Mail volume. The budget estimates for 1966 are based on expected volume of 73.8 billion pieces of mail, compared to 71.6 billion anticipated for 1965 and 69.7 billion in 1964.

The 1966 forecast includes 39.3 billion first-class letters and cards; 1.6 billion airmail items; 9.0 billion magazines, newspapers, and other publications; 19.5 billion pieces of printed matter and small parcels; and 1.1 billion zonerate parcels, catalogs, and other fourth-class matter. Comparisons of these and other items of postal workload and related 1966 revenues with corresponding 1965 estimates and 1964 results appear in the table on page 668. Financing.-Six separate limitations are enacted for the Post Office Department for operation of the postal service and other assigned responsibilities. The limitations apply to the postal fund which is financed by the deposit therein of postal revenues and other receipts and by an appropriation from the general fund of the Treasury for the balance.

Only the appropriation from the general fund to the postal fund (being equal to the excess of obligational authority over revenues) is considered new obligational authority for purposes of the Federal budget. Further, only the excess of the Department's disbursements over its receipts (exclusive of the general fund appropriation) is considered as budget expenditures.

The six individual limitations control obligations incurred by the Department and are therefore requested and accounted for in terms of obligations. However, the program and financing schedules show funded accrued costs for each principal activity reconciled in total to obligations.

The schedule of revenue and expense shows operating costs on a full accrual basis including provision for employees' accrued annual leave and costs funded by other agencies. Costs attributable to public services as defined by 39 U.S.C. 2303 and amended by Public Law 87-793 are shown in total on the revenue and expense statement.

Revenue from mail and other services of the Post Office Department is placed in the postal fund, which was established as a revolving fund in 1950 (39 Ú.S.C. 2202). In addition to the obligations and expenditures under limitations enacted in annual appropriation acts, the fund is also used without annual action by Congress for the purchase of stamp-embossed envelopes and for payment of certain indemnities, claims, and judgments."

Postal revenue comes primarily from private postal patrons. It also includes receipts from various Federal agencies for the handling of official mail and the payment by the Congress for franked mail. Reimbursements received for nonpostal services and other recoveries are likewise deposited in the postal fund.

The aggregate of postal revenues is less than the obligations authorized for payment from the postal fund. An indefinite appropriation is made from the general fund of the Treasury to make up the difference. After taking into account anticipated changes in funded working capital, the net budget expenditures for the postal service for 1966 are estimated to be $714 million, compared to $718 million for 1965, and $578 million for 1964. The increases in 1965 and 1966 are principally due to the recently enacted salary increases amounting to $222 million in 1965 authorized by Public Law 88-426.

Legislation will be proposed to authorize the Post Office Department to undertake a program for the Federal construction of major postal facilities. Financing of this program will be proposed through a new appropriation, Construction, postal facilities in the amount of $92.2 million.

444,938 482,550 537,592 610,950

681,150 757,324 763,799 926,011

Equity end of year....

Does not include contingent receivables based on contested CAB orders in the amount of $2.8 million at June 30, 1964, and 1963, respectively;

The changes in these items are reflected on the program and financing schedule. Liabilities do not include: (1) Undetermined amounts of postage in the hands of the public which, for practical considerations, have been accounted for as revenue then sold, and (2) the following contingent and future obligations which by law the Department may not fund or account for as obligations until payments are due: ntingent liabilities for pending suits and damage claims of $43.2 million and $37.1 million at June 30, 1964, and 1963, respectively, a substantial portion of which are expected either to be settled at less than the amount claimed or disallowed; and undetermined amounts for long-term leases.

FUND

ADMINISTRATION AND REGIONAL OPERATION

For expenses necessary for administration of the postal service, operation of the inspection service and regional offices, uniforms or allowances therefor, as authorized by the Act of September 1, 1954, as amended (5 U.Ś.C. 2131), including services as authorized by section 15 of the Act of August 2, 1946 (5 U.S.C. 55a); management studies; not to exceed $25,000 for miscellaneous and emergency expenses (including not to exceed $6,000 for official reception and representation expenses upon approval by the Postmaster General); rewards for information and services concerning violations of postal laws and regulations, current and prior fiscal years, in accordance with regulations of the Postmaster General in effect at the time the services are rendered or information furnished, of which not to exceed $25,000 for confidential information and services shall be paid in the discretion of the Postmaster General and accounted for solely on his certificate; and expenses of delegates designated by the Postmaster General to attend meetings and congresses for the purpose of making postal arrangements with foreign governments pursuant to law, and not to exceed $20,000 of such expenses to be accounted for