If you're wondering how the 20-cent stamp came about, when the commission that approves postal rates didn't approve it, you might ask Congress.
Eleven years ago, it created the U.S. Postal Service--a regulated organization with a monopoly over first-class mail--and gave it a rare power in the regulatory world: the right to defy its regulators.
Three times the Postal Rate Commission turned down Postal Service officials when they wanted to raise the price of the first-class stamp to 20 cents. When the five-member commission rejected the rate for the final time in September, the Postal Service's Board of Governors voted unanimously to go ahead anyway.
The vote marked the first time Postal Service officials have ignored the rate commission's ruling on a major issue since passage of the Postal Reorganization Act of 1970.
The governors' decision, according to Postmaster General William Bolger, was made for "straight business reasons," to provide $1 billion in needed revenue for the Postal Service, which has lost money five of the last six years. Each one-cent increase in the price of a first-class stamp means $700 million in additional revenue for the Postal Service; about half of its revenues come from first-class mail. The Postal Service said that rising costs and the need for rate stability for two or three years made the 20-cent stamp essential.
But many post-office watchers on Capitol Hill, at the commission and in academia say there's more to it than that: without four years of hostility between postal officials and rate commissioners--exacerbated when top postal officials requested a White House investigation of the commission chairman--the board of governors might not have ignored the commission's recommendation.
Much of the animosity, said William Sullivan, a Postal Service governor and a former regional postmaster general, "is institutional. When Congress creates two federal agencies to share responsibility for something, it is planting the seeds" for the kind of animosity that developed between the Postal Service and the rate commission.
"What has developed is a regulatory body that has only one thing to regulate--the post office," Bolger said. "You get to the point that it gets to be a struggle for power."
The dispute's origins go back to the late 1960s when the Post Office was a Cabinet department; Congress had the authority to raise the price of stamps, and the president, not the nine-member Postal Service board of governors, appointed the postmaster general. Mail volume was half its present level of 70 million pieces, but the department had 74,000 more employes than the 667,000 it has today.
As pressure mounted to get politics out of the post office, a presidential commission proposed an arrangement similar to the present one; reorganization legislation was introduced and shepherded through Congress chiefly by Rep. Morris K. Udall (D-Ariz.).
Throughout the debate, there was disagreement over who should have the final say on postal rates. Some members favored an independent agency to rein in the Postal Service, while others believed it should make its own rate decisions, with a board of part-time, presidentially appointed governors providing a check against managerial excesses.
The compromise was the rate commission, which holds hearings on proposed rate increases and mail classification changes, employs an "officer of the commission" to represent the public, and makes recommendations to the board of governors. But the governors may overturn the commission's decisions by a unanimous vote. In addition, the $3.2 million budget of the commission is controlled by the Postal Service.
That didn't keep the rate commission from getting aggressive in the late 1970s, challenging postal management proposals for everything from rate increases to electronic communications innovations.
The interagency disputes were infectious; soon commissioners supporting postal management became bitter toward Chairman H. Lee Fritschler, a short-tempered academic who took an aggressive approach and usually commanded a majority of the votes. Fritschler's purchase of a vacation home with an attorney whose client stood to profit from a commission ruling became the basis for conflict-of-interest charges presented by Postal Service officials to President Carter.
A more basic issue was postal managers' feeling that the rate commission was overstepping its authority. A recent General Accounting Office study (GGD-81-96 Sept. 8, 1981) concluded that "the line between what constitutes a Postal Service management prerogative and what constitutes a rate or classification matter can continue to . . .become the subject of disputes. . . . The expectation that the PRC and the service's Board of Governors would work in harmony . . . has not been realized."
If there had been no built-up antagonism, would the governors have overruled the rate commission on the 20-cent stamp? "I think probably not, if that had been the first big disagreement," said Fritschler. James H. Duffy, one of his antagonists on the board, agreed. "That was the straw that broke the camel's back."
Did Congress sow the seeds of discord? "We were in an uncharted area," Udall said last week. "Nobody knew how it would work." His current attitude toward the rate commission? "I haven't been very happy with it . . . I think we could get along without it."
Several possibilities are outlined by Joel L. Fleishman, a vice chancellor at Duke University, in a study of postal policy done for Harvard University and the Aspen Institute. They range from returning to the pre-1970 arrangement to deregulating the post office totally. The latter would eliminate its monopoly on first-class mail and make it a private business, forcing it to compete on an equal footing with anyone else who wants to deliver the mail.