Danny Davis: “In 1971, Congress made the Postal Service self-sustaining. However, Congress continued to subsidize the mailing cost of…”

“In 1971, Congress made the Postal Service self-sustaining. However, Congress continued to subsidize the mailing cost of the blind, nonprofit organizations, local newspapers, and publishers of educational material. It did so by providing an appropriation to the Postal Service to cover the revenues it had given up or 'foregone' by charging below cost rates to these groups. Appropriations for these subsidies increased as postage rates and the number of nonprofits grew, approaching $1 billion annually in the mid-1980s. In the early 1990s, Congress did not appropriate enough to cover these costs and refused to let the Postal Service invoke its statutory right to raise rates to cover the shortfall. The Postal Service pleaded that providing social subsidies was not part of its mission, hindered its competitiveness, and was more regressive than taxation with its impact. The Revenue Forgone Reform Act of 1993 eliminated appropriations to support reduced rates for nonprofits, which effectively transferred the costs to other mailers.”