```

[Senate Hearing 106-674]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 106-674

      THE ISSUANCE OF SEMIPOSTAL STAMPS BY THE U.S. POSTAL SERVICE

=======================================================================

                                HEARING

                               before the

               INTERNATIONAL SECURITY, PROLIFERATION, AND
                     FEDERAL SERVICES SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 25, 2000

                               __________

      Printed for the use of the Committee on Governmental Affairs

                   U.S. GOVERNMENT PRINTING OFFICE
65-647 cc                  WASHINGTON : 2000
_______________________________________________________________________
For sale by the Superintendent of Documents, Congressional Sales Office
         U.S. Government Printing Office, Washington, DC 20402

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio            RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico         ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania          JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
             Hannah S. Sistare, Staff Director and Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                  Darla D. Cassell, Administrive Clerk

                                 ------                                

      INTERNATIONAL SECURITY, PROLIFERATION, AND FEDERAL SERVICES 
                              SUBCOMMITTEE

                  THAD COCHRAN, Mississippi, Chairman
TED STEVENS, Alaska                  DANIEL K. AKAKA, Hawaii
SUSAN M. COLLINS, Maine              CARL LEVIN, Michigan
PETE V. DOMENICI, New Mexico         ROBERT G. TORRICELLI, New Jersey
ARLEN SPECTER, Pennsylvania          MAX CLELAND, Georgia
JUDD GREGG, New Hampshire            JOHN EDWARDS, North Carolina
                   Mitchel B. Kugler, Staff Director
              Richard J. Kessler, Minority Staff Director
                      Julie A. Sander, Chief Clerk

                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Cochran..............................................     1
    Senator Levin................................................     2
    Senator Akaka................................................     4

                               WITNESSES
                         Thursday, May 25, 2000

Hon. Dianne Feinstein, a U.S. Senator from the State of 
  California:....................................................     5
Hon. Mike DeWine, a U.S. Senator from the State of Ohio..........     8
Deborah Willhite, Senior Vice President, Government Relations and 
  Public Policy, U.S. Postal Service, accompanied by James C. 
  Tolbert, Jr., Executive Director, Stamp Services, U.S. Postal 
  Service........................................................    13
Bernard Ungar, Director, Government Business Operations Issues, 
  General Government Division, U.S. General Accounting Office....    14

                     Alphabetical List of Witnesses

DeWine, Hon. Mike:
    Testimony....................................................     8
    Prepared statement...........................................    10
Feinstein, Hon. Dianne:
    Testimony....................................................     5
    Prepared statement...........................................     6
Ungar, Bernard:
    Testimony....................................................    14
    Prepared statement...........................................    42
Willhite, Deborah
    Testimony....................................................    13
    Prepared statement with attachments..........................    29

                                APPENDIX

Letters submitted for the Record from:
    The Coalition for Safer Crossings, dated February 17, 2000...    53
    The American Philatelic Society, dated May 18, 2000..........    55
    The Women's Information Network, dated May 19, 2000..........    57
Questions for the Record from:
    Senator Cochran with responses from Ms. Willhite.............    59
    Senator Akaka with responses from Ms. Willhite...............    69
    GAO Answers to Questions from Senator Akaka..................    72

 
      THE ISSUANCE OF SEMIPOSTAL STAMPS BY THE U.S. POSTAL SERVICE

                              ----------                              

                         THURSDAY, MAY 25, 2000

                                    U.S. Senate    
              Subcommittee on International Security,      
                    Proliferation, and Federal Services    
                  of the Committee on Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:02 a.m. in 
room D-342, Senate Dirksen Building, Hon. Thad Cochran, 
Chairman of the Subcommittee, presiding.
    Present: Senators Cochran, Levin, and Akaka.

              OPENING STATEMENT OF SENATOR COCHRAN

    Senator Cochran. The Subcommittee will please come to 
order.
    This morning we are meeting to receive testimony on an 
issue regarding specially issued postal stamps that are sold by 
the U.S. Postal Service. These are sold with a surcharge that 
raises money for special purposes.
    The first such semipostal stamp was authorized by Congress 
in 1997 when we passed the Stamp Out Breast Cancer Act, which 
directed the Postal Service to develop and issue a semipostal 
stamp to help raise funds for breast cancer research. This was 
the first postal stamp of this kind ever issued by the U.S. 
Postal Service.
    The legislation authorizing the selling of these stamps 
expires this year in July, and a bill has been introduced and 
is pending before this Committee to reauthorize the issuance of 
the Breast Cancer Research Stamp for another 2 years.
    Other bills have also been introduced in Congress to 
authorize the Postal Service to develop and issue semipostal 
stamps to raise funds for a number of different worthy causes. 
One example is a bill to authorize a stamp to raise funds to 
support domestic violence prevention; there is another, by 
Senator DeWine, to raise funds for organ and tissue donation 
awareness; and another to promote railroad crossing safety.
    This hearing gives us an opportunity to examine the 
effectiveness of the Breast Cancer Research Stamp, its 
acceptance by the general public, the handling of the 
responsibility under the legislation by the Postal Service and 
what problems, if any, have developed as a result of that 
experience.
    And so, we are very pleased to welcome to our Subcommittee 
the distinguished Senator from California, Ms. Feinstein, who 
was the author of the Breast Cancer Research Stamp bill and has 
offered reauthorization legislation, and Senator Mike DeWine of 
Ohio, who is the author of the organ and tissue donation 
awareness bill.
    We are very pleased to have you come to the Subcommittee 
this morning and discuss these items of interest to us and the 
Congress and the general public, and we invite you to proceed. 
We call on Senator Feinstein first.
    Oh, excuse me.
    Senator Levin. I snuck in.
    Senator Cochran. Senator Levin, a distinguished Member of 
the Subcommittee has arrived. Senator, you have the floor.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Thank you very much, Mr. Chairman. Let me 
commend you for calling this hearing, welcoming also our good 
colleagues to this hearing. This is a very important subject 
which we are taking up this morning.
    There are many bills now which have been introduced to 
authorize semipostal stamps. In addition to the Breast Cancer 
Research Stamp, which has already been issued and has been a 
success, we have other proposals, including that of our good 
friend, Senator DeWine. I looked at the list of other bills 
that have now been filed authorizing semipostals. They include 
AIDS research, diabetes research, Alzheimer's disease, prostate 
cancer, emergency food relief, a World War II Memorial 
semipostal, the one this Subcommittee has already taken up for 
the highway rail grade crossing safety, and domestic violence. 
And, of course, we have the organ and tissue donation 
semipostal bill, which Senator DeWine has introduced.
    I have been troubled by the principle involved here that 
Congress should pick and choose which charities or causes to 
authorize semipostals for. I think it puts us in a very 
difficult position. It is hard to imagine too many of us voting 
against any of the semipostal bills because I think most of us 
are involved in probably most of those causes. I have been 
extraordinarily involved in the organ and tissue donation 
cause, for instance. And there are a number of other causes, 
diabetes, for example, where I have been very deeply involved 
in trying to obtain funding for those.
    I actually voted against the Breast Cancer Research Stamp 
obviously not because I oppose funding for that cause, which 
Senator Feinstein has championed so beautifully, but because I 
just think this is the wrong way for us to be raising funds and 
making decisions.
    I would vote in a New York minute, as they say, to double 
the amount of money for breast cancer research or organ and 
tissue donation or a number of these other causes. But to use 
this particular method with the Congress picking and choosing 
one cause over another, seems to me, creates a lot of problems. 
In some cases, the Postal Service may even lose money in the 
process. The Postal Service, in terms of costs, could actually 
be spending more money than is raised, and then that raises 
additional problems as well.
    But, Mr. Chairman, this is an important subject. There is a 
lot of interest in it. The causes here are clearly worthy. I do 
not think there could be any doubt about the worthiness of the 
causes, but the question here is whether or not we should be 
picking and choosing semipostal stamps to raise funds for these 
causes, and that is where I have some difficulty.
    One of the bills we will discuss today is that of 
Representative McHugh. Rep. McHugh's bill would transfer the 
authority to the Postal Service to issue semipostals, and allow 
them to make this decision the same way they do on all other 
stamps. We have taken the authorization of regular stamps, 
commemorative stamps out of the hands of Congress and put it 
into Postal Service Advisory Committee because we wanted to 
separate stamp selection from politics. That committee has had 
some real success. Now, each of us individually and by 
resolution make recommendations to the Postal Service for 
commemoratives, but we do not make political decisions in the 
Congress anymore. We do not mandate the issuance of stamps. It 
is a decision of the Citizens' Stamp Advisory Committee and the 
Postal Service to try to separate stamp selection from 
political considerations. I think that has been a real advance 
for all of us, and the bill which Congressman McHugh has 
introduced--seems to me is one approach to this. It would 
reauthorize the Breast Cancer Research Stamp because it is 
already on the books, but it would leave the future issuance of 
semipostals for other causes in the hands of the Citizens' 
Stamp Advisory Committee and the Postal Service. I think we 
ought to take a close look at that approach.
    So, Mr. Chairman, again I think that we are on a subject 
here which that is of real importance--and I look forward to 
discussing what the best way is to support these very worthy 
causes, which all of us support. I thank you for having the 
hearing, and I want to thank our two colleagues for their 
energies and their efforts on behalf of two causes which I hope 
and believe have universal support in the country and in this 
Senate.

                  PREPARED STATEMENT OF SENATOR LEVIN

    Thank you Mr. Chairman for convening this hearing. I have a long 
history of supporting many of the causes we will discuss today, 
including funding for breast cancer research and especially organ 
donation. These are important causes and Congress should support their 
full funding.
    I do not believe, however, that using the U.S. Postal Service's 
stamp program is an appropriate means to fund these programs. As we all 
know, in the battle over diseases and other causes, there are often 
many competing organizations, each promoting issues worthy of our 
attention. If we use the Postal Service to raise funds to promote one 
worthy cause over another it will ultimately politicize the issuance of 
stamps. In 1957, the Citizens' Stamp Advisory Committee (CSAC) was 
created to take the stamp program out of the political process.
    Last year, this Subcommittee held a hearing on the Look, Listen and 
Live Stamp Act. That stamp would require the Postal Service to issue a 
semipostal stamp, or a stamp with a tax over the regular rate, to be 
earmarked for an organization called Operation Lifesaver, a nonprofit 
organization dedicated to highway-rail safety through education.
    Operation Lifesaver is, no doubt a very fine organization, but it 
is not the only organization dedicated to preventing railroad 
casualties. In fact, railroad safety advocates are split over the best 
method to prevent rail-related injuries. Over the last several months, 
railroad safety organizations have contacted my office to represent 
their strong disagreement with the Look, Listen, and Live Stamp, 
primarily because of the emphasis that Operation Lifesaver puts on 
education, and education only.
    Scott Gauvin, President of Coalition for Safer Crossings, wrote: 
``I personally find Operation Lifesaver spin on education appalling. 
Three and a half years ago I lost a very dear and close friend of mine 
at an unprotected crossing in southwestern Illinois. Eric was nineteen 
. . . When I was in high school I received the same driver safety 
training regarding grade crossing safety as my best friend Eric did. 
Eric is now gone. The funds from this proposed stamp would not have 
helped him. Now if this stamp would have been around prior to 1996 and 
funds were allocated to the State of Illinois for hardware and a set of 
automatic lights and gates were installed at this crossing in question 
I wouldn't be writing you this letter today. I hope you understand the 
difference.''
    So, in the case of this particular semipostal stamp, Congress would 
be deciding not only to promote one worthy cause among various causes 
with the issuance of the Look, Listen and Live stamp, but to favor one 
specific approach and one specific organization over another.
    Other than making recommendations or suggestions, Congress should 
stay out of the stamp selection process. Before Congress authorized the 
Breast Cancer Research Stamp, it deferred to the Citizens' Stamp 
Advisory Committee, within the U.S. Postal Service, to review and 
select commemorative stamp subjects. Congress may advise the CSAC, and 
many of us to write letters or sponsor Sense of the Senate Resolutions 
urging CSAC and the Postal Service to issue a specific stamp subject, 
but we should leave the final decision on the issuance of stamps and 
the subject of stamps to CSAC, otherwise politics will swamp stamp 
selection.
    We have been waiting for the GAO report to evaluate the costs, the 
effectiveness and the appropriateness of semipostal stamps as a means 
of fund-raising.
    In the Stamp Out Breast Cancer Act, the Postal Service was directed 
to deduct from the surcharge revenue the reasonable costs it incurs in 
carrying out the Act, including those attributable to printing, sale 
and distribution of the Breast Cancer Research Stamp, but the Act gave 
the Postal Service the authority to define ``reasonable'' through 
regulations. According to the GAO report, in the case of the Breast 
Cancer Research Stamp, the Postal Service has not yet resolved what 
costs it considers ``reasonable,'' and has instead used informal 
criteria which the GAO claims the Postal Service has not applied 
consistently.
    To date, the Postal Service's records show that the bulk of the 
costs associated with the Breast Cancer Research Stamp are 
approximately $6 million. There are also nearly $350,000 in costs, 
identified by the Office of the Inspector General, that the Postal 
Service did not identify, and additional items, such as staff-related 
expenses and accounting functions, that the Postal Service considered 
inconsequential and did not track. Out of all of these costs, the 
Postal Service has deducted $482,000 of that total amount from the 
surcharge revenue. In the end, the Postal Service will recoup merely a 
fraction of the total cost. The Postal Service chose to deduct such a 
small amount from the surcharge revenue because it considers the Breast 
Cancer Research Stamp a ``blockbuster'' stamp, a commemorative stamp 
with mass appeal, one that will be ``highly retained by postal patrons 
and not used for postage.'' the Postal Service is therefore able to 
recover the costs from the remaining 33 cent portion of the stamp.
    The GAO report shows while the Breast Cancer Research Stamp has 
been successful, and I applaud the breast cancer research groups and 
the Senator from California's commitment to the promotion of this 
stamp, but the cost-benefit analysis of one semipostal stamp does not 
necessarily apply to another, nor does it make it an appropriate 
vehicle for future fund-raising efforts.
    All semipostal stamps can not be expected to be ``blockbuster'' 
stamps. According to the Postal Service, in the last few years, out of 
almost 30 stamps issued per year, there are only about 4 or 5 
``blockbuster'' stamps each year.
    There are now a dozen proposals for various semipostal stamps 
introduced in this Congress alone. If these stamps are not 
``blockbuster'' stamps and the bulk of the costs are not eaten by the 
Postal Service, as happened with the Breast Cancer Research Stamp, the 
Postal Service may not be able to turn any money over to the charity or 
cause. In fact, the issuance of so many semipostal stamps may cost the 
Postal Service a considerable amount of money with no benefit to 
charitable causes.
    Again, thank you Mr. Chairman for convening this hearing. I look 
forward to hearing from all of our witnesses today.

    Senator Cochran. The distinguished Senator from Hawaii, Mr. 
Akaka, is the Ranking Minority Member of our Subcommittee. 
Senator Akaka.

                   STATEMENT OF SENATOR AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman. I join 
you in welcoming our honored guests and distinguished 
colleagues.
    I am pleased also to have the opportunity today to hear 
from the Postal Service on its activities relating to the 
Nation's first semipostal stamp, the Breast Cancer Research 
Stamp. I also look forward to Mr. Ungar's testimony, who will 
review with us GAO's comprehensive report on the Breast Cancer 
Research Semipostal and the use of semipostals in other 
countries.
    I also want to express my appreciation to Senator Feinstein 
and Senator DeWine who have taken time from their busy day to 
speak on behalf of their bills, S. 2386, which would extend the 
Breast Cancer Research Stamp Reauthorization Act for an 
additional 2 years, and S. 2062, which would create a new 
semipostal to raise funds for organ and tissue transplants.
    As the GAO report found, the public welcomed the ability to 
contribute on a voluntary basis to breast cancer research 
through the semipostal stamp. Although the stamp has been 
successful in terms of money raised, $12.5 million as of March 
24, 2000, the report calls attention to uneven accounting 
procedures that have clouded the actual additional costs 
associated with Breast Cancer Research Semipostals. I know the 
Postal Service has responded to GAO's findings and 
recommendations and is working on a final cost recovery policy. 
Obviously, the issuance of semipostals poses certain problems, 
and I am hopeful that today's hearing will answer some of these 
concerns and questions.
    Again, I thank you very much, Mr. Chairman, for this 
opportunity and thank you for holding this hearing.
    Senator Cochran. Thank you, Senator.
    Senator Feinstein, you may proceed.

  TESTIMONY OF HON. DIANNE FEINSTEIN, A U.S. SENATOR FROM THE 
                      STATE OF CALIFORNIA

    Senator Feinstein. Thanks very much, Mr. Chairman, Senator 
Levin, and Senator Akaka. Thank you all for your comments. I 
make these remarks on behalf of my cosponsor, Senator Hutchison 
of Texas.
    Let me begin by saying this. This stamp, by any standard 
you use, has been a success. As of May 19, it has raised $14 
million. They have sold 191 million stamps. It has an organized 
community of breast cancer research groups and women all across 
the United States who support it.
    In addition to being a money-making stamp for breast cancer 
research, it has also, interestingly enough, served another 
purpose. The stamp has brought to the attention of women across 
this country, on their letters, the fact that one out of every 
eight women in this country will get breast cancer. It has 
raised the awareness about mammography and the need to have 
mammograms. So, the stamp also has provided good public health 
service to people.
    Now, that would not be enough if it had not produced money 
and run in the black. The Breast Cancer Research Stamp has 
substantially run in the black. The GAO is sitting behind me. 
They will testify on their report on the stamp
    According to the GAO report, the Postal Service compared 
the stamp's cost to those of a blockbuster commemorative stamp. 
In addition to the normal costs caused by blockbuster stamps, 
the Postal Service identified an additional $482,000 of costs 
uniquely attributable to this stamp. But if you subtract that, 
you'll see the Breast Cancer Research Stamp, by any quotient of 
success, has been a success.
    Therefore, Senator Hutchison and I implore you to please 
renew it for another 2 years.
    The stamp was actually suggested by an oncologist from 
Sacramento, California, and interestingly enough Sacramento 
leads all cities in the purchase of this stamp. His name is Dr. 
Ernest Bodai. He came here. He suggested the stamp. He 
campaigned for it. He was joined by the breast cancer 
community. The stamp was designed by a postal worker who is a 
breast cancer survivor. It is a beautiful stamp. It is bought 
at Christmas by women, on Mother's Day by women, and all 
throughout the year by women and men.
    I think one day we will find a cure for breast cancer. This 
stamp in a sense has become--you have heard of private 
foundations that give money--this is the people's foundation. 
This is how people, wanting to make an additional contribution, 
can contribute to breast cancer research. They simply go out 
and buy these packets. The Postal Service has packaged them in 
cellophane in $8 packets. So, people can go out and buy these 
packets, give them as gifts, use them on their cards, mail in 
their bills with them, and it is a great idea.
    And it has proven itself. Fourteen million dollars has been 
raised to date, and we feel we are just getting off the ground. 
Like any new enterprise, it has got to be capitalized. We have 
more than made up for the initial capitalization. Now the 
constituency is organized. The stamps are in the post offices. 
People are buying them and it has been a success.
    I would leave it up to you as to how you want to condition 
this in the future. My own view is that what is really 
necessary for the stamp to succeed is an aroused and organized 
community out there. This exists with respect to breast cancer. 
The cause of medical research is universally accepted as a 
positive cause.
    So, I would say to you in summary, the Breast Cancer 
Research Stamp offers a way of heightening the public's 
knowledge about a major problem. It is a way of raising money 
to solve the major problem. It is a way of groups coming 
together around the cause. They use stamps as fund-raising 
mechanisms, for example, for breast cancer research. I think 
that is good. The stamp is uniquely popular.
    So, I would just like to urge that it be authorized for 
another 2 years. I believe it will continue to make money, and 
second, I believe it will make money even more strongly than it 
has in the first 2 years because people are now aware of it, 
they are buying, they know where to get it, and so on and so 
forth.
    I will not take any more time, Mr. Chairman, but I thank 
you very much for your consideration. I would ask that my 
remarks in their entirety be entered into the record.
    Senator Cochran. Without objection, your remarks will be 
printed in the record in their entirety.

                PREPARED STATEMENT OF SENATOR FEINSTEIN
    Thank you, Chairman Cochran, Senator Akaka, and other Members of 
the Government Affairs Committee for giving me this time to talk about 
the Breast Cancer Research Stamp.
    The primary objective of my remarks is to ask the Committee to 
report out S. 2386, a bill to extend the life of the stamp by 2 years. 
Unless the Committee takes action, the Breast Cancer Research Stamp 
will expire on July 28, 2000--just 2 months from now.
    In 1997, I introduced legislation to create a Breast Cancer 
Research Stamp. This idea originated with Dr. Ernie Bodai, a physician 
from California. With the help of many Senators and Representatives 
from both parties, this idea became law in 1998.
    Results of Breast Cancer Research Stamp Program: The Breast Cancer 
Research Stamp has generated enthusiasm from postal patrons across the 
country. As of May 19, 2000, the U.S. Postal Service has sold 191 
million of these semipostal stamps, raising $14 million in surcharge 
revenue.
    So far, the Postal Service has identified $482,000 in costs 
uniquely attributable to the Breast Cancer Research Stamp program. 
Thus, the program has generated over $13 million dollars for breast 
cancer research. Clearly, the stamp has succeeded as a fundraiser.
    It is worth noting that the five post offices with the most Breast 
Cancer Research Stamp sales come from regions as diverse as (1) 
Turlock, California; (2) Providence, Rhode Island; (3) New York City; 
(4) Syracuse, New York; and (5) Boston, Massachusetts.
    The stamp's impact, however, goes beyond dollars and cents. Each 
stamp sold adds to public awareness about the toll of the disease. The 
Breast Cancer Research Stamp serves as a reminder for people to get 
mammograms and other preventive screenings. Moreover, the stamp has 
given ordinary citizens a convenient means to contribute in the fight 
against breast cancer.
    GAO Report: Since the Breast Cancer Research Stamp is the first 
semipostal stamp sold by the U.S. Postal Service, it has received 
intense scrutiny.
    On April 28, 2000, the General Accounting Office (GAO) concluded an 
exhaustive review of the stamp program. GAO conducted dozens of 
interviews, and investigated every facet of the program's operations.
    In the report, the GAO stated that ``on the basis of the collective 
results of all the measures we used to evaluate effectiveness, we 
believe the Breast Cancer Research Stamp has been an effective fund-
raiser.'' The report also goes on to assert that ``the Breast Cancer 
Research Stamp has been successful.''
    Seventy-one percent of the members of the public surveyed by the 
GAO had positive views of the Breast Cancer Research Stamp, and thought 
the Postal Service should continue to sell semipostal stamps.
    Why the Stamp Should Be Reauthorized: The Breast Cancer Research 
Stamp deserves reauthorization. The program is working, and it 
continues to fill a compelling need. Breast cancer is considered the 
most commonly diagnosed cancer among women in every major ethnic group 
in the United States. More than two million women are living with 
breast cancer in America today, yet one million of them have not been 
diagnosed.
    Breast cancer is still the No. 1 cancer killer of women between the 
ages of 15 and 54. The disease claims another woman's life every 15 
minutes in the United States.
    More and more people today are becoming cancer survivors rather 
than cancer victims thanks to breakthroughs in cancer research. 
According to the American Association of Cancer Research, eight million 
people are alive today as a result of cancer research. The bottom line 
is that every dollar we continue to raise will save lives.
    Reauthorization Bill has Strong Bipartisan Support: S. 2386, 
legislation I have introduced with Senator Kay Bailey Hutchison to 
reauthorize the Breast Cancer Research Stamp has 57 cosponsors, and 
enjoys broad, bipartisan support.
    S. 2386, the Breast Cancer Research Stamp Reauthorization Act of 
2000, would permit the sale of the Breast Cancer Research Stamp for 2 
additional years. The stamp would continue to cost 40 cents and sell as 
a first-class stamp. The extra money collected will be directed to 
breast cancer research at the National Institutes of Health and the 
Department of Defense.
    The legislation is a straightforward extension of the current 
Breast Cancer Research Stamp program. It simply extends its life by 2 
years. It has no gimmicks or changes.
    Numerous organizations support the reauthorization of the stamp, 
including the American Cancer Society, the American Medical 
Association, the American Association of Health Plans, the Susan G. 
Komen Breast Cancer Foundation, Y-Me National Breast Cancer 
Organization, the Women's Information Network--Against Breast Cancer, 
and many others.
    Conclusion: I would like to close with the following message. The 
Breast Cancer Research Stamp is an example of a government and public 
partnership that has worked. It lets ordinary Americans join in the 
ongoing struggle against cancer. I urge you to help me in saving this 
successful program from a premature end.
    The Committee has my thanks for being willing to consider my views.

    Senator Cochran. We thank you very much for your assistance 
and the information you have provided to the hearing.
    Senator DeWine.

TESTIMONY OF HON. MIKE DEWINE, A U.S. SENATOR FROM THE STATE OF 
                              OHIO

    Senator DeWine. Mr. Chairman, thank you very much for 
holding this hearing today. I appreciate the Subcommittee's 
time, Senator Levin, and Senator Akaka.
    I would like to talk about two things. One, I would like to 
talk about S. 2062, which is the bill that Senator Durbin, 
Senator Cleland, Senator Lieberman, and I have introduced with 
others. Then I would like to talk about some of the issues that 
Senator Levin has raised, that you have raised, and that 
Senator Akaka has raised about the whole issue of semipostal 
stamps and how we should approach the issuance of such stamps. 
I think there are some very good questions that we, as a 
Congress, have to look at.
    The issuance of an organ and tissue semipostal stamp will 
increase public awareness about the importance of organ and 
tissue donation, and this in turn, Mr. Chairman, will help save 
lives. As you know the National Transplant Waiting List, the 
list for those needing organs, grows by one person every 16 
minutes. Right now in this country, 68,000 people are on that 
list.
    Most distressing about all this, though, is that we have 
the technology and the ability to save the lives of those on 
the transplant waiting list, but we simply lack the organs. The 
reality is that many people on that list will die waiting for 
an organ. We lack organs, Mr. Chairman, Members of the 
Subcommittee, because most Americans are simply unaware of the 
lifesaving difference they can make by choosing to become organ 
donors. We lack organs because too many family members, when 
faced with the most difficult time in their life, the sudden 
loss of a loved one, do not know what to say when the doctor 
comes out and says, can we use your brother's, your sister's, 
your daughter's, or your son's organs to be transplanted? Most 
people have never thought about it, Mr. Chairman.
    What this stamp would do is bring public awareness to this 
issue. Senator Feinstein, whose bill I happen to support, has 
talked about a constituency that supports breast cancer 
research. Mr. Chairman, there is a broad constituency ready to 
buy this organ donation stamp and to help spread the word. It 
is a constituency and a group that is growing and growing by 
the day. They are organized and they have done a fantastic job.
    Mr. Chairman, one way to remedy this organ shortage, as I 
have said, is through the creation of a new organ and tissue 
donation semipostal stamp which would by itself increase public 
awareness as it moves through the mail. The new stamp we have 
proposed would sell for up to 25 percent above the value of a 
first-class stamp, regardless of the price of the first-class 
stamp itself, and the revenue generated over and above the 
value of the stamp would go to the Department of Health and 
Human Services to help fund organ donor awareness programs. 
Many of these programs already exist. They are out there to 
spread the word, to increase organ and tissue donation 
awareness.
    This stamp, an organ and tissue donation stamp, was issued 
as a commemorative stamp, and in the very short period of time 
that it has been available on the market, it has sold 47 
million stamps. It has only been on the market a short period 
of time when you consider the fact that within 5 months of 
issuance the postage rate increased, and people have had to buy 
that stamp and then add an additional 1 cent stamp. But I think 
it demonstrated clearly the constituency for a stamp like this.
    If we are going to issue another stamp to bring the public 
awareness to this issue again, it has to be in this manner 
because the Postal Service's policy is not to reissue 
commemorative stamps.
    Let me, though, turn now away from my bill to some of the 
specific questions that I think this Subcommittee has to look 
at, and that is the whole issue of the semipostal stamps. I 
believe that these stamps can be a great tool for informing the 
public about important issues. Senator Feinstein has done a 
wonderful job just describing how successful her stamp program 
has been for breast cancer research, and I will not go through 
those details. Let me just say, Mr. Chairman, that I believe 
that this is a way that the general public, stamp by stamp, 
person by person, in a very grassroots way, a very real way 
that everybody in this country can participate in, can help a 
given cause.
    I understand that this Committee is now looking at a number 
of different bills, and the tendency might be to say, let us 
just throw up our hands and let us say, look, we really do not 
want to be in this business. We really do not want to do this. 
Let us just not do anything. Let us not reissue the Breast 
Cancer Research Stamp. Let us not look at any of these other 
stamps. Let us just stop it because we really cannot, for all 
the reasons that Senator Levin has mentioned, choose between 
causes.
    I think that inaction would be wrong, and I think it would 
be a mistake. I think that this is something that clearly the 
Postal Service can handle. They can handle it by maybe changing 
some of their procedures, some of the problems they had with 
the last semipostal stamp. But they went through a learning 
process. They can handle this.
    The sale of semipostal stamps can generate a significant 
amount of money for a good cause and can enlist the direct 
participation on a grassroots level, like nothing else can, 
from every average American, from a little 5-year-old who walks 
in with his mom and dad to buy a stamp, to an 85-year-old man 
or woman who is sending out Christmas cards. Everyone can 
participate.
    I do not know how you make the decision about which stamps 
to approve. Senator Levin has talked about maybe turning it 
over to the Postal Service. That certainly is one way of doing 
it, with certain standard criteria to be established either by 
the Postal Service or by this Congress. I am comfortable with 
that.
    I am also comfortable, Mr. Chairman, with this Committee 
making the decision, to decide upon a yearly basis to issue one 
or two stamps, and if the stamp that I have proposed happens to 
make it, I will be very, very happy. I think that it is 
something that will save lives. I think it will have a direct 
impact. If it is not, I would hope that you would choose some 
stamps and set some policy to establish a process for the 
authorization of semipostal stamps.
    I just think it is a very positive thing. It is something 
that the people in this country can participate in, and I think 
it would be a shame if we turned our back on this and said, 
well, because of some of the difficulties in making the 
selection or because of some of the difficulties in 
administering this, we just do not want to do it. I think it is 
an opportunity. We should not let the opportunity go. We can 
issue one or two stamps a year. We can provide a great deal of 
money for a good cause and we can help people participate in 
that cause.
    I have a written statement I would like to submit for the 
record. I thank the Chair and I thank the Members of the 
Subcommittee.
    Senator Cochran. Thank you very much, Senator DeWine. Your 
full statement will be printed in the record.

                  PREPARED STATEMENT OF SENATOR DeWINE

    Thank you, Chairman Cochran and Ranking Member Akaka, for inviting 
me here today to testify. I would like to take this opportunity to 
encourage all the Members of the Subcommittee to support the bill that 
Senators Durbin, Cleland, and I have introduced to authorize the 
creation of an organ and tissue donation semipostal stamp. I would like 
to discuss the merits of this particular stamp and then talk about the 
importance of semipostal stamps in general.
    The issuance of an organ and tissue semipostal stamp will increase 
public awareness of the importance of organ and tissue donation--and 
this, in turn, will help save lives. As you may know, the National 
Transplant Waiting List--the list for those needing organs--grows by 
one person every 16 minutes. Right now, over 68,000 people are on that 
list.
    Perhaps most distressing about all of this is that we have the 
technology and ability to save the lives of those on the transplant 
waiting list--but we simply lack the organs. We lack organs because 
most Americans simply are unaware of the life-giving difference they 
can make by choosing to become organ donors. We lack organs because too 
many family members, when faced with the sudden death of a loved one, 
don't know what to say when asked to donate that loved one's organs. If 
more families would discuss this before tragedy strikes, I am convinced 
that this vast majority of people would say ``yes'' to organ donation.
    One way to remedy this organ shortage is through the creation of a 
new organ and tissue donation semipostal stamp, which would, by itself, 
increase public awareness and also generate considerable revenue 
through its sale. The new stamp we have proposed would sell for up to 
25 percent above the value of a first-class stamp, regardless of the 
price of the first-class stamp itself. And, the revenue generated over 
and above the value of first-class postage--known as surcharge 
revenue--would go to the Department of Health and Human Services to 
help fund programs that increase organ and tissue donation awareness.
    Let me now turn from my specific bill to a general discussion about 
semipostal stamps. These stamps can be a great tool for informing the 
public about important issues. Just look at the example of the Breast 
Cancer Research Stamp. This stamp has been an extreme success. The U.S. 
Postal Service estimates that due to its great demand, the Breast 
Cancer Research Stamp already has generated $12.9 million in surcharge 
revenue, with $10.4 million being transferred to the National 
Institutes of Health and the Department of Defense for breast cancer 
research. This has been a tremendous success and I am confident that 
other semipostal stamps can do equally well. These stamps are a 
valuable, simple, easy, grassroots way for Americans to support very 
important causes. They offer Americans a great opportunity to 
participate in the promotion of issues they care passionately about.
    So that we may move forward on the creation of other semipostal 
stamps, the U.S. Postal Service simply needs to apply consistent 
criteria to determine how they can recoup any ``reasonable'' costs 
associated with the designing, printing, marketing, advertising, and 
distributing of such stamps. The last thing we should do is let 
``process'' concerns stand in the way of creating stamps that have 
proven to be successful both in raising public awareness and in 
generating much-needed research and awareness dollars.
    But, I do recognize that organ and tissue donation is not the only 
important issue that merits the creation of a semipostal stamp. There 
are a lot of competing proposals out there. What is important here 
isn't so much whether the Committee decides to issue any specific 
semipostal stamp, but that it decides to establish a fair process for 
authorizing one or two semipostal stamps each year for important 
causes.
    I strongly recommend that Congress acts to require the Postal 
Service to issue one or two semipostal stamps each year. We should not 
let bureaucratic concerns undermine the importance of creating 
semipostal stamps. As long as the Postal Service is fairly compensated 
for the costs they incur and a fair and consistently applied formal 
cost recovery process is established, we should move forward with 
authorizing additional semipostal stamps.

    Senator Cochran. We appreciate very much your taking time 
to be with us. Actually, this hearing was at your request, I 
think, for favorable consideration of your amendment on another 
bill that was being considered by the Senate. We suggested a 
hearing on the subject to look at the ramifications of 
continuing to approve or reauthorize the semipostal stamp that 
we already had. So, you have been the catalyst for focusing 
attention on this issue at this time.
    Senator Frist has a piece of legislation I think you were 
going to add this as an amendment to. That is still a 
possibility because that legislation has not moved through the 
Senate yet, as I understand it. Is that correct?
    Senator DeWine. That is correct, Mr. Chairman.
    Senator Cochran. So, this is a timely hearing. I know you 
have other responsibilities. We all have to go over and vote in 
just a little bit on some amendments on the Senate floor, so we 
will have to take a break.
    I do not have any specific questions, except to thank you, 
as I did Senator Feinstein, for being available to us and 
helping us understand the proposals that you have authored.
    Senator DeWine. Thank you, Mr. Chairman.
    Senator Cochran. Senator Levin.
    Senator Levin. Let me add my thanks to Senator DeWine for 
his typically thoughtful approach to an issue.
    I do not know if you have had a chance to review the Postal 
Service's position on this. The Postmaster General has taken 
the position that the Breast Cancer Research Stamp, the 
semipostal stamp, should not be followed by any additional 
semipostals for reasons that he sets forth in his letter to us. 
Have you had a chance to look at the Postal Service's 
opposition to any additional semipostals?
    Senator DeWine. Mr. Chairman, I have a summary and I have 
not looked at the full testimony in detail, but I would have a 
comment, based on the summary at least if, Senator Levin and 
Mr. Chairman, you would permit me.
    Senator Levin. Sure.
    Senator DeWine. I do not want to be disrespectful to the 
Postal Service. I think we should take into consideration what 
they have to say, but I think ultimately it is Congress' 
decision. This is a public policy issue. I would have expected, 
quite candidly, that the Postal Service would oppose this. This 
is asking them to do something that they look at as not in 
their purview, something that they have not done in the past. 
It is probably an inconvenience, maybe a little hassle. But I 
think that it is our decision, as a Congress, to make.
    And I think that we need to look and see how difficult it 
is for them to do this. Maybe they had some difficulties the 
first time. The GAO has outlined some things that the Postal 
Service should probably change in the future. But, you know, 
they can do it. They are doing a good job. The Postal Service 
is more efficient today than it has ever been in the history of 
this country, contrary to what we sometimes hear when mail does 
not get delivered. They are doing a good job. There is no 
reason they cannot handle this on a limited basis, one stamp 
every year or whatever you all decide to do. They can do it. It 
is just something that they can get done.
    And they can charge a reasonable surcharge. They can figure 
out what their costs are. Maybe we need to do a better job 
figuring out what their actual costs are, and when we authorize 
a semipostal stamp, know how many that the Postal Service has 
to sell before they are really going to make a profit. 
Obviously, when you pick the semipostal stamp, it does have to 
be something where there is a constituency, where you clearly 
have a pretty good idea you are not going to lose any money.
    But, Senator Levin, I just think that it is our job to make 
that decision. I would have expected them--and I mean no 
disrespect at all--to look up and say, look, this is not our 
job. We are not in the charity business. I just think they can 
do it and I think it is something they can do without a great 
deal of hassle. And it is something that will contribute to the 
common good, and I think we ought to make the decision for them 
to do it.
    Senator Levin. By the way, I do not think there is any 
doubt that the Postal Service would agree this is our decision, 
that we can issue semipostals if we want to. That is not the 
basis of their opposition. The basis of their opposition is 
mainly the picking and choosing issue, the politicization of 
charitable selection.
    Senator DeWine. And I understand that, but Congress can 
pick and choose which semipostal to authorize.
    Senator Levin. Is there not a constituency for AIDS 
research, diabetes research, Alzheimer's disease, prostate 
cancer research, and the World War II Memorial?
    Senator DeWine. Senator Levin, absolutely.
    Senator Levin. Would you not agree these have strong 
constituencies?
    Senator DeWine. Absolutely. Let me just say, as I said, I 
am comfortable with you turning it over to a commission that 
you want to establish. I am comfortable with you turning it 
over to the Postal Service. I am comfortable with Congress 
making the decision.
    My guess is--and I will be willing to bet--if you took 
every bill and every constituency and put them in a room and, 
say, there are 20 or 30 or 50 or 100, and you said to them, OK, 
here is the deal--we can either not authorize any semipostal 
stamp at all or we can pick one a year. What do you want us to 
do? To a person, to a man, to a woman, they would say pick one. 
Because these are not people who are saying ours is better or 
more important. These are people who say ours is important, and 
I have been touched by it and I lost a mom or a dad to this and 
it is important. But if it is a question of not doing it at all 
or doing it and making some rational choice--and that is what 
all of us in public policy get paid to do is make tough choices 
every day--I think every one in that group, if there is 100, 
would say do it. Make a choice--99 lose, 1 wins--do it.
    Senator Levin. There is a second issue, though, which you 
have pointed out and that is, the way in which who makes the 
choice and whether we ought to leave this decision to a stamp 
advisory group that is a little more separated from politics.
    By the way, there is no doubt in my mind at all that the 
cause that is reflected in your stamp is an incredibly 
important cause.
    Senator DeWine. Right, and I know you have been involved 
directly.
    Senator Levin. I walk around with a driver's license that 
says, if I am killed in an automobile accident, take any organ 
which is available. There is no doubt that this is an extremely 
important cause. And I want to commend you and many of our 
colleagues for the involvement in that cause and so many other 
causes that many of us are involved in. Thank you.
    Senator Cochran. Senator Akaka.
    Senator Akaka. Thank you, Mr. Chairman. I want to thank 
Senator DeWine for his statement.
    Senator DeWine. Thank you, Senator.
    Senator Akaka. I thank you very much.
    Senator DeWine. Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator DeWine, again for your 
help with our effort here this morning.
    Our next panel of witnesses will include Deborah Willhite, 
who is Senior Vice President for Government Relations and 
Public Policy of the U.S. Postal Service, and Bernard Ungar, 
who is Director of Government Business Operations Issues of the 
U.S. General Accounting Office. We welcome you to the hearing, 
and we invite you to introduce those who are accompanying you 
today. Ms. Willhite, we will proceed to hear from you first.

   TESTIMONY OF DEBORAH WILLHITE,\1\ SENIOR VICE PRESIDENT, 
 GOVERNMENT RELATIONS AND PUBLIC POLICY, U.S. POSTAL SERVICE, 
ACCOMPANIED BY JAMES C. TOLBERT, JR., EXECUTIVE DIRECTOR, STAMP 
                 SERVICES, U.S. POSTAL SERVICE

    Ms. Willhite. Thank you, Senator Cochran. Joining me today 
is James Tolbert. He is the Executive Director of our stamp 
program.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Willhite with attachments appear 
in the Appendix on page 29.
---------------------------------------------------------------------------
    We are honored to represent the Postal Service today. The 
Postmaster General is unfortunately out of town and could not 
join us. He sends his greetings to you, Senator Levin, and 
Senator Akaka.
    The Postal Service has submitted testimony that I would 
like printed for the record, and I will just give you a brief 
background on what our position is.
    We have enjoyed the success of the Breast Cancer Research 
Stamp and believe that we have had a great community of support 
and it has been very successful in the cause that the Congress 
set for us. But we do not believe that we should continue to 
print semipostal stamps.
    We are working to finalize the regulations and have been 
working with GAO and the Office of the Inspector General to 
make sure that we do the cost accounting that has been in 
question for everyone.
    But we think that there is a dilemma for us to continue to 
do semipostal stamps.
    First of all, it is not part of our core mission. Fund 
raising is not part of our core mission, and it does distract 
from it to some degree.
    Second, the choice of stamps and the causes, which has 
already been alluded to this morning by the other Senators and 
yourselves, is a very difficult one and we do not believe we 
are in the position to make those decisions. And if you did 
decide to move on to having semipostals directed to the Postal 
Service in the future, we would hope that Congress would make 
those choices.
    Finally, the philatelic community has been very averse to 
the issuance of semipostal stamps. They believe that it is a 
tax on their particular hobby and it dilutes the quality of the 
stamp program.
    For those reasons, we would officially be against any 
future semipostal stamps, but of course, if Congress directs us 
to do anything, we will do it to the best of our abilities and 
be as successful as possible. Thank you, Senator.
    Senator Cochran. Thank you, Ms. Willhite. Mr. Ungar.

 TESTIMONY OF BERNARD UNGAR,\1\ DIRECTOR, GOVERNMENT BUSINESS 
 OPERATIONS ISSUES, GENERAL GOVERNMENT DIVISION, U.S. GENERAL 
                       ACCOUNTING OFFICE

    Mr. Ungar. Thank you, Mr. Chairman, Senator Levin, and 
Senator Akaka. We are certainly pleased to be here today to 
discuss our review.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Ungar appears in the Appendix on 
page 42.
---------------------------------------------------------------------------
    I am accompanied on my right by Gerald Barnes, our 
Assistant Director, who is responsible for overseeing our work 
here, and also by our two team members, Roger Lively and 
Charles Wicker. I also have with me one of our other Assistant 
Directors, John Baldwin, who has overseen our work in the past 
on commemorative coins which have some relationship and 
similarity to semipostal stamps.
    I would like to summarize the work that we had done that 
was mandated by statute, as well as point out a few of the 
lessons we learned from our prior work on the commemorative 
coin program.
    The Stamp Out Breast Cancer Act required GAO to address 
three issues, which we have done. The first one was the 
appropriateness of using the stamp as a fund raiser. The key 
effort that we undertook in this regard was to sponsor a study 
of the American public, adults 18 years or older, about a year 
after the stamp was issued, and basically about 70 percent of 
the public would say that it is appropriate for the government 
or the Postal Service to use semipostal stamps to raise funds. 
In other words, they believe that this was an appropriate 
function to be performed.
    Most of the stakeholders that we interviewed regarding the 
Breast Cancer Research Stamp believed that it was an 
appropriate function for the Postal Service to undertake. As 
you know, the Postal Service was not among that group; nor were 
stamp collectors. We certainly do agree with the Postal Service 
that using a stamp as a fund raiser is not within its basic 
mission, and it would need specific, separate authorizing 
legislation in order for it to do so under law.
    Interestingly, the stamp collectors were quite concerned 
about this, initially. However, in commenting on our draft 
report, they pointed out that if a mechanism or selection 
process could be established which they considered to be fair, 
and a relatively small number of semipostal stamp issues could 
be selected at any given time, they would not be as opposed to 
semipostals.
    The second issue that we addressed was the effectiveness of 
the semipostal as a fund raiser. Here we looked at three 
criteria:
    First, did the semipostal raise money for breast cancer 
research? Obviously, it raised a substantial amount of money. 
It raised over $10 million as of the time that we had issued 
our report and, as you heard, the semipostal is expected to 
raise about $14 million in total. So, it certainly raised a 
substantial amount of money that has been given or will be 
given to the National Institutes of Health and the Department 
of Defense.
    Second, was the semipostal a convenient mechanism for the 
public to contribute? Here again we found it was. It was to be 
available in all post offices, some postal vending machines and 
some special events. In addition, about 68 percent of the 
public believed that the use of a stamp is a convenient way for 
them to contribute to a designated cause.
    Third, was the semipostal voluntary? Obviously, it is 
because people have other stamps to choose from if they do not 
want to purchase a semipostal stamp.
    Another issue that we addressed was the most problematic, 
and that is the monetary resources used to develop and sell the 
Breast Cancer Research Stamp and the reasonable costs 
associated with that stamp that were to be recouped from the 
surcharge revenue. Here we broke that down into two components.
    First, how much did it cost the Postal Service to do this? 
Unfortunately, the total cost is not known because the Postal 
Service did not establish a separate accounting system or 
modify its existing accounting systems to completely capture 
all the costs. This is not necessarily a major issue or problem 
in our view because the Breast Cancer Research Stamp was 
considered to be a one-shot deal, and it would have cost the 
Postal Service a great deal of money to establish a separate 
accounting system or make substantial modifications to existing 
accounting systems. So, that in and of itself, the fact that it 
did not do that was not a major problem.
    The Postal Service did identify 18 categories of costs 
which it did track. So, I think that was certainly a positive 
thing that the Postal Service did. And through that mechanism, 
the Postal Service identified about $5.9 million in costs 
through December 1999 that it had incurred.
    Now, that was not all the costs. The Inspector General 
identified about $348,000 in additional costs which it believed 
should be reported as program costs, although the Postal 
Service disagreed with that. And I do not believe it has been 
resolved. Maybe it has by now. It had not been resolved as of 
the time that we issued our report. There are different 
philosophies of how one counts costs here, and I think it 
depends upon one's philosophical approach as to how one would 
come out on that.
    Of the $5.9 million that the Postal Service did identify 
and agree to as being costs, about $482,000 was the amount that 
the Postal Service identified that it thought should be 
recaptured from the surcharge revenue, meaning that these were 
the costs it believed were uniquely attributable to this stamp. 
And the remaining $5.4 million of its costs, the Postal Service 
believed, was recaptured by the basic 33-cent cost that you 
would normally pay for a regular stamp.
    The real issue that we had here was that the law required 
the Postal Service to issue regulations defining the criteria 
that it was to use to determine the amount of cost it would 
recapture before turning over the revenue to DOD and NIH. 
Unfortunately, the Postal Service did not issue those 
regulations. During the course of our review, it had what we 
would consider or call an evolving set of criteria. In other 
words, it changed its criteria for recapturing costs several 
times. It was a little difficult for us to nail down the 
criteria that was used. So, we did recommend that the Postal 
Service promptly issue these regulations that would specify the 
criteria it was to use. It has agreed to do that and I believe 
plans to do that by July 28, 2000.
    In addition, we recommended that the Postal Service provide 
data and analysis to show how it is recapturing some of these 
$5.4 million in the basic 33 cent cost of the stamp. In other 
words, it was not clear to us how the Postal Service was 
recapturing this $5.4 million. We are not saying it was not 
recapturing it. It just never provided the data that would show 
us what portion of that 33 cents covers the development and 
selling costs of the stamp. So, we just did not see that. We 
think it would be important for everybody involved in this 
issue to be able to see that and be able to feel comfortable 
that, yes, these costs are being recaptured, that people who do 
not choose to buy this stamp are not subsidizing the stamp.
    In addition, we pointed out that if Congress has some 
concern about how the Postal Service is defining reasonable 
costs, then it might want to specify in legislation either the 
criteria that are to be used or the specific costs that are to 
be recaptured.
    Finally, I would just like to mention a couple of key 
points that we learned from our previous work on commemorative 
coins, which is a similar type of issue. The U.S. Mint coin 
program goes back quite a while and we reported in 1996 that 
the Mint had actually lost money on some commemorative coins, 
and there were a number of reasons for that.
    First, the Mint sponsored a lot of commemorative coins, 
some of which were not popular and did not sell well.
    Second, there were too many commemorative coins on the 
market at one time. They literally saturated the market and the 
coin collectors just did not want to buy that many 
commemorative coins at the same time.
    Third, the Mint was turning over the revenues from 
commemorative coins, in effect, before it knew whether it made 
money or not. So, it was actually turning money over to the 
sponsors of these coins or the beneficiaries of these coins and 
actually losing money at the same time.
    Those were some of the key things that we wanted to point 
out. We would certainly be happy to address any questions that 
you might have.
    Senator Cochran. Thank you very much. We appreciate your 
efforts to acquaint us with the findings of your report and 
also the opinions and views of the Postal Service on this 
semipostal stamp issue.
    Let me ask a question, Ms. Willhite, about the 
commemorative stamps that the Postal Service issues. Now, we do 
not, as a Congress, authorize any specific commemorative stamp 
to be issued by the Postal Service. The Congress recognizes the 
Postal Service as an independent service, and those decisions 
are made by the Postal Service. Tell us how that process works 
and whether or not that would offer a way to select stamps that 
are specially issued with a surcharge as well?
    Ms. Willhite. The Citizens' Stamp Advisory Committee was 
set up in 1957 to advise the Postmaster General on the stamps 
to be issued several years in advance. It has criteria that it 
has set down through its processes. One of the different rules 
states that no person can be on a stamp until they have been 
dead for 10 years, except for Presidents. And they have other 
criteria to try to keep the stamp program collectible, 
commemorative, reflecting the culture and the history of the 
country, and those sorts of things.
    One of their criteria is also that they will not authorize 
any semipostal stamps because they have a commitment to the 
philatelic community. So, they have historically been on record 
as being against semipostal stamps as a part of the 
commemorative stamp program.
    They do, as Senator Levin pointed out, put a layer between 
the political and marketing pressures that would be on the 
Postal Service and act as a filter. They get some 50,000 
requests for different stamp issuances every year that they 
select from and suggest stamp programs 2 to 3 years out so that 
we have adequate time to get economies of scale in printing and 
that sort of thing.
    Senator Cochran. How many commemorative stamps are normally 
issued in a year?
    Ms. Willhite. Normally 35 to 40.
    Senator Cochran. And how many regular kinds of stamps do 
you also issue?
    Ms. Willhite. Ten to 15 definitive stamps. Definitive 
stamps are the ones that are in the booklets, in the machines. 
I always bring up the berries.
    Mr. Tolbert. The work horses.
    Ms. Willhite. They are the work horses. The flag stamps, 
those that are renewed year after year.
    Senator Cochran. What kind of expense is attributable to 
the issuance of commemorative stamps? Do you keep up with that 
in any way in terms of costs?
    Mr. Tolbert. Mr. Chairman, relative to the commemorative 
stamp program, what we do is track the costs of printing 
stamps, all the costs in terms of the retail vending 
applications that take place, and much of the same costs that 
are right now being tracked by the semipostal that the Postal 
Service has been able to identify and track within a reasonable 
and short window of time since the launch of the semipostal 
stamp.
    So, basically we are able to track the costs of design, 
costs of the process of the Citizens' Stamp Advisory Committee, 
the costs of printing those stamps, any marketing initiatives 
associated with that particular stamp, whether it is promotion 
or the price associated with that stamp, as well as what we 
project in terms of consumer demand against the stamp.
    Senator Cochran. There was some question the GAO had about 
the efficacy or reliability of your cost analysis in the case 
of the semipostal stamp for breast cancer research. What is 
your reaction to that suggestion? Are you comfortable with the 
fact that you identified the costs and that it is a reliable 
figure so that we could assume that those funds that are said 
to have been cleared, the difference between the gross receipts 
and the net, would be fairly accurate?
    Ms. Willhite. In the course of the GAO study and the Office 
of the Inspector General analysis of the program, we have come 
to some moderation of what we thought we should be assigning 
costs to. This has been a learning process. It has been an 
evolving process. But we are comfortable with where we are on 
the stamps' attributable costs at this point in time.
    Senator Cochran. And the bottom line conclusion is that the 
Breast Cancer Research Stamp did generate substantial funds for 
breast cancer research. It was successful in that regard. There 
is no question about that. Is that correct?
    Ms. Willhite. It has been incredibly successful. It has had 
a wide community of support. Senator Feinstein, Senator 
Hutchison--the members have continued to propel it forward. It 
has been a very unique grassroots movement. Not many subjects 
that you would put on a stamp could have the broad support that 
the Breast Cancer Research Stamp has enjoyed. Just this past 
Mother's Day, there was a huge initiative to sell the stamps. 
We are getting ready to have the Race for the Cure here in 
Washington, and again they will promote the stamp as part of 
the Race for the Cure. So, it continues to have a very big 
grassroots support behind it.
    Senator Cochran. Senator Levin, I am going to stop my 
questioning at this point and let you ask whatever questions 
you would like. We probably are going to have to go over and 
vote pretty quickly. So, we will recess and go over and vote 
when the second bells ring.
    Senator Levin. Thank you, Mr. Chairman.
    There is a huge community, and properly so, in support of 
breast cancer research. There's also very strong community 
support and very well organized for a number of other important 
causes, including organ and tissue donation, and AIDS research. 
Is there any doubt in your mind that there is a very strong, 
organized community in support of funds for AIDS research? I am 
part of that community supporting funds and I feel its 
strength. Diabetes research I am personally familiar with--very 
actively involved in seeking funds for diabetes research. Is 
there not a strong community support for diabetes research? Are 
you able to say that one of these commemoritves is not as 
strong as another?
    Ms. Willhite. The breast cancer community uniquely 
surrounded the stamp from conception and continues through this 
day and has been very, very unified in including the stamp as a 
part of all their activities and promotion. I do not know 
whether the AIDS community or the diabetes community would have 
the same outpouring.
    Senator Levin. You just do not know that.
    Ms. Willhite. We just do not know.
    Senator Levin. All right, but it could be.
    Ms. Willhite. It could be.
    Senator Levin. The same with prostate cancer, it could be, 
could it not?
    Ms. Willhite. It could be, yes, sir.
    Senator Levin. This Committee has approved already another 
semipostal stamp. And let it be clear to everybody we are not 
talking about whether a stamp be issued as a commemorative 
stamp. It is the surcharge which is the issue here. I think 
there has been a little confusion about that. There is no doubt 
that stamps have a huge educational value, but that is a 
separate issue and it is apart from the surcharge question.
    We approved a stamp recently, a semipostal stamp that will 
generate funds for Operation Lifesaver, a nonprofit 
organization dedicated to highway rail grade crossing safety. 
Now, I voted against that semipostal even though it was the 
Majority Leader's bill, who we all have tremendous respect for. 
I am just as much, I hope in favor of railway crossing safety 
as anybody else, but I just think when we start walking down 
that road, that we are going to find ourselves in an impossible 
position I am afraid of saying that diabetes comes ahead of 
Alzheimer's or after Alzheimer's or one railway crossing 
approach comes ahead of another.
    I got a letter from another group on railway crossings, and 
I am going to ask that it be made part of the record, Mr. 
Chairman. Is that OK?\1\
---------------------------------------------------------------------------
    \1\ The letter of the Coalition for Safer Crossings appears in the 
Appendix on page 53.
---------------------------------------------------------------------------
    Senator Cochran. Absolutely.
    Senator Levin. This letter is from the Coalition for Safer 
Crossings, and the group says the following: This person, the 
president of the organization, opposes the stamp that we 
approved for the railway crossing safety cause. This person 
says. ``I personally find Operation Lifesaver spin on education 
appalling.'' That is the group that was going to get the funds, 
a nonprofit, but private group that was going to get the funds. 
``Three and a half years ago I lost a very dear and close 
friend of mine at an unprotected crossing in southwestern 
Illinois. Eric was nineteen. I fought to close the crossing 
where Eric was killed and since helped many families after the 
loss of a loved one through my organization, the Coalition for 
Safer Crossings.''
    ``I personally and professionally oppose the measure that 
the Senate passed. When I was in high school I received the 
same driver safety training regarding grade crossing safety'' 
as his best friend Eric did, he writes. ``Eric is now gone. The 
funds from this proposed stamp would not have helped him. Now 
if this stamp would have been around prior to 1996 and funds 
were allocated to the State of Illinois for hardware and a set 
of automatic lights and gates were installed at this crossing 
in question I wouldn't be writing you this letter today.''
    In other words, this group favors putting in lights and 
gates at crossings, very much opposing the semipostal stamp we 
approved because that money was allocated to another group 
which favors education. I very much worry about the Congress 
making these kinds of decisions.
    And by the way, before the Postal Service created a 
Citizens' Stamp Advisory Committee to take this process out of 
politics, here are some of the stamps that were issued when 
political pressures were brought to bear: A stamp honoring the 
steel industry, the trucking industry, the railroad engineers, 
American bankers, the American turners, the poultry industry--
and I have got to be careful here because I know I am getting 
close to home. [Laughter.]
    Now, I love every one of those groups, just for the record. 
[Laughter.]
    I just want the record to be absolutely clear. I favor 
their work. I am all for them but I just think we have got to 
try to separate these crucial decisions on where funds go from 
a political process. I am afraid that once we go down the road 
that we have started, unless we get a barrier there of some 
kind of a mechanism to shield this from a political process, we 
will be making the wrong decisions. Is it education relative to 
railway crossings or is it lights and gates relative to railway 
crossings or neither? And by the way, I have to tell you, I 
would put diabetes, Alzheimer's, AIDS, and a number of other 
causes ahead of that one, although that is an important cause. 
But that is not really what I think the Congress is all about.
    Thank you, Mr. Chairman.
    Senator Cochran. The Subcommittee will stand in recess. We 
will return as soon as possible from our voting on the floor.
    [Recess.]
    Senator Cochran. The Subcommittee will please come to 
order. Thank you for your patience during the votes that we had 
to cast on the floor of the Senate.
    We have an opportunity now to complete our hearing and we 
appreciate very much the Postal Service representative, Ms. 
Willhite, and Mr. Ungar from the General Accounting Office 
being here to help us understand the implications of this 
legislation on the issuance of semipostal stamps by the U.S. 
Postal Service.
    Mr. Ungar, you mentioned in your statement that you believe 
there are similarities between the semipostal stamp program and 
the commemorative coin program. That is the program operated by 
the U.S. Mint. As I understand it, GAO examined the 
commemorative coin program and found as the number of 
commemorative coins increased, the sales for each coin 
decreased. Would you elaborate on this for us and tell us 
whether you believe the success of any future semipostal stamp 
would be affected if more than one semipostal stamp were 
authorized by Congress?
    Mr. Ungar. Yes, Mr. Chairman. Obviously, it is impossible 
to predict precisely what would happen, but it certainly was 
the case several years ago, before the commemorative coin 
program was restructured and reformed, that there were several 
commemorative coins on the market at the same time, and an 
analysis that we did showed that the sales were not as high 
when you had more than one commemorative coin on the market and 
that a number of coins did lose money.
    Now, there is a slight difference in the program. Typically 
commemorative coins sold at a much higher value than the face 
value. In other words, there was a higher surcharge placed on 
the coin than typically I would think you would have on a 
semipostal. Nonetheless, I think the experience would point out 
that at some point you need to be careful. The Postal Service 
or the Congress might need to really weigh this dilemma of how 
many different semipostal stamp issues would the public be 
willing to buy at any one given point in time. I think that 
would be a fair characterization.
    Senator Cochran. Let me ask you whether or not you think 
the stamp surcharge is about the right amount in terms of what 
the traffic will bear or what the public is willing to pay as 
an extra surcharge. If they raise it too high, it will diminish 
the attractiveness of the stamp I would expect. Do you think it 
is priced about right, or was that part of your analysis?
    Mr. Ungar. No, Mr. Chairman, we really did not look 
directly at that. We did get some information on foreign postal 
administrations' semipostals. Some foreign semiposstals carried 
more surcharge than others. The proper amount of the surcharge 
would probably be a topic that market research could address. I 
think if the surcharge was too high, it certainly could affect 
the number of stamps that are purchased. It is just something I 
think that would be worthwhile to look into if the Congress is 
going to authorize either the Postal Service to have additional 
semipostals or you are going to do it directly.
    Senator Cochran. Ms. Willhite, what is your reaction to 
this comparison between commemorative coins that the U.S. Mint 
has for sale and semipostal stamps? Is there any relevance 
between the two that we should understand?
    Ms. Willhite. Yes, sir. We would think that if we had 
semipostal stamps essentially competing with one another at the 
Postal Service for sale, that it would diminish the focus on 
the stamp that would be--if we had another stamp right now 
being sold against the Breast Cancer Research Stamp, it would 
probably diminish the Breast Cancer Research Stamp sales and 
probably not boost the sales of the others.
    Also on the subject of the amount of costs for the stamp, 
we did look into the market research when we came out with the 
Breast Cancer Research Stamp and found that 35 cents or 40 
cents would be what the public would prefer. They seem to like 
rounded, even amounts on the stamp prices. And we went with 40 
cents so that we could continue to contribute as much as 
possible off of the stamp as the rate went up. Therefore, the 
stamp remained a viable tool under the criteria that it raise 
money with the stamp price increase from 32 to 33 cents. So, we 
think that that is important also.
    Senator Cochran. What changes, if any, would the Postal 
Service have to make in its operation if Congress were to issue 
more semipostal stamps to be sold? Would this affect you in 
terms of the accounting system that you have or the staffing 
that the Postal Service would have to have to handle this 
responsibility?
    Ms. Willhite. Yes, sir. And I will let Mr. Tolbert comment 
on this also because he is in charge of the stamp program and 
would have to put that structure in place.
    We have absorbed most of the staffing for the Breast Cancer 
Research Stamp through our existing resources, thinking that it 
was a once-in-a-lifetime type occurrence. We did not set up a 
whole new accounting procedure. We did not set up staffing just 
for that stamp. If we were going to have an ongoing semipostal 
stamp program, like our commemorative stamp program and 
definitive stamp program, we would dedicate financing and 
accounting and staffing to assure its ongoing success. It would 
not be easily absorbed on an ongoing basis.
    Mr. Tolbert.
    Mr. Tolbert. Sure. Just to extend off of that, Mr. 
Chairman, it would seem to me that as part of the semipostal 
proposed legislation, it would require us to set up a separate 
tracking system and a costing system to track every element 
associated with a semipostal stamp issuance. So, as a result of 
that right now, as Ms. Willhite indicated, some of the actions 
and activities associated with the commemorative stamp program/
semipostal were integrated into our work efforts. But when we 
start talking about design, subject, research, and some of the 
other activities associated with it, it would seem to me we 
would have to clearly establish a separate track to account for 
all costs, whether it is institutional or whether it is 
attributable cost to that semipostal.
    Senator Cochran. While it is not the subject of our 
specific hearing, we are looking at bills that Senators have 
introduced, and there are several statements we are going to 
put in the record. For example, a statement from Senator 
Campbell who has introduced semipostal stamp legislation. 
Senator Lott's bill was already discussed to some extent by 
Senator Levin. We have received letters from people commenting 
about the issue. So, we are going to add to the record comments 
on these specific proposals.
    The American Philatelic Society--when I was doing this, it 
was called stamp collecting. I do not know how it got so fancy. 
[Laughter.]
    The Women's Information Network--we have a letter and we 
will include that as well.\1\
---------------------------------------------------------------------------
    \1\ The letters from the American Philatelic Society and the 
Women's Information Network appear in the Appendix on pages 55 and 57 
respectively.
---------------------------------------------------------------------------
    But there is also the House bill that has been mentioned. 
Congressman McHugh is chairman of the companion subcommittee 
over on the House side, and he has introduced a bill that will 
reauthorize the Breast Cancer Research Stamp, but create at the 
same time an alternative mechanism for passing on future 
requests for this kind of specially issued stamp.
    What, if any, would your observations be, Mr. Ungar--I am 
going to ask both of you--and Ms. Willhite, on that as an 
alternative to the individually authorized special stamps?
    Mr. Ungar. Mr. Chairman, we specifically did not look into 
that. Obviously, it would be an alternative that you would want 
to consider. On the commemorative coin program, there is an 
advisory committee that has been set up but the actual 
decisions there as to what coins will be minted are up to the 
Congress and specific legislation must be enacted; so, the 
committee is purely advisory to the Congress.
    I guess in this case, the Congress would authorize the 
Postal Service or a committee to make those decisions in terms 
of what stamps would be produced and sold. I think one issue 
there might be the criteria that might be used in making that 
kind of a choice, if the Congress were to delegate that 
function.
    Senator Cochran. Ms. Willhite, what is your response?
    Ms. Willhite. We have looked at Congressman McHugh's bill 
and there are elements of it that we support. Again, we believe 
that it would be the role of Congress to choose the subject 
matter of any stamp that was not a part of the commemorative or 
definitive series.
    Also, Senator, we believe that we would want to have some 
input on the timing of the stamps. We now have a lead-in time 
in our commemorative program of up to 2 years in development 
and 3 to 5 years in the actual roll-out of a stamp. If we were 
going to have a new semipostal stamp every 6 months, it would 
be very difficult for us to do that in a cost effective way. 
So, any legislation that would impact the development of a 
semipostal act, we would like to talk about some of the 
technicalities of stamp production that might make it a more 
successful bill.
    Senator Cochran. Well, judging from your comments and also 
the GAO, there is more to this than just meets the eye, rather 
than to just gloss it over with that kind of analogy or 
metaphor.
    The obligation of this Subcommittee is to carefully 
consider and review in a thoughtful way the proposals, and I am 
confident that we will bring that kind of consideration to 
these proposals that are before the Committee.
    There are a number of other questions that we have that we 
think we should ask and have answers for the record so that we 
will have a body of facts and information that will enable us 
to make a decision about whether to report out the bill or not.
    I am going to yield to my good friend from Michigan for any 
additional questions he has and then I am going to submit the 
others that I have here for the record, along with those that I 
mentioned. We have statements that will be included. Senator 
Campbell has introduced this legislation that I mentioned and 
his has to do with violence against women, domestic violence, 
and to raise the awareness and funds for dealing with that. We 
want to have a statement that he has prepared included in the 
record.
    [The prepared statement of Senator Campbell follows:]

 PREPARED STATEMENT OF SENATOR BEN NIGHTHORSE CAMPBELL, A U.S. SENATOR 
                       FROM THE STATE OF COLORADO

    Thank you, Mr. Chairman and Members of this Subcommittee, for 
holding this hearing today on the issuance of semipostals by the U.S. 
Postal Service. I am pleased to take this opportunity to testify about 
my legislation, S. 2044, the Stamp Out Domestic Violence Act of 2000. 
S. 2044 has 13 bipartisan cosponsors and I thank my colleagues for 
their support.
    The Stamp Out Domestic Violence Act of 2000 will allow postal 
patrons to easily contribute to the fight against domestic violence 
through the voluntary purchase of certain specially issued U.S. Postal 
stamps, generally referred to as semipostals. Proceeds raised from the 
stamps would fund domestic violence programs nationwide.
    Consider the following: A woman is battered every 15 seconds in the 
United States. According to the Justice Department, four million 
American women were victims of violent crime last year. Two-thirds of 
these women were victimized by someone they knew. In fact, 30 percent 
of female murder victims are killed by current or former partners. In 
Colorado alone, the Colorado Coalition Against Domestic Violence 
reported 59 domestic violence related deaths in 1998. We can and must 
make every effort to change that. But, before we can eliminate the 
incidence of domestic violence we must acknowledge the problem and 
identify the resources needed to combat the problem.
    Mr. Chairman, I believe S. 2044 represents an innovative way to 
generate money and raise awareness for the fight against domestic 
violence. As you know, a recent GAO report calls the Breast Cancer 
Research Stamp an effective fundraiser. According to preliminary 
reports, more than 164 million stamps have been sold nationally, 
raising $12 million for breast cancer research. My bill is modeled 
after the Breast Cancer Research Stamp legislation, and I am confident 
it will be just as successful.
    Specifically, under the Stamp Out Domestic Violence Act of 2000, 
the Postal Service would establish a special rate of postage for first-
class mail, not to exceed 25 percent of the first-class rate, as an 
alternative to the regular first-class postage. The additional sum 
would be contributed to domestic violence programs. The rate would be 
determined in part, by the Postal Service to cover administrative 
costs, and the remainder by the Governors of the Postal Service. All of 
the funds raised would go to the Department of Justice to support local 
domestic violence initiatives across the country.
    In a country as blessed as America, the horrid truth is more women 
are injured by domestic violence each year than by automobile and 
cancer deaths--combined. We can no longer ignore this fact for our 
denial is but a small step from tacit approval. The funds raised by 
this stamp will represent another positive step forward in addressing 
this national concern, and I urge the Committee to act favorably on 
this legislation. Thank you, Mr. Chairman.

    Senator Cochran. Senator Levin.
    Senator Levin. Thank you, Mr. Chairman.
    Ms. Willhite, first let me ask you a question about the 
advertising and promotion costs for regular commemorative 
stamps. My understanding is that the entire annual budget to 
promote stamps and postal products is $1 million. Is that 
correct?
    Ms. Willhite. I am going to let Mr. Tolbert, who actually 
runs the budget, get into the nitty-gritty with you, Senator.
    Mr. Tolbert. Senator, relative to the advertising and 
promotion, it is not specifically for a stamp. There are 
philatelic products which we produce, which you just 
referenced, and we have basically, from a costing standpoint I 
would say, for fiscal year 2000 allocated approximately $1 
million against costs for philatelic products.
    Senator Levin. Does that include stamps, the promotion of 
stamps?
    Mr. Tolbert. Yes, to some degree, because the product is an 
extension of the stamp. Yes.
    Senator Levin. According to this memo from Terry McCaffrey, 
manager of Stamp Development, to Tom Edwards, it says that the 
annual budget is approximately $1 million to promote the entire 
annual program, which is what I think you are saying as well.
    Ms. Willhite. Yes.
    Mr. Tolbert. Yes.
    Senator Levin. Now, on this one stamp, on the Breast Cancer 
Research Stamp, is it not accurate that there was $1.5 million 
spent in advertising and promotion?
    Mr. Tolbert. Yes, there was in terms of tracking against 
the semipostal. Just to extend off that for a second, as well 
as part of, I believe, the Office of the Inspector General's 
report, there was a difference in the Postal Service and their 
audit relative to the advertising promotion which, for example, 
the billboards in Times Square--those were billboards that were 
part of the overall program, but one of the spots was allocated 
to promote the Breast Cancer Research Stamp.
    Senator Levin. Well, if your total budget for promotion and 
advertising for your entire program, including commemorative 
stamps, is $1 million, and you have spent $1.5 million on one 
stamp, then that is clearly a lot different from what you 
ordinarily would spend to promote a commemorative stamp. It is 
a lot more than you have ever spent, I guess, to promote one 
stamp. Is that not true?
    Mr. Tolbert. I would say yes, there was a lot more spent 
against the semipostal as it relates to the advertising and 
promotion.
    Senator Levin. OK, but none of that $1.5 million was used 
as part of your reasonable costs for reimbursement. Is that 
correct, Mr. Ungar?
    Mr. Ungar. Yes, sir. The Postal Service did not recoup that 
money from the surcharge revenues, at least as of yet, and I 
think the Postal Service did not plan to do that. We would 
certainly suggest that the Postal Service might want to 
reconsider its decision.
    The concern that we would have is that, while statutorily 
the Postal Service does have a lot of discretion here, I think 
the issue is a precedent. This stamp obviously, was quite 
successful. If the Postal Service should, unfortunately, have a 
situation in the future where a semipostal stamp is not so 
successful and does incur a substantial amount of incremental 
costs like advertising, it could find itself in a loss 
position. So, I think it might be wise, if the semipostal 
program is going to continue, that this type of issue really be 
reassessed.
    Senator Levin. Why were the promotion and advertising costs 
for this commemorative not attributed to this commemorative, 
particularly in light of the fact that they exceeded the entire 
budget of the entire Postal Service to promote all 
commemoratives for the entire year or your entire program? 
Should that not have been attributed to this program? Mr. 
Tolbert or whoever does the attribution here?
    Mr. Tolbert. Yes.
    Senator Levin. No, I am sorry. I was not sure whether you 
make the policy decision or not. If you do, let me address it 
to you.
    Should the cost of the $1.5 million, or part of that, not 
have been attributed to this stamp as one of the costs to be 
deducted from the surcharge revenues?
    Mr. Tolbert. Yes, sir.
    Senator Levin. But it has not yet been done.
    Mr. Tolbert. Not to my knowledge.
    Senator Levin. By the way, I am not trying to reduce the 
amount of money that goes to breast cancer research. If you put 
an amendment on that floor right now asking me would I add $6 
million to breast cancer research, you would get an aye from 
me. OK? So, that is not the issue. The issue here is what we 
are getting into, what is the road we are walking down, and how 
are we going to figure this out.
    What would be the estimated costs of the Look, Listen and 
Live Stamp, Mr. Tolbert? Could you give us that? The bill that 
has passed the Subcommittee and now the full Committee. Have 
you made an estimate as to what that would cost?
    Mr. Tolbert. I have not, no.
    Senator Levin. Let us assume that the costs on that were $3 
million or $2 million, but that the surcharge produced less 
than that so that there was actually a deficit. Mr. Tolbert, 
what then happens? With that stamp, a private foundation is 
supposed to get the money. It is not even a governmental 
research program. Would the private foundation then reimburse 
the government for the loss to the government? Is that part of 
the program?
    Ms. Willhite. Under the legislation, if it was the same 
legislation of the Breast Cancer Research Stamp, if we could 
not get back our reasonable costs, we would not be able to give 
any money to the program. I do not know that we would be able 
to actually charge the program, but it would mean that the 
stamp would not provide any money to the program.
    Senator Levin. Well, thank you all. I think there are a lot 
of questions that this hearing has brought up. I hope, Mr. 
Chairman, that one of the things we will really look at and ask 
the Postal Service to review is this other approach where the 
Citizens' Stamp Advisory Committee or a similar group can 
fairly and objectively apply criteria without political 
influence.
    If we are going to have more semipostals after the Breast 
Cancer Research Stamp, those decisions ought to be made by an 
independent, objective citizens group working with the Postal 
Service--applying fair criteria so everybody knows exactly what 
those criteria are.
    I hope that we would get a Postal Service response to the 
bill that authorizes the Postal Service to issue semipostals. 
If you have not already given us a response to Congressman 
McHugh's bill, could you give us your response?
    Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator.
    Let me ask you one final question. This breast cancer 
research authorization expires in July. So, if the Congress 
does not act, how do you phase this out? Is it just ended if 
somebody comes up to the window and wants to buy a Breast 
Cancer Research Stamp, can they still do that? Do they pay a 
surcharge? Will it be an automatic commemorative, or if we do 
not authorize it, what happens?
    Ms. Willhite. If it is not reauthorized, sir, we will take 
it off the market. We have a very defined time table for 
removing stamps from the post offices, and that pull-out 
process would actually--we would do our first Postal Bulletin 
notice June 15, that the stamp was going to expire July 28, 
2000, so that we would make sure that all of our clerks and 
postmasters knew that the stamp was no longer authorized for 
sale.
    Senator Cochran. Thank you very much.
    Senator Levin. May I have one comment, Mr. Chairman?
    Senator Cochran. Sure, Senator Levin, go ahead.
    Senator Levin. I think the question of reauthorizing an 
existing semipostal is a different issue from whether there be 
additional semipostals. At least in my mind it is. We have got 
the costs already sunk into this and spent. We have got stamps 
I presume printed. I think there are still, what, 10 million or 
15 million or whatever number.
    Mr. Tolbert. Seventeen point five.
    Senator Levin. Seventeen point five are already printed. 
So, I think that is a different issue than whether or not we 
authorize additional semipostals. At least in my mind it is.
    So, my doubts about semipostals in principle are real, but 
I put that in a different category from the reauthorization of 
something which already exists and where we have already spent 
money. I do hope, though, that if we are going to reauthorize, 
that we would look at this other possibility of having the 
decisions made on semipostals being made by this group that 
distances this from political forces which otherwise, it seems 
to me, are unleashed to nobody's benefit.
    Thank you.
    Senator Cochran. Thank you, Senator.
    Thank you, Mr. Ungar and Mr. Barnes from the GAO and Ms. 
Willhite and Mr. Tolbert. We appreciate your cooperation and 
your good assistance to our Subcommittee.
    The hearing is adjourned.
    [Whereupon, at 11:52 a.m., the Subcommittee was adjourned, 
to reconvene at the call of the Chair.]

                            A P P E N D I X

                              ----------                              

[GRAPHIC] [TIFF OMITTED] T5647.001

[GRAPHIC] [TIFF OMITTED] T5647.002

[GRAPHIC] [TIFF OMITTED] T5647.003

[GRAPHIC] [TIFF OMITTED] T5647.004

[GRAPHIC] [TIFF OMITTED] T5647.005

[GRAPHIC] [TIFF OMITTED] T5647.006

[GRAPHIC] [TIFF OMITTED] T5647.007

[GRAPHIC] [TIFF OMITTED] T5647.008

[GRAPHIC] [TIFF OMITTED] T5647.009

[GRAPHIC] [TIFF OMITTED] T5647.010

[GRAPHIC] [TIFF OMITTED] T5647.011

[GRAPHIC] [TIFF OMITTED] T5647.012

[GRAPHIC] [TIFF OMITTED] T5647.013

[GRAPHIC] [TIFF OMITTED] T5647.014

[GRAPHIC] [TIFF OMITTED] T5647.015

[GRAPHIC] [TIFF OMITTED] T5647.016

[GRAPHIC] [TIFF OMITTED] T5647.017

[GRAPHIC] [TIFF OMITTED] T5647.018

[GRAPHIC] [TIFF OMITTED] T5647.019

[GRAPHIC] [TIFF OMITTED] T5647.020

[GRAPHIC] [TIFF OMITTED] T5647.021

[GRAPHIC] [TIFF OMITTED] T5647.022

[GRAPHIC] [TIFF OMITTED] T5647.023

[GRAPHIC] [TIFF OMITTED] T5647.024

[GRAPHIC] [TIFF OMITTED] T5647.025

[GRAPHIC] [TIFF OMITTED] T5647.026

[GRAPHIC] [TIFF OMITTED] T5647.027

[GRAPHIC] [TIFF OMITTED] T5647.028

[GRAPHIC] [TIFF OMITTED] T5647.029

[GRAPHIC] [TIFF OMITTED] T5647.030

[GRAPHIC] [TIFF OMITTED] T5647.031

[GRAPHIC] [TIFF OMITTED] T5647.032

[GRAPHIC] [TIFF OMITTED] T5647.033

[GRAPHIC] [TIFF OMITTED] T5647.034

[GRAPHIC] [TIFF OMITTED] T5647.035

[GRAPHIC] [TIFF OMITTED] T5647.036

[GRAPHIC] [TIFF OMITTED] T5647.037

[GRAPHIC] [TIFF OMITTED] T5647.038

[GRAPHIC] [TIFF OMITTED] T5647.039

[GRAPHIC] [TIFF OMITTED] T5647.040

[GRAPHIC] [TIFF OMITTED] T5647.041

[GRAPHIC] [TIFF OMITTED] T5647.042

[GRAPHIC] [TIFF OMITTED] T5647.043

[GRAPHIC] [TIFF OMITTED] T5647.044

                                 

```