Statement of Administration Policy: H.R. 4150 - Postal Reorganization Act Amendments of 1988

(House)
(Ford (D) Michigan and 357 others)

The Administration is opposed to removing the U.S. Postal Service from the Federal Budget, and the President's senior advisers would recommend that he veto H.R. 4150 if it is presented to him in its current form. The U.S. Postal Service is wholly-owned by the Federal Government, and its revenues, expenses, and liabilities are Federal revenues, expenses, and liabilities. Omitting the U.S. Postal Service from the Budget would therefore misrepresent the full range of the Federal Government's financial activity and the true extent of the Federal deficit and would lead to further erosion of the integrity of the unified budget by encouraging other Federal entities to seek off-budget status.

In addition, the Administration opposes the increased authority that H.R. 4150 would grant the USPS to borrow from the Federal Financing Bank. This provision would exacerbate the explosive growth in USPS's capital debt (which has increased from $1.4 billion in FY 1983 to $7.2 billion in FY 1989). This increased borrowing has frequently financed projects motivated by political considerations rather than genuine business needs, led to the purchase of equipment to perform functions that could be more economically contracted out to private firms, and diminished the amount of credit available, raising interest rates for private, State, and local borrowers.