The Commerce Journal

Community News Network

February 17, 2014

Go paperless? One group lobbying against it

WASHINGTON — As the Obama administration pushes to do more business over the Internet, finally seeking to close the technology gap with the private sector, the digital makeover is running into a dogged opponent called Consumers for Paper Options.

The group is working the halls of Congress in closed-door meetings, underwriting research favorable to its position and mounting a news media campaign in an effort to preserve Washington as the capital of paper — and slow the move away from printed checks, forms and other paper communication.

The lobbying group has had some recent victories, including language tucked into last month's budget deal that requires the government to plan for resuming paper delivery of annual Social Security earnings statements to some of the nation's 150 million future retirees. And it's been claiming these wins in the name of the elderly and low-income Americans the Internet has left behind.

Except Consumers for Paper Options is a creation of the paper industry.

The group — which bills itself as "a coalition of individuals and organizations advocating for access to paper-based services and information" — was set up by the Envelope Manufacturers Association (EMA), officials from both organizations said. It receives financial backing from the paper industry's largest trade group, several of North America's biggest paper manufacturers and the EMA, according to documents and interviews with company and trade association officials. The EMA and other paper companies are also pushing for Congress to pass legislation to help stabilize the Postal Service.

Consumers for Paper Options is led by a veteran advocate for the industry's interests on Capitol Hill. His previous posts include head of government relations for International Paper, the largest pulp and paper company in the world, and treasurer of its PAC.

"The glitzy new thing is to be pro-technology," said John Runyan, Consumers for Paper Options' executive director. "But a lot of government agencies are saying, 'We're going electronic and the heck with it.' "

With federal budgets under fire in Congress, the government's move to the Internet has gained pace. An electronic payment, for instance, costs the government only 9 cents to process, compared with $1.25 for a paper check, the Treasury Department says.

At Treasury, which last year suspended most paper mailings for all but the very aged and those with "mental impairments," officials estimate the shift will save $1 billion over 10 years. The move by the Social Security Administration in 2011 to stop mailing paper earnings statements to 150 million Americans is saving $72 million a year.

For the paper industry, the stakes are high. The digital age has ravaged sales of envelopes, office paper, catalogues and pulp products, with industry analysts saying that demand for paper products dropped 5 percent on average in each of the past five years. Mills have closed, and thousands of employees have been laid off.

So Consumers for Paper Options and industry officials have raised the banner of the digital divide, warning that putting government services online is creating hurdles for many Americans.

Runyan said his group is not against technology but rather is for choice: "If there are Americans who can't use an iPhone to navigate the Internet, there ought to be an option for them."

When asked whether Consumers for Paper Options represents consumers or the industry, Runyan said the point is that a quarter of Americans do not have Internet access. He added that its efforts have won support from ordinary Americans.

Maynard Benjamin, president of the EMA, said the "consumers" in the group's name are "everybody's mother and father and sister who care about the way government policy develops."

While some traditional consumer groups have also asked the government to make accommodations for the elderly and others who do not use the Internet, it is Runyan's organization that has been most active on the issue.

The group's lobbyists have been meeting with members of Congress and their staffs, concentrating in particular on those from paper-producing states and districts with large elderly populations. Runyan and Benjamin said the goal is to "educate" lawmakers about what advocates call the government's willy-nilly rush to digitize without proper oversight.

Runyan met with Rep. Susan Davis, D-Calif., and pressed her to get language put into the budget bill requiring the Social Security Administration to develop a plan to restore the mailing of paper earnings statements, said Runyan and the lawmaker's staff.

Late last year, Consumers for Paper Options scored another victory when Rep. Michael Michaud, D-Maine, working with the American Forest and Paper Association, used his influence to have language removed from a pharmaceutical bill that would have ended the practice of printing prescription information and inserting it into drug packages, instead requiring that it be posted online. The Food and Drug Administration has been pressing for the change, which the agency says would save money and ensure the information is up to date.

But Michaud said the change would put consumers at risk.

His argument about the dangers of the "rush to go paperless" was highlighted in a December op-ed article in Roll Call signed by Michaud and Rep. Sean Duffy, R-Wis., which said the shift was "disenfranchising millions of seniors and other vulnerable Americans and making the digital divide even deeper." Consumers for Paper Options helped craft the piece and got it placed in Roll Call, according to officials familiar with the article.

The group has conducted several studies of consumer preferences, Runyan said, including a poll last year that reportedly found that 73 percent of American adults do not think they should be required to interact with the government online. Those research findings have been repeatedly cited in newspapers and trade publications across the country and attributed to Consumers for Paper Options. In very few instances did they disclose that the group was set up by the paper industry.

Consumers for Paper Options started in 2010 as the Senate was debating the Dodd-Frank Act, which created new regulations for the financial industry. A little-noticed proposal would have required banks and credit-card companies to put all statements online. That was never enacted.

But the Obama administration had other plans to reduce paper services. The government, for instance, was looking to make use of direct deposit or prepaid debit cards for monthly checks for veterans, federal retirees, disabled Americans and 66 million retirees on Social Security. IRS tax forms and other government "paperwork" were also going online.

The paper industry was growing alarmed. Consumers for Paper Options stepped up its fundraising and outreach in Washington, arguing, for instance, that using debit cards would saddle the poor with high fees and that electronic tax refunds and checks would lead to stolen identities.

"I wish we had launched this effort 10 years ago," said Thomas Howard, vice president of government relations for Domtar, one of North America's largest paper manufacturers and a financial backer of Consumers for Paper Options. "But we're on top of things now. Government agencies are in effect slamming citizens by determining how they will receive vital information."

In the past year alone, 22 of the largest federal agencies have reduced their spending on paper by about 7 percent, to $64 million a year, according to data from the General Services Administration. With the trend likely to continue, Duffy and Michaud have introduced a resolution calling for government action to ensure that people be provided with "paper-based information" along with electronic. The measure is awaiting a hearing.

While government purchases of paper are a small share of overall demand, Runyan said that restoring the use of paper in federal transactions could set a precedent for the private sector, where the economic threat of financial firms and retailers going all-digital is far greater.

He says his group has enlisted many partners in the fight, including Consumer Action and the Gray Panthers, an advocacy group that focuses in part on issues affecting senior citizens. The organizations are not official members but like-minded groups in an "advocacy effort that's trying to leverage resources. . . . We're not just advocating on behalf of the industry," Runyan said.

Officials from several traditional consumer groups said they had held discussions with Consumers for Paper Options about their shared concerns and ways that it could help them, for instance by conducting research.

Sally Greenberg, executive director of the National Consumers League, said she's a "big believer in getting a piece of paper sent to you at least once a year" and isn't opposed to teaming up with others on the same side of the issue. But along with other advocates who held discussions with Consumers for Paper Options, she still wasn't sure whom that group represents.

"I don't know who's behind them," she said.

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