8/21 UPDATE:Â U.S. Postal Service spokesman Gerry McKiernan just dropped me a line disputing Peter Roff’s take on the post office’s tax exemption. First, the Postal Service doesn’t own any planes on which it could pay taxes. Secondly, the Postal Service for many years was not allowed to run profits as a corporation does, meaning it had no income on which it would pay taxes, even without the exemption. (A 2006 reform allowed the Postal Service to turn a profit on competitive products like Priority Mail and package services, but in lieu of taxes, the post office uses some of that money to help cover the costs of first-class mail and other universal service obligations.)
Finally, while the Postal Service’s quasi-governmental status does yield some benefits (such as tax exemption on property), McKiernan pointed me towards a January 2008Â Federal Trade Commission study that said the Postal Service’s obligations — primarily its requirement to deliver universal mail service to every household and business in the country — far outweigh those benefits. Those obligations, FTC said, actually leave the Postal Service at a disadvantage when compared to its private-sector counterparts.
ORIGINAL POST: At a White House press briefing yesterday, Press Secretary Robert Gibbs was asked about the National Association of Postal Supervisors’ pushback against President Barack Obama negatively comparing the U.S. Postal Service to FedEx and UPS:
Q:Â In a letter sent last week to the White House from the National Association of Postal Supervisors, the president of that union, Ted Keating, said that his union had a “collective disappointment that you — meaning the President — showed the Postal Service as a scapegoat and an example of inefficiency.”Â Does the President — has the President seen that letter?Â Has he responded?Â Does he regret using the post office as an example of inefficiency?
MR. GIBBS:Â I doubt he’s seen that letter and I don’t have any reason to believe he regrets it, since he repeated it.
(Just for the record, NAPS isn’t a union. It’s a management association that does not collectively bargain. But that’s neither here nor there.)
I didn’t mean to imply that UPS doesn’t have to deal with unions. They do — their employees are represented by theÂ Teamsters.Â (FedEx is viewed as an airline, not a trucking,Â company and covered by the Railway Labor Act, which makes it much tougher for them to organize.)
But the Postal Service’s unions have Congress’ ear in a way that the Teamsters could only dream of. After all, it’s hard to imagine lawmakers calling UPS CEO Scott Davis on the carpet the way they regularly do Postmaster General John Potter. That’s why the Postal Service gets a lot of “not-in-my-backyard” pushback when it so much as hints at closures. That — plus the role the Postal Regulatory Commission plays in approving rate hikes — makes it trickier for the Postal Service to take actions private sector firms can to deal with tough economic times.
On the other hand, U.S. News’ Peter Roff makes a good point:
[T]he post office does not have to pay taxes on its income or on its planes, trucks, vans and postal buildings, unlike UPS, FedEx, and the rest of the private delivery companies. It also overlooks the fact that the post office sets a mandatory minimum price that a private shipper can charge for parcel and express mail services that, by law, is higher than what the post office charges.
All of which is to say that the Postal Service’s odd status as a “quasi-governmental entity” — neither fish nor fowlÂ — probably makes it a bad example to trot out in this heated health care debate.