Stamp of Foolishness

The folly and fiction of congressional budget balancing are evident in what was done to the Postal Service in this year’s federal budget. Congress, in collaboration with the White House, took short-term savings in the postal accounts that will mean long-term cost increases and deterioration of service.

With the reorganization of the Postal Service in 1971, Congress made it largely independent and--at least in intent--self-supporting. But three years ago President Reagan put the Post Office funds back into the unified federal budget. That has made its revenues vulnerable to budget-balancing efforts, discouraging efforts of the service to stand on its own financial feet and encouraging congressional meddling.

In the new federal budget Congress usurped the functions of the postmaster general--mandating special appropriations, freezing postal rates and postponing many major capital expenditures that had been planned to improve automation and to modernize plants and the vehicle fleet as the mail volume steadily increases. The Postal Service has made a profit in five of the last 10 years, but a $305-million surplus in 1986 became a $223-million deficit last year. The deficit was expected to increase this year to about $500 million, but, with all the congressional meddling, it could now surpass $1 billion. Paradoxically, however, that deficit will not be reflected in the federal budget, whereas the cutbacks in operating and capital expenditures will show as a $1.2-billion reduction.

Under the postal rate freeze, Congress will permit only the changes requested last May. That request is pending before the independent Postal Rate Commission, which is not expected to report until March. If the new rates are approved, first-class mail will increase from 22 cents to 25 cents, and overall domestic mail rates will go up about 16% around June 1.

Implicit in the original reorganization of the Postal Service was placing this $36.6-billion-a-year operation on a business basis and ending the years of political manipulation. It was that commitment that has attracted some experienced business executives, most recently Preston R. Tisch, to serve as postmaster general. Tisch has now resigned, insisting that the resignation was not based on the congressional action but, at the same time, decrying the intrusion. He could well have added that this sort of congressional action will make it all the more difficult to recruit an experienced executive as his successor.

Better than this budget shadowboxing would be a fresh mandate from Congress to restore full independence to the Postal Service, including the responsibility and independent authority to raise revenues to balance its budget. Part of the foolishness of the Gramm-Rudman-Hollings budget-reduction mandate is encouraging bookkeeping and budget practices that only result in higher costs and poorer service in the long term.