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A First-Class Institution

Despite the clamor raised over cutting Saturday delivery, the Post Office is not broke—and it hasn't taken any of our tax money since 1971



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In fact, the Post Office Department was considered such an important function of public affairs that it was explicitly authorized by the founding document of our nation's government (Article I, Section 8 of the Constitution). The founders would've laughed their wigs off had anyone proposed that the existence of such an essential civic agency be dependent on its profitability. Be efficient and fiscally responsible, yes, but the bottom line for the Post Office was delivering a public service for the good of all the people.

But Nixon happened. His presidency gave laissez-faire ideologues a long-sought opening to insert blasting caps into the structural framework of government. Their first big success was the 1971 "reform" that shattered the public service model by imposing a bottom-line profit mentality on the Post Office and installing a corporate form of governance over it. "Run it like a business," was the political demand of the right-wing think tankers, Nixonians and congressional fixers.

So overnight, the cabinet-level Post Office Department that was overseen by Congress and funded by taxpayers was transformed into today's Postal Service, overseen by a board of governors and funded by postage sales. Technically, the USPS is an independent agency of the executive branch, but operational authority is in the hands of the 11-member board (whose acronym, aptly enough, is "BOG"—as in a morass that prevents progress).


Will it surprise you to learn that the BOG tends to be quite corporate? From 2005 until 2011, for example, one of its most influential members was James Miller III, who was Ronald Reagan's budget director and a longtime proponent of totally privatizing mail service. He's a product of such right-wing, Koch-funded outfits as the American Enterprise Institute and Citizens for a Sound Economy (now called Americans for Prosperity) that are ardent pushers of postal privatization.

Also, prior to the 1971 transformation, the postmaster general had status as a cabinet official appointed by the president and confirmed by the senate. Now, though, the top postal executive is hired (and fired) by the board. This helps explain why incumbent Donahoe—who started as a postal clerk and rose through the ranks—has been a willing member of the sledgehammer crew that's out to "save the service" by demolishing it.


The anti-government ideologues have had to concede that profit's not the point, but still they groan that the USPS is losing billions of dollars a year. Why should hard-pressed taxpayers be expected to keep shoveling money from the public treasury into this loser of a government agency?

They're not. Important factoid No. 1: Since 1971, the postal service has not taken a dime from taxpayers. All of its operations—including the remarkable convenience of 32,000 local post offices (more service outlets than Walmart, Starbucks and McDonald's combined)—are paid for by peddling stamps and other products.

But wait, what about those annual losses? Good grief, squawk the Chicken Littles, the USPS has gone some $16 billion in the hole during the past five years—a private corporation would go broke with that record! Important Factoid No. 2: The Postal Service is not broke. Indeed, in those five years of loudly deplored "losses," the service actually produced hundreds of millions in operational profit—$100 million of it in just the first quarter of 2013.

What's going on here? Sabotage of USPS financing, that's what. In 2006, the Bush White House and Congress whacked the post office with the Postal Accountability and Enhancement Act, an incredible piece of ugliness requiring the agency to pre-pay the healthcare benefits not only of current employees, but also of all employees who'll retire during the next 75 years. Yes, that includes employees who are not yet born! No other agency and no corporation has to do this. Worse, this ridiculous law demands that the USPS fully fund this seven-decade burden by 2016. Imagine the shrieks of outrage if Congress tried to slap FedEx or other private firms with such an onerous requirement. This politically motivated mandate is costing the Postal Service $5.5 billion a year—money taken right out of postage revenue that could be going to services. That's the real source of the "financial crisis" squeezing America's post offices.

But it's not the only hocus-pocus that has falsely fabricated the public perception that our mail agency is "broke." Due to a 40-year-old accounting error, the federal Office of Personnel Management overcharged the post office by as much as $80 billion for payments into the Civil Service Retirement System. Last year, a Senate bill allowed the USPS to recoup less than 14 percent, or roughly $11 billion, of those funds. Restore the agency's full access to its own postage money, and the impending "collapse" goes away.


That's all well and good, claim postal-agency opponents, but there's no disputing the fact that government-delivered mail is a quaint idea whose time has gone. They point out that the USPS' first-class business has fallen by about 7.5 percent in each of the past couple of years, and even Postmaster Donahoe says flatly, "That's not going to change." This funereal school of despair breaks into two groups: "Kill it" and "Shrink it."

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