Updated 6:30 p.m. ET
(CBS News) The U.S. Senate passed legislation Wednesday afternoon that would preserve post office services now set to be slashed due to the agency's financial problems.
The measure, which passed 62-37, eases the Postal Service's money woes by reimbursing the agency to the tune of $11 billion for overpaying into federal workers' retirement fund.
The Senate bill would slow or prevent the closing of many low-revenue post office locations that have been slated to close. It also prohibits the elimination of Saturday delivery for at least two years to allow cost-cutting measures to go into effect. In addition, the measure authorizes the Postal Service to offer buyouts and early retirement incentives to its employees.
Without legislative action before May 15, the Postal Service would be forced to close post offices and mail processing centers, cut Saturday delivery and possibly lay off workers to address more than $8 billion worth of losses.
Senator Bernie Sanders (I-VT) praised the passage of the Senate bill.
"This comprehensive postal reform legislation will preserve vitally important rural post offices and mail processing plants," Sanders said. "It also would give the Postal Service the flexibility that it needs to raise additional revenue in the years to come by offering innovative new products and services in the digital age."The USPS is a government agency; it does not take taxpayer dollars, but it has depended in recent years on loans from the federal government.
The Postal Service has struggled in the Internet age as many have turned to email over traditional mail. It has also faced money problems due to a 2006 law that required the agency to pre-fund health care benefits for future retirees.
Sally Davidow, spokesperson for the American Postal Workers Union, told CBS News that the bill is "flawed" because it still requires the Postal Service to pay workers' health care benefits in-advance.
"It gives the postal service some financial relief," Davidow said, but "it doesn't give the Postal Service sufficient relief to pre-fund health benefits of future retirees."
The Republican-led House of Representatives must pass the bill before it can be signed by the president, but one lawmaker with oversight of the Postal Service called the Senate bill "unacceptable."
Rep. Darrell Issa, chair of the Oversight and Government Reform Committee said: "Worst of all, the Senate bill does not stop the financial collapse of USPS, but only delays it for two years, at best, when reforms will only be more painful. The Senate's approach is wholly unacceptable."
Additional reporting by John Nolen.