[Congressional Record Volume 144, Number 82 (Monday, June 22, 1998)]
[House]
[Pages H4896-H4898]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SENSE OF HOUSE THAT BOARD OF GOVERNORS OF UNITED STATES POSTAL SERVICE
SHOULD REJECT RECOMMENDED POSTAGE RATE INCREASE
Mr. LaTOURETTE. Mr. Speaker, I move to suspend the rules and agree to
the resolution (H. Res. 452) expressing the sense of the House of
Representatives that the Board of Governors of the United States Postal
Service should reject the recommended decision issued by the Postal
Rate Commission on May 11, 1998, to the extent that it provides for any
increase in postage rates.
The Clerk read as follows:
H. Res. 452
Whereas the United States Postal Service has realized a
cumulative net income of approximately $5,800,000,000 during
the past three and one-half fiscal years;
Whereas the national rate of inflation has declined
substantially during that time;
Whereas the postal customers and taxpayers of the United
States deserve to share in the recent financial gains of the
Postal Service;
Whereas any increase in postage rates affects every
citizen, resident, and business in the United States, and is
especially harmful to individuals living on low or fixed
incomes;
Whereas the Postal Rate Commission issued a recommended
decision on May 11, 1998, that proposes, among other things,
increases in certain postage rates;
Whereas it has been estimated that the proposed rate
increase for first-class mail would increase the annual
revenue of the Postal Service by approximately
$1,000,000,000; and
Whereas the Board of Governors of the Postal Service is
expected to meet in June 1998 to act upon the recommended
decision: Now, therefore, be it
Resolved, That it is the sense of the House of
Representatives that the Board of Governors of the United
States Postal Service should reject the recommended decision
issued by the Postal Rate Commission on May 11, 1998, to the
extent that it provides for any increase in postage rates.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Ohio (Mr. LaTourette) and the gentleman from Illinois (Mr. Davis) each
will control 20 minutes.
The Chair recognizes the gentleman from Ohio (Mr. LaTourette).
(Mr. LaTOURETTE asked and was given permission to revise and extend
his remarks.)
Mr. LaTOURETTE. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I first want to commend the gentleman from Iowa (Mr.
Latham), one of my better friends here in this body and a diligent
member of the Committee on Appropriations, for sponsoring the
legislation before us today. He has been joined by 49 Members in
cosponsorship of H. Res. 452.
The bill, Mr. Speaker, addresses a small topic; that is, a penny, the
fact that penny by penny, the United States Postal Service will be able
to raise $1 billion per year. Mr. Speaker, that penny may be
insignificant for some, but when paid collectively by all mailers, the
accumulation is significant, $1 billion.
The question is, why does the United States Postal Service require
this additional annual $1 billion when it has, over each of the past
four years, made more than $1 billion in profit? That is a fairly
significant balance.
Postal ratemaking is a complicated and specialized process in itself.
The statutory provisions for changing rates are also unique. The law
provides that the Postal Service may request rate increases. The
request is sent to the Postal Rate Commission, which must review all of
the documentation within 10 months and render a recommended decision
that is fair and equitable.
The recommended decision of the PRC must provide sufficient revenues
so that the Postal Service will, quote, break even. The governors then
may approve, allow under protest, reject, or modify that decision.
The Postal Service showed an approximate $1.8 billion surplus in
fiscal year 1995, a $1.5 billion surplus in fiscal year 1996, a $1.2
billion surplus in fiscal year 1997. However, last July the Postal
Service requested increased rates because it estimated that it would be
deficient by $1.4 billion. It turns out, Mr. Speaker, that in mid-1998
the net operating surplus of the Service was more than $1.3 billion.
The chairman of the Postal Rate Commission, during a May 11 press
briefing on this recommended decision, said, and I quote, ``The
commission believes that the Postal Service is unlikely, in the absence
of either the economy going into a free fall, a spending binge or some
very creative accounting, to incur any of the $1.4 billion loss it
projected for fiscal year 1998. We believe the service may have
seriously misestimated its need for a rate hike.''
Additionally, the PRC discovered that the Postal Service based its
estimates on 1996 data which did not reflect the current changes. It
must be noted that the inflation rate is lower than anticipated.
Therefore, costs to the Postal Service are lowered and its financial
situation is stronger.
{time} 1500
The Postal Rate Commission's hands are tied by law. The PRC is not
permitted to substitute its judgment over the recommendation by the
Postal Service even though the PRC did comment that they do not believe
that the Postal Service needs to raise rates to break even in fiscal
year 1998.
The PRC did, however, cut the original Postal Service request by
almost a third and reluctantly granted a raise in the price of a first-
class stamp without which other types of mail would have undergone
economic consequences.
The chairman of the PRC said, ``We can, however, recognize and
account for known and certain changes that have occurred since the
request was filed. This we have done.''
Mr. Speaker, it is my strong belief that, given these circumstances,
all Members of this House will want to be on record as to whether or
not they believe a postal rate increase is a responsible course of
action at this time.
I urge all of our colleagues to support H. Res. 452. This resolution
simply expresses the sense of the House of Representatives that the
Postal Board of Governors reject the recommended postal rate increase.
Mr. Speaker, I reserve the balance of my time.
Mr. DAVIS of Illinois. Mr. Speaker, I yield myself such time as I may
consume.
(Mr. DAVIS of Illinois asked and was given permission to revise and
extend his remarks.)
Mr. DAVIS of Illinois. Mr. Speaker, as a member of the Committee on
Government Reform and Oversight, and the Subcommittee on the Postal
Service, I deeply regret the fact that H. Res. 452 was never referred
to our subcommittee for consideration.
House Resolution 452 was introduced on June 3 of this month and
referred to the Committee on Government Reform and Oversight. On June
19, committee
[[Page H4897]]
consideration of the measure was waived by the gentleman from Indiana
(Mr. Burton), the chairman.
The Subcommittee on the Postal Service, chaired by the gentleman from
New York (Mr. McHugh), is the proper forum for discussion and
legislation relating to the United States Postal Service. Indeed, House
Rule 10, Establishment and Jurisdiction of Standing Committees, grants
the Committee on Government Reform and Oversight sole jurisdiction over
the Postal Service, generally including the transportation of the
mails.
House Resolution 452 never had the opportunity to be considered by
the subcommittee of the gentleman from New York (Mr. McHugh). This is
especially noteworthy given the fact that the gentleman from New York
(Mr. McHugh) and his staff had been actively engaged in the drafting
and redrafting of postal reform legislation over the past 3 years.
H. Res. 452 has not followed what I would consider to be the proper
legislative process. The Postal Reorganization Act of 1970 shifted rate
making authority from the Congress, where it had become a politically
charged process, to two presidentially appointed bodies, the Postal
Service Board of Governors and the Postal Rate Commission.
House Resolution 452, by expressing congressional opposition to a
process currently before the Postal Board of Governors interjects
itself into that very process. The Postal Rate Commission has issued
its decision on the postal rate increase, and the matter is before the
Postal Board of Governors. I urge that we respect the statutory process
or request hearings on this process by the gentleman from New York (Mr.
McHugh).
Mr. Speaker, whenever we start talking about increasing rates or
increasing taxes, I think that every Member of this House perks up, and
all of our antennas go out. I for one believe that we should get every
ounce of service out of every dollar generated, whether it be on the
basis of fees or in taxes.
In addition, whenever an idea or a proposal for raising and/or
generating additional revenue is put on the table, there should be
maximum time and opportunity for discussion and debate. Therefore, I
had hoped that this item would have come before our subcommittee under
the leadership of the gentleman from New York (Mr. McHugh) so that we
could have had a full-blown discussion. There is still time for this to
happen. I would urge that we do so.
In addition, the matter is currently, as I stated before, before the
Postal Service Board of Governors. I hope that we would give them an
opportunity as well to act.
Mr. Speaker, I reserve the balance of my time.
Mr. LaTOURETTE. Mr. Speaker, I yield such time as he may consume to
the gentleman from Iowa (Mr. Latham), author of H. Res. 452.
Mr. LATHAM. Mr. Speaker, I wanted to personally thank my good friend
from Ohio (Mr. LaTourette) for being here today and also express my
appreciation to the gentleman from Indiana (Mr. Burton), chairman of
the full committee, and the gentleman from New York (Mr. McHugh) of the
subcommittee for waiving jurisdiction, because this is very time
sensitive. They are going to make this decision next Monday.
I think the people's House has a right to express an opinion. This is
a sense of the House resolution, expressing an opinion. Mr. Speaker, I
rise today to urge my colleagues to support this sense of the House
resolution calling for the United States Postal Board of Governors to
reject the $1.6 billion postage rate increase recommended last month by
the Postal Rate Commission.
This $1.6 billion rate hike, of which $1 billion will fall upon
senders of first-class letters, will affect every American, but
primarily those who are poor and are on fixed incomes. Whether we are
sending a Father's Day card, a ``get well'' card to our grandmother, or
just paying our monthly bills, the Postal Service will be hitting us up
for even more change out of our pocket.
Just to add insult to injury, the Postal Service even raised rates on
certified mail, which millions of Americans use to send in their taxes
to the IRS.
Included in this $1.6 billion rate hike or stamp tax is an increase
in rates for nonprofit mailers. Local churches, temples, and charities
in every Member's district will have to pay about 11 percent more per
mailing they send out. As we all know, mailings are often the lifeblood
of these organization's donations.
That is why the Alliance of Nonprofit Mailers, and it has more than
150 member organizations, strongly support this resolution. The
Alliance includes a broad spectrum of organizations such as the AARP,
the American Cancer Society, the American Farm Bureau, the
International Association of Fire Fighters, AFL-CIO, Disabled American
Veterans, Citizens for a Sound Economy, American Baptist Churches,
B'nai B'rith International, the Salvation Army, the YMCA, Rutgers
University, UCLA, the Chesapeake Bay Foundation, the National
Association of School Boards, the World Wildlife Fund and Consumers
Union of the U.S. Also nonprofit periodical publishers such as the
National Geographic Society will be hit hardest by the stamp tax.
Again, all this adds up to a $1.6 billion tax on the American people
if this rate increase goes into effect. However, it could have been
even worse. In fact, the Postal Service's own recommendation was for a
$2.4 billion rate increase, but the Postal Rate Commission, forced to
recommend a rate hike, slashed the Postal Service's plan by $745
million.
This rate hike is all the more outrageous since the Postal Service
has actually made a profit during the last 3\1/2\ years, and listen to
this, of $5.9 billion. Let me say that again. They made a profit in the
last 3\1/2\ years of $5.9 billion. That is better than most Fortune 500
companies.
However, by law, the Postal Service is not supposed to make a profit,
but, instead, break even. Though, about three-fourths of this year
already, the Postal Service is running a $1.4 billion profit, hardly a
sign of an organization which needs a large infusion of cash.
This is the same Postal Service that would like this Congress to pass
legislation to grant it more autonomy in how postage rates are set. If
the current situation is any indication, can Americans really entrust
the Postal Service with that sort of power?
The law says that the Postal Service may, from time to time, request
that the Postal Rate Commission recommend a hike in rates or fees so
that the Postal Service can meet its expected costs. That is, as long
as it will equal ``nearly as practicable total estimated cost of the
Postal Service.'' This is the so-called break-even requirement.
So why did the Postal Rate Commission recommend last month to grant a
rate increase, albeit of less magnitude than originally asked for?
According to Edward Gleiman, who is Chairman of the Postal Rate
Commission, the Postal Board of Governors left them with little choice.
The Board of Governors rejected a proposal by the Commission to delay
a decision on the rate increase until more accurate financial data was
available, and, therefore, the Commission was forced to decide on the
Postal Service's rate increase.
In the event that the Postal Rate Commission did not act, the Board
of Governors would have exercised its authority to increase rates
temporarily. Gleiman stated on behalf of the Commission that, ``while
we do not believe, given its strong financial situation, that the
service needs to raise rates to break even in fiscal year 1998, we may
not second-guess them and send the request back.'' The decision is in
the hands of the Postal Board of Governors.
I think it is evident that the leadership of the Postal Service has
forgotten that they operate a public trust. This $1.6 billion stamp tax
represents a break in that trust. I urge all my colleagues to join me
in sending a clear and unanimous message to the Postal Board of
Governors to reject this huge stamp tax.
Mr. DAVIS of Illinois. Mr. Speaker, I yield myself as much time as I
may consume.
Mr. Speaker, my colleague may very well have captured the real spirit
and essence of where the sense of this House might be. I would be the
first to agree that the Postal Service has been operating with a level
of efficiency, a level of effectiveness, and has, indeed, been turning
a profit, which is what we would like to see all businesses do.
[[Page H4898]]
By no stretch of the imagination would I want to suggest that I or
any of my colleagues would be seeking an increase, as a matter of fact,
especially when we talk about not-for-profits who are hard-pressed and
hard hurt, even especially when we are talking about some of our
businesses and commercial interests that also must, in fact, thrive as
well as survive.
I agree with my colleague that setting the rates is a very complex
matter. I would have been pleased to hear the dialogue, the discussion.
I would have been pleased to hear from the Board of Governors if they
were to make such a decision, or from the Rate Commission, their
rationale for even making such a proposal. Knowing full well that it
was nothing more than a proposal, I would have appreciated that
dialogue and that information.
The power of this House reminds me of a discussion I heard the other
day about three umpires who were discussing how they call close balls
and strikes. The first umpire said, well, let me tell you, all of the
close ones, with me, are balls. The second umpire said, well, let me
tell you, with me, all of the close ones are strikes. The third umpire
said, well, let me tell you, as far as I am concerned, none of them
ain't nothing till I call them.
I think that is the way it is with this House. We can hear proposals,
we can hear ideas, we can hear what others would have to say, but the
bottom line or the final word is, indeed, ours. So I am not in
opposition to the concept to the idea or even the bottom line. We would
have just appreciated more opportunity to engage in the dialogue in our
subcommittee and to have had an opportunity to more thoroughly explore
the concept.
Mr. LATHAM. Mr. Speaker, will the gentleman yield?
Mr. DAVIS of Illinois. I yield to the gentleman from Iowa.
Mr. LATHAM. Mr. Speaker, I would not disagree with the gentleman, but
the fact of the matter is, with the decision being made next Monday,
the time sensitive nature of that situation, I am very much
appreciative of the fact that the gentleman from Indiana (Mr. Burton)
and the gentleman from New York (Mr. McHugh) allowed us to go forward,
because I think it is very important in that the people's House express
an opinion.
We are representing the people. I think that is the one part of this
whole equation that has been left out is what the effects are on the
people out there that we represent.
{time} 1515
I apologize that because of the time sensitive nature of this that we
had to proceed in this manner. I would hope that he would continue the
oversight job that I know he will and to continue his work, but I think
this is very important, for us to make a statement here today for the
people.
Mr. DAVIS of Illinois. Mr. Speaker, I thank the gentleman very much
and would just suggest that I am sure that we will do that under the
very able and capable leadership of the gentleman from New York (Mr.
McHugh) and the gentleman from Pennsylvania (Mr. Fattah). We look
forward actually to engaging in as much dialogue relative to postal
oversight as we possibly can have.
Mr. LaTOURETTE. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, before yielding back, I just wanted to make a couple of
observations about the gentleman from Illinois' observations, because
he has in the 105th Congress demonstrated himself to be not only a very
studious but also a very insightful Member not only of the full
committee but also of the Subcommittee on Postal Service and I know
that this Member very much appreciates his input and appreciates his
getting into the issues that affect all matters that come under the
jurisdiction of the committee.
Mr. Speaker, we had an oversight hearing last week in which the
gentleman from New York (Mr. McHugh) presided. We had the opportunity,
all of us, to interchange with the new Postmaster General, Mr.
Henderson. I think we are all impressed with his ability to lead the
Postal Service into the next generation. But also testifying at that
hearing was the General Accounting Office. I was struck by their
remarks relative to this postal rate increase that they were
particularly concerned about the quality and the quantity of
information that had been supplied by the Postal Service to the PRC
before making this recommendation.
I am also struck by the gentleman from Iowa's remark that this
decision will be made next Monday and time is of the essence; and,
lastly, just to reiterate something I think the gentleman from Iowa
said, when the PRC came out with its decision, sadly, and why I think
this House needs to become involved, in their May 11 document, they
indicated that complicating an already challenging case was the finding
by the PRC that the Postal Service's financial projections and
underlying cost data from 1996 were outdated and contained what
appeared to be serious computational errors. As the gentleman from Iowa
stated, the PRC then recommended to the Board of Governors that would
it not be better to delay a decision even though they had this 10-month
clock ticking, but would it not be better to delay a decision and have
it right rather than to conform with the requirement of getting it
decided. But, sadly, the Board of Governors rejected that. The head of
the PRC said, in a response reflecting a preference for form over
substance, ``The Governors rejected the proposal and reminded the
Commission that it was obligated to complete the case in 10 months.''
I think the gentleman from Iowa's resolution, I am sure the gentleman
from Illinois and all his colleagues on his side of the aisle would
rather that the Board of Governors get it right than get it done
quickly. It is for that reason that I would respectfully request that
this House pass H. Res. 452.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Nethercutt). The question is on the
motion offered by the gentleman from Ohio (Mr. LaTourette) that the
House suspend the rules and agree to the resolution, House Resolution
452.
The question was taken.
Mr. LATHAM. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 5 of rule I and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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