Braille Monitor                                                                                January 1986



Nonprofit Postage Rates Saved in Congress: The Federation Leads the Battle

by James Gashel

Sometime in November (or maybe it was early December), 1984, news accounts of impending federal budget cuts being planned at the White House mentioned payments to the United States Postal Service as a target. The postal subsidies had survived an earlier challenge once before during President Reagan's first term of office. But now the battle lines over budget cuts would be drawn more tightly to reduce the federal deficit mounting up to over $250 billion per year.

On February 4, 1985, the President's budget was released and sent to Capitol Hill. Not by accident there were also over 200 Federationists walking the halls of Congress and making the rounds to talk to their representatives and senators about the contents of that budget, particularly the postal subsidy issue. We were right on the scene and very insistent that Congress act favorably to preserve taxpayer-supported postage rates covering mass communications (education and fundraising) by nonprofit groups and free matter mailings for the blind and physically handicapped.

The 1985 appropriation to the postal service fund for free and reduced-rate mailings was $801 million. Under the Postal Reorganization Act of 1970 the federal appropriation compensates the Postal Service for "revenue foregone" in connection with the free and reduced rate mail services also required by the law. Otherwise, the Postal Service has to operate as a self-sustaining corporation, independent from the federal treasury. First-class postage is not subsidized, but certain second, third, and fourth-class mailings are paid for in part with federal funds.

This aid in the form of reduced-rate postage helps small newspapers, churches, charities of all kinds, environmental groups, labor unions, libraries, educational institutions, alumni associations, and even the national political parties, just to name a few. Many of the private agencies for the blind (in fact, most of them) use the reduced-rate postage to communicate with the public about their services and to do fundraising. In the case of the National Federation of the Blind we, too, conduct mass mailings throughout the United States in order to inform and educate the public about blindness, to improve the climate of public opinion, to convince employers to hire the blind, to find people who are blind or becoming blind so we can offer them our help, and to obtain financial support for our work. Most of the mailings we and others do would be too expensive if we had to pay commercial postage rates. Then our means of spreading the word, securing public support, and expanding our programs would be cut off. This would isolate the Federation and shrink or stop what we are doing.

Late in January, 1985, just prior to the President's budget message, the Postal Service announced that almost $1 billion ($980.9 million to be exact) would be needed to maintain subsidized postage rates and free matter for the blind and handicapped during Fiscal Year 1986. Meanwhile, the President's budget called for only $39 million, which on close analysis turned out to be a payment due from the federal government to the Postal Service Retirement Fund covering obligations to be met on behalf of postal workers whose employment with the Postal Service began prior to 1970. So the amount in the President's budget to pay for "revenue foregone" for free and reduced-rate postage was zero.

If Congress followed the President's recommendation, the Postal Service would begin charging commercial rates for all previously subsidized mail, commencing October 1, 1985. For example, the large packages of books that are mailed free from libraries to blind patrons and returned free to the libraries would have to be paid for at whatever the commercial rate would be for mailing the same package--maybe $2.00 or $3.00 per carton, or more. The Federation's mass mailings of print information would cost 12.5 cents per piece (third-class rate commercial rate) as opposed to 5.2 cents per piece (6.0 cents after February 17, 1985) at the federally subsidized nonprofit rate. If a million or more pieces are mailed, the difference is very significant. Commercial postage would also have to be paid on each issue of the Braille Monitor, whether in disc or in Braille.

Sparked by the early visit to Washington and news of the crisis before us with the possible cutoff of reduced rate postage, NFB members and leaders from throughout the country came alive. Collectively, we all understood that the free matter was never really in jeopardy. The price tag to provide that service for Fiscal Year 1986 was quoted by the Postal Service as $37,882,000. With $1 billion at stake, that amount would be rather minor, and Congress could find the money. The real battle would shape up over reduced-rate postage for mass communications. The lower the federal payment for "revenue foregone" the higher the postage rates would be and conversely.

Hearings were held by the House of Representatives Committee on Post Office and Civil Service, Subcommittee on Postal Operations and Services, and by the Senate and House Appropriations Subcommittees directly responsible for approving the "revenue foregone" funds. I appeared in each of these hearings to represent our views and to advise the members of Congress on how the blind would be affected by a fund cutoff or a sharp reduction in federal support. Reprinted here is a transcript of my actual remarks before the House Appropriations Subcommittee. An expanded written statement was also filed for the published record of the proceedings.

Remarks Before the Subcommittee on Treasury,
Postal Service, and General Government
Committee on Appropriations
U.S. House of Representatives
Washington, D.C.
April 17, 1985

Mr. Chairman, my name is James Gashel. I am representing the National Federation of the Blind. I will make some brief remarks and ask that my full statement appear in the record.

The purpose of the National Federation of the Blind is to serve as a vehicle for self-expression to give the blind a collective voice. We are not just some charity doing humanitarian work for the blind--we are the blind. The policies and positions we adopt are decisions made by the blind themselves through the process of collective discussion and vote. Today I will express our concerns relating to appropriations for the United States Postal Service fund known as revenue foregone for free and reduced-rate mail.

There is no point in beating around the bush, Mr. Chairman. We oppose the plans announced in February to balance the budget by terminating taxpayer support for special postage rates and the free mailing of books and aids to the blind and handicapped. As I have described in my written statement, there is a tremendous need to continue the revenue foregone appropriation to provide the special postage rates and services authorized by the Postal Reorganization Act. But the budget is a statement of national priorities which turns its back on human needs, not to mention some of the most cost effective ways of meeting those needs.

This budget calls for an end to taxpayer supported free mailing service to bring books, equipment, and information to the blind and physically handicapped. While it might be easy to publish such a proposal amid the pages of charts and tables created by the Office of Management and Budget, it will not be possible, Mr. Chairman, I dare say, to get the blind of this country and our friends to like it or to take it lying down. Obviously the budget writers do not understand or care that the free matter for the blind and handicapped provisions of the Postal Reorganization Act carry out the longstanding national policy of bringing books and information to the blind, since we have no other way of obtaining these materials.

But the free matter crisis is not the only issue. The plan to eliminate the revenue foregone appropriation entirely would also bring an end to much needed help and hope for the nation's blind. For instance, an organization the size of the National Federation of the Blind uses a very small portion of the revenue foregone subsidy. This is pennies to the federal budget. Yet, to our budget (the budget of the National Federation of the Blind) the difference is crucial. We cannot afford to sustain a doubling of our postage rates. It is a false and misleading distortion to claim that taxpayer savings will actually result from ending the postal subsidy. What about the costs to the U.S. Treasury that will surely increase because private sector programs such as ours cannot operate? In the space of only a few years, the National Federation of the Blind has helped to stimulate jobs and opportunities for thousands of our fellow blind who would otherwise live at public expense. I doubt that anyone (least of all the budget planners) would question that such privately sponsored assistance has tremendous value. But the budget writers do not weigh the costs against these benefits. If private efforts cannot flourish, then blind people will necessarily increase dependence upon government programs and financial support. If this happens, the cycle of tax and spend will start all over again. Surely it is not too much for groups such as the blind to ask that affordable, stable postage rates be justified as a continuing public expense on the basis that they stimulate beneficial efforts that are paid for with private dollars.

Mr. Chairman, on page six of my statement there is the text of a short letter from someone who responded to one of our mailings. She is going blind and she is scared. She expresses the feeling of thousands of others who read our materials every day and gain hope from having them. I will read only this portion of the letter and then pose a question when I am through: "I don't have anything brilliant to say or any wonderful remarks about how brave I am. I am very frightened and just plain sick in my guts as to what I am going to do. I am 47 and live alone. I live on Social Security and have many other health problems. Would appreciate hearing from you. I need all the encouragement and help I can get. Many thanks."

Now for my question: What will happen to this individual and thousands of others if we have no way to know of their need or reach out to them to offer help? Now we can do so via the mails at a price we can afford. But what about the future? That is what worries us most. This is why we need a revenue foregone appropriation sufficient to maintain stable, affordable postage rates.

Mr. Chairman, I will conclude by thanking you for the opportunity to appear in these hearings on the 1986 appropriations bill. We appreciate your past support for the programs in question. If there are questions, I will be pleased to answer them. I thank you.

This is what I said to the Congressional Committee April 17, 1985; and as it turned out, our fears that Congress might actually go along with the President and cut off support for reduced rate postage were not unfounded. It became clear that a complete termination of the funding to cover "revenue foregone" was possible when the Senate Budget Committee reported its version of the First Concurrent Resolution on the Budget for Fiscal Year 1986. The resolution and report, issued in late March, followed to the letter the President's recommendation. Something had to be done to stop this plan and continue the funding at no less than current levels.

Some groups affected by the cutoff vowed to beat it in the House, so never mind the Senate. But the National Federation of the Blind, joined by a handful of others, decided to make a stand head-on against the Senate Budget Committee's resolution. It is a good thing we did.

First, we had to find someone in the Senate to sponsor an amendment. That was accomplished when Barbara Pierce, President of the National Federation of the Blind of Ohio, organized a meeting with Senator Howard Metzenbaum. We also invited representatives from higher education institutions in Ohio to attend the meeting with Senator Metzenbaum held in Columbus, Ohio, on April 10.

We decided to ask Senator Metzenbaum to be our standard bearer, which he agreed to do, then and there. He has been a close friend and ally of the Federation for several years. Senator Metzenbaum was our successful champion on the voting rights amendment in 1982. He spoke at our 1981 Convention when we rallied on the Capitol steps, and he came to Minneapolis the following year to tell the Convention of the victory we had just won on voting rights. Senator Metzenbaum received an NFB "Special Service" award, recognizing him for his good work and successful efforts on behalf of all blind Americans.

Under the circumstances, and in a time of crisis, it was only natural that we would turn to our good friend, Senator Metzenbaum. He immediately agreed to help us, and we were off and running. The amendment to the resolution passed by the Senate Budget Committee sought to restore $817 million to the budget in order to cover the appropriation for "revenue foregone." It did not provide for full funding, but it was certainly better than zero.

On May 9, as the Senate was only hours away from completing action on its version of the First Concurrent Resolution on the Budget for Fiscal Year 1986, Senator Metzenbaum rose and was recognized to present his amendment. It was immediately followed by a motion to table the amendment, offered by Senator Ted Stevens of Alaska. That was expected. Senator Stevens had developed what he called a compromise provision, intended to be incorporated in a substitute for the original budget resolution, calling for $100 million for the revenue foregone authority. Senator Stevens said this would cover free matter for the blind and several other types of mailings. For other mailings not funded, Senator Stevens pledged to prepare legislation requiring the Postal Service to maintain reduced rates by paying for them from other postal revenues. That was an attractive approach especially to Republican Senators, who could say that they were backing the blind and continuing to support reduced rate postage, while still balancing the federal budget. So when the yeas and nays were ordered, Senator Stevens' motion to table the Metzenbaum amendment was agreed to by a vote of 51 to 46. Although the amendment lost, the show of support to continue funding for "revenue foregone" was impressive. Fortunately, the budget resolution in the House appeared to be in better shape. Backed by the Chairman of the House Budget Committee, William Gray of Pennsylvania, the provision concerning "revenue foregone" sought budget authority of $871 million, later revised downward to $801 million as the budget resolution passed the House.

A conference committee of members from the Senate and the House took almost the entire summer (or so it seemed) to resolve their differences and report an agreement on the First Concurrent Resolution on the Budget for Fiscal Year 1986. But on August 1 the issues were suddenly settled, and the resolution was cleared for final passage by both Houses of Congress. As approved, the Budget Resolution uses the assumption of $749 million as the authorized appropriations level for "revenue foregone," during Fiscal Year 1986. In order to establish this authorization as a technical ceiling on appropriations, the budget resolution directed that the $749 million authorization of appropriations for revenue foregone be included in a later bill generally known as the Budget Reconciliation Act. A budget resolution by itself is only a guideline for the various committees of Congress. It is not enforceable as a matter of law, and it places no particular limits on federal spending. Other laws must be passed or changed in order to carry out the assumptions made in the budget resolution.

Meanwhile, as the debate over the Congressional budget dragged on throughout the summer, the appropriations committees got down to work on their regular spending bills which are supposed to be enacted by Congress in order to become effective in time for the beginning of the federal fiscal year on October 1. In July, the House moved first by approving a bill calling for $922 million as an actual appropriation for "revenue foregone." That amount would be enough to prevent a rate increase until after January 1, 1986, and then the increase would be about twelve percent.

But in the Senate Appropriations Committee, a very dramatic battle had developed. The Republican leadership was holding out for the $100 million funding level adopted in the Senate version of the Budget Resolution. Meanwhile, supporters of "revenue foregone," led by Senator Quentin Burdick of North Dakota, called for 1986 funding to be $801 million, the same as Congress originally enacted for 1985. As an aside, Congress had quietly increased the 1985 appropriation by $168 million (to a total of $969 million) in a supplemental appropriations bill which finally passed both Houses of Congress on August 1. But back to the debate over the 1986 bill. Senator Burdick and his supporters in the Senate Appropriations Committee prevailed on a vote of 17 to 9 after a tension-packed session.

That was the turning point in the Senate. Until then it was still possible that our special reduced-rate postage would more than double beginning in October, 1985. With the Appropriations Committee vote, however, the increase would not be more than 2396. And with the House vote for $922 million, it was very possible that there would not be an increase in reduced-rate postage until after the first of January, 1986. Things were definitely beginning to go our way.

On September 7, the Board of Governors of the Postal Service announced a 23% rate hike for third-class nonprofit postage, effective October 1, 1985. Since Congress had not yet settled on the Appropriations which would become effective in October, the announcement was certainly premature. We decided to seek a delay with the objective of postponing the rate increase for at least three months, until after the first of the new calendar year. This way mailings during the 1985 Thanksgiving and Christmas holiday season would not suffer the impact of higher postage rates.

On September 19 leaders from several organizations affected by this issue met in Washington, D.C. President Jernigan was asked to chair the event. In addition to the National Federation of the Blind, which was heavily represented by NFB leaders who came from several key states, the other groups were the Council for Advancement and Support of Education, the American Society of Association Executives, and the Nonprofit Mailers Federation. At our request, Senator Ted Stevens of Alaska came to address the morning breakfast of the entire assembled group. Senator Stevens is chairman of the Subcommittee on Civil Service, Post Office, and General Services in the Senate Committee on Governmental Affairs. He explained the direction he would like to go with respect to reduced-rate nonprofit postage. Then we told Senator Stevens our views about the whole situation. One item was the immediate plan of the Postal Service to raise rates beginning on October 1. As the diplomats would term it, we had a wide-ranging discussion of the issues of mutual concern and a frank exchange of viewpoint.

There is no use speculating or editorializing about the results we were able to achieve at the breakfast. Here it is, published in the Congressional Record of September 23, 1985.

In the Senate of the United States: Mr. Stevens. Mr. President, recently I had the pleasure of speaking to a group representing four different organizations, one of which was the National Federation of the Blind. Their main concern was the impending postal rate increase for all nonprofit mailers. This increase is scheduled to take place on October 1, unless Congress directs otherwise.

One of the major problems that the nonprofit mailers face with a rate increase on October 1 is that most of the fundraising they will do for the entire year takes place between now and the end of the year, primarily during the Christmas season. The increase these groups are facing is in the neighborhood of 60 percent. Such an increase on such short notice will dramatically affect their ability to raise funds to allow them to do their work.

We ought to be both sensible and compassionate about this problem. Therefore, Mr. President, I am introducing today legislation that would direct the Board of Governors to hold off any increase of postal rates until January 1, 1986, or in other words until after the holiday solicitation season. This legislation would apply to all nonprofit mailers, whether second, third, or fourth-class.

Mr. President, I ask unanimous consent to have the text of my bill printed in the Record.

That was on September 23rd. Three days later, while the Senate was completing action on its version of the 1986 appropriations bill which includes the postal service, Senator Stevens offered his bill as an amendment, requiring the Postal Service to wait three months before raising any of the tax-supported special postage rates. The amendment passed unanimously. So there would not be a postage rate increase at all on October 1 or any time in the Fall of 1985, that much was for sure.

At the time this article is being written, it is still not possible to say exactly what the postage rate increase will be effective sometime in January, 1986. The rate hike will be 12%, 23%, or somewhere in between, depending on how much money is actually appropriated. Meanwhile, reduced-rate postage remains unchanged under a continuing resolution, incorporating Senator Stevens' amendment and keeping all government programs running while Congress completes final action on the 1986 appropriations bills. It was a hard-fought battle to work our way up from a recommendation of zero (or a 108% increase in postage rates) urged in the President's budget. Although this may emerge as a future budget cutting target, once again its success is less likely next time because of the victories and the support we were able to achieve in Congress this time.

Increasingly, the National Federation of the Blind has come to be recognized as a leading force among the highly respected national-level charitable groups in our country. Anyone who joins this organization and contributes money, time, and energy to its work can do so with real pride. We are effective in what we do because we are proud of our movement, our philosophy, and our leaders. Anyone who doubts that we have either the will or the strength to survive can come and test us out. What we lack in financial reserves we make up in people and commitment. Whatever the price, we will pay it. Whatever the battle on behalf of the blind, we will win it. That is why we have formed the National Federation of the Blind and why it continues to grow and flourish.