with eight .4% of gdp. said it would shrink is that correct? >> yes congressmen. >> we have a lot of people here but if we wait until the clock is that zero before we ask the question we will not get to the other members. >> your point* is well taken [laughter] . .

military five-day letter delivery service. this is 40 minutes. >> i have a statement that i want to give. i'm going to just yield to her friends from the house, chairman issa, try ranking democrat on the elisha cummings.

especially in the last months of last year, had a chance to bear down and try to get to -- we got in the red sun in terms of final solution we've made real progress. and when to forego comments initially and ask our colleagues to just go ahead and pick it up from there. again, thank you for joining us. >> thank you. chairman carper, ranking member coburn, you are new to your positions, even though you are from assisting the body. mr. cummings and i came close to the last congress to what we thought was a bipartisan and bicameral deal. we start off this congress with a view that with you as team members and coaches about with and as a bipartisan bicameral problem and bipartisan bicameral

solution, we believe we can get there. clearly as you can meet today, the subject of five-day delivery is going to be among the most important subjects. a day to emphasize that because i believe in order to get a comprehensive reform, we must first realize free in the realize free in the hands of the postmaster general and away envisioned is a good first step. postmaster has determined going from a less than 50-cent single delivery on a saturday to a five-day delivery of that mail no matter how small an amount aware for the sunday dissents from a single flat letter will be delivered anywhere in america. but on saturday, a light day, relative to most other countries come and the idea there should be a small premium for flat air,

$5.60, still less than the cost of a good hallmark card from cbs term you can have a letter delivered. more importantly, the postmaster's proposal will continue to see vital medicines and packages delivered in any other way at any other point in america. the maintenance of universal service, better rightsizing of cost or benefit is the hallmark of what the postmaster is asking this congress to not stand the way it is. probably the postmaster is correct that he is the authority with the law and maintain service, but the lot number and tended him to do it at a loss. the postmaster had to bear over 15.9 losses last year. this completely depleted his line of credit.

it cost 10 to make cash flows to virchow required and agreed payments of $5.8 billion for the second air in the row. this deferral does not mean eventually those amounts more common due. it is clear alternately to ratepayer a taxpayer will have to pay the over 25 and an accumulated debt of the postmaster or the post office. and i say 25 billion eye to what statisticians to say it's only 15 alien. this deferral still has to be taken care i've asked you the eventual medical retirement and other benefits of postal workers. keeping that commitment currently is backed by full faith and credit of the u.s. taxpayer. as i said, the important thing to realize is guaranteeing six-day delivery in america, but

doing it at a rate that allows the post office to become solvent again is critically something the postmaster has to be allowed to do as a preamble to the legislation we vision. australia, canada, finland, spain and as we often know but sometimes snicker, sweden have all gone to five-day delivery. rural and urban countries have found that the advantages of electronic mail, with advantages of direct deposit, including social security, which is 100% correct deposit for seniors, the volume of five male has gone down and will continue to go down. we in congress often look at loss of jobs is it that thing. i want to close them making a conclusion. had we to years ago from a three

or sicko, four years ago dealt with this problem, individuals of the post office who are long-time workers fully able to retire, could have been paid a full year of their pay as an incentive to retire not early, but in fact not later. the cost of a $50,000 buyout of a potential retiree is swiped us and retirees for $1 billion. essentially, in less than a year, you could provide that benefit to every single person eligible to retire and still do it for less than we lost last year. i'm not suggesting we automatically pay large buyout, but if we can find efficiencies, we can find a way to encourage people to retire without breaking contracts, trust, having people have to go into their golden years are the post

office has the right amount of people. one last point as a bargaining point we are so aware of. chairman come you enjoy a great many urban older homes in your state. many of those homes have shoots in their door. everyday a postman comes up and puts flat mail in there, but more and more, the son home see about a piece of medicine or purchases from amazon placed on the stoop, crammed inside the door for some other way delivered as best a postman can with the reality that that system, the flat bell system did not envision what you do with a box that will be left if you're not home and more and more seniors and young people are out inactive. so the postmaster at his request would like to accelerate over the near future the ability to put in boxes pushed back the

older homes in seniors to say what if i have to walk around the corner? ever tell you here today that providing a secure box large enough to take purchases and medical supplies in every neighborhood in america should be a goal we in congress pernell, whether it's a new neighborhood portal neighborhood, we find a way to define acceptable boxes to reduce the time necessary to deliver mail, but increased security at medicines delivered to every point in america. i believe it to his largest single savings in the system, five-day delivery and modernization of to the curb delivery are both beneficial it done right. we now have the postmaster was to do it. the other should be a goal to make sure funding is available to provide appropriate secure

storage for every american because more and more that the medicines are delivered and that's how purchases are delivered. with that, i'd be happy to take your questions and i yield back. >> mr. chairman, thank you for thoughtful testimony and now i'm pleased to welcome congressman cummings. >> thank you, it's my honor and privilege to be here this morning. i want to say to you, mr. chairman come you're absolutely right. we spent some time in the red zone, but america expects us to get in the end zone. i do believe and i was listening to you, senator coburn this morning on morning joe. i said to myself, we have to get this done with a reasonable guy like senator coburn and i believe we will. i really do.

you know, i'm also pleased to be here with my friend and colleague, chairman and he said in the postal service is a vital link that binds our nation together, delivering mail to more than 150 million addresses in operating 32,000 post offices nationwide for postal service connects families, friends and businesses across the vast distances of our great country. last year however the postal service reported losses of approximately $16 million. at last one but $3 billion in the most recent quarter. it is friday for a 50 alien dollars. it is authorized to borrow from the treasury and continues to this approximately $25 million a day. it also faces a burden not required of any other agency or

business in this country. it must be billions of dollars every year to pre-fund health benefits for its retirees. as we all know, this not simply does not add up. the postal service needs a new formula for success. last week the postal service announced it intends to end saturday mail delivery and accept packages in august. in my opinion, this announcement was an unfortunate development and will not solve the postal service's long-term fiscal problems. instead, congress needs to pass comprehensive reform legislation that addresses not only delivery standards come up with a range of reforms needed to fundamentally reengineer the postal service for the next century. to its credit, the senate last year passed comprehensive bipartisan legislation to reform postal operations, including

extending the schedule for retiree payments, overpayments to the postal service made to the federal pension system and providing key tools to access the portal service workforce. everybody agrees we have to resize the workforce. i was pleased the senate included several provisions for my legislation. too many people argue the postal service to be self-sustaining, like a business. at the same time arguing it should be banned from competing against the private sector. i believe we must allow the postal service to expand into new business lines in that bill would've done that. unfortunately, the most significant challenge facing the postal service today is not the delivery or declining mail volume or pre-funding health care to retirees.

it's congress' failure to act. although the senate passed a comprehensive and bipartisan bill, the house failed to consider legislation. we cannot solve this problem if we continue to worry. that will only grow more desperate and more dire. there is some reason for hope however that is the ongoing commitment of the members of congress in this very room. the people in this very room can make this happen. over the past 10 months we've come together to discuss potential solutions in a serious matter and i've been encouraged by many areas of agreement was reached. as a matter of fact, leader pelosi asked me today about the status of the bill and i told her that we've got 90% there. we weren't that far. i believe we were on me that the two-point line, mr. chairman and i just can't afford to fumble

the ball because when we fumbled the ball, what happens if america loses. i believe we are close. if we would launch a renewed effort as soon as possible, we can have a bipartisan bicameral solution. i predict we can complete the legislation before the end of march for the current appropriations expires. to meet the deadline, we need to do it right now. there's no time to waste. finally, let me conclude the issue closest to my heart in this debate. i believe we have a solemn obligation to honor the dedicated postal service employees who has served this institution for decades. a 60 how to resize the postal service workforce, i urge my colleagues to fight and fight

very hard to demonstrate compassion and respect for middle-class american workers and their families. by the way, 21% of them are veterans. 40% are women. many of them single head of households. and so mr. chairman, i thank you for holding this hearing and i look forward to recorded during our colleagues in the days to come in with that i yield back. >> thank you. another thoughtful and it struck to comment. thank you at the view. i like the visual here are the two review side-by-side, democratic republic and, rolling up sleeves to make this happen. a lot of us watched the super bowl and you and i are pulling for the same team. we have a quarterback, where's he from? >> delaware. that's right.

as can imagine the ravens, but i didn't want to take it too far. >> at the end of the game, 40 niners headed in the red zone close to the end zone. couldn't get the balmy and sound to me is to make sure we get the ball in the end zone. we been joined by senator ayotte. delighted you're here today. she brought with her a veteran, a great colleague, one i love to work with, make enzi. they been joined by senator baldwin from wisconsin is a member of our committee. i have a long statement i ask unanimous consent to be made part of the record. i went to leadoff witnesses instead. dross and pieces out of my prepared testimony. we need the postal service. the event of the postal service

if the patient was born. 70 million people don't have a job today there relates in no small part because of the work the postal service does for all of us. 12 years ago when i was a freshman here, tom, i had my staff count the number of letters we got them for about everyone e-mail we receive, we got about 50 miners. today is just the opposite. for every 15 e-mails a day roughly one letter. therein lies the problem. the way to communicate is changed or the postal service is trying to change but that induce some degree have succeeded in there's a number of other things we have to change further in our job is to facilitate that. when they come up with new ideas to try not to be an impediment to those ideas. the president talked last night about what we need to do on

deficit reduction and i think there's a lesson in what he said forestier today. we need to resize this enterprise. the postal service is attempting not with a number of mail processing centers which are owned by now most a year or so from now. it didn't post thousands of post office, but we found a better way to get the job done and save money by allowing community to say goodbye to have their posts post is open for two, six hours a day. take a postmaster and put them to work on an hourly basis. they're still provide an essential service. we have trajan make it possible to incentivize boats to try to retire. the postal service is beginning to incentivize people to retire. within the workforce strop from looking at the postmaster general, but i think it wasn't

that long ago we had about 800,000 employees or so in the postal service. today were approaching 500,000. not year that. maybe below and moving lower than that. the idea is to resize the enterprise. the other thing the president talked about last night was entitlement programs, something tom coburn and i have tried to do a lot about. we spend our money for health care in this country than any other country on earth. japan spent a percent of gdp. we spend 16. closest country to assist norway. they spent 52% less on health care than we we do. they get better results. one of the things post office is trying to do is figure out how to get better results for less money or better results the same amount of money. her anxious to hear what she had to say on this, mr. postmaster general to work to make that

happen anyway that does not disadvantage employees or retirees. the other thing is the president talked about the need to grow revenues. he has some different ideas. he can't just be about cutting. it can't be cutting people, cutting services. when he took grow the pie of revenue for our country. i heard on the radio the other day about paul simon song, 50 ways to leave your lover. the postal service says that to mr. make money in the gao here later today, maybe comment on those ways to make more money. we look forward to see how you do that and how to be less of an impediment when you come up with a good idea. last thing i want to say is this. postal employees are going

through a time of great uncertainty. it hasn't been an easy time to be a postal employee. i want to remind them and all of us do most americans are the postal service does a great job. they have better approval ratings that even dr. coburn and me as hard as that is to believe. [laughter] if you're over 85% -- i want to drink what you're drinking over here. >> a disconnect that the combination of not that high and a whole lot lower for us. >> i don't know. i don't know. at the end of the day, i want the postal service employee sued over critical for the work they do. they do vital service, important service and we appreciate the willingness to work with leadership to resize this enterprise. this is a problem that can be

fixed. this is a challenge that can be met and our goal, michael and one shared by dr. coburn is a whole lot sooner than later. for an overtime right now. this is not going to be like notre dame the other night for week five other times were not going into five overtimes. are going to get this job done. that having been said, i'll yield to dr. coburn. >> i want to thank you for your testimony and hard work on this issue. i was one of those who failed to vote for the postal reform bill because i felt it? some essential things required to solve it. i want both of you to know i'm firmly committed to getting a compromise bill that will pass both chambers and doing a forthright. you have a commitment to do that and i appreciate your testimony. >> have a question if i could. sometimes the members testified

they don't anticipate answering questions. i'll ask a question if you have a thought that's fine. i don't want to put you on the spot. the issue of health care and deficit reduction if we don't figure out how to get health care results less money for same money, will never balance the budget. the postal service has acknowledged fully we got to do more than just amortize, if you will, prepayment of health care over 40 years. my hope is in the compromise will change the amortization schedules. that's a more appropriate approach. the postmaster general was sure this ideas with respect to doing what they've done in the auto industry with the uaw and the big three. the big tree said were trying to run a health insurance program.

they thought they could get better results for less money. would you will just react do you think that's crazy or something we can work towards click >> no, i don't this blue sky. we've all had good guidance for the postmaster on whether to do. it's very clear the government can in fact transferred full faith responsibility for health care and a willing racist that's everyone best interest. we have to be realistic. you can't transfer something out but early if they were going to turn it over as general motors denoted did and so beautiful face. i support the idea that getting the government out of the health care business is a good idea, but i'd like to know something because your committee in the senate slightly different has

complete control where we have a big chunk, but don't have it all. the question on health care is the federal government retirement system first or second relative to medicare? this is an import miss you when the federal government has to decide from the standpoint of accountants consider it natural because it's two different pockets. from the standpoint of what would happen in the private sector, and the private sector no company would say are going to pay the bills and if there's anything that people try to medicare. they say medicare's been fully painted by men and women of the post office and we expect medicare to provide what it would provide further private sector and then we will supplement it. this is what states choose to do and a few that are fully in the system, this certainly with the

private sector does. that's one of the key questions for your committee even within eyesight is are we going to look at medicare is the primary for federal workers including the postmaster's proposal and if so changes the calculation of what the ratepayer should pay for what is in fact a supplemental medical facility. that's not the way we put that in the past. that's the reason the number were arrested with this obeyed. >> i've heard proposals of the postmaster and i think and i said to him that i don't have a problem with it has long history of get comparable coverage. you know, it's one thing to go out and change things. it's another when you have on the one hand at the present

system 100% and another system you got 75%. he claims they can do that. if you can do that, that's fine. the two words i think we need to concentrate on, effectiveness and efficiency. and so, if we can affect nearly do it cheaper with the same kind of effect, then so be it. but i think the jury is still out. i believe that he believes it can be done. i'm not going to doubt him, but i'd like for him to show me. let me leave you with this. but think when you will listen to the testimony today, i hope to concentrate on some thing you said. and that is, you know, i'm the one hand we want the postal system to write facets of to the effect that an efficient, to now

adapt to a new world, but at the same time the question becomes they will mention all the things they can do to bring in money, but i know they will be frank in a tuesday when maybe congress is to give them the opportunity to do that. you know, in our committee we had folks that the postal service would lift a proposal for how to bring a new revenue and say no, can't do that. not you, mr. chairman. [laughter] you can't do that, you can't do that. i know the postmaster would get very frustrated. i'm the one hand, fighting new revenue, do things the right way. he goes and tries to do it. don't touch that, don't close the post office.

don't compete against the sky. in some way, we need to get past that and i hope is to listen to the testimony, that's the kind of thing we need to go to figure out if we're going to innovate, they have to have the license to get their do not be hindered by us. >> i love it when we agree. that's good. normally we don't ask questions. >> were fine. >> senator tester, welcome. >> thank you, mr. chairman. i am one of those guys if they don't shut down mail processing center and i will tell you i because it has an impact that you may not feel in pittsburgh or miami or chicago or houston or l.a. or we don't get mail for five or six days. so if were going to have a mail service that will work for urban america come it well better for rural america, too.

we've had many discussions that we disagree. if are going to cut the nose up her face, why don't we just turn the contractor to ups or fedex? is in the constitution which of the service and is something that's worked well for centuries we have to continue to make it work in the future. they may not be before someone spies, but when it comes to senior citizens, rural america, this is something absolutely critical. we don't have broadband where we are cutting service to. so i'm one of the guys that says to make a service on saturday says no. are there any other options? by the way, we have given other options may have not seen results come from the zuckerman nation's recommended. i'm a farmer. the worst thing i can do is give my customers something they don't want a mess is happening world america. i cannot speak for big service

areas. >> if i could respond, first of all, something you and danny ray bourque agree on. >> amen, brother. >> then he was a classmate of mine and he let me know he was going to serve any processing changes in mind cannot. .. >> it's the point of which you have your neighbor, going to a processing center, how long before your next door neighbor gets that mail. >> i agree with that, and i tell you the problem is once it's

done, it's done. once that processing center in wolfpoint, montana is closed, and that letter going to somebody who doesn't have a job in western montana takes five or six days, it's the last time the postal service is used. that's what i'm talking about. >> as you know, senator, the ups very muchments -- much wants to maintain a service because that haul to montana, ups is delivered by the united states postal service. we have a partnership with the post office, the private sector, that's a win-win, but i assure you that we want to make sure that there are safeguards so that what is claimed to be a level of service, is, in fact, verified to be a level of service before any processing center is closed. that's what you need to insist in the bill, and that's i think what that all of us have to make sure we promise in the bill, and i know that alaska has the same concern. they, of course, have bythe --

bypass mailed. i have been to the rural areas. theyed need to maintain is service that's unique, and we have to preserve both of them. it's the right sizing in urban areas of not having, if you will, processing center that see each other and post offices that see each other. it's something the post postmasr wants to focus on, and we think we can have a bill that maintains the service and post offices that are rural. >> i look forward to that. i think you touched on the issues that congressman and i both agreed upon, that standard the service delivery has to be kept competitive, and i tell you what i see going on in rural america with the proposals coming out makes it not competitive, and we count too. that's all. >> senator, let me say this, that senator collins kept this at the forefront, these issues at the fore front of all of our

discussions, and this one who lives in an urban area and has grown up in one, i am very, very sensitive to this. i think when we legislate, we have to legislate all of america. >> that's right. >> and i get it. and i'm not anxious to see our postal service and with all do respect, the ups, but i don't -- i think we can do this. i really believe that. i don't think that we are that far, and being able to do it in a way that satisfies your constituents, we just got to make our minds up to do it. >> i agree, senator. i will just say this. the reason that i oppose some of the things that the postmaster general has recommended is because i -- i don't oppose them because i don't think the postal service needs to be solvent. i think it does. we have to work towards that and try to achieve it. my concern is is that the postal

service will not remain competitive in rural america, and consequently, it will be gone, and that's a real negative for economic development. it's a negative for the seniors, for everybody. we're on the same page, but when i object to the fact some of the things the postmaster general's putting forth that i don't agree with, i'm going continue to do that. >> mr. chairman, two seconds. i hope we understand that the post office can remain competitive with a much lower level of service. the reason we want to maintain the service and guarantee it in the bill is we want rural america to remain competitive, and if they don't get that level of service, it's harder to be a rural american and still compete in the 21st century. we totally support what you want to achieve. >> all right, good. anyone else? senator -- you were here first, do you have anything you want to ask of these witnesses? >> just a brief question for both of the witnesses. >> i'd ask you to briefly have your responses.

>> i'm new to the committee, but what struck me in looking at the ga report because we're going to receive testimony on this report today was something that i think i'm hearing from both of you, you would agree on, so i wanted to get your comment on it, which is the report says if congress does not act soon, the postal service could be forced to take -- meaning implementing reforms to allow the post office to be sustainable that if we don't act soon, the postal service could take daughter andc actions with a disruptive effect on the employees, customers, and availability of reliable, affordable postal services. i see this, many areas around here, whether it's preserving medicare, social security, if we don't act soon on this, the choices get harder. is that true? >> absolutely. i agree wholeheartedly. we have to act. that's why i said from the beginning, you know, we were so close in the last session, and i think that we can get there.

we're not that far apart. we really aren't. >> okay, thank you. >> senator, do you have a question for the witnesses? okay. >> thank you very much, mr. chairman. thank you, both, for being here, and congressman, i just thank you for going up to alaska. i know we had a good conversation about that opportunity, and you got to see what we would call a hub, and then you saw real rural alaska. >> nowhere else do they use hydrofoil to deliver mail. >> that's right. amazing place. no roads, you fly in, figure if it's a boat or what to get to the next location. i appreciate that. i also want to say thank you for your common here in the engagement with senator tester. alaska is unique, and i think you experienced the long flight, but, also, it's not just about mail. it's about food. it's about supplies. without that access and that affordable access, we would have situations out there that people

could not afford to live or survive literally out there so i appreciate the work you both did, especially towards the end. i think we were, like, you know, you could feel the moment, i think, senator carper was constantly reminding us of the moment that we were so close, but clock ran out, and it was what it was, and i hope that we can get back to that, in that broad sense because it's so important for my state, understanding the rural component, understanding the uniqueness of alaska and getting things to places where you just can't get in the car and drive down the street to the next walmart seeing we have no walmarts in rural alaska to say the leastment thank you for that understanding. i want to continue to work with you, through this committee, with the chairman on making sure alaska in the uniqueness of the delivery because that is it. i mean, that's how we get food. i mean, and timeliness with the post office is critical. as you heard, the examples when you were there that when food is shipped in, sometimes if it's

delayed and bypassed mail consolidates, gets it out quicker, that food may come out in a other system, not consolidated, and what happens? it's rotten, spoiled, or can't get to the customer in time, and it's no longer valuable. when you pay, in some cases, for half gallon of milk or gallon of milk $12 you want it usable for a couple days. i don't know if you have comments, but, again, congressman issa, we had a conversation, and then you took me up on the challenge, and i thawfng for -- thank you for that. >> senator, fixing bypass mail is strictly about finding greater figure sigh. -- efficiency. you're right. it's the most efficient way on a per mile basis one could imagine to the extent we bypass mail, our goal with the postmaster is to still make it affordable, to

make it the least cost delivery system to those native islands, rural parts that even in montana they would call rural -- >> john -- jon and i would agree on that. >> exactly. i think we can do it. particularly, we are looking at simply trying to make sure there's maximum efficiency, maximum choice. as you know, the concern that i started with was that i want to make sure that we not mix apples and oranges. there's another problem in alaska. it's not my committee's responsibility. mr. cummings is involved, but we have to make sure when we are done, we empower the mail to be delivered as inexpensively as possible, but we try to preserve that affordable passenger service that is also been intertwined with the same carriers, and that's a

sensitivity that i know you have, and i want to make sure our committee has as we try to find a win-win solution. >> mr. chairman, a last comment. it's unique, and i don't know what plane you were on, but in alaska, we have when you get row 16, that's actually the front of the plane because the other front of the plane is all cargo. that's a unique mix that makes it affordable for passengers and freight, and it's -- there's nothing like it in alaska, and, literally, i was in alaska this weekend. the day before i was ready to go to homer, alaska, the airline canceled total service. we had to switch. there's only one airline beginning into a community of several thousand people, problematic for food and passengers. i appreciate all your work, both of you. thank you. they are first front half is cargo, and the back half is passengers, and in alaska, cargo is higher value meaning it's food, supplies, and you can get easy kicked off a plane if it

means bringing out food or bringing in food, and for our fish products, that's how it's shipped out, and just reminute folks here that 60% of wild cod fish in the country comes from alaska. they are high priority, but they move food so you literally when you get row 16, you should be excited about that. that means you got at least three foot of leg room, but there's a blank wall. that's all the cargo in front deliveredded into it. >> all right, thanks. senator, would you like to -- okay. i just -- i said though when we introduced the first, a lot of times when members come and testify, true in the house, it's a deal, and they come courteous, give a testimony, no questions, and they head out on their way. i wanted to see more than that. it's been that. i said earlier, i love the visual of you two sitting side by side working on the important

issue together, and before you leave, the last thing i wanted to do was quote albert einstein. you said a lot of memorable things, and what's especially memorable and appropriate for today, "inadversity lies opportunity." that's what he used to say, "inadversity lies opportunity." we have adversity and opportunity. we'll see the opportunity and seize the day. with that, sending you on your way. go hour.

[inaudible conversations] while her witnesses are gathering for the third panel, let me just take a moment to express our appreciation for members to our staff on the democrat and republican side. one of the things we aspire to do is have differences from time to time, but i especially like the idea of members working together and staffs working together. we've got a lot of cooperation

to put the panels to prepare for this hearing. thank you all for your work on that. panel number three, third and final panel. i like to say we are saving the best for last, but the other two were pretty good, so we will see. just very brief introductions for a third pml. and then we'll ask them to proceed with their testimony. first witnesses cliff guffey. good to see you. mr. guffey has served as president of the postal union since 2010. we enjoy working with you very much. next we have the sub one. basis up to you -- [inaudible] i asked to introduce you.

we're glad you're here. jeanette dwyer, president of the world letter carriers association. here, right click since 2011? very nice to see you. we've got three presidents here. national association of postmasters. i think your third year. thank you for joining us today. were you from, mr. quadracci? >> wisconsin. >> senator baldwin was here earlier. she has another meeting she has to be at. if she was back in time she wanted to introduce you. i'm hoping she's going to be able to. we are glad you are here and she is so slow. you're the chairman and president and ceo of

quad/graphics, a printed company founded by your dad in 1971. it is your son or daughter going to take it over? >> and three daughters under the age of 11. we have a ways to go. >> you can never start too early. finally mr. geddes at cornell university and visiting scholar of the american enterprise institute. last week you weren't available to do it in dr. coburn said it was wisely thought we should wait and i think you're worth the wait. we're delighted you are here. welcome. i'll ask you to keep your entire testimony, about five minutes. >> good morning, chairman carver, dr. coburn and members of the committee. im cliff guffey and msa have been hard by the cooperation between the parties here today.

mr. innocent american citizen to see how this is plain out. the postal service has an income of $65 billion a year. the chief financial officer reported recently postal service has an annual cash flow of $140 billion. that's one way to measure the postal service to our economy. in addition to the business, support to ordinary citizens. many towns, cities have protested against the closing of mail. the post office is an important part of the town's identity and communication center. many people do not have access to the internet. according to recent study by the pew center, one in five do not use the internet. 40% of american bills do not have broadband access. senior citizens, those with less than high school education and those in low income households are the least likely to have

internet access. for the 36 years before the passage of the p8 ea, the postal service is always changing from a manual process seen operation to an automated operation. to those changes come and spend the world's best postal system. to do this by identity technologies and challenges. the postal service has been well aware of the impact of the internet in developing strategies to deal with it. from 2000 through 2006 before the passage of the p8 ea, postal service reduced approximately 100,000 people, almost 80,000 came from representation. since the passage, they have reduced employees by another 86,000 employees, but the trend to did not change. the postal service is in the middle of a rapid change. change is an ongoing process.

unfortunate the crisis for retiree health and if it is to go too fast and too far. it's on the brink of coming services in ways -- the service by making it less useful. this'll be a tragic mistake and it's unnecessary. calls for privatization would take policy in the wrong direction. universal service has been provided without any government subsidy. privatization would lead to a loss of service. there's enough mail volume to continue to provide universal service. we need to consider postage rates of service can tinea. postal rates are low compared to other industrialized countries. this includes for postal services have been privatized. i read slower. we appreciate the leadership of chairman carper and the problem

caused a predefined name benefits. did $46 billion for health benefits, something more than enough. senate bill 1789 but is made another important change to offer additional products and services. the federal agencies and local governments make services more accessible. it's a number of ways for the postal service to provide useful services to the public while increasing revenues. these include secure digital mailboxes. they provide banking services for people in need of an expensive and readily available banking services. these changes are necessary. we need to preserve post office is for communities they serve. but these changes, the service can provide services in that new services. we urge congress to set the

predefined requirement to have the cap on postal rates and authorize the postal service to provide additional services. the time for action is now. we'll do what we can do to help congress and the service make these changes. >> thank you so much for being here, for your leadership in those comments. president dwyer, welcome. >> chairman carper members of the homeland security and governmental affairs committee. my name is jeanette dwyer and i president of the national letter carriers association, which represents over 113,000 bargaining unit employees. our crack epitomizes the concept of the universal service by providing these services in rural, suburban and urban areas to the united states, including places the postal service competitors do not go. we do this in the most cost effective way.

letter carriers are paid under his systematize salaries to a variety or other factors. particular to individual rows in good times when a row grows, salary increases. when volume goes down, the carrier may receive less pay. were the only postal employees to the postal service. letter carriers to their part to generate new business and revenue for the postal service said the rural letter carriers actively approach businesses on their route you think editors. as of february 1st, 2013, more than $313.5 million in new business for the usps. the nrlca and its members care about the postal service and its service to americans and we are turned about the apparent direction it is going.

the postmaster general sainthood lemonade saturday mail delivery will destroy the postal service. the nrlca does not support this plan, nor do we believe the postal service can implement the plan without congressional action. the post general himself recognizes he could not circumvent congress to implement his plan. the postal service states in its question that in order to eliminate saturday delivery, congress must elect the legislation to deliver six days a week, unquote. postmaster general donahoe has testified twice before congress before the same committee. they're asking congress to enact legislation that would grant him the authority to reduce mail delivery five days. he said in savanna georgia

international convention, before 3000 carriers and their families whether it is a current postmaster general for his predecessor jack potter, both have recognized at the postal service wants to eliminate the day of delivery, they must first seek congressional approval to remove the six-day delivery requirement for the relevant legislation. we share the same concern echoed by senator pryor family then. so why does the postmaster general now believe he can eliminate mail delivery without congressional approval? beyond questioning the legality of the action, there is also good reasons to question the postal service claim of how much money was saved by reducing service. in a recent letter to postmaster general donahoe and regulatory chairman and congressman gerry connolly expressed their concern

with the usps did not consider the impact of eliminating service on rural and remote communities. we believe since they deliver remains a critical strength, that will enable it to grow business in both the revenue over the long run. indeed, the postal service can ill afford to eliminate fixed e-mail delivery. the nrlca believes any savings by reducing delivery days will be offset by the lost revenue that will occur when consumers and businesses flock to the postal service's competitors to have their mail packages and products delivered. less service equals less mail equals beginning of the hand for the postal service. and then there are jobs. at a time when unemployment hovers at 7.8%, this is no time for massive layoffs. we put the postmaster general

should really underestimate the jobs lost when he put that number at 22,500. they would experience a loss of approximately 20,000 jobs. that number could reach upwards of 30,000 jobs depending on availability of work. mr. chairman, the postmaster general was dead wrong when he stood up at his press conference and said he would talk with letter carriers and support the reduction of five day delivery. i can assure you rural letter carriers do not support the elimination of saturday delivery. the nature in which the postal service announced its decision to eliminate saturday mail delivery is traveling. first postmaster general donahoe gave us less than 24 hours notice that the amount and. furthermore, the nrlca has received reports that the country has conduct is standard tax to carriers and employees regarding this plan.

managers have reduced employees to tears with warnings they will lose their jobs. think about getting this news being sent to deliver mail to customers who are surely going to question you about the postal service's plan. this is not the way to manage a business. maintain harmonious labor relations or bolster employee morale, especially in an organization that consistently ranks as the most trusted government agency because of the loyal, dedicated and trustworthy employees who make up its work force. i must point out the severe hardship that would be remiss if our customers and small businesses lost a day to stand and receive mail. we cannot afford to move backwards. we must continue to provide service our customers expect. thank you for allowing me to testify before the committee today. i'd be happy to answer any

questions you may have. >> thank you for accepting our invitation today. president rapoza, please proceed. >> chairman carper, ranking member coburn, i am rapoza can the president of the postmaster said the united states and postmaster in hawaii. last year members of this committee provided a 1789. we recognize the legislation was imperfect but i've had the opportunity to provide the postal service with essential breathing room to restore the postal service to viability and we look forward to joining the two this year to advance meaningful legislation. i think constructive postal legislation, the postal service responded to those challenges that are within our control. at the very least, it is time for congress to pass legislation

that addresses those challenges that congress may have created. this related story leading to disaster consists of nonstop cost cutting by the postal service, unfair congressionally imposed financial obligations and failure to reach a compromise on fundamental differences regarding postal legislation within the congress. one of the most damaging impediments within your control is the statutory requirement that the postal service pre-fund 75 years of retiree health benefits. no other entity, public or private is under such an obligation and 70% of the postal service's recent losses are tied to this pre-funding requirement. cheekiness can down the road has already damaged the image of congress as well as the postal service's ability to provide service that americans expect and deserve.

they have made sacrifices as the postal service attempts to drive down the cost of providing an essential public service. with the implementation of the initiative bonus cosigned, physicians have been reduced and upon completion, more than 50% will offer the public six or less hours of service. american access to post offices will be based on work hours with both postmaster organizations working with the postal service to save universal service by reducing post office hours to earn workhours. convenience and accessibility will be in your hands. let me know that revenue generation must be included and legislative relief. congress should enable the postal service to expand a variety of products that can be

mailed to include wine and spirits and future legislation should authorize greater pricing flexibility within its dominant classes of mail. the postal service must be in a position to capture a significant share of it. it provides a major competitive advantage to the postal service's participation in the partial market. it is crucial they partner with other federal agencies and municipal government in delivering essential government services. for example, we understand social security administration is exploring the use of social security as an alternative paper checks for beneficiaries unable to utilize for those who do not want direct deposit annuity.

the post office could verify identity and residence in the local post office could be worse such cards could be reloaded on a monthly basis. it impacts communities the post office could be the distribution point to assist in relief efforts. sanders, will be a sad day for the american congress, for america if congress is incapable of reaching a compromise and meaningful postal legislation. as we've heard this morning, some due to postmaster general's recent actions as acts of desperation, which are doomed to backfire, while as part of a boat calculated plan for the postal service, and organization of which have been an employee for the past 46 years.

in either case, my fear is that this congress does nothing to resolve their fundamental differences on postal reform, the integrity of our nation's universal postal system, which was constitutionally established more than 230 years ago will be irrevocably compromised. as president of the national association of the united states and on behalf of the nation's postmasters, i used this congress to promptly respond and assist the postal service to provide products and services americans expected mr. and i pledge during the remaining months of my term in office, they will assist them in. thank you for inviting me to testify on behalf of our nation's postmasters, the future of the postal service is in your hands and may god bless you.

>> is also in your hands in the hands of our leaders and those who testified and those who would have a chance to testify. we have a responsibility to provide leadership and we intend to provide that leadership. i think we've heard from chairman issa, they intend to join us. mr. quadracci. pretend i'm tammy baldwin. we welcome you. >> you have actually two senators who also served, so welcome. >> thank you for giving me the opportunity to talk about the impact of the postal issues on our industry.

mr. chairman, as you said, quadratic service founded in 1971. a standard and 69 comments you can imagine i've grown up around it by entire life. ink is pretty much amazing i know a lot about it. i know at the end of the day print is not dead. i know i am supposed to think it is sad because i read about it a lot in print and is nothing further from the truth, but this had challenges with it. at the end of the day, print is continuing to change and that's an important fact that everybody has to keep in mind that how we look at print historically is not how it's going to be used in the future or even now. when we think about comparing to other countries in terms of the rate system we have, from a marketing standpoint, this is

the most competitive i've seen them are operating all over the world. it's not apples to apples to see how it's used elsewhere. examples of how it's changing in the post office is helpful with the advent of things that are qr code, marketers try to figure out all different media channels. the days of approach where you have a print strategy, online strategy or tv strategy are over and everyone is trying to look horizontally and statuses were together. we were able to help customers to product demonstrations so when he saw the product print, you immediately saw a product demonstration, which led to a 20% in greece, says a perfect example of how media channels come together for the immediacy of print to be more important

than it was for the past because the consumer is very finicky. the only media channels they've ever, our smoke signals and morse code. figure it ambidextrous. one of the main points i wanted to make this print is important, but it's changing rapidly and marketers change have you said. the other important thing to note is the post office maybe $65 billion business, but the rest of the industry associated is $1.3 trillion business with a .4 million americans being supported by it in some way or fashion. wisconsin allowed with over 2,200,000 people who rely on the post office for what it is their jobs. what we see is a crisis of

confidence. the rate at which we solve this is causing problems in our business. the uncertainty is fair. i'm not sure what to do. they are trying to figure out where they spend their money and they have it figured out this marketing scheme vm. we had the same conversation and they said about the change in strategy was the number is being delivered. sales on weekends are extremely important to us. so i urge this committee to move forward. i've heard a lot this promising that we do the solutions here because our customers are demanding it in the competition is real and it's out there. and people don't have it figured out, they may move away from a medium that may hurt them in the long-term to solve that problem. the other thing i want to talk

about is the importance of rightsizing meshed, we had to resize their shape. the industry lost 25% of its volume. we ended up acquiring whatever larger competitors because they couldn't keep pace. we ended up closing over 21 facilities to shore it up and make it sustainable. without taking the curse out of her business, without 25% reduction is a reset, we wouldn't run a business today. we believe the core elements talk about today is assuring the postal system has the authority to make those changes to reduce the infrastructure. parameterization for pre-funding retiree health benefit return overpayments to his first program that provided the

managed health care. there is space to pull cost out how much has been talking about who pays for what is supposed to the cost out. we do it at about 25% to 30% last banal industry. so who would've thought managing your health care are paying attention to them they should be part is could be a printing company. the other people working with primary care is his focus are seeing the same things. so thank you for letting me share my points of view. >> dr. coburn and i have a huge interest. the last part you talked about. as i said earlier, long-term sustainability is getting good

health care. to do that will drill down. we're happy to be here this week to look forward to your testimony. welcome. >> is extremely honored to hear you say you saved the best for last. >> does before i heard mr. quadracci. keep me honest. >> i'll try to project. i'll thank you for this important issue. i'm excited the committee is taking this a. the main reason we are here today is because of fundamental and technological innovation in the communications marketplace. i do this story we talk about today is a very old story of industries that either adapt to major technological changes where they end up being crippled

as a result. postal services in the long-term can go in the horse and buggy for the automobile for the old slide rules some of us might remember in the age of the calculators. international experience is far ahead of the united states regarding how to tab to change is extremely helpful to what we can do. the technology we work as communications for the close substitutes, including e-mail, text messages, telephone calls, things that come down the pike pretty soon. this is weakening. the core reason for the postal service's current legal structure and is really reason for being delivered at the first-class letter. a recent example of technological change than many of us are familiar with this netflix, which used to send any

first-class dvds to the mail, moving to streaming video. first-class mail volume has declined by 413th since 2001. this is a big issue for the postal service because letter mail us by five and most profitable project. they make three times the amount of profit per piece on first-class letter mail that they make on a piece of standard or advertising material. that's really rather profit is. there is too broad postures for reactions that one can have to such a technological threat. one can either shrink from it and try to say we're going to downsize in reaction to this or you can embrace the tape knowledge and try to innovate in response to it. i believe the first approach which is that the postal service is constrained to do now with alien fortunate for the postal service.

unfortunately, however -- for chile sa noted a substantial amount of experience in the postal sector now shows that he take a second approach you can embrace the technology, dynamic, with changing your innovate as a result of this postal sector is in a number of countries have evolved in the dynamic industries and cooperation between a whole different group of units. i want to emphasize fiber line of downsizing in the is going to be hurtful to the postal service. first of all, there's a natural limit to how much you can cut costs without sacrificing the postal services core asset, which is universal delivery network that allows it to take a physical piece of mail to the household the last mile. they do that six days a week. that borders on america will at the postal service is able to achieve that. the second thing is that her for

15 years the reason we need a monopoly is the idea is that a bigger entity can provide this service. so you want one entity doing it. economies of scale work. the cost per unit of the latter is going up, working against you. i view the postal service caught in a base right now between declining revenues because this economy of scale in the other. it's really a problematic approach to say we're going to shrink in response to this new technology. however, the international experience teaches us if we forget our postal sector in meaningful ways, we allow it to operate more like a regular business, which is an extension that created the postal service until the postal service to upgrading my business site

action. let's take the next step and adopt those laws that would allow it to do that. it can be self-sustaining or even profitable. some policy can liberalize and made a sound business decisions to be innovative and much purgatorial in these existing delivery assets to create more economic value to customers with existing assets. they can even thrive in the electronic age. all members in the 298. sweden repealed in 2003. germany netherlands repealed respectively. competition is hot postal services become more efficient and focused enterprises in the freed up their monopolies because they realize those entities are not going to get commercial freedoms they need if they retain monopoly over the

core business sector. as a host of examples i could give you. to allow private investors to help needs years ago that acquire dhl in 2001, which oppose dhl on the delivery side air in 220 countries and is now the world's largest courier country. new zealand post is widely considered to be one of the best run companies in new zealand. there's no reason why if we take this cue from other countries, the u.s. is behind the end of the pack at this point that the u.s. postal service cannot become a player and a leader in carrier businesses. liberalization and give it the ability to attract experienced global talent and focus incentives and give access to additional sources of capital.

baluchistan with an analogy. economists have said the difference between competition from another competitor versus a new technology is the difference between breaking the door down in the door is broken down along time ago by the internet and what came as a lion and that's the internet. that is calling up a whole bunch of industries, including my own, massive open online courses. college courses for free. cornell has to adjust to that and we are trying to figure out how that is going to affect our business at cornell. the postal service seems to be given that freedom to adapt to this neat technology changing the landscape landscape in many businesses. i hope to be the focus we taken

this and not simply worry about this cost or that cost. thank you and i look forward to answering your questions. >> thank you for making us think outside the box. how to thank dr. coburn for inviting you. i've been joined by a new member of our committee from north dakota. i went to recognize when it comes to make. >> a brief comment is providing i was unable to attend the whole hearing i obviously have great concern particularly about rural delivery. what happens when the economy when you eliminate the monopoly, the economy still at work economically in your favor for the guy at the end of the line and we know and i'm sure the people here representing the

rural carriers know the importance of that as a social connection for a lot of people as well as connection to commerce and business. for he appreciate your comments, mr. chairman, my concerns are going to be how do we continue to deliver what is mandated in the constitution to those people at the end of the line and how do we continue to have a viable post office in light of these challenges and i really appreciate the opportunity to hear this part of the power to deliberation of the committee. >> were just happy you're here and we appreciate the fact the u.s. much is anybody will be presiding over the senate. so we can work on this together. were going to get this done. thank you. i want to go back to

mr. quadracci. he talked about health care. i was broke up with employers talk about how they get better health care results for less money and move from what i call a stove pipe fee-for-service delivery system to coordinate delivery of health care and really smart to be able to incentivize personal responsibility for health care and focus on wellness and prevention rather than a sick care system, but having a health care system. here's part right. maybe we can learn from your company and take them too hard as we postal reform. please take a minute or two to tell us what you're doing. >> 23 years ago caused of health care is going up too fast. imagine today. what a concentration --

>> roughly how many employees you have? >> 20,000. about 7000 in wisconsin. while we did is brought it back to the future, which you have your neighborhood doctor bring them in a must start seeing them there and it sort of evolved into the whole wellness programs, but really it's about preventive health care in the primary care to her in the middle of the circle and being the quarterback of what has to happen here and it's also on the above maintenance. it's about enlisting should be engaged to be a part of it. there is one in senator coburn's backyard in oklahoma city. it is a full clinic. ripper on ophthalmology and the longest time you wait his five-minute in the shortest time you see is 20 minutes for a

hangnail because so use it as an opportunity to reconnect and find out what's going on with you. that dialogue and family lineage wraps together to the health care provider understand what's happening. instead of spending five minutes complaining about abdominal care into order $500 nra would work together to mishap and its aunt millie, that information is incredibly important and over the next couple of months will design a program that ends up as opposed to starting with one in my dock or they are told me i'm the sole practice the agenda he would have been fired and he would have been told to get the mri and will go on to the next test. it's incredibly powerful with 22 years and now are doing it for big companies all over the

country. >> there may be some lessons learned and just with respect to postal employees, before a federal work force for less money are the same amount of money. i want to turn if i can and i asked earlier of the postmaster general. give us your three best ideas for generating new revenues. we know it just can't be cut, cut, cut. how do we use this enterprise to be able to generate more revenues. had to review your leadership position, give us one good idea for the postal service that can actually generate significant revenues. >> being from a rural place in

oklahoma, when i wanted to change and enroll in the key benefits for veterans, i have to drive to muskogee, oklahoma. .. and. >> caesar whatever.

that is when you get your change of address card in 20 different spots. i just think as a witness testified we need to embrace the changes that are coming and find out -- if we are going to have brick-and-mortar there is no reason for six other agencies have rick and mortar and in the same type of thing and there should be a way to find as i said in previous testimony the post office where the flag flies in the burr communities. and to invest in this work well so i would think you could save costs and money by putting those activities into the post office. >> thank you very much for those ideas. >> the post office has done a lot of things right recently. parcel delivery and going after parcel delivery. we need to compete with fedex and ups and real-time things

that we can give to our customers. those kinds of things are the kinds of things we are reaching out and willing to work with and do that. we deliver 30% of fedex on the ground. we are delivering a significant portion of ups partials -- parcels. we need to be getting something for that and we don't know what we are getting as far as money but certainly we need to capitalize on ups and fedex. we go where they cannot go. we go where they do not want to go because it is not cost-effective for them. the last mile is something that we need to be building on and parcel delivery and working to go towards that. >> thanks very much. for some folks who may be watching most people don't know this but one of the nice things about the postal service is they go to most mailboxes six days a week and are able to partner in

some cases with fedex and ups and get paid for it. a smart piece piece of business as you suggest we want to make sure they are being appropriately compensated for it and we will have private conversations about what is happening. i don't know but it's our job to mandate what this is and what those relationships might be but it's something to build on. thank you very much. >> we need to partner more with the local governments. there are other things we can do such as licensing and motor vehicle transactions and what i mentioned earlier but the social security cards. we missed the opportunity on the package business by what we are focusing on, the package business is the delivery portion. we should be looking at having areas in our post office where they can package it and then ship it out from us. we are just looking at the back and so we should take a broader look at how we can get these companies or how we can get into

the wrapping of the packages and then put it out into our system. thank you. dr. coburn. >> well thank you. one of the things that mr. dwyer says and i would like for him to restate it, he said the eliminating of saturday delivery could destroy the post office. i think that may be a paraphrase of what you said. would you explain why you think that and what do you see as the events coming about if let's say it happened on august 5. tell me what you see happening because of that. >> let me say them and make it back to something else i set my testimony. less male equals the beginning of the end for the postal service. services with the united states postal service is all about. in eliminating that day of delivery takes away our competitive advantage. there are companies and there are people who will pounce on

that. they will be more than glad to give that one day of delivery. the problem with that sir is they not only take one day of delivery, everything they have been mailing through the united states postal service now walks out the door. >> who are those people? >> there are plenty of people out there. >> give me an example of somebody that you think is going to do that since to build the infrastructure to get the last mile is so competitive, the two smartest package delivery people besides the post office have decided they can't afford to build that infrastructure. tell me who can build that infrastructure to continue with that? >> i can tell you who would do that right now but i can tell you that data does not tell you what walks out either. >> let me ask you the other question. if the services that important why are we delivering on sunday? i mean, taking your theory -- to

let me finish my question here for a minute. eliminating saturday delivery, there is no question that when it was studied by the gao when it was all eliminated in finish of the savings, if you do parcels on saturday, if in fact your theory is right than what we have to be doing is gearing up to deliver on sunday. and so, but i heard nobody testified in four years from the post office this says we have to go to an additional day of delivery. my real question is, i don't see anybody out there with the capital available to build the infrastructure to go the last mile. and i think there are some real data to say there are some savings whether it's 600 billion a year, $600 million or

$2 billion a year in terms of doing that but there is nowhere in the constitution that says you will deliver six days. nowhere does it say that so the question is, i understand the concern, and i can certainly see it in terms of apparel to the letter carriers because of their compensation. it will impact compensation if we eliminate saturday delivery, will it not? >> yes, sir. >> and so that -- and i have one other question for ms. dewire. >> can i finish answering that one? >> let me put this point in you could do want, how's that? mr. guffey testified they support the post office's ability to have great flexibility. in other words if they see a spot where they can raise the rates they shouldn't have to wait to go through the process and should capture what is of value based on their service. there is a point where increasing demand for succinct

reasoning pricing -- to do the rural letter carriers support that philosophy by the post office's ability to do that? >> yes. >> answer how you want to. >> can i do that? we have a pilot program at amazon which would be seven days a week and we are testing that right now. the problem with all of this is all you hear is negative publicity. we don't hear any positive publicity about the postal service. you don't hear that we are doing seven days a week. all we are talking about is how we eliminate. how do we slash and cut, not how we build and go to the rules committee and not how we support the people who are working and chairman issa said we take it is a bad thing that we have job loss. yes sir, we do. we have 38% part-time employees that work on saturdays and replace a carrier during the week. their jobs will go away.

those are middle-class jobs. those are minorities and women. those are veterans and the postal service has approximately 25% so yes sir we do care about jobs. >> senator heitkamp i'm going to give you another shot for anything else you would like to say, anything you want to add or take away. >> i do want to add to what you have been talking about in terms of the synergies between print and other forms of media and how eventually people are going to catch on how important print is too reinforcing an advertising message and reinforcing political messages. we saw obviously latta printed my state so my question to you is you know the timeframe and a

direction because it seems to me that one of the things that the post office has is the ability to meet the six day requiremerequireme nt and the ability to reach every person. television doesn't do that anymore because television, you get cable and regular service so one thing that the post office is universal and that is their marketing niche. if they lose that marketing niche they lose their value to you but we need to know how we can and when we can see that kind of click in new marketing strategies that will again bring back some additional business to the post office. >> well you are seeing it and you may not know it, but at the end of the day when you think about what is good about print, it's a passive medium. the old adage put the right product in front of the right person at the right time and you

may get something. the problem with on line is it is more about search and active participation so from a marketing standpoint print is really powerful for keeping people's attention. what marketers are doing today, we do a lot of virtualization so you have the efficiency that maybe you are doing a million versions of that catalog to 1 million people. maybe just bundle change here in one little change their neck creates a response. it is proven and we have been doing it for years. now what's happening when you think about global technology as the example i showed showed you before work to mediate you no longer have the break in the chain where you get that impulsive, oh i like the product and now i have to remember when i go on line to look at it. now it's immediate and you can make things happen. it's already happening and you you will see some things that are subtle and some that are not so subtle and really respond.

i wish i had a crystal ball as to what the timeframe is but it's really the consumer. >> if i can just follow up one more point. >> i don't know, you were pretty junior. [laughter] go ahead. >> how was the lack or loss of universal delivery effect that outcome? >> you know, i think, i said before that with the new channels abroad is a degree of need for immediacy in your marketing channels and my concern, and we have different categories of customers who will be affected in different ways on the six day to five day. some agree and some don't so i'm not going to pass judgment on that but what i worry about is how print will be used in the fact that now with some of the technology we can pull print closer and make sure it has a multichannel approach. it can start to degrade that and

so that is why i said, i put some caution out there not about what we do now but about how this is evolving in the future because the immediacy of things is really important to markets. >> thank you. >> i had one other question for all three of our president. you heard mr. geddes' testimony about what's happening in the rest of the world in terms of postal organizations. what is your gut reaction to it and what you think about it? >> a couple of things. the idea of allowing the postal service more freedom to do things is a good idea. i think when you start comparing hard national delivery systems from alaska to florida from maine to the y and islands universal cost and you start talking about new zealand, it does not --

the same thing with germany. if you look at the size of germany and the real system. the postal service used to run their rail system. they would have a high-speed rail throughout the whole country. time ways they can put the mailman trained. we don't have that in this country. germany has universal health care for everybody in the country. we are paying for health care. which is something else i would like to mention real quick way. the postal service's plan, they want to take us out of the opm health care. the oig, inspector general of the postal service looks at that $63 billion would save over x amount of time and 37 billion of that or 42 billion of that excuse me would go directly into medicare shifting costs and to medicare and taking it off budget and putting on budget for you guys and you have to match that 42 billion from somewhere

and another $13 billion would be transferred to the workers. i think they're a means for us to sit down with the post office and negotiate some kind of single-payer plan within the postal service without going outside and without transferring money cost to the federal government. >> our country, the united states of america is the most affordable postal service and the world. when you compare us with other countries they certainly are more expensive than they do not deliver to a universal network. we have south dakota, north dakota, montana, those states in rural communities throughout this nation that depend on the united states postal service for an affordable postal service and i think we don't need to get away from is it affordable and is it affordable for every united states citizen? i think america has a history of caring about their community and

i think that is what you have got to look at. can i say something about the health care on the health care issue, i agree with what he said we have looked at that plan but our letter carrier plan we have 96% of our membership under medicare a and d. the postal service and their financial predicament today can get the money to pay the claims for those employees who would file claims in the health care plan. >> mr. rapoza? >> i agree with what i've heard here but we do have the best postal service and the world. we are going through some turbulent times now because we are so used to adjusting and now with a decrease that we are going to adjust them when we are done with all of this the other countries will be looking at us

and how we can continue to maintain universal service with low cost. i would stay with what we have. what i take from this is one of you all have missed one of mr. mr. geddes' main points. you can downsize and i would love to get his response to what he said. >> thank you senator. i naturally respectfully disagree with my fellow panelists. some of these countries that have liberalized and new zealand is a sparsely populated country, the population is concentrated in christchurch and a few other cities. it said lee concerned about the citizens that live in the more rural areas and they been extremely successful. australia has a population the size of the lower 48 states.

it's extremely rural country with a very concentrated cities. one thing i would like to stress senator and with regard to senator heitkamp's remarks is the link in the notion that we have to retain a monopoly in the state-owned enterprise structure to ensure universal service is simply false. it's just not true that you have to do that. you can ensure universal service in several much more efficient ways to enter a governmental monopoly and i've written about that and some other venues about bidding for routes where you bid on the basis of the low subsidy you will accept. what that does is inject one of the most powerful forces in economics in one of the most powerful forces for social good in the equation and that is competition. you can include the postal service and you can include ups

and if you liberalize the factor you can have many bidders. it's non-sequitur to say that we must retain two monopolies. we haven't discussed the dell box monopoly that there are two monopolies in the united states plus government -- government ownership structure to ensure universal service and in fact i think the universal service would improve in we could more precisely defining consider the standards to enforce contractual arrangements if we inject the competition into each equation. as i noted all 27 countries that are members of the european union including hungary have repealed their post-monopoly. they are just as concerned about universal service as we are but they have gone through this whole process 10 years ago and they made that decision. >> i would like to thank all of our panelists and appreciate you being here.

you have heard both from the chairman and myself say that we are committed to try to fix this problem and we thank you. >> i said i would do the benediction so that is what i intend to do. the chaplain is here and -- he reminds us all that the cliff notes in his testimony that a goal as is a goal. it's not just the cliff notes in the testimony that catholic protestant jewish muslim and almost every one of them you find the golden rule. that is something i use for just about everythineverythin g i do in the same mr. right thing for all of my colleagues. i would like to say as we go forward it's good to keep in mind picture we are treating our customers, post-office customers the way we want to be treated and make sure we are treating

the employees of the postal service the way we want to be treated and try to make sure that we are treating the taxpayers of our country the way they would want to be treated. the postal service has used up its line of credit with the federal government. when talking about the role of government i'm a recovering attorney and heidi is a recovering governor but one of the things i say, senators don't create jobs. governors don't create jobs and presidents don't create jobs. what we do is create a nurturing environment for jobs and part of that nurturing environment is the postal service and the ability to deliver six days or seven days a week some of the good services that are needed and demanded. but the heart of what we need to

do to be part of that and are chairing environment is to provide certainty and predictability in the postal service needs to be able to offer that to their customers. and i think employees as well. one of the best ways to grow an economy is to provide certain predictability in the postal service and i leave this hearing today not discouraged, not ready to throw up my hands but he needs. i was encouraged and there's a good spirit in this room and there's a good spirit of cooperation within this committee. i think we have got a lot of partners that are going to help us solve this problem. our society changes and the world changes in which we live and operate. we are going to solve it for now and hopefully put it in place so is the world changes in the market changes and the people change we will meet those needs.

for all the folks here today the first panel in the second panel we appreciate very much your input. again as i said earlier we are in overtime here. we didn't get the ball in the end zone and went into overtime and i'm not interested in two or three or four overtimes. i want to get this done in the first overtime and provide that deductibility then we can move on to cybersecurity, immigration reform and a whole bunch of other challenges that we face. it's been a good day. i said we would he done at 1:00 and by golly it's 1:00. with that, this hearing is adjourned. thank you al