rate increases.

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Democratic leaders of that committee were among the leading critics of cost-saving steps that Postmaster General Louis DeJoy took last year soon after being installed by the postal governing board, including restrictions on overtime and taking some processing equipment off-line.

The chair of the government operations subcommittee, Rep. Gerald Connolly, D-Va., has called on President Biden to fill the current vacancies on that board and replace some of the current members, saying that a combination of higher costs and degraded service will send the USPS into a “death spiral.”

Bills have been offered in Congress to relieve the USPS of an obligation to pre-fund retiree health insurance, a main contribution to the financial losses of recent years. While the USPS has not made those payments for years, it carries the required amounts as obligations on its books.

Similar bills have been introduced for years but have failed to advance, with the best prospect for enactment considered to be as part of a larger reform bill. Wider reforms, some of them bipartisan in nature, also have been attempted many times but have failed in the face of concerns about the potential impacts on employment and on-time performance.

USPS recently reported an increase in income largely from package deliveries as shopping from home has increased during the pandemic, although labor and other costs meanwhile increased, as well.

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