CONTENTS Page Bailar, Benjamin, Senior Assistant Postmaster General, Support Group, accompanied by Louis Cox, General Counsel, and Arthur Eden, Director, Office of Rates and Classification, U.S. Postal Brief, Henry, executive director, Recording Industry Association of Chilton, Mrs. T. G., national president, American Legion Auxiliary. Ford, Hon. William D., a Representative in Congress from the State Kelly, Stephen E., president of Magazine Publishers' Association, accompanied by Joel Davis, president of Davis Publications; Harry C. Thompson, president of Magazine Network, Inc., and Richard J. Barber, president, Richard J. Barber Associates-- Myers, Robert J., publisher, the New Republic Magazine, representing the Committee for Diversity of the Press - O'Neil, James F., publisher, American Legion Magazine..- Roth, Ralph S., chairman, American Newspaper Publishers Associa- tion Postal Committee, accompanied by Stanford Smith, president, Wertz, Terrell M., assistant director, National Legislative_Commis- sion of the American Legion, accompanied by James F. O'Neil, publisher, American Legion Magazine; Daniel H. Burkhardt, department adjutant, American Legion of Maryland; and Mrs. T. G. Chilton, national president, American Legion Auxiliary. Wilson, George M., executive vice president, the Billy Graham Biemiller, Andrew J., director, department of legislation, American Federation of Labor and Congress of Industrial Organizations.... Fink, John F., executive vice president, "Our Sunday Visitor," Hunt- 152 137 138 147 105 173 Communications received from Crane, Doris R., secretary-treasurer, Egg Candlers & Poultry Johnson, Charles E., counsel, Recording Industry Association of 176 179 152 Lund, Bert, president, Agricultural Publishers Association, Inc., Lucey, Charles Emmet, law offices of Reeves & Harrison, letter dated April 6, 1973, with attachment_ 173 176 Sand, Edward A., president, Parents' Magazine Enterprises, Inc., letter dated March 15, 1973_ McKee, Russell P., board of directors, American Association for Conservation information, letter dated February 22, 1973. 170 175 Sandy, James M., legislative chairman, the American Legion Spring- 176 172 Letter from Price, Waterhouse and Co., dated March 21, 1973, en- "An assessment of the impact of increased second-class postal rates Administration reports: Office of Management and Budget_ United States Postal Service.. Postal Rate Commission.... 59 67 2,7 11 12 19 FINANCING THE COST OF REDUCED RATES OF POSTAGE TUESDAY, MARCH 27, 1973 U.S. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON POSTAL SERVICE, Washington, D.C. The subcommittee met at 10 a.m., in room 210, Cannon House Office Building, Hon. James M. Hanley (chairman of the subcommittee) presiding. Mr. HANLEY. Today we begin 2 days of hearings on H.R. 4128 and H.R. 528, and related bills. The major issue involved is secondclass postal rates and the extent to which we should carry charges for the mailing of second-class publications as public service costs to be paid out of general revenues. In a related issue, some mailers of fourth-class educational and cultural materials are raising the same question. Historically, the United States has treated publications differently from other users of the mail. Under the theory that the public benefited from the easy and expeditious dissemination of information and opinion, postal rates for this category of mail have always been considerably lower than costs attributed to it. The passage of the Postal Reorganization Act changed the complexion of this issue. In general, the Postal Service was charged with ultimately running on a break-even basis. As the act states, Postal rates and fees shall provide sufficient revenues so that the total estimated income and appropriations will equal as nearly as practicable total estimated costs of the Postal Service. In accordance with this mandate, the Postal Rate Commission and the Board of Governors of the Postal Service approved a substantial second-class increase to be phased over a 5-year period. The second of these yearly increases will go into effect on July 1, 1973. Overall, the increases average 127 percent and in some cases may go as high as 250 percent. Publishers of all types have complained loudly that these increases severely jeopardize both profit and nonprofit publications. It is clearly within the jurisdiction of Congress to declare all or part of the rates for publications as public service costs and to provide appropriations to cover these costs. During the course of these hearings, we hope to fully develop the justification or lack of justification for the proposals pending before us. I think it would be appropriate to place a copy of H.R. 528, H.R. 4128, and the administration reports received from the Office of Management and Budget, the U.S. Postal Service, and the Postal Rate Commission in the record at this point. [The items referred to follow:] 93D CONGRESS 1ST SESSION H. R. 528 IN THE HOUSE OF REPRESENTATIVES JANUARY 3, 1973 Mr. WILLIAM D. FORD (for himself, Mr. CHARLES H. WILSON, Mr. WALDIE, Mr. THOMPSON of New Jersey, Mr. HAWKINS, and Mr. CLAY) introduced the following bill; which was referred to the Committee on Post Office and Civil Service A BILL To amend title 39, United States Code, with respect to the financing of the cost of mailing certain matter free of postage or at reduced rates, of postage, and for other purposes. 1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That this Act may be cited as the "Educational and Cul4 tural Postal Amendments of 1973". 5 SEC. 2. That (a) section 3626 of title 39, United States 6 Code, is amended 7 8 9 (1) by inserting "(a)" immediately before "If the rates of postage for any class of mail or kind of mailer"; I-O (2) by striking out "with annual increases as nearly 1 2 3 4 5 equal as practicable, so that-" and inserting in lieu thereof "with annual increases as nearly equal as prac ticable for mail under former sections 4421, 4422, and 4452 and with biennial increases (after 1972) as nearly equal as practicable for mail under former sections 4358, 6 4359, and 4454 so that-"; (3) by inserting "(and the ninth year in the case of mail under former section 4358)" immediately after "tenth year" in paragraph (1); (4) by deleting "4359" and "4554 (a)” in paragraph (2); (5) by deleting the word "and" at the end of paragraph (1), deleting the period at the end of paragraph (2) and inserting in lieu of the period a semicolon and the word "and", and adding immediately below para graph (2) the following new paragraph (3); "(3) the rates for mail under sections 4359 and 4554 (a) shall be equal, on and after the first day of the ninth year following the effective date of the first rate decision applicable to that class or kind, to the rates that would have been in effect for such mail, if this sub section had not been enacted."; (6) by adding immediately after "unless he files an nually with the Postal Service a written request for per mission to mail matter at such rates." the following new |