Contact: Robert E. McLean
703-418-0390
bmclean@mailers.org
www.mailers.org

Postal Facts: Why Congress Owes the Postal Service Almost $1 Billion

This year the Postal Service sent to Congress its annual request for the postal appropriation-an appropriation that subsidizes certain mailers, NOT the Postal Service. This appropriation subsidizes a select group of mailers (including Members of Congress).

These funds, called "revenue forgone," pay for free mail for the blind and overseas voter registration. (Congressional franking is not part of revenue forgone; Congress pays the cost of congressional mail directly to the Postal Service.) Revenue forgone at one time also helped reduce the cost of postage paid by nonprofit mailers. However, Congress eliminated the nonprofit postage subsidy in 1993, phasing out the appropriation over five years (from 1993 to 1998).

For several years in the 1990s, as Congress struggled to deal with the soaring national deficit, it did not give the Postal Service the revenue forgone funds it was owed. In 1993 Congress approved legislation that created an interest-free payment schedule, under which the Postal Service would receive $29 million a year until the year 2035.

If Congress paid the money it owes as of today in one lump-sum, it would be $813 million.

In recent years the Whtie Househas ignored this appropriation request. If the final appropriations bill does not include the funds, the cost to individuals and businesses that use the mail would be significant. That is because under Generally Accepted Accounting Principles (GAAP), the Postal Service would have to recognize the present day value of the entire outstanding balance of nearly $800 million as a bad debt.

The result? Higher postage rates and an incease that would have to be implemented sooner--because Congress and the Administration refused to pay the funds they owe the Postal Service.

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