Special Message to the Congress Proposing Postal Rate Increases To Reduce the Postal Deficit

To the Congress of the United States:.

The Post Office Department faces a record deficit in Fiscal Year 1970, one which will reach nearly $1.2 billion. This unhappy fact compels me to recommend to the Congress that it increase postal rates for first, second, and third class mail.

The increases that I am proposing will reduce the postal deficit in Fiscal Year 1970 by over $600 million. If rates were not raised, that sum would have to be added to the already considerable burdens of our taxpayers. But if these recommendations are adopted, the costs of postal service will be borne more adequately by those who use the service most.

That is the way it should be if the Post Office is to become an example of sound business practices. That is also what the law requires. The Postal Policy Act stipulates that postal rates should produce revenue which is approximately equal to the cost of operating the postal establishment-after the costs of such special public services as the Congress may designate are deducted. It is in accordance with both general principle and specific law, then, that I make the following recommendations:

1. First class mail--I propose that the rates for letters and postcards be increased one cent, to seven and six cents respectively, on July 1, 1969. Air mail postage rates would remain unchanged.

2. Second class mail--The rates for newspapers and magazines which circulate outside the county in which they are published would go up by 12 percent on July 1, 1970. This increase would constitute an addition to the 8 percent increase for second class mail which is already scheduled to take effect on January 1 of next year.

3. Third class mail--Bulk rates are already scheduled for increase on July 1, 1969. I suggest that there be a further increase on January 1, 1970, so that the overall level at that time would be some 16 percent above present levels. Further, I recommend that the minimum single piece third class rate be increased by one cent on July 1, 1969.

I regret the need to raise postal rates. I can suggest, however, that these increases can help our country achieve two important goals. First, the proposal can help in our efforts to control inflation by bringing federal revenues and expenditures into better balance. Secondly, rate increases will make it easier for the Postmaster General and his associates to provide better postal service. After carefully reviewing the fiscal 1970 Post Office budget submitted by the previous administration, we have been able to achieve reductions of net outlays equal to $140 million. A comprehensive review of all postal operations is now underway; modem management techniques are being introduced and efficiency is being increased.

Further improvements will take time-and during that time it is essential that financial pressures should not impair or reduce available services.

I would add one further comment: this Administration is determined that the cycle of greater and greater postal deficits and more and more rate increases will be broken. The only way to break that cycle is through effective, long-range reforms in the way the postal system operates. Some of these reforms can be implemented by the Postmaster General; others will require Congressional action.

We will be submitting specific proposals for such reform to the Congress within the next forty-five days.

Postal reform will not be achieved easily; there are always many obstacles to even the most necessary change. But we remain confident that we can, with your cooperation, move boldly toward our three goals: better postal service, improved working conditions for all employees, and a reduction of the recent pressure for frequent increases in postal rates.

Proposed legislation to effect the revenue increases which I have recommended here will be sent to the Congress shortly.

RICHARD NIXON

The White House

April 24, 1969