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91 IRET Policy Bulletin 1 (2007)

handle is hein.taxfoundation/iretpbul0050 and id is 1 raw text is: July 30, 2007
No. 91
GOVERNMENT-IMPOSED ADVANTAGES AND BURDENS
ON THE POSTAL SERVICE'S COMPETITIVE PRODUCTS:
TWO WRONGS DO NOT MAKE A RIGHT
Congress enacted the Postal Accountability and Enhancement Act (PAEA) after over a decade
of Congressional deliberations on Postal Service reform. President Bush, whose Administration
played an active and positive role in crafting the legislation, signed it into law on December 20,
2006.1 One provision in PAEA directs the Federal Trade Commission (FTC) to prepare a
comprehensive report identifying Federal and State laws that apply differently to the United States
Postal Service with respect to the competitive category of mail ... and to private companies providing
similar products. ,2
In ordering this study, Congress properly recognized that the Postal Service offers several
products outside the postal monopoly that compete with close private-sector alternatives. Compared
to private-sector businesses, the government-owned Postal Service enjoys a wide array of
government-based advantages and suffers from numerous government-imposed burdens in its
competitive product operations. Congress perceptively asked the FTC to examine both the
advantages and disadvantages; both sides have significant public policy implications. The legislation
specifies that the FTC is to submit its report to the President, Congress, and the Postal Regulatory
Commission by December 20, 2007.
The FTC has picked up on the challenge and issued a set of thoughtful and probing questions
to help guide it in preparing the study. The quality of the questions is an encouraging sign that the
FTC will produce a valuable study. Most of the issues have been examined in IRET's series of
studies on the Postal Service, but in the past IRET has used separate papers to evaluate the Service's
advantages and disadvantages. Given the FTC's thought-provoking questions, this would be
a good time to update earlier IRET work and to examine the Postal Service's benefits and
1 H.R. 6407, which became P.L. 109-435, the Postal Accountability and Enhancement Act (PAEA). An
earlier IRET study examined more fully the main elements of the new law. See Michael Schuyler, Congress
Delivers Postal Service Legislation, IRET Congressional Advisory, No. 216, January 8, 2007, available at
ftp://ftp.iret.org/pub/ADVS-216.PDF.
2 PAEA, sec. 703.
Institute for         IRET is a non-profit, tax exempt 501(c)3 economic policy research and educational
Research                organization devoted to informing the public about policies that will promote
economic growth and efficient operation of the market economy.
on the
Economics of     1710 Rhode Island Avenue, N.W., 11th Floor 9 Washington, D.C. 20036
Taxation              (202) 463-1400 - Fax (202) 463-6199 - Internet www.iret.org

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