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184 IRET Congressional Advisory 1 (2005)

handle is hein.taxfoundation/iretcgadv0181 and id is 1 raw text is: INSTITUTE FOR RESEARCH ON THE ECONOMICS OF TAXATION IRET is a non-profit 501 (c)(3) economic policy research and educational organization devoted to informing the public about policies that will promote growth and efficient operation of the market economy. March 16, 2005 Advisory No. 184 SHOULD THE POSTAL SERVICE BE ABLE TO WITHHOLD SOME OF ITS FINANCIAL RESULTS FROM THE PUBLIC? Executive Summary The government-owned U.S. Postal Service often cites commercial sensitivity as a reason to withhold from the public various details about the costs and revenues of its products and how it estimates per-product costs. The federal entity compares itself to a private business when resisting disclosure, although it stresses its governmental status in many other contexts. Should a government enterprise like the Postal Service be able to use claims of commercial sensitivity to conceal financial results from the public? This study finds that a government entity does not deserve as much financial confidentiality as individuals and private-sector businesses. A government enterprise - which is ultimately owned by the people - has no legitimate right to privacy when asked to disclose its financial results to the people. In the case of the Postal Service, it should not be concealing financial results from the taxpayers and monopoly-market customers it puts at risk if it performs badly. The Postal Service has provided no hard evidence that more financial openness would hurt it competitively. Further, with dual statutory monopolies on non-urgent letter delivery and mailbox access, the Postal Service is largely protected from direct competition in its massive core market. Government entities need the financial discipline provided by a high level of disclosure more than private-sector businesses because government enterprises lack the financial discipline that skeptical lenders and profit-seeking shareholders impose on normal businesses. Greater financial transparency may help government enterprises by making it easier to spot and correct problems. An amended rule by the Postal Rate Commission (PRC) to require the Postal Service to disclose more of its financial results is an excellent, pro-transparency step. As a matter of good public policy (and also current law) the Postal Service should obey the PRC's rule, instead of citing commercial sensitivity as an excuse to defy it. Bills proposed in Congress last year and this year include provisions that would increase the Postal Service's power to withhold financial information from the public based on claims of commercial sensitivity. The Administration recognizes these provisions would reduce financial transparency, violating a basic principle of postal reform. The Administration has correctly called for pro- transparency changes in the legislative proposals.

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