The Post's editorial "Free the Postal 800,000?" {Feb. 9} gives its readers the impression that last December's round of postal budget cuts was "par for the course" -- an exercise of the usual congressional supervision and nothing new. If we were talking about the 1950s and 1960s, that view would be correct, but it is no longer true.

Previously, the Postal Service had to beg each year for funds to operate and maintain the postal system. It competed directly with such other federal activities as the Veterans Administration and the Agriculture Department, to follow The Post's two examples. In the political arena of the day, this competition for money was stiff, and the postal system was a consistent big loser. Over the years, its plant and equipment became badly antiquated, and its service eventually suffered major breakdowns under the booming volume of mail.

The situation deteriorated until a broad coalition of interest groups demanded and got basic legislative reforms. Successive administrations of both parties and bipartisan majorities in Congress delivered them by fundamentally reorganizing the Postal Service in 1970 to stand more on its own feet.

The 1970 reforms required the postal system to fund its own services and capital improvements. The Postal Service remained part of the government, and its budget continued to be presented in the government's budget documents -- but as a separate, annexed presentation. This revised format did not exempt the Postal Service from its share of public attention and legislative oversight. Contrary to The Post's suggestion, being "off budget" did not shield the Postal Service from being a frequent target in the annual federal deficit reduction efforts.

What was "new" this last time was really "old," if we look back at the '60s. It was the sudden, dramatic and direct cut in funds already budgeted for construction, equipment and operating expenses, without regard for its effect on our ability to handle the mail over the long or short term. Congressional leaders who were involved have told me they didn't think for a minute that we were building too much or providing too much service. They threw in these cutbacks in current operations and capital improvements only because they were forced to, for new "scorekeeping" reasons.

It wasn't enough anymore to require a self-supporting, break-even Postal Service (and we are that) to pay liabilities previously falling on the taxpayers and adjust its affairs over an appropriate planning cycle. To "score," reductions under the new rules had to cut into the postal system itself.

The accounting shift in the budget presentation is not a gain in accountability. In fact, the new presentation makes it more difficult to understand and appreciate the current state of Postal Service finances. The real Postal Service budget -- the one it operates from and has its postage rates set by -- is a business-type accrual accounting budget that funds capital improvements through depreciation charges over the useful life of the investment. Under the government's cash-basis accounting budget, a postal dollar invested in capital assets is given the same effect as a dollar in operating losses.

No one can reasonably expect a self-supporting enterprise as pervasive as the Postal Service to do well if its service-improvement efforts and capital-modernization plans can be canceled in midstream whenever the latest reading on the government's overall bottom line looks bleaker than forecast.

-- Preston R. Tisch The writer is postmaster general.