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By David Shepardson
WASHINGTON (Reuters) -President Joe Biden on Wednesday signed legislation to provide the U.S. Postal Service with about $50 billion in financial relief over a decade, paving the way for future reforms as the service aims to overturn years in the red.
Struggling with diminishing mail volumes despite having to deliver to a growing number of addresses, USPS has reported net losses of more than $90 billion since 2007. In February, it booked a quarterly net loss of $1.5 billion.
"The Postal Service is central to our economy and central to rural America," Biden said at a White House ceremony.
The new bill enacts some measures proposed by Postmaster General Louis DeJoy in a March 2021 reform plan that aims to eliminate $160 billion in predicted losses over the next decade.
In particular, it eliminates a requirement that USPS pre-fund retiree health benefits for current and retired employees for 75 years, a condition faced by no other business or federal entity, saving $27 billion over a decade. Future postal retirees must now enroll in government health insurance, a move that will save it $22.6 billion over 10 years.
On the day of the signing, USPS filed notice with the Postal Regulatory Commission (PRC) to raise prices of first-class mail stamps from 58 cents to 60 cents and raise First-Class Mail prices approximately 6.5%.
Asked in an interview why USPS was seeking the price hike, DeJoy was blunt: "Because we need money."
Even after the legislative changes and PRC pricing changes approved in 2021, USPS still needs to cut more red ink, he said, speaking after the White House event.
"I've still got about $80, $90 billion to do and we have a lot of plans to keep moving that forward," DeJoy said. "Now it's really about improving our service, reducing our cost from waste, investing in our facilities and employees and growing our business."
Biden last month also proposed $5 billion for USPS to handle election mail over the next decade. His predecessor Donald Trump criticized voting by mail that was used by a record 46% of 2020 voters.
"The Postal Service delivers democracy," Biden said on Wednesday.
Still, the postal service has faced criticism from the White House and Democrats in Congress over a decision to buy mostly fossil fuel powered vehicles for its next-generation delivery fleet from Oshkosh Defense.
USPS "needs to do more to modernize and electrify its fleet of vehicles to reduce greenhouse gas emissions and to save money," Biden said.
(Reporting by David Shepardson; additional reporting by Kannaki Deka in Bengaluru; Editing by Shailesh Kuber and Richard Pullin)