The Senate passed a Postal Service overhaul bill intended tosave the cash-strapped organization from default.

The measure was passed 62-37. The bill would make it harder forthe Postal Service to close facilities, authorize it to providenon-postal products and services, revise payments to two federalfunds that provide worker retirement benefits, and install aninnovation officer to create new business practices.

Enactment would show that “we can face a tough problem thatexists in a public service,” said Connecticut independent JoeLieberman, the bill's sponsor. He said the proposal will “askpeople to sacrifice but keep a venerable and critically importantAmerican institution alive and well.”

The vote on the bill, S. 1789, followed more than five months ofnegotiations among senators, led by Vermont independent BernieSanders, who were concerned about how post-office closings wouldaffect their constituents.

The Postal Service has marked about 3,700 post offices and morethan 220 mail processing facilities for potential shutdown. Thosenumbers are already being reduced in Postal Service estimates tocomply with revised minimum-service standards in the Senatebill.

The House hasn't considered its main Postal Service overhaulbill, H.R. 2309, which would create a commission modeled on theDefense Department's base-closing commissions to oversee closingpostal facilities.

The Senate legislation includes a new version of an appealprocess allowing customers to protest planned closures ofindividual offices. The Postal Service would conduct surveys onalternatives to offering retail services.

Maryland Democrat Barbara Mikulski, who had placed a hold on theSenate bill to protest the planned closing of a mail processingfacility in Easton, Maryland, withdrew an amendment that would haveplaced new restrictions on the closing process. She citedassurances from the Postal Service that the facility would remainopen under standards set by the bill.

“We need postal reform, but we need to be smart about how we doit so that we preserve important mail delivery services in ourcommunities,” Mikulski said in a press release.

Before passing the bill the Senate adopted several amendments,including one restricting agency spending on travel andconferences.

Vote By Mail

Other adopted amendments would prohibit, through the Novemberelection, closings of postal facilities in states that usevote-by-mail procedures, and set a one-year moratorium on ruralpost office closures, with some exceptions.

The Postal Service has estimated it may reach its $15 billiondebt ceiling as soon as this year if scheduled payments to itsretiree health benefits fund aren't deferred or if there were amajor interruption in service, such as an anthrax scare.

The Senate bill would adjust the health benefits costs,canceling a 10-year payment schedule enacted in 2006 that requiredthe Postal Service to set aside about $5.5 billion a year forfuture retirees. Instead, the bill would create a 40-year paymentschedule with reduced pre-funding levels for the projectedliabilities.

The Postal Service, which reported losses of $3.3 billion in thequarter that ended Dec. 31, attributed $3.1 billion of that torequired payments into the retiree health-care fund.

The Postal Service has estimated the measure could save it $19billion a year starting in 2016, Lieberman said.

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.