[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.

                          ____________________