A Self-Supporting Postal Service?

As long-time postal guru Murray Comarow notes in the postal perspective printed below: "While transparency should be practiced by the Postal Service, transparency ought to first begin with the Administration and its Executive branch agencies. They certainly were not transparent when they used a method to calculate the government's share of CSRS pension costs which differed from other methods used for similar purposes in the past; they were also less than transparent when they designated OPM's chosen "Board of Actuaries" to decide the USPS's appeal of OPM's change of methodology; they are less than transparent when they recalculate the history of Government subsidies to the USPS.  Do we really want to vest the authority to calculate the USPS's future pension and health care liabilities with an agency that lacks the objectivity of an independent third party? "

 

On April 14, 2005, Postmaster General Jack Potter told a Senate committee that the Postal Service was "self-supporting," and that it has "broken even over its 34-year history." The Postal Service’s last annual report claims that "we receive no tax dollars," and that it has "not received a public service appropriation since 1982."

The U.S. Treasury disagrees. In the same hearing, Assistant Secretary Timothy S. Bitsberger testified that "The Postal Service should be self-financed. This was the intent of the 1970 Postal Reorganization Act, but thus far it has never been accomplished."

Policy differences are normal and expected. The stark factual differences between Potter and Bitsberger, however, are astonishing. Bitsberger omits the fact that the Postal Service has received no public service money since 1982, leading the committee to believe that such appropriations continue to this day. Lest there be any doubt about Treasury’s position, he repeats that "the Postal Service’s cumulative performance has been bolstered enormously and in an extraordinary way by U.S. taxpayers, and as a direct benefit to ratepayers."

The 1970 Act required that preferential rates for some kinds of mail, especially non-profits, be gradually phased out. It also authorized public service appropriations through 1979. These were limited to 10 percent ($920 million) of the 1971 appropriations. That was to go down one percent a year through 1984, when the Postal Service was to be self-supporting. (If the USPS annual report is right, this was accomplished two years earlier, not bad.) The Congressional Research Service's April 7, 2005, Issue Brief on postal reform states:  "While USPS has received regular appropriations totaling billions as a congressional subsidy for free or reduced rate mail for non-profit organizations, the blind, and overseas voters, this was to reimburse it for not charging full costs to such beneficiaries."

None of this comes through in the Treasury’s version of postal history. Bitsberger seems to be grasping at straws to construct a disingenuous argument in support of the Administration’s position on military pensions. If ratepayers are being subsidized by taxpayers, why shouldn’t they pay for military pensions? I stand with Daniel Patrick Moynihan who wrote "Everyone is entitled to his own opinion, but not to his own facts."