How did the US Postal Service become what it is today?


The U.S. Postal Service ("USPS") is the successor to what used to be a full-fledged government department - namely, the Post Office Department, founded in 1792.  It was such a crucial part of the government that its rationale is mentioned in the U.S. Constitution and the Postmaster General was in the line of succession to the Presidency - last in line, yes, but in line all the same.  

This remained the status quo until President Richard M. Nixon's administration reorganized the Post Office Department in 1970 in response to a debilitating strike by postal workers, establishing the newly branded USPS as a "corporation-like" independent agency.  

So what does this mean?

It means that, as of July 1971, when the reorganization took effect, Postmaster General was no longer a cabinet-level position appointed by the President.  Instead, a Board of Governors with nine members was appointed by the President.  These nine, in turn, chose the Postmaster General.  These ten individuals, in turn, then chose a Deputy Postmaster General to serve as chief operating officer.  The new arrangement also called for a Postal Rate Commission consisting of five President-appointed members in order to provide a check on those who controlled the USPS's financial operations.  (As of December 2006, the Postal Rate Commission became the Postal Regulatory Commission, with somewhat expanded powers.)

The result is a perplexing organization that is neither a Federal agency nor a private corporation.  Nor is it a hybrid, government-owned corporation, like Amtrak, for example.  In fact, the USPS isn't really a corporation at all.  Because the Board of Governors does not have the same sort of fiduciary responsibilities and liabilities as real corporate directors, it amounts to little more than window dressing. 

In fact, the USPS's only real shareholder remains the U.S. government, and it has no actual board of directors other than Congress - more specifically the Subcommittee on the Federal Workforce and the Postal System of the House Government Operations Committee.  But Congress, as we know, only deals with emergencies; it does not engage in long-range strategic planning or market research.  It does not evince responsible financial behavior or exemplify corporate best practices of any kind - especially when it comes to oddball appendages like the USPS.  

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