The Postal Service and the Unified Budget

GAO discussed the proposed Postal Reorganization Act Amendments of 1988. GAO noted that this legislation would: (1) provide the Postal Service Fund with an off-budget status and exclude it from presidential and congressional budgets, statutory general budget limitations, and some deficit calculations; and (2) increase the fund's borrowing authority. GAO also noted that the determination of the fund's appropriate budget status is part of a deeper issue regarding problems with the current unified budget structure, which: (1) focuses on a single, cash-based surplus or deficit total; (2) does not distinguish between capital investments and operating expenses; and (3) can lead to unsound deficit control strategies, a budget bias against capital investments, a distortion of credit program costs, and a masking of trust- and nontrust-fund fiscal relationships. GAO believes that: (1) the federal government should replace the current budget structure with a new four-part budget which would distinguish between capital investments, operating expenses, and trust and nontrust activities for effective budget decisionmaking; and (2) Congress may wish to weigh the importance of protecting the fund from budget cutback pressures against its need for a comprehensive budget.