thank you, mr. chairman issa and ranking member cummings. they are taking leadership role and pursuing reform thatted would lead to the financial stablization. in some key respect the draft are close and others they there are disagreement. it's my hope and the printing and mailing industry will lend strong support to earn bipartisan approval of the necessary reform. my company graphics has grown over the past forty years to one of the largest printers. of other support facilities

across 28 states. and i want to be clear that we are believers in print. we believe that print is here to stay but it is e volving. we worked with the postal service on innovative ideas that entail things like mobile devices qr codes and interactive print to make print a more viable part of the multichannel world. and so print is here to stay and we have to make sure we have the ability to deliver efficient manner. what is at stake here that the postal service is a $65 billion business supporting a $1.3 trillion industry that provide $8.4 million americans all of which accounteds for the it is about deciding whether or not we want to have the post office self-funding, sustainable, or whether we want to offload the problem on to the taxpayers. in term of decline and involve and access capacity.

pricing in 2007, the significant increase that happened then along with the recession lead to a permanent reset within the printing and mailing industry. the last rate increase before the cap was in the implemented in 2007, which was double digit in size lead to double dejt decrease and volume. on heat of the case, the great recession continued rerogues of volume out of the volume of not only the post office but our industry. the too command as price increases will not provide additional revenue but further erosion of demand. access capacity are the problem it must be fixed. the postal service has the

capacity to produce approximately 300 billion pieces of mail. the projected volume in 2013 is closer to 150 billion. this is an unsustainable fact that leads to fast outweighing the actual demand. if they removed the cost delivering them will be closer. quad graphic has a love experience. when the great recession happened and the industry lost the volume, because we had a strong balance sheet and strong business we were able to take advantage of it. we were about $1.7 billion company we acquired a $3 billion competitor who had gone through bankruptcy and lots of issues. we knew that the opportunity was cob sol dedication because we knew the industry had to. there was access capacity. we took on the hard work of closing over 21 plans throughout our networking to make sure that we have the remaining business the resulting business of the combination would be sustainable on to the future.

the private sector economic activity is at risk unless. congress act to ensure the postal service is sustainable. the postal service reform cannot wait until the last minute as it hurls toward insole vent sincerity. the crisis of confidence is already costing the industry customers and volumes as marketers decide how best to spend the advertising dollars. fear of large increases in price will scare volume away. our industry changes rapidly customers in the postal service need to be nimble and flexible. they must be allowed to make the business decisions that are necessary without artificial con straibt in order allow it to happen. for the reform need to be legitimate we agree there need to be six key provision of it. to stream line the operation to rise size the capacity. maintain a postal rate structure with cpi cap. change it in five days and

something the industry hasn't been clear on. i think we feel in conjunction with the rest of the reform we're willing to support five day deliver i are and can adjust to it. a return to the u.s. passenger's side overpayment to the federal retirement system reamtize from ten to forty years without impacting what is due to the employee and provide the u.s. passenger's side the ability to shop different health care benefiting. something they have experience of doing. and our cost happens to be 12020 to 30% lower of all industry. there's not only shift things. i thank you, mr. chairman, for the time and i urge you to move this along adds we are at the stage where our customers are concerned. thank you. thank you. thank you for adopting senior member cummings proposal.

especially using the demographic. i think that's a huge step forward. the postal service was not broken in 2006 congress passed paea. as consequence of the legislation is nearly broke. but t still to the broke even today it delivers mail to every address the united states and delivers six days per week at less than half the cost of mail and other industrialized nation. as a matter of fact, we looked at england, england is.6 of a pound. it's a dollar a letter. there are no discount. i think the discounteds are appropriate and taken whole postal service everything is operating properly and needs to be some adjustment to save this grand institution. congress needs to legislate to remove the burden of health benefits prefunding. that and few other changes they can continue to provide excellent and universal service to the american public. individual mail processing plants and post offices should

not be judged in isolation. they are a necessary part of the universal service networking. like the point out that over 250 plants have already been right sized. we're to the point now where the more right sizing that we get, the more the mail is delayed. in other words, if the mail is delayed two or three day, by going other plant and getting to the point where it becomes loses the value to the customer and we lose the opportunity to keep the customers that we have now if we keep right sizing. right sizing is not wrong. it's not inappropriate as long as it doesn't damage the product. the product needs to be universal service overnight or two days at maximum. small officers were the mail is going is just as important where the mail begins. without the networking none of the networking pieces will work. all the pieces fit together. cut backs due to financial

pressure cause a severe cut in service. the situation will only get worse if postal manage system permitted to course. the could be as little as $46 million. although this may sound like a great deal of money. it's only about poe l revenue. more than open mystic cost savings are build on retick lousily high activity increases. i'm sure the member of the committee have seen numerous press account as i have that report strong complaint from postal customers by about delayed mail because of the networking consolidation. we received an article today about the fact that corporations finances have been damaged by delay mail. their account receivable are not receiving the money in a proper time frame. mail is being delayed more than

the postal service thought it would be. when the mail processing facility is closed. it's stoant a back to the original processing. for an on time delivery. in places they try to discourage. it mailers cannot do that they cut off mail and delay it a full additional delay. they delivery standards where the postal service is intended to delay mail one or two days the actual effect is greater. the postal service plan to deliver tuesday's mail on wednesday or thursday. often it doesn't get delivered until friday. mail intended for delivery rate in the week is not being delivered for the following week. these are unnecessary cuts and sf to the public. congress should require it provide overnight delivery of first class mail and local delivery area.

congress should reject the proposal to create a new class of business mail. the -- congress should not require the changes that postmaster general is asking but allow it.

or what they're going to unveil next year. that's why we are careful and addressing the legislation now. let's get this done. these guys can plan what their going 0 to put in the system. we continue want to -- if we can d then a lost 20% volume. in a sen we would have 20% of the letter carriers in other words there would be even though it's not allowed on the current collective bargaining. 20% of letter carriers would have nothing to do and 20% of the volume -- wouldn't that be true? >> if we lost 20% of volume. it would be devastating to the finance. i want to understand from labor stand point if we want to maintain the maximum number of efficient workers in retail operation, and carrying the mail to every point in the nation, the maximum number of people

being used is based on the maximum volume. isn't that true? >> that's true. another means to help reduce the work force to match the current volume and keep the price low or as low as -- for your union and all the other training. of course that's what has been going on for the last ten years. the union reduction and productivity increasing in consolidating the plans. okay. when you sort of sneered a little bit. just a little, about the money savings if indian correctly what you're saying is you would like

to have an active role. you're not objecting to the postmaster finding ways to deliver the same amount of mail with lower total costs in maintaining that volume. well, it may be done in lower labor and i did nation. lower cost. we have done a lot of that in the last contract. we saved them $3.5 million. i talk about raising the rate i'm not talking about 120%. i think i would say just as much as -- >> i want to just look at -- or even if you did all of the maneuvering you could do under current law it would still be on 4eu6d billion on revenue you are losing more than 12 readjustment of retirement. it to me that's 20%. you have to get it from somewhere. if you don't get it the american association mailer you have to get it from somebody else's mailer. there are reductions we're talking about here in

refinancing the long-term health insurance for the retiree. >> right. >> talking about -- all of that is on the table. absolutely. >> it would not throw all the cost save pings. >> okay. i want to understand the point i was making. hopefully all three of you are going agree. the last desirable part of any reform is the rate increase that drives down volume. is that agreed? >> that's the last thing you really want. if you can find savings without incoming cost savings you can find savings without reducing those things which drive people to use your service. that's the best solution. >> correct. it would also include the fact not slowing the mail down. it would drive -- the committee is very concerned about all the quality of service. the quality of sf. we want to find it and make sure the final legislation provides the guidance that is going assure quality of service.

understand i flew to alaska and i understand their need for a certain type of delivery. they are less concerned about speed. others are more concerned about time perhaps than whether they can get a can of coke or case of pepsi. a mr. ranking member,ic it would be better when we pick you up when we come back. i want to thank you you all. we'll stand in recess until after the last vote. [inaudible conversations] i was intrigued we've had the discussion before and i've been very willing to give you that

jurisdiction if we can. whether we are working on a government wide attempt save in health care cost. the question i have if we were -- again, i'll be back in a minute, i'm sure. if we were to give you that authority, allow you to do it, and essentially give you back both your prefunding would the federal government be off the hook in if so how would we eliminate the liability iflet say twenty years from now there wasn't enough money and ultimately people retired postal workers look to the federal government as the bailout. you might remember the railroad retirement. >> we, mr. chairman, we are put together a proposal on the health care. what we proposed we would take our plan over postal service

wide, the key to success that plan would also be able to be recover the retiree. we had discussion with the union service. there's been discussions that e tried to organize that. because there has been an concern for the employee not -- from my perspective, we're okay to as long as we get the saving. the savings which is key to us. it. i could put a chart up here. >> sure. yes. >> if i can explain this chart is the key to thed billion savings. if you look on the far left, you see that representative -- represents the average health care cost for 65-year-old and older on postal service retiree. we pay 70%. they pay 30%. if you take a look at the con

ciewnt bar on the right, the largest bar. that's represents the where we are from the funding perspective right now. we have done about $49 billion in the bank with another $46.9 billion. so $96 billion. we are required to make this -- we are required to make these payments because this is the most affordable plan that you can get existing in the system right now. the next column over. >> i'm going to cut you -- one sec. it's at least under consideration to move the entire federal health care -- health care benefit to one that would put medicare in a position as you were talking about doing. >> that's excellent. >> if we do that with the entire

federal work force including postal workers, if i understand correctly it will take a substantial portion -- >> if you a, b, and d we pay for everything now. the mailers pay for the postage money. what happens is the farthest hndz you can see we would a small surplus. we would have completely prefunded e.g. >> we'll followup more on that. i i want to make sure indian. our committee controls the federal work benefit. we are working specifically at the rehabbing member here. i know, he would chime in positively. we are making sure federal government on behalf of federal employees do not pay more or less than lockheed martin, ibm or private sector company. currently as you have said, and

we fact-checked it. the federal government is more generous to the savings not of the federal worker, necessarily, but of medicare which means we're not properly standing. as you have known since the '0u78 all workers paid in to the system. they are fully vested. >> mr. davis, are you ready to go? it's my. >> thank you very much, mr. chairman. let me thank you you and the ranking member for moving this to the point we have actually gotten legislative initiative to take a good hard look at. i want to thank them for being here and testifying. we talk a great deal about the quality of service that is provide.

let me ask you, could universal service be may be contained when the service standard requirement are a created through unilateral are done by realizing of the networking that is mail networking and -- there's the claim that we lose $25 million a day. is that an assessment we are pretty comfortable with? >> thank you, congressman. let me first of from the on the sf standard. we measure first class mail, commercial periodical. our people were doing a tremendous job and right now everything we measure is showing us an all time service level. that's from taking the mail all

the way through delivery. if all the consolidation we have been doing the people have been doing a good job. one of the things for next year we are looking at the system to figure if there's a way we can maintain current service standards and continue it make the consolidation to absorb in the excess capacity we have. that's the balancing point. no final decision has been made on that right now. we think that as we run through the first set of consolidation and we found the service level held high. we check it with the customer and both send mail through the blue mailboxes as well as the commercial mailers. as far as the $25 until a day. that's a number we have used based on the fact we have we had the loss associated with the prefunding. if you check today, this year we're going finish our finances

approximately -- just approximately about a million $s better than in the beginning of the year. we had revenue increases especially in the package business. we have also been able to work and take advantage of the negotiated contract with mr. duff if i and other union leaders and able to reduce the rate of pay with the employees. so that's helpful. so it's a little less than the $25 million a day right now. thank you. >> thank you. let me ask you a little bit about five-day delivery discussions that we've been having. have you asked for an updated advise i are opinion on the savings of piewfing to a five-day moved delivery? >> the last time we had the official discussion with them was last year when they came out with the savings statement of $1.7 billion. we think it's a little bit higher. there have been other adjustments made, as you know. we said we would deliver

packages especially medications on saturday too. >> are we currently losing money on saturday delivery? >> well, you could -- when you take a look at universal service you could look at pretty much some places you always make money monday through saturday. and other places as far as it is to goat place you're going lose. from a fairness perspective, that's why we have made the it on saturday. it's the lightest day of the year. the lightest day of the week. it's the day of the week where we are fewer businesses open. in order to maintain universal service to hard to reach places across the country. we would go with saturday as standard for everybody. >> well, let me just quickly, mr. duff if i. -- continuous decline of mail volume, do you think that eliminating the postal monopoly

would create a serious disadvantage for the postal service? >> i think it would create a serious disadvantage for the american public. keeping the monopoly on the mailbox is what keeps the postal inspection service able to follow through and investigate with lost mail and what have you. other people have routine access to i think that would key or it your -- the postal service to have the universal service needs that right. if it doesn't have that right. that will deor it rate very fast in the country. >> thank you very much. thank you, mr. chairman. i yield back. >> i thank the gentleman. we go to the gent gentleman from texas. >> thank you very much. i appreciate you being here.

i'll start with -- [inaudible] all right. there was some testimony earlier on, i'm sorry i forget that as a result of some of the consolidation and maybe part of the question. there have been substantial delays in getting product delivered. have you noticed that? your experience and customer? >> i would say over the last two years perform has been before the than it's ever been. a couple years ago they put in a system to monitor perform. i want to be clear i'm speak about catalog and magazine and district mail. we haven't seen the disruption as they have -- we have better visibility to get the destruction and cat them quickly. it's actually been quite good.

we're talking a lot about giving the postal service the flexibility to give what they need to do to be competitive in the 21st century. the bill that you -- the draft legislation do we go far enough? do we give you what you need to go that? it's our intention to press for -- we think that what the bills do in term of the helps. give -- you would be looking at overall health care federal system. i would strongly encourage that. i would strongly encourage a good deal of competition in those systems and bring the prices up. we know we are paying too much now. from that perspective we think it's good. we like the fact there's a six to five day considers in there.

we would also like to encourage the continuation on flexibi with govns and -- govern innocence and pricing. >> can you explain to us why mail volume is going down, and whether or not you see any way of turning that around? . .

>> it has cost us $14 billion a and the other areas that we are worried about bills and statements we have done a lot of work. >> with respect to the proposals of chief innovation officer is a great idea. >> i do. we pride ourselves on the innovations reordering now a and we worked very well to listen to our customers

people come up with good suggestions. >> with a drop of volume of first-class mail but if this is still hindered if i put a piece of mail in the mailbox at my house and didn't corpus christi within the next day would that accelerate? >> we would if it was three days sid real looking at that to see how to strengthen that to maintain overnight service. >> suze areas of cost savings with innovation in above a and beyond. with those efficiencies that we can find and you and your

folks get behind? >> there are some opportunities at this time something that we recognize the problem a and we think there is opportunity to sit down with the postal service to put something for the cost of the retirees it is not fair for the postal service to pay the full cost of the health insurance plan for some of that will get most of the services from medicare. we recognize that but because if that goes into the health care system so griffin this dynamic there is a shift of cost and

meeting that balance is something that we can do that all the unions can get together we don't want to be required to do but. >> i realize my time is expired. i appreciate it. >> but i was explaining what i was doing with also talking about what you propose that is one of yours >> now we go to the gentleman from california. >> boy am i tired. >> you need to know the shortcuts. >> i am learning. >> of a like to thank the panel for being here in answering questions but

according to the congressional research service postal service employees otherwise most employees make up 22% of the federal work force a 40% of the cases recorded could you explain why the postal service accounts for such a large percentage of federal workers? >> number:the work is hard work. an end to you have letter carriers delivering mail if you go into the plants at the evening they represent the people is a hard job h1

negative and your feet to $8 per night we're proud of the fact over the last 10 years we have been able to reduce workplace accidents measured by illness and injury rate by 50 percent to take a look at has what has happened we have a high injury rates we were able to push those rates down. >> so even in the most automated times we have ever seen in this country the postal service has a manual intensive as postal workers go door-to-door in addition we still have people who are in a warehouse situation moving goods.

in general i would assume that organizations are doing the intense kind of work we be given the office setting. also been next question is does having the higher than normal injury ratio the efficiency? >> yes. that is what every focus of and reducing the rates because an accident has a cost with the short term but also long-term injury you could carry the back injury the rest of your life so we try to reduce it. >> you mentioned the mets did you have taken as a department such as ergonomics. what does that mean?

>> if you think about a nightly basis working in a certain machine learning people to stretch better so if they move things they don't have a tendency to hurt themselves the and you can employ pieces of equipment like back support everything we use to try to reduce accidents rebekah and as. it is important for the taxpayer to go that you asked congress to inform the workers' compensation program requested the postal service'' to be provided with the ability to settle workers' compensation claims this would allow the postal service to agree on the summit and sever ties and discontinue benefits. why did you make that request? why should we give you that

authority? >> we would like to see that there is a bill presently being sponsored between the senate and the house that talks about changing some of the retirement requirements to prove people off of retirement we also would like to have the buyout process like the states do they take the buyout to go on with their life we have 17,000 people right now that will cost us about $60 billion of liability we think we could reduce that if they could go work somewhere else. >> my time is expired i yield back. >> i recognize the gentleman from florida.

>> but something like 80 percent of the cost. how about the of benefits? with these issues with benefits all 48 percent of all benefits so with the employer mandate and just to put them on obamacare what do you think of that? >> we have without thought

to solicit the private market for the non career employees. >> you wouldn't have the amendment and then to give the best price for health care. >> would you rather have the mandate or open up obamacare >> i think obamacare was written in the manner a person could keep their current insurance and real happy with the current insurance. thank you. >> we're shifting with the staff and 40 percent of the cost is on account of

reducing fat cost maybe we could look at that. how the employee is? with as/400 90,000. >> how many were mandated? >> about 50,000 people on the career side with the it industry native people. >> so 340,000?

>> you're not selling? >> no. >> right now with the downsizing of the network we could support 400,000 employees or those that are non career this $62 billion. >> but if you look at the availability to pay a premium to get mail on a saturday? >> to get active service on saturday we will be sorting

mail at the post office box. >> and also increase the revenue. >> you said you are $1 billion better fit you were with reid had reductions. >> the loss was projected 7.6 billion and this is not one had to present at this point between six and 6.four a little better than a billion and the reason why is fairly close to $1 billion better the health care cost is fixed with the

interest rates that help with the long term liabilities. >> the unfunded liabilities we have 100 billion unfunded liabilities. >> we now recognize mr. klay for five minutes. >> using the collective bargaining agreement seeing the postal service 3.$8 billion over the lifetime of the contracts. so to say it was taking into consideration when negotiated. >> every negotiation and every arbitration about the status of the post office

was of consideration. >> the draft bill would require that every negotiation of in a collective bargaining agreement but instead this bill would require the postal service to unilaterally has your legal department reviewed this position and if so have they provided the opinion what the time frame may be? >> we have not looked at that from whenever the chairman spoke there may have been a change that we did not look at that. >> i would suggest your vehicle council vote caddish. >> could you yield?

>> i am richer i am not too far off. >> we agreed to take the mandatory reid negotiation. >> we intend to take that out. >> does the 2011 agreement have a provision? >> there are specific provisions that is spelled out in article six of our contract. the danger has been, i don't think it is a danger because the postal service and the unions are both concerned about the employees and we could manage the down side about organization by almost

200,000 employees to access to other functions. i would caution the repeal of the contracts prohibits negotiation is not necessary to. >> with a new collective bargaining agreement require that? >> yes. >> is there a particular reason why the postal service has chosen not to renegotiate with that collective bargaining agreement? >> not that i am aware of. we have worked very hard.

>> it is the latest negotiated -- initiation to expand with 30,000 and they would be used with the loss of volume with the idea there of the temporary so to get the postal service the flexibility. >> if the chairman would replace the conventional arbitration process with the last best final offer, this establishes a set time frame within arbitration to must select a final offer but you think the current arbitration process moved too slowly? >> most definitely but to

get to the agreement there times to go to arbitration there is one person from the union in but the final outcome would be in to benefit from a structured process. >> i think the timing would help to resolve things faster but i liked the idea to have more flexibility in terms of what we do now referred to as what he and be worth some -- worries some. >> thank you very much. recognize the gentleman for five minutes of.

>> in talking about the partnership and the press release to say it is a great template for hall people with private enterprise can work together with the bottom line we hope we serve as a model for others customers so is it a template how it cayenne implement more for private industry? >> we work with private industry in many different ways click get the volume of mail $65 billion revenue base with 50 or 18 billion more with revenue alone if we did not have'' worked share partnerships with to

produce a the same time it is very efficient tear drop it into our system so that is a good working relationship negative egos opportunities has been very good especially for the paying customer chris they can get the best price and the best value in timely service. >> what about the area of first-class delivery? is there an opportunity to do something like ups? >> we do wear a lot of companies produce the male then bring it in to us that is an active process. >> but the final delivery we have a great delivery and we have a unit that has said

drop ship. >> diaz of innovative ways to keep up the service what are some reforms? >> we are working with their role carriers right now coming at of the last arbitration rethink it is a good process to get a good handle for delivery of the rule areas centocor's a lot of work has been done with the military and soon-to-be mail delivery so people will die within 10 minutes so there are certain services that lerner logger provided are there opportunities?

>> we're doing the play and try to match the revenues and the workload with the brother service also opportunities for people to have a village post office we have 350 now it another 100 of the way the to otis ball gasoline station his extra revenue but also they could buy stamps at there store. >> so far is that a model that works? >> absolutely there's a lot of interest we will continue to expand that. >> what is the overall plan? >> it boils down we have to resolve the health care issue it is worth a billion dollars we strongly advocate what he has mentioned about taking a look at the entire

federal system we overpaid substantially for our health benefits on average $10,000 for this 65 year-old retiree when he should be paid 30300. very efficient. we keep saturday delivery with packages been looking at other street -- cages with the structure. >> but there is still opportunity available to partner with private industry. >> and several cities yes. >> thank you very much. i yield back. >> we now go to their ranking member of the subcommittee. >> just for the record i want to express my disagreement with you leon

the six days scheduled now. we have had this conversation but america is business and america's debt of workers in families are on the '60s schedule and i and very concerned by stopping delivery on saturday which is the consensus we would exacerbate the down respirable of the postal service and lose volume which our problem right now was to don't have enough volume with the mail and i think by eliminating saturday we will exacerbate that problem to have less volume it is a self-fulfilling prophecy. i can just picture myself

and about to mail something and when stare thursday in the fidelity will like it there by friday if it is closed on saturday and sunday it would make more sense for me to call ups i thank you will advice to a further decline. but to talk about door-to-door delivery i have great sensitivity to their rural community. i and a stand on a lot of several communities consisted of a gas station and the post office figures restore and that is downtowns of losing the post office is a big deal and could be very damaging to

those small communities especially if you have to drive 200 miles to find another post office why insensitive to there needs. bassos see that for instance right now according to the briefing they said you do door-to-door delivery with more than 37 million homes and businesses. the chairman's plan is to eliminate 30 million of that. that is likely ever been in the ada is to replace that with cluster boxes or other means to deliver the mail. i come from a densely settled urban neighborhood where the houses are basically attached with no

open space in no place to put the cluster box and basically eliminating door to door delivery with urban residents. i a don't see how this works i am not just saying the city of boston red dior, las angeles baltimore, a hint on top of this you have to buy land in construct these boxes understand how you make money on that instead of half an somebody deliver it like they have over the past 80 years. >> i will comment first of all, with this ball post office there is no plan and the gas station in can rest assured we may have fewer

hours but the sixth day delivery my biggest concern we may lose volume but we don't lead to raise prices so we have to cut the infrastructure we are excited to move that direction but never fear is if we don't do something it will affect prices but to talk about that cluster box that is the interesting proposal because if you look at what the customers say the biggest thing is when we move into that area there is the economic opportunity costing would have to $61 per year versus 353 with the door to door but what we're looking at is that if you put that cluster box in boston northern virginia could you set it up in the way they and it is designed

differently? today we have two slots for packages were tendered 12 for the letters. >> you have to knock the house down. >> we will get a free standing unit to put packages and as well as mail so few are worried about coming home to pick up the package if you ordered we could put it right on your box sova we could define these -- design these people may start to like them and we would try to do is test them all to see what the feedback looks like i have had door delivery and cluster boxes. with that it is good once you understand how they work and the key thing for us is that customers don't see queer taking something away from them.

>> would do allow when observation? >> as long as the voters of virginia do not might. i will give you the one did it but it could be at your own peril. [laughter] >> but he is talking about the lack of plant one negative may and -- land it is not about the shape of the box but there is no common lands at all. >> we understand that. >> you recognized. >> in the highest density area you could name with the new york city cluster boxes

are the reality of the high rise isn't it true the non curb is the apartment house is so at the end of the day is a did true if you do it where you can in the way you can use save money? >> yes. what redo in new york is to have package boxes to protect your delivering. >> i appreciate the good work that has gone into it but i think everybody in the stands we have to have the reform but one thing i ian deeply concerned about i have a county in my district larger than the size of connecticut with 50,000 people and one of the strongest considerations we have is how to look at the role of market and the

proximity and that should be the case and as with south boston or cape cod for they have a ridiculous amount of post offices or other areas it is 100 miles. proximity is that key metric but at the same time we need the ability to have flexibility to close post office is. i come from the high growth area we had a situation him my largest city there was a major fire it just so happens there is no longer access to get access from the north or the eastern side or the western side. only from the south side with no side what can you get to this post office we have been begging and pleading to look at the extenuating circumstances to

make a change for the betterment of the community which is a reflection of the postal workers who was at the front end of the criticism that it is just negligent and reluctant to make the change. and we are hamstrung because within the bowels of your organization everybody is scared to death to make a change. somehow or some way we have to have the flexibility. we had a fire and our people are not served but they say we have to keep waiting because there is postal reform in senators the dow would to close at post offices but we have to do better. the other thing i would encourage the chairman is i have said this many times before the greatest opportunity in my mind is to become more relevant in people's lives and the

balance is to make sure we don't cannibalize in to the private sector so my question is whether redoing to galvanize other government agencies to be the conduit with the opportunity to be the face for other government services? those pat court -- passport services are great fight have to redo the past four 1/2 to 32 my passport in fema is trying to revamp the united states but the postal worker knows where the street is there are other services that would not cannibalize the private sector but would open up an avenue and a conduit so

people could access government services have above to have the state department do that dmv through the post office when a great place and a good revenue source. my question is the flexibility but also to be sure we are being innovative without cannibalizing the private sector so suddenly that mom-and-pop to is not have to compete if the post office wants to sell coffee. >> offer comprehensive legislation it will get people away cannot be to their needs i guarantee the money will spring up because that is what they're looking for. >> we now go again to the

bostonian the third member of massachusetts. >> by the way there are three of us including my good friend. >> every three of us at the same high-school to of us are gone i am the lone survivor but i do not talk about closing up in cleveland before 1974 as though that was the only solution. i would not do it. [laughter] >> my parents appreciate my advocacy. canal before in this committee the

living, walking expert of the federal health program who writes the annual book in great detail in he looked at your claims in said it extremely unlikely and you say failing to match the employee benefits in they say they could offer the saber better health care choices he said that is extremely unlikely and inconsistent with claims with the more understandable set of choices you sit with the health and will this with a chronic disease program is absolutely false and finally he says you say

you can get the benefits more effectively that is interesting because every group by have talked to is utterly confused about what you are proposing and quite dangerous about it we heard the president of the did say we have the options available and we are happy with it. is that true? >> more or less we would be willing to negotiate. >> but i am looking at what he u.s. ps has posted the self called health care proposal that utterly lax in detail with you or the employee wanting to know if this is a better deal than i get right now if i am over 65 looking at households or medicare or the annual deduction there is no

specificity so how with to answer the proposal? >> when we asked if we could put that slide back up, the charts? if you look at the far left, that $10,000 health care plan is what the po 65 role federal employee has to pay. period that is what we all pay. if you were in the private sector with medicare wraparound on average paying $4,500 if you have the abc which we feel we have every right there is 3,000 so why in the world would we ever

tolerate spending three times the health care for our retirees with they don't offer wraparound? batted is the way the rest of the federal government works. in 1962 when the omb was created that was a wonderful plan but that was 43 years ago. >> can you commit to providing specific data? >> i can't give you specific what you have in years period i am not sure where you got that from but i king give you a much more detailed presentation in person to go step by step over every detail for the record is in the best interest of the federal government there is money to be saved. so we should not be subsidizing like a show of you on the chart. >> i look forward to the data. this came from your

professional relations. >> i will get you the updated version. >> prickly covet why have you signed -- why have you decided -- and signed a disclosure? but you have not agreed to their privacy standards that could lead to the violations of privacy act? >> we are between a rock and a hard spot because we are working to bring people back to work with 6,417,000 people but now we have discussions of people we share that information electronically with the union as required by our contract we think if we have to go through the process with a more restricted

process we cannot share the information with the unions than that becomes a labor department to issue on the other side. we would like to get it worked out i have written a letter to go to the acting secretary to see if we can clear this up. >> figure for the extra time you are most welcome and your parents are welcome. the gentleman from oklahoma. >> you have a tough job in a lot of ways because we need significant reform in waiting on the house and senate to get its act together you are stuck in across america people say over and over that is my post office rather they disagree how many times it took to get there they drive home from work to stop by to get to their box there is a

sense of ownership so there are a lot of folks that don't get tanks that are out there today so we do appreciate that. you made some proposals of different ideas but what a cost savings proposals would reduce support that our neighbor related the way the post office does its business you agree the people better experts interact with the union folks at the military base that they know better than in the wind of the efficiencies in production and so reduce the cost savings? >> we're trying to save transportation rethink weekend work with the post office. >> to read to the routes to make it more efficient to do

with three stations at the same time to make sure the facilities can handle less certain size struck if it can handle the bigger trucks then do that those are in negotiations i know what to speak on them too much but we're willing to talk about doing more efficient to things with the health plan we did look at those approaches and there are other things that happened talking about on-the-job injuries rethink some containers that should not be utilized if that should not be that could cause of on-the-job injuries and there is a myriad of things that we are looking at with rotation to get more flexibility renegotiated

those but also went away from the traditional eight hour days to schedule without paying overtime they keep the post office open later a and we did what we could do to provide a work force more conducive to providing services to the american public. >> are we the right size with the work force? rebekah it is hard to say. the volume is constantly changing our concern is when consolidation delays the mail. and i graduated with 32 kids and i don't you talk about but we have situations where the mail is processed here

and now is here that is 90 miles away. and then it went to 20 different cities the indigo back deliver the next day but now they have to change the dispatched five at one or 2:00 in the afternoon in one town is in oklahoma is '01:00 to get to tulsa so that all those businesses cannot put the nail on the counter because he did not get backed until 5:00 that means the bill does not get despatched that day.

scales of the economy are important did it will very. the postmaster general has the tools to get it done properly and we can work together ryan said several times we will solve the problem. we have to solve the problem in the long run and i think we can but if the congress gives the opportunity to do certain things we will do our best to work to the problems it is not in anyone's interest to destroy a the post office. there is a tremendous debris that is affected by rates and time a unscheduled and all those are built in so this is important to you a year and us in the private sector as well so what has to be right but i do hope there is a way to get together to look for e efficiencies. >> no the gentlelady from

new york can't you are from new york. >> i have relatives in boston. faq to the regime member for holding this hearing in the also recognized the former chief of staff to the committee it is good to see you and congratulations on your new move to the deputy postmaster general and we miss you. i just noticed you. we just want to think year-old that postal reform is something that needs to happen and i hope we can work on this in the bet -- bipartisan rice serious concerns of the postal reform act as it stands the current discussion requires

major vatic downsizing of the postal service reduces customer service by moving to the five day delivery and that's the collective bargaining agreements. i deeply in greatly opposed these initiatives that hurt seniors, businesses and take a major step back on a hard-working letter carriers. these initiatives not only hurt seniors and low income urban areas but many businesses and postal workers will be hurt but i do however want to commend the chair before including in this discussion the underwater class division to address them as they did not always cover their costs such as magazine. to many magazines are going of business this provision

prevents a seriously negative impact on the magazine publishing industry that employs a great number of people in our country much of which is headquartered in my district it takes a sensible approach on the issue to delay a rate increase on the underwater surveys of male and tell there is excess cost removed from the system after two years of reform if periodicals do not cover 90 percent of their cost a reasonable increase of 2 percent goes into effect and this makes sense and i hope it is included it whenever final postal reform bill that this committee considers.

i know there is a review of postal services across the country i want to know your criteria specifically in closing post offices if you look at cost benefit. are they making money? regretfully i have some cases where the post offices are making money, literally of profit which is what we wanted and the competitors are opening stores across the street hoping people will come to them instead of standing at the line in the post office but even when they're making money money, sometimes they are slated to be closed. what is your criteria for closing post offices and why is a cost-benefit analysis of productivity? we want a strong post office those making many we should

be keeping because that will cover the cost of. >> i did agree. we have a process for large cities down to the smallest that we do review if we propose any closures we have moved away from that as we have put changes into place it in a big city like new york a couple in your district unfortunately we lost the least of the building then we had to move. so we have been actively seeking retail space in your area because some high-rises are being built in we were in buildings of 30 or 40 years and forestall but we're looking at relocating and other case is whether stamps online or old local drug store we will move in that direction.

so working with youh your people in upper manhattan is to make sure we do a good job in the retail space not moving too far you have my commitment to work with you on that. >> figure very much want to commend to the postal workers that work under terse conditions with the mail with a great city of new york and have great devotions to their jobs. >> now to the gentleman from tennessee. >> i see one of your recommendations is to reform workers' compensation and i see notes that some have

been since before it was established in 1971 for a few have 70,000 employees? that you referred to as periodical? how would you reform workers' compensation? to have an estimate how much you could save if reforms were put into place? >> it is a multi step approach but we have been working this issue for a number of years but we have been very aggressive the hess saying the reductions there least tell of people of workers' compensation and we would like to have the ability to retire out of the

system in there is legislation and that supports those in the house that what is addressed those who have ben on workers complices 1971. but in some cases they make more many than they do during their retirement so we have to figure out to resolve the issue. the other approach is to either help them get back to work or whether private sector company would do so we have worked closely to have reemployed it people and it has been helpful with that liability the son of a long way to go to you get people back to active duty but we think fear is 10,000 people one way or shape or

form we could get back to work then the other would have to be retired or the buyout but we have well liability of $70 billion in sitting on 100 billion of liability and we have to resolve that. >> another recommendation is the right to to have the class-action decisions from the federal court to have a large number? >> know it is the small number but the extremely expensive process. this is not what we would normally see in a complaint but the claims have dropped but the class-action has come about we just settled one and 70 million and a class action was i did not

get overtime when i was on workers' compensation if you are on workers' compensation you should not get overtime and we could not go anywhere from the plea-bargain to say it is the oversight and the other is give us the opportunity if we disagree to take them to court to have somebody look at them. >> you said your employees are happy with the present health care do you think they would be willing to go under obamacare if you recommend that they do that? rebecca and not willing for them to go to obamacare recommends a state with their own insurance but we are willing to sit down with the postmaster general to negotiate on different types of health care within the

family. i am a single payer type of person if you take out the overhead the cfo and the ceo and the people in the boards with a different health plan for the same amount of money we can't come up with a health plan that will deliver services and to the membership bid to the post office and come up with something but that is something i think in the insurance that they go into is negotiable and we are more than willing to negotiate. >> you have seen that letter that the unions originally sent that objected to the requirements that they go under obamacare to give up the cadillac health plan? >> i would sign it today. >> you would sign the same letter? >> yes. >> okay. >> to clarify are you saying

from the union position that if a comprehensive reform eliminated the letter carriers bidding and went to a larger group with less overhead as long as there was representation they would be supportive if a lower the cost because right now the federal employee health care plan has specific grandfathers for the letter carriers. is that what you are saying? because those have separate overhead costs that could be eliminated. >> we could come up with the health plan we could tell the members this is the house planned he will get your matching funds from the post office for maybe i

think there is an opportunity to negotiate that now having said that i think the real savings for the postal service is to not pay the full freight. >> we're working on that but if you do that and then it puts the additional cost that to the courage to employ a but now let's get to universal type plan to give the membership what they wanted we could come up with a lower cost to save the post office money to prevent the cost from going up. >> data when to take more time today but i want to invite your representatives to work with our staff because we control that question for the entire federal work force is

currently working on the reform with the postmaster leaving the system intended to achieve those areas the postmaster put forward but if it is a willingness to give us the additional opportunities specifically at of changes how we deal with coastal to the benefit of all workers a you can see what we are proposing. >> i industry and our position is we will provide information and but we believe our position as negotiating with the post office and not with the committee. >> we're happy to have your input but to on this you don't get a vote but currently the committee's position and it has to be for about remaking a decision on behalf of the federal workforce and the of post office is part of the federal work force so we would like to have that

occur in this section have input just as i would any other federal worker. like the postmaster and i are talking about the cost savings that we cannot get the cbo score that supports the postmaster position if we can get that it makes legislation difficult that is why retry to work on things that we know will score real savings for the post office to put into the comprehensive health care reform in research and they would welcome your union input and we hope you have a seat at the table. >> take seven minutes i owe you that much. >> i appreciate that but to appreciate of the thought of the federal employees' compensation act you have not signed the memorandum of understanding.

, so these records really require production you agree with that? >> yes. does the postal this -- service ever disclose the feca records and under what circumstances? >> i don't know what we do with those other there and share information and talk with the doctors or maybe if there is a grievance filed a some information would be shared but i cannot tell you that for certain. >> has the postal service every use those records when he was before the eeoc? >> i am not aware of that but i would have to get back to you. >> as the matter of policy.

>> absolutely we would not do that now. >> the department of labor legal counsel when to get an opinion concerning your dispute they said they thought that they agreed with them on the matter the age you would not participate in those conversations. why not? >> i am not aware of that i would have to get back to you on that to. >> what they said what they determined to is it has exclusive authority so following that they told the committee made no longer provide access has that cause you problems? >> not in the short term but it will long term because future of the whole process is to a manual process there is a win-win somewhere.

we don't want to end up in this situation where we end up of violating the agreement with the unions because of other agreements that we had made. >> can you share your reluctance? >> recent zero letter to speaker the acting secretary to get a common area where we might be able to work together. >> any other questions? i yield back now to the gentleman of pennsylvania's. >> thank you. just to make sure we correct the record you are not a bostonian. >> but as somebody who is

suffering red sox fan in david pass out if he thought he played for the white sox. [laughter] >> i am the cleveland indians fan and. >> my condolences. >> they were once a professional baseball team and they still have a great ball park so as we run down your clock remember you started this. >> i appreciate that. i perceive the work that is being done but the tough choices that has to be made with the spirit of collaboration into have the resolution and i find myself looking for the way to support the post office to make their calculations and decisions but also live and work with neighbors who work

for the post office is sometimes i get very frustrated with the process we have discussed some of this but let me just say it is difficult as we get to the end of some of these issues with the question of consolidation, we begin with the identification they suggested there was a light of savings so from the outset of my region this slated to be closed projecting a $60 million savings in realize they denied leaving calculate the four corners of the letter correctly if we asked for a recalculation and it

confirmed it was done appropriately and they said based on the information the you have given to said they could see how wade decision could be paid so to speak in refined during this process process, there is a second consolidation considered even though we asked for a stay that the mail was supposed to go to philadelphia under the process to keep an open was being diverted to delaware because there was the overflow and we began to question of the efficiency of that finding now there is a second study being done during the period of time that we all believed the first consolidation was still being considered come

back the second time to say they will consolidate everything in delaware that makes no sense to me because i have a big city between delaware and southeastern not just impacting the postal service but those that use it to rely on it for its efficiency so now we begin to see there is a proposed savings of 30 million by closing down the south eastern facility as part of plan b but now it is consolidated even quicker so the bottom line is how can i have confidence the decisions and calculations made are accurate and correct in the best interest of the postal service not do to other issues that quite frankly i cannot understand because the logistics' don't make sense to me to close

southeastern and they keep it within a short distance of each other as well as new jersey right across the river. >> first of all, the history of southeastern came because of the overflow of philadelphia that rebuilt the new facility in philadelphia right before the mail volume lost 27 percent and a substantial portion was the outgoing mail that we processed in the southeastern the idea was originally to move southeastern into philadelphia there were opportunities with the zip code down into wilmington because of the geographical proximity and from what i know all of southeastern with the exception of 193 only the far south 193 portion splits the mail we have already started the move is because financially we are in a desperate

situation trying to keep our head above the water with eight days of cash on hand and i know it hurts when it happens to a local facility but we have to make these changes across the country. there will be no service degradation because philadelphia and southeastern in overeaten are considered overnight in that will lead changes and we will watch that like a hawk we have to change we have to take the capacity of the system we can eliminate the building in southeastern to find mending spots with those people better in that area anyway to make sure we provide great service to. >> what it job security is there for those of southeastern is there the assurance they will receive work within that area? >> we have eliminated in the last six years to hundred thousand jobs in the last 30

years, three to 14,000 and never played any one of. never. i have been fanatical about holding jobs using on career people we work together to eliminate the excess people for a distance of more than 50 miles that makes us even holder saul's to account because when you start moving people it is bad for them personally economically it is the disasters you have my commitment we will find a landing spots i know that for a fact as i sit here. >> one last question. the company prints all kinds of different meals -- male i have heard from some of those that do that in my area with the aggressive postage rates can be

devastating so can you tell me from your experience what happens to your business with the rate increase if it was really more cost-effective you might lose more business by virtue of their great increase? tell me how you were impacted. >> 2007 the be the last example the last time they raise prices with the double digit increase to many clients and resaw double-digit increase the volume as people pulled back and i was explaining before there are different styles one is the prospecting file to get a new customers it is based on the of responsory viewdata rapid spike of pricing you will see them cut that back and we saw that a and in fact, the whole industry sought it we ended up consolidating

businesses that could not make it also be closed over 21 plants to right size the infrastructure it is important to save jobs but we had to release jobs very tough to do as a company but to be sustainable we've made tough decisions since 2001 postal rates went up 50 persons per prices went down 33% in we had to make tough changes every part to stay profitable and we have been able to do that sova and you talk to the private sector to talk about the declining situation you have to make the tough decisions. it is challenging but it is real those increases have devastated this industry and it will devastate it again if we let that happen.

>> we now go to the lady from a little like. >> thank you for holding this hearing to follow up a little bit it would seem to me some of the mail calling a with a standard flat rate catalogs are generating more mail so when people decide to purchase something does your industry keep data or logistics' on that or homage subsequent mail is created out of the catalog mail? data and theure if we have organizations might but there has been a decline of the catalog mail through this time frame there is some stabilization does generate packaged products through the post office which is a good thing.

>> you have data at all in terms of how much fallout that a higher rate how much is generated? >> there are some statistics from and the industry and to the point some catalogs will generate the first-class mail so is the of multiplier effect i can have the marketing people get in touch with you. >> the second quarter of this year they supported having 1,600,000 employs is it correct this is the smallest workforce since 1966? >> yes. >> why do weber costello such of a large portion of your cost? >> they are high a in terms of total because we are the

people in tents organization of their great companies but they run the air system in the airline's we contract to lot of that out the major drive for our cost is the benefits cost me also think there is some efficiencies we to get working with the unions it everyone here to allow those cost of the courage to employees. >> so the postal employees receive lower contributions to their health benefits and life insurance than they do now requiring the employees contribute more. that seems to be as big cut for the courage to employees. >> we're working through that right now we have moved

management employees very close to the federal rate in 2014 as part of the union negotiations starting back up then we will ask to continue to prove that the. >> looking at the most collective bargaining agreement include any concessions with the share of these cost? >> we move three or 4% per year these were based on the wages to get more pay for the health benefits and now the post office and negotiates to take it back that is why we don't believe it is in legislation because it is a negotiation issue not in the same legislation to give us back what we gave up to get that. we think it is imperative

when you have a labor organization dealing with management its is give-and-take quid pro quo there is the take back for something we gave up years ago we think is not right. >> how would you assess that agreement devil is just talking about with the increase of the share? >> would that do that? >> we think we have not seen the final bill but we believe anything that deals with labor relations and negotiations should not be legislated but may be allowed under the bill but not required that is what i was talking about dealing with the postmaster general with the realm of issues that we can work through a lot of issues if we have the

ability to do so. >> i about of time. >> will you yield for a colloquy? >> so you'll understand the intent of the bill at the expiration of their contract they would harmonize with the rest of the federal work force however the clear intent is that allows $0.100 on the dollar to be moved back into pay or benefits not covered so the intent is to say once and for all the federal work force based on categories substantially the same reimbursement benefits and retirement more as a matter to compare apples and apples so there has always been they make less but they do this and don't do that and quite frankly our employees here in the house

and over at the white house we want to make a statement if you are a federal employee to the greatest extent possible the benefits that earlier not negotiable in federal workers cannot negotiate benefits the union can but to be on the state created a different interpretation of a fair reimbursement so although it is open to amendment the intention is not to reopen negotiations but say simply it would be harmonized when they read negotiate the new contract in the intent is in the gift back with the past on to translate into higher pay but a different benefit obviously was no effect of retirees. >> we now go to the ring key member who has been patiently waiting.

>> first of all, let me say we have to resolve this. if we can send somebody to the moon is seems like we should be able to resolve this. i think that our constituents have sent us here to work to problems and i think they are getting more in smaller frustrated when we fail to do so. we have a limited amount of time in this is our watch. i insisted that you be here mr. duffy into thank the chairman to make sure that happened. tell me if we do of bill

what must you see that would make you feel comfortable to support it? can you give me the elements is that a fair question? >> i think it is fair personally the organization would like to see something to look at the refunding issue with the health insurance with the over funding of the retirement plan higher heard germanize assay we will be using postal of the calculations

to take care of the zero bridges of the different accounts and for more opportunities for the post office to do things we would like to see them do more so to deal with the agency's to generate income to use of postal service. we've liked to make sure the issues that need to be done remain in collective bargaining but there are things that need to be changed to allow a certain sameness to have been part of that maybe the health insurance issues.

what issues to what he just said? >> because the key for us is resolving the health care we are in 100 percent agreement the difference between where the unions are in the postal service is the degree and speed of change i understand there more reticent we are in full agreement and we still consider to overpay that comes out of our pocket

we also in full agreement to open a four do products there are discussions around other services like wine and beer a and spirits there is a lot of points of agreement >> i feat as long end as we want to see a viable postal service whatever that is in the future. >> now earlier to talk about cannibalism of the private side. what he was referring to going to the innovation peace that we not interfere

with their private side you just mentioned wine shipments i figured out where we draw the balance with this innovation officer but on the other hand, you have folks that say no-no no. don't step on this story that had by this time you start to eliminate the private things there is nothing left. to talk to adam opel sides of our mouth. -- out of both sides of our wealth can you mentioned the other things?

>> what we should challenge ourselves is to build things or perform work that not only helps the postal service but to others as a good example to work through the digital approach to fill an important role to authentication with things that cannot be done by the private sector there is a concern of a lack of trust or who has what information to fit in that spot but that allows other people to grow in to think about the group of us sitting here to think of the infrastructure of retail and delivery to bring volume in for thousands of customers so if we can replicate that into the future there is a win for us and we will but triple on

those that and not the private sector. >> attwood ask unanimous consent i just want three more minutes i will be finished. icy waiting with your gavel. thank you very much. let me ask you this. if given the proper tools with to expand the use of new technology i also believe it should be given expanded authority so how much of the space it was making. >> there is a never have to get back we can't squeeze

that out. >> so to lease that space out? >> so to move in the space to use that as a fulfillment site to to handed to us to get it delivered. >> so to do things right now that would yield substantial funds? it has not been sealed? >> i would say from a digital perspective we have very careful because we did not want to get ahead of legislation. >> are we entering you from going where you're trying to

go? >> as fast as we can get the legislation. >> you are out there eddie you are wary du canada reached the deal but you are so worried that congress has not caught up with regular stephen if you reach a proposed deal you cannot carry it through right now? >> in some cases where they are afraid to do deals we had problems with financing is a wick goes both ways. >> this hearing is adjourned.

coming up tuesday, the house judiciary committee hold a hearing related on children brought to the u.s. illegally by their parents. starting at 2:00 p.m. eastern on c-span 3. you're watching c-span2 with

politics and public affairs weekdays featuring live coverage of the u.s. senate. every weekend the non-fiction author and books on booktv. you can see past program and get our schedule on our website. you can join in the cfghts -- conversation on social media sites. president obama issued an executive order in february addressing cyberthreats. monday house intelligence committee chairman discussed the issue as the biggest national security threat america is not quite ready to handle. you can see the remarks from the international institute for strategic study any time at c-span.org. here is some of his speech. [inaudible conversations] your speech you mentioned that china is committing intelligent imriewl property theft because there's no consequences.

can you outline what some consequence might be? >> great. great question. talk is cheap. they deny it. so obviously we're going have to change that paradigm if we're going to get somewhere. there are several things that i think we can do. one is on any bilateral discussion with china, it has to be number one, two number, and number three on the list. it's that serious, in my mind. we shouldn't get to any other discussions before we get some answers on their efforts on cyber espionage. by the way, the united states government does not use the military and intelligence services or any other part of the u.s. government to steal intelligent yule property to bring it back to give to an american company. it doesn't happen. and certainly will not happen that's not who we are. that's not what it does. our intelligence services do not. not going happen. some notion when they get out there and say -- the u.s. doesn't do it .

i'm telling you right now. thank why we join with other nation states who don't steal intellectual property to give it back to the private industry to compete in the world market. the bilateral piece has to be important. we did an bipartisan bill introduction bill that said let's go after the individual. let's make it uncomfortable for individuals at the machines stealing intellectual property. we're going to make sure they can't vis can to the united. they are put on list that wouldn't allow them to travel to the united. we can start looking at financial issues we could make sure that their finances don't travel in transactions clear through the united states. i think the next level down from that, once we do this public shaming, if you will, of these individuals, and take concrete actions, one of the things that these folks have to understand there's a consequence for stealing intellectual property.

the next step, i think, would be looking at counter vailing duties for product benefit from cyber espionage and reproposed trying to get back to the united states. we would a counter vailing duty regime that would make that a nearly impossible for them to compete against u.s. companies at least here in the united states. we haven't gotten that factor yet. if we can do that piece on visa and other things the bilateral piece, i think we can have a real impact. we can talk about it all night long. i think after the report they were down four days. before that full organizations back. huge benefit, no consequence. next the impact of immigration policy on cities and local communities. speakers look at the economic

benefit of immigration reform on melt metropolitan area. [inaudible conversations] >> good morning. >> good morning. >> welcome to brookings. we appreciate you joining us this morning. more discussion about immigration reform for cities and met poll contain areas. i want to start by talking about just set the conversation today and why we're focusing on cities and metropolitan areas in particular as the focus on the important topic. now our program, the brookings program recently released a book coauthored by bruce c.a.t and

again for bradley called the metropolitan revolution. within an ambition title how cities and metro are fixing the broken politics and fragile economy. the basic premises of the book is this. at the time when washington is paralyzed in gridlock, leaders in cities and metropolitan areas across the country are stepping up with innovative, often boich bsh bipartisan solutions to superrized challenge of our time. reviving the manufacturing sector in northeast ohio. one university partnership at the time. building a world class region nap transit system in denver with -- at the point of production such as we're seeing in portland, oregon. today's forum is about loyal leadership in another super sized issue. which is managing the flow and

immigration of immigrants. this morning we will hear how leaders in regions as diverse as los angeles and silicon valley, salt lake city and new york are moving forward toed a van opportunities for immigrant family, workers, and employers in the ab sen of comp hennive immigration reform. to be sure, regional leaders must lead, you know, because they know that unique needs and assets of their economy best. they cannot go at it alone. a strong federal partner, a tran parent predictable set of national rules and policies. so in that spirit, our panel today lead by our senior fellow

to strengthening regional economies, and regional opportunities. yet i also hope you will learn that if washington cannot make roads on immigration reform, then there remains a silver lining. which is the progress still possible because the hard work and creative collaborations of local and regional leaders. to start us off we have the good fortune of hearing from one -- the director of the white house domestic policy council. she's been a champion for immigrations right prior to joining the administration when she was senior vice president, and now where he has been working tirelessly within the administration and with members of congress to get both legislative reform done. as a testament to her commitment

to civil rights she received the macarthur genius award in 2002. i want to note she was born and raised in detroit. her father worked as a engineer at the ford motor company. we have join us this morning, the congressman in the flint from the area. time permitting, i think it would be very interesting if she can also give us a window to whether or not there's a short term role for the federal government to help detroit get out of the fiscal crisis and emerge as a mighty center of in-- induction. please join me in welcoming sill seal ya muniz. [applause] [applause]

this it discussed and decided upon in washington the impact of the discussion are felt across the country and it's the town that the innovators. in dealing the implication of immigration and helping them become fully integrated to american life i know this from person experience. i'm from detroit, i'm the daughter of graipts from bolivia. and i grew up surrounded by communities populated with immigrants from around the world in search of the american dream. my tab on the block where i grew up were ukraine, finland. really from all over. it's very much part of the detroit story. just as it's part of the american story. i started career providing

services to immigrants in california and chicago and building coalition that worked on issue of integration. it happens in local communities. when started at the white house before i became directer. i was the directer of intergovernmental affair. i managed the white house's relationship with governors, mayor, across the country. in that role, i worked closely local leader as they struggle to recover from the historic recession. many from both political parties understand the role that immigrants play in helping the cities innovate, grow the local economy, and get through difficult economic times. i can tell you that president obama understands it as well. as a u.s. senator and before that as a state senator from illinois, the president developed a view that immigration reform is not just the right thing to do. it's an economic imperative that impacts all sort of community and families in tangible ways.

two weeks ago, the white house released a report highlighting the economic benefit of the bipartisan immigration reform bill that passed the senate in june. the significant cost to our country and economy if congress fails to act. it make clear how high the stakes are in the debate. let me give you a few of the highlights. if congress acts, higher productivity, more investment. over the next two candidates our economy will grow additional 5.4%. if congress acts real wages will rise, deficits will fall by $850 billion and the debt will shrink. if congress acts the solvent sincerity of the social security trust fund will be extended by two years, and the 75-year shortfall will be reduced by nearly half a trillion dollars. if congress acts the recovery of the healthy market will be strengthened.

if congress acts things like the visa whatever program and the corporation for travel provision will provide a significant boost to tourism and hop talty around the country. comp hen it's a security imperative. it's about basic fairness. on top of that, the economic cost of inaction are simply too high to delay. metro area i should add if congress acts question finally address the challenge that cities have been facing if they grapple with the symptom of our broken immigration system. was the crux of the matter is while congress and the federal government have the authority to set immigration law and enforce this, local governments life with the results of what congress does and what congress fails to do. because congress failed to address the broken immigration

system for years. local governments wrestle with the challenge of large number of undocumented immigrants living and working comt community. in a variety of ways from arizona and alabama adoption of harsh law that attempt to engage local law enforcement fishes and immigration enforcement. to state that passed instate tuition law. they communities are by definition living in fear of contact with the authorities. which makes it harder to encourage forks to come forward to strug with the fear that the parent will be deported. research is showing, as you might expect, the anxiety interferes request they responded by passing laws which reflect a variety of approaches the fact that a states can't regulate

immigration. that's the job of the united congress. and even if they could, we could hardly say a patchwork of fifty different approaches is racial. we know that there's innovation happening and states and local government especially on the issue of immigrant integration. i know, you'll hear more about it today. it's important that congress to act. it's their job. in the frame work of policy we can give senate and lot of the support they need do it the job well. integrating us to community successfully. to i'm hope of the that june 27, tbirt, is a day that will go down in history. i was fortunate enough to be sitting in the gallery of the senate passed the border security economic opportunity and immigration modernization act. the bipartisan bill we've been talking about for so long. that vote of result of countless hour put in my a extremely

dedicated group of senators, their staff, and administration staff providing technical support along the way. nobody got everything they. ed. including the white house. but the final bill reflected president obama's principle for common sense immigration reform. it was consistent with our history as a nation of laws and nation of immigrants. and when the time came to vote on the bill, the senate passed with an overwhelming bipartisan majority. 68-32. to put in perspective in last november's election only two places, utah, and d.c. gave either candidate 68% of the vote. the reason this bill got so many votes is simple. it's a smart comprise and pretty good policy. it creates a fair pathway to citizenship for the 11 million undocumented immigrants working in our community. the pathway that will require them to pass background check, learn english, go to the end of the line behind legal immigrants

who have been caught in the limbo of immigration wack log. it will create a new path to citizenship for agricultural workers who contribute and put food on the table. these are immigrants who play a role in the future of food security and time we gave them a pathway to citizenship. the bill creates an expedited path for young immigrants known as dreamers who were brought to the u.s. as children attended school, know this as their country, yet lived in constant fear of deforration. the bill also represents the best chance our country had has in decade to modernize or legal immigration system. it builds on the administration's progress of strengthening border security and cracking down on employers that hire and exploit undocumented workers and create a meaningful path way to learn citizenship. modernizes the legal immigration system for family, workers, and employees. we know the fight for immigration reform has never been easy. we don't expect it to be easy

this time. there were plenty of people that predicted we would never get this far. there are folk predicting we won't get any further. there's little question in my mind that the senate bill or something very much like it would pass if the house got a chance to vote on it. but as the president said when the bill left the senate now is the time when opponents will try their hardest to pull the bipartisan effort apart so they can stop common sense immigration reform from becoming reality. we have work to do. i believe that even in today's washington, the coalition call for action is too broad, too deep, and too forceful to ignore. if we keep our urgency and sense of purpose, i believe congress will listen to a clear majority of americans that listen to the business community and the labor movement, the chamber of commerce and the fciu. they'll listen to leader from across the spectrum, faith community, law enforcement, the civil rights movement, and importantly state and local government. all of whom are calling for a

common sense immigration reform along the line of what the senate passed. they'll listen to leading voice in both parties. just the other day david, the architect of the president obama campaign and steve smid senior adviser to the 2008 mccain campaign wrote a story. "pass the immigration bill ." let me leave you with this. we are endangering the clear majority of americans who support reform and telling them that now is not the time to let up. it's the time to speak up. it's the time to make sure that anyone not just in this city, but around the country knows what is at stake. to make it clear to families from all backgrounds and all part of the country why this matters to them. i came to the work because families like mine are still working hard for the piece of the machine dream. we have done so much as a country to put that dream within each. we have come too far to quit now for immigrant families and

communities all over the country who are dealing with effect of the broken immigration system. i won't quit. i know, president obama won't quit. with the hard work of unprecedently broad coalition and voices from around the country question get it done. so i thank you for your contribution in shining a spotlight what is going on in new municipal government and cities and towns around the country. i look forward to the effort and forming our work and getting to the place with the president is signing that bill in to law. thank you all very much. [applause] [applause] thank you so much for being with us this morning pop she's been working on immigration issues for most of her professional career, we are lucky to have someone as competent an compassionate as she working in the white house. good morning and welcome, everybody. i'm awe degree, the senior fellow in the metropolitan

policy program. i'll be moderating the discussion today. we have three awesome panelists. we're going to talk about what immigration reform means for metropolitan areas and cities and suburbs. i want to ask the panelists to get micked. while it's happening i will say a few words and make an awkward move to the seat and get micked myself and continue talking. as you heard there are many good reason for immigration reform. many make -- to make our immigration system work better and strnt. the u.s. economy. the immigration debate is very much alive in congress as they continue to discuss how to change laws around a number of dimensions which were mentioned, border security, legalization, work site verify indication program, temporary worker programs for different industries, and policy around the admission of legal permanent residents. we don't know yet what the

outcome of the current effort will be. we don't know whether we'll see a law that resemible the package of immigration policy passed in the senate a month ago. or whether congress will take a different approach such as introducing a number of discreet bill like those being discussed in the house presently. or will congress not be able to come to agreement and with the status quo. what the consequences of doing that? those are the things that we'll be discussing. we do know several things. u.s. immigration policy has not been overhauled in more than twenty years. in 1986 there was the immigration reform and control act which was primarily known for the legalization of about 3 million undocumented immigrants in the united states. the 1990 immigration reform and control act, -- sorry 1990 immigration act followed four years later which increased overall immigration levels, established a priority system of employment, and family-based immigration, and

also created well known and debated program such as h1b and diversity visa. this law, with some minor modification along the way is still in place today. what is different; however, the u.s. economy has changed creating new demands for workers and industries. some of which barely existed twenty years ago. while other industries have diminished. in addition, national economies have developed abroad, and would changes to transportation and communication technology, there's a global economy which is where the u.s. competes. on top of that, the u.s. now has twice as many immigrants -- more than 40 million today than we did in 1990. so these are some of the sources of pressure for the united states to adopt. an immigration policy in keeping with the time and works better with the economy. i'm going to make my awkward move to over to the chair right now.

[inaudible] [inaudible conversations] so to continue. our discussion today is about federal immigration reform, but today we're petting a -- putting a metropolitan spin on it. cities, suburbs, and states across the country are already in the business of incorporating immigrants and their children. we have three guests today who are going to help with put the issue in perspective. i'll introduce them in a moment. it's a federal responsibility we have seen many state and municipal action over the last seven years that underscore the fact locality with the effect of immigration both positive and negative playout. the success of broad immigration

reform hinges how it's implemented at the local level ultimately. in some ways, since most of america's immigrants live in metropolitan area the debate should live there too. and in some ways it does. cities in metro areas are different from each other. they strair they different from each other and the response to immigrations vary considerably from cities in the great lakes region put out the welcome map for immigrants because they start businesses, pay taxes, create jobs and buy homes fop states like arizona, alabama, and georgia that have taken measures to make the state most unwelcoming by creating their own enforcement laws designed to reduce their undocumented populations. immigrants are not evenly spread out across the country near are the cost, benefit, nor the

investment made by municipal government, non-profit organizations, and businesses. today our three distinguished guests from different three different places when it comes to immigration trends and local programs and policy around immigration and integration are going talk to us today about what is happening in their city. to my far left commissioner of the mayor's office of immigrant affairs. she's had a number of job in the city government. ..

but. >> she has worked with them her entire career in and brings the unique perspective hall building skills adds value to the workers in and the families in the communities that they lived in also possess second

largest in the great gate way with the revenues outside the united states of these three areas have been focused to make sure the children of immigrants who live in english in schools and immigrant owned businesses thrive and they have ways to communicate with communities and workers have access to programs that give them skills and they can get the help that they need. our guest today has some of the non-strategic and innovative practices across the country but as we just heard there is a lot of possible ways that immigration reform may unfold with comprehensive set of measures and discreet issues serious enforcement measures and from what they would like to see happen.

>> sova fatima what parts resonate with you talk about the efforts of your organization that talk about immigration. >> good morning. i have to say that what we care most about is the reality comprehensive immigration reform has to happen we have invested a lot he started a national coalition to bring together business leaders so it is the economic argument and the reality that nearly 40 percent of foreign-born 60 percent of new yorkers are immigrants half of the businesses are in the grid to owned half of the supermarkets are immigrants and these individuals are in our school systems in to

make everything from main street to wall street bosporus to insure that any number of individuals can be a part of our economy is important for these individuals that graduate from high school to realize their full potential to add to the tax base is critically important to become the homeowners of tomorrows so i think i would have to say the mayor would prefer to see something that is not piecemeal. the reality is we have to fix this now and the senate bill provides a framework to think about this with the strategies and other opportunities and a portfolio to allow reform to

happen. >> are there other particular facet sought that you see in the senate bill? >> we did york recognized we are building what we hope to be competition for silicon valley but we have toehold do incredible campus and institutions it universities so clearly those become part of the infrastructure to allow us to compete globally is critically important but with that said we believe you cannot have the doctor without having the judge senator. so we need to recognize with

those individuals to come out of the shadows with the essential hand sid our community to help maintain our streets and buildings with over 50 million tourists per year to have the diverse community is very much who we are and who we continue to be. >>. >> guest: to do talk about what resonates with you? >> i will mention it is not nearly the size as new york city but a lot of the issues are the same and it boils down in simple terms we want to be a place that welcomes people we want to contribute to that community and the

current system now doesn't work for anyone. if they're concerned about amnesty it is a defacto amnesty so we would disagree with everything that you said that time is now to solve this problem so people need to come forward to tell the members of the house that now is the time there is a great sense of urgency with the great research to document that we stand in solidarity. >> i imagine in some ways immigration reform is something that will change but life as a duet but in

some ways they will stay the same and could you talk about that or anticipate what d.c. with the next move? >> one of the areas we have already been working on regardless to integrate to build success is the position with this cycle of poverty for children and that really helps with participation and civic engagement to focus to development and partner with dozens of suppliers like to editors to clean our buildings with silicon valley in downtown los angeles to keep the building safe and clean to enforce

our practices too diverse waste management one thing to understand is immigration reform is not about the immigrant to is what is happening to the communities not just a path for legalization but citizenship those are the indicators that we see for successful communities to create adaptable communities to adapt to the changes but it is important we look at allegre jack position as one of the up possible requirements that is something we are already

working on to be integrated into the communities. >> let me turn that question around a little bit. it is clear doing work with the immigrant communities and the children and in many parts of the country this goes on as well in the your core less situlas this is the way they have built themselves and have grown. in other places there is conflict. knu talk a little bit about like salt lake city are those that are welcoming at this point?

>> as indicated their rich to places in the country where there was a preponderance of the notes and washington d.c. and utah was the other side of the spectrum and that should not be a surprise talking about a conservative state although there are pockets of moderate and progressive people sometimes it is difficult to be a moderate in a conservative place like utah, but for our sake, what it boils down to is not just the economic impact it is clear they are a net positive for the high skilled and hourly employees and contribute to our communities but it has to do with the kind of country we

want to live in do you want to be a place where they hide in the shadows or do we want to be up place that is inclusive to recognize the diversity of the strength in the world view that a vigorous brain is something very positive and helpful of get the history of my state when immigration is following the arizonas style example in through the work of the business community and community leaders that it is not the right approach we re able to richer radically change that we have in-state tuition for

undocumented people and a community that is truly quite welcoming and does not have as much to do to be on the right or the left but about to link the right saying and thinking of what our state has done in my big push now is what we hope for is the members of the house of representatives will find a way for word that it is critical not just to the state but to the nation to move for word in a way to create the plays we want to live and are proud of. >> it might be worth talking about the compaq tel that can about i know the entire

part but cagey talk about the goals? >> summer 2010 and is the inevitable utah lead pass a law similar to arizona with legislation drafted it was moving forward a and it was being driven by of very small but vocal group of people who felt this was the priority and wanted to move forward but the people who read my stay and those who'd care about the state's or community leaders were very uncomfortable with that but it seemed like a free trade it with not a lot of ways to divert that's every time somebody stood up my boss was opposed to this it they said if you pass this i will

enforce it the republican and attorney-general said this is not appropriate but individual profiles of courage to say it is not the right approach but they were beat down so we thought if we could have a group of people stand about the same time to articulate this simple values based solution that would be empowered enough to change the course of the conversations over the course of several months we had 100 people work on this document with 227 words to highlight the five principles we thought were critical to the immigration and discussion that it is a federal issue it is not between e utah and other countries but the federal government and other countries. to focus on the economy and

as taxpayers and consumers the role that they play to focus on law-enforcement.

>> q personally historically a has been instrumental of city government and a nonprofit community based faith based organizations to receive immigrants to provide services that help them make it to move up. is there a figure what to say what fed is there a figure what to say what federal inaction might mean and would it change much on the ground? >> i have to say that we did york recognize immigration is a federal issue but they are a local issue and our responsibility and very much

for new york in particular there the past, present, and future so federal in connection is a problem but we do all that we can innovatively to make sure we create is a place where individuals who choose new york as their home are welcome and able to enroll their children play in our schools a healthier can do all the weekend to ensure the summit was too small to start a small business to be part of the committee there are opportunities to engage we insure that there are parts of those communities to provide a safety to that and the police department does a great job to work with the community to understand the needs of the communities with graduating

class is of the police department fell late wages spokane the real fabric of who we are. there are those who have graduated that have streams and american in every way but with a document. so in action in is a problem because these young people absolutely want to be a part of our city and we want them to be a kabir are doctors so there needs to be something there. we have a tremendous amount of capital but to create any of those that want to be a

part of the american dream so then i would say we recently did a financial-services steady. so those that focused and all three overwhelmingly interested to invest in the children's education and home ownership. all at different points baker accounts at different points but every single one of them wanted to recreate their success by the marker that makes our city successful by owning a business so in action id impacts us but without it we will do all that we can't.

>> i would just add something we have been working on this is coming together a community based organizations and and, labor, the sheriff's department cover the mayor's office to come together to have a discussion amir of principles in terms of immigration reform and also to have comprehensive immigration reform to bring the workers out of the shadows 40 percent of those are business owner so liberating as the economy to the surface a and i think the most conflict to come together to figure out what the city's needy and it might differ from silicon

valley or salt lake city or new york. those are the conversations we need to step up to have to understand where we have the common ground 100 words, a 200 words than that alone can be the guide for us what we started to do to build a collaboration of services or education for not just the immigrants in our city and belgrade really important point. >> but to make the distinction that immigration really is the federal point

there are people that live in places and institutions that are affected by a vigorous and immigration policy. what kinds of services are you already providing to be hopeful of what prepares you for the implementation of some kind of immigration reform with a son or all of the undocumented population orate a temporary work visa in and out of your city? what kinds of challenges do you see ahead? with anything that's connects.

>> some of the things we have been doing to build the partnership is our vocational esl program and then based on the needs providing a customer service and then judge material work force with those depositions skills so we have been working on the wind when partnership to bring the different points of view with the opposite sides of the table in terms of the bottom line. to use it that aside and

together boasts the us labor and management together with the workers covered with the union with over 40 janitorial companies to the largest to sit down together what program is needed to do work force development for the added value but it has added value to what you have invested? so building the confidence to know that my industry is investing in may we have a client company to contract so the largest collection of real-estate owners that this is what i want to see a my building also who brings

that quality of service to my house? in the bottom to be productive to bring that together that we also provide computer literacy skills than citizenship. with those trading sam partnerships but 200 for another and here was it just spread out every where. so with a variety of other employers to have that relationship with those hardest to reach they have the language barriers but they're also working at

night when most of us are asleep to keep the area safe and clean but the cuts that are happening with adult education and other programs but with over 2,000 workers or they're already set up a gorgeous investment of the work force in to be higher level workers to create opportunities of you get jobs of living wages and

access to health care and then to be coming out of the shadows. >> i will add to that thought what services are related directly what are you dissipating with scaling up for investing wrote in dealing with the budgets and the like? >> i would say it is a very good test case. approximately 85 individuals who would be eligible and the city of new york made a conscious decision to create

a partnership of the interagency passports to figure out what dave needs to put out a message if you need your school record cover immunization records records, after-school program, i got married with a marriage license, we could put that in place to tell you. of love my colleagues were wonderful champions and we did it well. in fact, several cities said to be bar your model? but we learned a lot from that experience. . .