Postal Service Managers Angry at Obama for Denigrating Postal Service While Defending Government-Run Health Plan

By Fred Lucas | August 19, 2009 | 6:55 PM EDT

Air mail envelope (public domain)

( – U.S. Postal Service managers are upset with President Barack Obama for denigrating the Postal Service as part of his argument defending the idea of creating a government-run health insurance plan to compete with private insurers.

In a town hall meeting last week in Portsmouth, N.H., Obama sought to reassure the public that creating the so-called "public option" health insurance plan--a government-run health insurance organization that would compete with private sector insurers--would not mean the death of private insurers. He pointed to the financially troubled Post Office as an example of a government-run system that does not compete very well with private delivery services. 

“People say, well, how can a private company compete against the government?” said Obama. “And my answer is that if the private insurance companies are providing a good bargain, and if the public option has to be self-sustaining--meaning taxpayers aren’t subsidizing it, but it has to run on charging premiums and providing good services and a good network of doctors, just like any other private insurer would do--then I think private insurers should be able to compete.”

He then cited the U.S. Postal Service as an example of a public option that is not driving its private competitors out of business.

“I mean, if you think about, if you think about it, UPS (United Parcel Service) and FedEx are doing just fine, right? No, they are,” said Obama. “It's the Post Office that's always having problems.”

In a bulk e-mail sent to Republicans on Thursday, Michael Steele, chairman of the Republican National Committee, said Obama “is acknowledging what Republicans have been saying all along: That the private sector does a better job offering choices and delivering services to customers in a competitive and cost effective manner than a government-run monopoly.”

Steele said Obama and liberal Democrats in Congress are pushing for a "government-run health care scheme that is inefficient, limits choices and hemorrhages taxpayer money like the Post Office.

“Two weeks ago, the Post Office was called a ‘high risk’ federal agency by the Government Accountability Office. The Post Office will have a $7 billion operating loss this year. So what makes the President, Nancy Pelosi and their left-wing allies think that government bureaucracy can run health care better than the private sector?" Steele said.

The Government Accountability Office says the U.S. Postal Service faces a net loss of $7 billion in fiscal year 2009. (See Previous Story)
The Postal Service is expected to end 2009 with $10.2 billion in outstanding debt and it may not generate enough revenue to make a mandated fiscal year 2009 payment of $5.4 billion for future retiree health benefits, the GAO report said.

But the Postal Service has said things are looking up, and in an Aug. 14 letter, Ted Keating, president of the National Association of Postal Supervisors, criticized President Obama.

“On behalf of 35,000 members of our association, I am writing to express our collective disappointment that you chose to use the Postal Service as a scapegoat and an example of inefficiency,” Keating wrote.

“Your negative comments on the Postal Service--without knowledge of the facts--was not only a disservice to members of our organization, but to all the postal employees,” he added.

“Employees of the Postal Service are largely represented by unions and management associations, all of whom strongly supported your candidacy last year,” the letter said. “For our support we do not expect any special consideration. However, we would like to be treated fairly and not have our current situation misrepresented, especially by the commander-in-chief.”

The president does not retract his comparison, White House Press Secretary Robert Gibbs said Tuesday.

“I doubt he's seen that letter and I don't have any reason to believe he regrets it, since he repeated it,” Gibbs said.

The letter from the postal supervisors said USPS revenues are down by 8.4 percent, compared to UPS, whose revenues are down 17 percent and FedEx, whose revenues are down more than 20 percent.

In a statement earlier this month, U.S. Postmaster General John Potter said: “Thanks to extraordinary efforts across the entire organization, we are well on track to achieve our 2009 target of more than $6 billion in total cost reductions.”