Postal myths: #2 The USPS isn’t part of the federal government

Earlier this week we dealt with the popular belief that because the US Constitution mentions post offices, it would take a constitutional amendment to eliminate or privatize the USPS. Today we have the flip side of that myth- the belief that the US Postal Service isn’t part of the federal government. You see this in news stories often- FedSmith ran a column just a week ago referring to the USPS as a “quasi-governmental entity”, that had been privatized in 1971! The Gallup Organization, which was responsible for the poll we reported earlier today naming the USPS the best-liked government service, referred to “the quasi-governmental U.S. Postal Service” in an earlier poll report. A recent story in the Atlantic claims that “Postal services were quasi-privatized in the US decades ago”. Just to make things interesting, the Washington Post’s Ed O’Keefe once referred to the USPS as “a quasi-federal outfit”– whatever that means!

Most of the quasi-confusion can be traced back to the 1971 Postal Reorganization Act, which eliminated the old Post Office Department, replacing it with the US Postal Service. The act was intended to make the USPS self-financing from its own revenues, and to make it an independent, non-political public service. Prior to the PRA, postmasters (including the postmaster general) were political appointees; rates were set by Congress, and the POD had to go through the appropriations process to get the money it needed to operate.

The PRA established a Board of Governors who were responsible for selecting the PMG and setting policies and budgets. It allowed the USPS to use its revenue to finance its operations without any appropriation process. It set up a separate commission to set postage rates.

What it didn’t do was privatize the postal service in any way, shape or form. Some in Congress, then as now, would have favored privatization. Consideration was also given to making the USPS a government owned corporation, like the TVA or Amtrak. But neither of those things happened. Here’s what the Act says:”The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States”. It also defines the USPS as “an independent establishment of the executive branch of the Government of the United States”. Being “independent” doesn’t make the USPS a “quasi-” anything- it simply means it is not part of one of the cabinet departments. Other “independent” agencies include the CIA and NASA.

In a footnote to its most recent report on postal finances, the Congressional Research Service, part of the Library of Congress, had this to say:

The USPS often is mischaracterized as a quasi governmental or private entity. It is neither. The USPS is a government agency that was created by Congress to achieve various public purposes. Federal law defines what products and services the Postal Service may offer. Additionally, the USPS’s employees are federal employees who participate in the Civil Service Retirement System, the Federal Employees Retirement System, and the Federal Employees Health Benefits Program.

The Supreme Court has even weighed in on what being “independent” means for the USPS, in an opinion from 2004:

The PRA’s designation of the Postal Service as an “independent establishment of the executive branch of the Government of the United States,” 39 U. S. C. §201, is not consistent with the idea that the Postal Service is an entity existing outside the Government. Indeed, the designation indicates just the contrary. The PRA gives the Postal Service a high degree of independence from other Government offices, but it remains part of the Government.

That would seem to settle it, wouldn’t it?

  • stargood

    I think part of the confusion might be caused by the fact that the Post Office’s website URL is http://www.usps.com, not http://www.usps.gov (usps.gov does redirect to usps.com though). The dot-com would seem to imply to some people that it is a private company, which of course it is not.

    • YONKERS_NY

      .gov is used for USPS employees only

  • charlie baker

    I used to personally know a post office worker who worked for the USPS for thirty years, and he would tear your ears off to hear you say the service is a government agency. He is adamant it was privatized in 1971. The fellow has since retired and moved away, but I used to enjoy arguing with him about this.

    • boilerluv

      I think your poor friend had some sort of mental disability. 🙁

  • alex vranescu

    They did this because now instead of using taxpayer money to the Department now they can take from the Department profits or take money from the basket. The same way they’re doing with Social Security. The company makes billions a year in profit but! We’re still broke because how Congress passes laws they we have to give money here and there. Was still broke will never change and I will still get a pay cut. 9 years I got a total of 7$payout. And trust me the Union is very happy with this why? Because now the post office with my pay cut can I wore postal employees more postal employees mean more union dues. Put that in your article

  • littlebuddy12345

    If the carriers are federal employees, then it seems it would still be a government entity. Unless we have a bunch of federal employees, working for a privatized business? Doesn’t make sense.