Special Message to the Congress on Increasing the Postal Rates.

To the Congress of the United States:

In the Budget Message I urged the enactment of legislation to increase postal rates in order to eliminate the postal deficit. Several facts indicate the urgency of such action by the Congress.

The Postal Policy Act of 1958 definitely states that postal rates and fees shall be adjusted from time to time as may be required to produce the amount of revenue approximately equal to the total cost of operating the postal establishment, less the amount attributable to the performance of public services. That Act directed the Postmaster General to submit to the Senate and House of Representatives no later than April 15th of this year the results of his survey of the need for the adjustment of postal rates and fees in accordance with this policy.

Because of the existing inadequate postal rates, the Post Office Department is losing $2 million every working day. In the thirteen years from July, 1946 to June, 1959 the postal deficits have been approximately as much as the entire cost of running the Federal government in 1938. The cumulative $6.8 billion postal deficit for these 13 years represents nearly one-half of the total increase in the Federal debt during this same thirteen year period. Interest charges alone on the debt represented by this cumulative deficit are costing our taxpayers some $200 million each year.

These huge postal deficits are phenomena of the years since World War II. In the years from 1900 to 1940 the losses of the Post Office Department averaged only $33 million a year. Since that time--excluding the war years--these losses have increased astronomically. The tremendous losses incurred since World War II have been due to the increases in cost of everything the Department uses or buys, and to the failure of the Congress to enact postal rate increases to pay for the added costs. For example, since the increase in the first-class letter rate in 1932 from 2 cents to 3 cents, costs have more than doubled, but the first-class letter rate has been increased only one-third. The annual losses on 2nd and 3rd class mail, now in the hundreds of millions of dollars, are likewise growing.

It is imperative that Congress implement the policy it wisely established in 1958 of providing that the Post Office Department shall operate on a self-supporting basis. The Postmaster General is transmitting to the Congress the Administration proposals for increases in postage rates on first, second, and third class mail to yield an estimated $550 million of new postal revenues in the 1961 fiscal year. Responsibility in the handling of our public affairs demands prompt action, in this session, to restore the Post Office Department to its traditional posture of budgetary good sense.

DWIGHT D. EISENHOWER