On this date, the House agreed to the conference report for the Postal Reorganization Act of 1970 in a 338 to 29 vote, which eliminated the Post Office Department and replaced it with the United States Postal Service, an independent executive agency. The reform came after a tumultuous period in the 1960s during which the Post Office Department faced major growing pains. While it processed 80 billion pieces of mail a year—some of it by hand—the department faced a budget deficit, operated in aging facilities, and suffered from high employee turnover due to low pay. As it did with other federal departments, Congress determined the post office’s finances, and it also held the exclusive power to set postage rates and employee salaries. But in late 1966, a mail pileup in Chicago caused major delivery delays, prompting national headlines and calls for reform. Chicago Representative Edward Derwinski blamed Postmaster General Lawrence O’Brien for being “more involved in politics than postal service.” The Post Office Department blamed high employee absenteeism and a flood of pre-Christmas advertising for the delays. Postmaster O’Brien eventually outlined a proposal to convert the beleaguered Post Office Department into an independent, government-owned corporation managed by a presidentially appointed board of directors.
In 1969, President Richard M. Nixon embraced the notion of an independent postal corporation that could set its own rates and negotiate employee salaries with postal unions. Under Nixon’s plan, the position of Postmaster General lost its Cabinet-level status, in part to insulate the post office from direct political influence. Several members of the House Post Office and Civil Service Committee, including Chair Thaddeus Dulski of New York, resisted the idea, insisting that a business-like management structure might not align with the public interest. Opponents countered with a scaled-back reform package that would have maintained the Postmaster General’s Cabinet status and Congress’s power to set rates and salaries. On March 12, 1970, the committee overruled Dulski and approved the Nixon bill. That month, postal workers waged a first-ever nationwide strike to protest a pay hike contained in the bill that postal unions deemed too modest. In response, Nixon asked Congress to include an 8 percent raise for postal employees in the reform bill on top of a planned 6 percent hike for all federal employees. The President also modified his proposal to make the United States Postal Service an “independent establishment” within the government, rather than a corporation. That summer, the House and Senate agreed on the bill’s final language, which followed the contours of Nixon’s plan, provided for a gradual reduction of federal appropriations until the post office reached financial self-sufficiency, and required that local postmasters and other employees be hired without regard to endorsements made by Members of Congress or other officeholders. President Nixon signed the Postal Reorganization Act into law on August 12, 1970.