Opportunities and Challenges in the Postal Service Reform Act of 2022

  • The Postal Service Reform Act of 2022 (PSRA) is the culmination of more than a decade’s worth of congressional efforts to pass meaningful reform legislation.
  • The PSRA contains financial reforms intended to improve the Postal Service’s financial sustainability, and operational reforms intended to increase efficiency, accountability, and transparency.
  • The PSRA will have both short- and long-term implications for the Postal Service.

The Postal Service Reform Act of 2022 (PSRA) was signed into law on April 6, 2022. While some form of postal reform had been proposed in every Congress since the 112th (2011-2013), none has made it to the President’s desk until this year.

The PSRA contains provisions that impact the Postal Service’s finances and operations both immediately and in the long term. The financial provisions eliminated large unpaid obligations and reduced the size of the Postal Service’s annual budget deficit. The elimination of prepayment requirements for retiree healthcare has already impacted the Postal Service’s financial balance sheet. Medicare integration, set to begin in 2025, will reduce the Postal Service’s health insurance premium expenditures.

At the same time, operational provisions are intended to increase transparency and improve the quality of service provided to customers. For example, the Postal Service will work with the Postal Regulatory Commission (PRC) to establish performance targets and create a public-facing dashboard to report on progress toward meeting them. Other PSRA provisions include examining flats processing and a PRC study reviewing the Postal Service’s cost attribution guidelines.

Although the financial and operational implications of the PSRA are significant, previous reform proposals could be revisited in the future. These include, for example, investing Postal Service retiree assets in index funds or clearly defining the Postal Service’s universal service obligation.

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