office, the health of the post-office is intertwined with my state economy, and i know that is true for other members of the committee. so the rate setting, the certainty, the volatility matter in my state economy. governance is also important to me because it is part of the united states postal service operates as a monopoly. and i believe that the substitute amendment that was put before us last week puts about monopoly in charge of setting its own rates. and we just don't do that. we have to protect the ratepayers and consumers. i used the analogy last week of an electrical utility. we never let them set up their own electrical rates. ..

and i believe that modification has been distributed in writing. what he would do on rates is, it would allow the exigent price increase to remain in effect for one full year. after that time, the remaining exigency amount would be recouped by moving to a cpi plus one. the cpi plus one would remain in effect until a new rate system

is implemented. it would also maintain the schedule the rewrite of the rate process in 2017, which could lead to a future rate increases, only they would be part of what would be a transparent process that involves the postal service customers in discussion. the prc projects my amendment would bring in 3 billion more in total revenue to the postal service verses some of the -- well, if i might say the audible which was -- i think this actually is a real, true compromise because of that and because of what you are trying to do to enable the post office to remain or to become profitable. on governance under current law which my amendment would

maintain the postal regulatory commission would establish a new rate system in 2017. i understand there is likely to be a second-degree amendment to my modification without unduly complicating the debate right now i would say that my understanding of that the substitute or second-degree amendment is that it would make the four. three exigency rate permanent. i put it into the baseline and but the postal service in a position where there is really no incentive to initiate a great review. i think that this gets us back into a very difficult situation for those who we might consider captive customers of the postal monopoly. prc would be powerless in that instance many before i get in

too deeply to speaking against second-degree amendment let me just make formal by offering of the modification as i describe did and urge support of that modification. >> i have an offer, as substitute on behalf of myself and dr. coburn to your amendment before i do that -- >> substitute or second? >> substitute. before i do that want to say this, have not seen anybody more tenacious. and i really the thing it's awful. and i commend you for your tenacity and persistence. i would call at this time a second-degree amendment. i would like to talk about that.

>> i want to go back in time a bit. i want to go back to august august 1st last year. we worked for eight months to get to that point. and what we propose on rates was this, pretty clear, pretty simple. basically we said on -- the postal service would be free to raise rates to the extent that they thought it was appropriate. if there were products that were under water the postal service would raise rates in order to recover their costs. i think it is of fair amount of reason. the postal service raises rates too much the products will be under water and there would stop using the postal service.

there would be a self correcting amount of time. that was what we proposed. really a free market approach. and that had a lot of appeal. that is what we are suggesting. that was august 1st. when we proposed our substitute a week or so ago the amendment, we moved away of the proposal. and what we basically moved to is a proposal the said the accident rate case agreed to a couple of months ago by the prc, the race case would be the new baseline going forward. and that beginning in 2015 that the cpi cap would go to the cpi plus one. we would have an exit rate case and a baseline. 2015 and 2016.

>> 2015. >> starting in 2015 as cpi plus one would go into effect. and for the foreseeable future. some agreement along the line a new rate structure. we gave the prc them actually deciding what that new rate structure would look like. that was our proposal. remove dow. starting in 2014 going forward, and the cpi plus one would follow in 2015 going forward. that is an agreement on a new rate structure. you really put the postal service in the driver's seat. i don't even know if the prc was in the car. more recently and the conversation. since that point in time it was

hers that we consider backing of the cpi plus one. go back to cpr which is where we have been since 2006. mb find a way to make the prc their relevant role, an appropriate role. here is what we came up with. the idea would be the starting in 2017 the prc would propose a new rate structure and begin a dialogue with the postal service on that new rate structure. the substitute amendment, which is not give the postal service of veto right. but basically the two would have to agree with. it had to come to some kind of agreement. since the postal service would have -- am i correct? >> no, mr. chairman. >> the prc -- >> under the second-degree eminent the postal service would initiate a review.

ultimately the regulatory commission would be able to veto >> they give for that. >> 2017 rolls around, postal service proposes water rate structure. pass it off to the prc. the prc has the opportunity to say yea or nay. they say we can stay right at cpi. right at cpi. so that is where we are now. again, exit rate case, the baseline going forward. 2015. begin to cpi. a new race structure in 2017 or some other year the cpi stays in place. now, why do we like that? what we like that? dr. coburn and i have asked the postal service to run any number

of outlooks, financial statements to tell us what net income is likely to be, operating income, cash on hand, the situation of the postal service going forward. if everybody here should have -- look through your paper, if you welcome everybody here should have two pages. the first page has a lot of yellow at the bottom. if you would just find that. the top of the says the postal service ten year outlook, the coburn amendment. again, just to reiterate, this is the exigent price increase. 2014, the exited to what -- price 14. cpi price increase begins and 2015 going forward.

as i said earlier it has been some kind of agreements. if not, then we stay at cpi. if you look in the right hand corner of the way in the bottom of the spreadsheet the most important number to me -- and that think to dr. cockburn is the net cash balance at the end of 2023 a $7 billion. $7 million. the sounds like a lot of money. that is out of $750 billion in revenue. it's like less than 1 percent of the revenue this year are likely to receive. this spread sheet assumes no recession, no recession for ten years. and we are concerned about that.

we are all concerned about that. but what the postmaster -- for the postal service has done, dr. coburn knows, the conservatives recognize that in years is a long time with no recession and a camp down the revenues. they have reduced by in $20,232,000,000,000 in revenue forecast expectations, and reduced by $1 billion each in 2021 and 2022. that does not mean -- we will will still probably have a recession of the next ten years, but at least we have urged the postal service to be conservative with respect to the revenues, and that think the adjustments they have made in tamping down the ama does that. for me the most important thing for us to accomplish with what we do here today is we pass out a bill with the financial service postal service will be financially viable to the best of our estimation. and the numbers here would

suggest that is likely to be the case. unfortunately we don't have the ability to take what senator bald and has laid out here today in her most recent proposal and to actually run. use those assumptions, use those revenue assumptions, if i understand correctly and be able to price out what kind of net cash or debt position that the postal service would be at the end of 2023. there were able to take an earlier proposal from senator baldwin where we add the eggs and rape cases in place in 2014 only for that one year and then the cpi plus one price increase began in 2015 going forward. and based upon that proposal, that earlier proposal the debt position for the postal service, this is the sheet that has a lot

of green, turquoise on it, the bottom half. but that proposal led them to a deposition summer between four and a half billion dollars. that is concerning to me. that should be concerning to all of us. now, let me yield to dr. coburn. >> thank you, mr. chairman. first of all, i would comment the senator from wisconsin to my appreciate your efforts on this. there was a lot of back-and-forth between our staffs. your accurate that she did not get it in writing, but there was a lot of discussion all week. actually for two weeks on this issue. so it's not that we did not respond and were not working in good faith. we were. this second point -- this piece of information that you got from the post office committee assumption and it was cpi plus

one forever which is why you see a difference. it's not a real difference because they ran the numbers at cpi plus one continuing 32,203. the third point i would like to make is if you look at any of these numbers anywhere and you look at the net debt, the positive cash flow only comes in the out years where we are the least accurate. so whether you take mine are your numbers, the fact is at the lowest possible revenues for the post office is still a guess. as the money comes after ana of -- is way too optimistic.

remember, were looking at these numbers taking of their going to grow partially 6% year. and they're looking at these numbers, the standard mail is only 45% over the next ten years i think the both of those promises are highly unlikely. i think we are way too positive right now on the revenue in terms of our projection, but that's the projection. i would also said, they did not have a look -- recession. what they had was a conservative blocking of some of the revenue based on these revenue mixes because they don't really believe they are positive projections on growth, which is how people plan on 10-year projected budgets. they try to make them as conservative as possible. i don't think it may be conservative enough, but they know it and i don't.

my experience, and there are three accounts sitting on this side of the table and we have a little bit of experience of budging and pro-forma balance sheets and income statements, i would go back and say one other thing. i have no doubt everybody on this committee wants the post office to survive. the statements that we have heard is that the american taxpayer and not paying any of the bills of the post office, it's just ludicrous. they paid 15 billion so far in the bills. we had to come to a compromise that is fair as we can make it to those of japan and the press imposes. fair to the postal employees and fair to the american public. and i have learned some things on service standards for you. i no there are some real

problems out there. i am going to get to the bottom of it and help us get to the bottom of that whether we pass this are as we move to conference. we will take care of some of those service standards that are promised that and not delivered in a rural areas. so i think you have a legitimate complaint, and we have to look at them. though we have started -- our whole goal and we started this thing was the same thing everybody here wants, to make the postal service by will. and we have moved a tremendous amount from a troop competitive bill that would really make the post office respond to competitive prices, respond to efficiencies and give them the freedom to do that too much more constricted now position that will put the post office at much higher risk if any of our numbers are wrong. even if senator -- even if what senator carper and i propose in

the second agreement, i still think it is really shaky weather will have accomplished what we intend to. the final thing i would put this the numbers proposed an eminent to force a price decrease. we go down in terms of the prices be is taking away the agent after one year. rasa taking away the cpi. and then we start her in a much lower baseline. if you look at the numbers of the $12 billion swing from what senator carper and i have proposed, from seven to minus foreign half. it's a $12 billion swing. we're talking about a business that has net cash flow of less than 1% based on very, very positive on opportunistic

revenue numbers under that proposal. so we are to the point that if we don't except what we have proposed to we will not have solved the problem. so my hope is is that we can come to an agreement knowing that this is all going to change as we go to the floor. it will change as we go to conference, but knowing that we have moved to a significant position to where we've really limited the ability of the post office to increase rates was i disagree with fundamentally as a principal, we have really limited their ability to cut costs, which i fundamentally disagree as principal, but we are still above water, we hope. and my hope would be that we can compromise on.

otherwise we have not fixed anything. we have not solve the problem. and so mr. chairman, i fully support your second amendment. we worked hard to get to this compromise and i hope it will be seen as a compromise that meets have with the concerns of the senator from wisconsin. i would also say want to thank senator johnson for is working of the numbers and actually making a positive to protect both the mailers and solve the problem. i am not saying you're not trying to do that, but the fact is we want as much volume to get to the post office as we can get we know that there is relationship between price increases and decreased buying. we understand that. and the point is, i'm not capable of knowing exactly where there should be. i don't think either of the senators from wisconsin are, but i think in working with the mailers and the postal service they can come to an agreement that gives the best revenue the still saves the post office.

i would hope that we would vote on your second degree. >> mr. chairman. >> thank you, dr. cockburn. >> i just have a couple of remaining comments. and i do not want to deliver because i think members are concluding whether votes are on this. one is on the issue of governance i do have a question that i would like to pose to the general counsel for the prc. >> please. >> thank you. >> mr. corcoran. >> they do, mr. corcoran. >> i am the acting general counsel for the postal regulatory commission. >> welcome. >> thank you. i also want to thank you. you responded to an inquiry from

center live-in after our last markup. he was kind enough to share that with our entire committee. i appreciate that. i want to know whether the postal regulatory commission has a position on the new carper-k-9 second-degree amendment that we have been discussing right now concerning governments. >> yes, we had a brief, which ended this morning to consider it. the commission. we did not have time to prepare something in writing. >> how many folks serve on the commission today? >> three. >> okay. are there any vacancies? >> there are two. >> i know. >> the postal regulatory commission has a history in expertise. so it is an incumbent's from the community in developing a system of rate making.

while the language provides a role for the regulator and approving the finished product, it plays the development of that system within the control of the regulated entity. the process may be better managed as a joint process among the postal service, stakeholders, and the commission whether regulators balance competing interests in the development of a new braking system. >> i think you. just a couple of additional comments. i certainly would urge my fellow committee members to reject the second-degree amendment and vote favorably on the compromise alternative. we have had members talk about how far we have come since the original bill. i would not be able to support the underlying bill if the second-degree amendment were to pass because of the original concerns that brought me to offer my amendment in the first place to strike section 301.

the volatility that i see forthcoming in rates to that will affect so many in the wisconsin economy concerns me greatly. but that transparent governing process when we are dealing with the u.s. postal service that has such a sizable monopoly is crucial in my mind. i place heavyweight on what i just heard from comments from the postal regulatory commission on how they would see their role being depleted significantly moving forward. just a couple of additional comments. i have to say that our reliance on these spreadsheets is very troubling to me. when you find $4 billion discrepancies when we find

assumptions that we have not -- $4 billion of padding here. i mean, they are guesses. and after 2017 a lot of changes are happening. we are guessing after 2017. and so it is just very frustrating for you to take out a spreadsheet and point to 2014 or, sorry, 2023 and be able to suggest that is the impact of some of the amendments that we're talking about right now. unless you know all the assumptions we know that there really are guesses. would that, mr. chairman -- with that, mr. chairman, i yield back. i urge my colleagues to vote no on the carper-coburn second-degree amendment to the modified baldwin amendment, to pass or adopt the ball when amendments and carry on with a

markup. >> senator johnson seeking recognition. >> mr. chairman, thank you. i certainly share and represent the same interest as senator baldwin, obviously taking a somewhat different perspective on this. i would like to respond to a couple of comments and reinforce a couple of points. from my standpoint this is not my solution. i really think the best thing for the post office is to be set free. the best way to actually ensure that it remains an entity long term would be to go through our reorganization under the protection of the bankruptcy code. just the way it would happen in the private sector, providing the best chance for the postal service to survive long-term. again, what we are doing is resolving it through political process and seeing how messy that is and really, is that long-term survival is being put at risk. secondly, let me put my business had on. i think it is always risky as a business to base your business

model on the supply who let's face it, is basically bankrupt. so as concerned as i am about the industries and wisconsin they are relying on a business model that is not particularly stable. what we're trying to do -- and this is where i appreciate the work of the chair and the ranking member, to try and make this into to survive so that we provide some stability so that we take at least at risk out of the business model. because right now if this bill fails who knows what will happen to the postal system. i don't know. i don't know what size the mounting losses will be. that is something of want to reinforce. in theory, sure, the american taxpayer is not paying for the post office. $15 billion worth of debt came out of the american taxpayer hide and as losses mounted in the future, where is that money going to come from? the unfunded liability is tacked on to the $15 billion the post

office altman fails to will pick up that tab? the american taxpayer is surely on the hook. it is very strange in business by and large unless you are in a commodity type of business where you have volatility of, structure to just increase prices. it just doesn't happen. that is what we're talking about here. if we step toward early resend the exigent price increase, what is that going to do the post office? what would be the rationale for rescinding that? you know, has the cost decreased? i don't think so. so i would see no reason in a normal business model that a price increase would be rescinded in any responsible manner. i would agree, by the way, that looking at projections is pretty dicey. but you have to look at them. you have to do something projecting forward. the way i would manage this

business decision, i would also looking history. one of the things i try to do in the intervening week since our last sharon was try and get some sense of what has been the history of price increases between the post office and its competitors. ups and fedex. i have -- and it is difficult to get this because we have announced price increases, but have got a schedule your. i don't know if we should enter this in the record, but i think it is relevant. i want to take time to go through this. if you add that since 20096 years in terms of the amount of price increases for ups and fedex and ground service to my totals 30%. you take a look a what price increases the postal system has done on carrier routes and presort finds it is at 16 and 14%. so in a business setting you have to benchmark your pricing structure verses our competitors i just want task as long as i

have be assistant postmaster general here, is that relatively accurate? of your price increases lagged that far behind both ups and fedex? >> i will defer to our chief financial officer. >> quick answer is, yes, they have. >> that is a problem. that should also be brought into the equation in terms of what we should be doing price wise. from my standpoint congress is going to be a pretty bad evaluator for warrior prices ought to be. i think any business -- i cannot imagine trying to run a business where one of the riskiest decisions i have to make is the price increase our price decrease in not having the flexibility to make that based on economic conditions and business conditions on a day-to-day basis. we are pretty well taken that flexibility away from the postal service. it is not going to end well. from my standpoint would rather give you the greatest flexibility.

i think you're reasonably intelligent understanding that you don't want to lose a big chunk of your business. you want to maintain that, even if it is a loss leader. i don't believe you're going to overpriced and price yourself totally out of business. last point because it has been made repeatedly that the post office's monopoly. the post office is a true monopoly you would be making all kinds of money, your service with stink, your prices would be incredibly high. the fact is, your not which is why you're suffering these losses. you need the flexibility. again, this is not my solution to the problem, but i really do command center carper and k-9 for their effort to craft some kind of compromise that just my survive to provide some postal reform that gives the post office at least the possibility of surviving. if we don't do this i think we put at risk the postal service and a think we put at even

greater risk those businesses in wisconsin that rely on you. so i think providing the stability and security trump's certainly my idea of how this thing should be resolved, and i am willing to support what they have done. thank you. >> i want to thank you very much for what you just said. thank you very much for what you offered to us two weeks ago. it's important. we thank you for reiterating. before i yield, we will try their wrap this up. i asked the exit rate case meaning in terms of the prices of mailing a catalog. the eggs is a great case calls for an increase in 38 to $0.48 for catalogs and increase and magazines from 28 to $0.29 an increase in nonprofit from $0.10 to $0.11. these are not huge increases. all right. senator. >> mr. chairman, i will try to be quick. i know time is of the essence.

but want to ask mr. cochran a question since we have him here. that is, are you familiar with the language in the baldwin second-degree as well as the carper second degree? >> to some extent. >> well, the question i want to ask you is pretty specific. that is, what is the difference and the two proposals as those differences relates to the prc? how did these two amendments, proposed amendments treat the prc and how they treat them differently? >> well, under -- as i understand the baldwin second amendment, if you will, that preserves the lectern to governance. and under the -- center carper and k-9 second degree, it provides -- it has no pre implementation review of postal

service market dominant rates, and it would, for their review and 2017 the postal service would come in with a proposal and a choice for the commission which would have a hearing and comments from affected stakeholders to approve it without modification or rejected so it is an either or -- as i understand it is an either or decision. >> and that is different than the status quo today. >> yes. the status quo today would have the commission undertake the review with input from affected stakeholders including the postal service. there would be a proceeding, and the commission then would issue an order for decision whether the existing system would be revised or a new system would be implemented. >> thank you, mr. chairman.

>> i would like to respond to that. i think that is an important point that you brought of. we obviously don't have enough revenue at the postal service. and we have the postal rate commission that is susceptible to the lobbying of those that use the system which is totally accurate, but when you look at the numbers one of the reasons that the post office is in trouble even with all the cost-cutting that they have done is the rate increases have not kept up with the cost associated with doing what they're asked to do. and so when you see their competitors at almost twice as much in terms of rate increases so that they can maintain profitability and capital back into the business, we are not allowed to enter the prc. and i would also remind that the people that the prc are not required to have a significant business management or other background which limits their ability to see things from the postal perspective to the postal

management perspective. it does not mean that there not doing a good job, paying attention or hard-working. so we have handicapped the post office. all you have to do is run the numbers that the postal service, even with the buying declines at the same increases at other fedex or ups has had and we would not be sitting here doing this today. >> mr. chairman. >> before center live and speaks , again, keeping in mind, senator pryor, last august while the bills are introduced gave really no participation -- almost nonparticipation. there was a lot of blow back on that. we modified that so that it would be providing a role for the prc. not to the extent that they have under current law, but we have provided a significant change. we have provided a further significant change with the second-degree amendment that is before us.

exit rates baseline, 2015 cpi goes into affect joined ford, and in 2017 if there is negotiation between the postal service and the prc on changing rates structure, the postal service can propose whenever they want. nothing happens unless the prc greece. if the prc does not agree with stay cpi. that is pretty simple. it is fair and reasonable. the other thing that is the postal service to a positive $7 billion cash position even assuming we can't down revenues tend, eight, nine years out. i want to let -- recognize senator levin. >> thank you, mr. chairman. just to reiterate the point you made it the end of your statement that we have every incentive to work with the prc and the industry because if we didn't we would have to be a cpi so the incentives in the amendment really force us to work very closely with the prc,

which we would do to try to complete an agreement as to an acceptable rate structure. >> thank you. >> gentlemen, first of want to thank senator baldwin. i happen to think this is the fair approach and involves the prc in a significant way because the power to say no is the power to shape. it is also the power, as far as i'm concerned, you are not precluded from having any pre implementation review. does not say you may not permitted to simply says that there will. if you want to listen to stakeholders or have any other input, you are not precluded, but you have the final right to say no to a proposal. that would not be there but for senator baldwin. so i'm not going to vote for permanent. i do want to say that we are at a place which i think is a fair place because of her effort. the same thing is true on the rate. i just don't see any realistic

way that the exit rate is going to be repealed in any event. i don't think have ever seen a government raid which is been reduced. i mean, the need is there. it is clear and will continue to be there. i think we ought to use that in the baseline. it is a fair approach. again, i would ask unanimous consent that the very helpful letter from the regulatory commission to the fed be part of the record. >> as we prepare to vote on the canine-carper system to the ball when amendment i just ask you to keep in mind -- and this is for democrats and republicans, but especially for democrats. i have been concerned and you have been concerned about the post office closures. we tried to be attentive to those concerns. i think thanks to dr. coburn and his willingness to compromise we

have made good changes. we have tried to make some others. we tried to be attentive to concerns about the closing of centers without tying hands of the postal service unduly. we tried a number of other ways to help the postal service to basically rain in their cost. it cannot just be cut, cut, cut. the postal service has taken huge amounts of money out of the system in terms of head count, in terms of the post offices and restructuring the post offices. in terms of reducing by almost half the number of mail processing centers. they have cut the heck out of their costs. there has to be some revenue here. there has to be revenue. what i think we propose is a fair approach to provide certainty. the increase in magazines and catalogs and nonprofit mail is

not huge unfair increases the part of the eggs is a great case . i don't think that is an unrealistic or unfair burden to place on the mailers. with that having been said that think we're ready to go to the votes on the carper-k-9 second-degree amendment. [roll call]

[roll call] >> mr. chairman, on the vote 64. >> thank you. i think my colleagues for their vote. this is not the finish line. there will be plenty of time for us to talk further on this. i want to commend senator baldwin for tenacity. i would ask, if we could, i

don't want to run out of time and members. if we could go to senator high campeau has an amendment i think we have a couple of others. all right. good point. now that we have amended the second-degree amendment do we need to vote on baldwin as amended? all in favor. requests for roll call vote. the amendment is modified as agreed to. senator, thank you for your patience. >> mr. chairman, i call up high camp number three. i don't want to belabor a long discussion here on every detail. it is a fairly link the amendment. i want to respond to the senators suggested that some of this is related to parochial interests. obviously we have service centers in north dakota camauro post offices in north dakota,

but we have a growing population in north dakota, and i could tell you stories about the post office. you know, including my favorite one that i heard on my last trip back which is that the local lady who delivers the mail for years under contract, loral carrier, and everyone newer, she knew everyone, always check ten on the elderly, well, she lost her contract, cost-saving measure. they hired a company out of california who hired ex-convict who through the mail the dutch. so that is the way i look at the post office these days, through the eyes of my constituents who, let me tell you, you might think that is an isolated story. i could go on for at least 20 hours telling you about the post office. my interest is to try and have some accountability one for what's going on as they make decisions, whether it's on service centers, whether it's

going forward -- and i know it looks like a fair amount of increase the bureaucracy, but from my standpoint we cannot just sit idly by without some accountability to the post office and how the post office being managed. i might suggest we would not be here if we had quality management post office. and so i am not going to go through this in any detail unless someone wants me to. i understand senator levin has been able to get an accommodation on extension on the six day delivery, which incidently if i could comment, the one thing the post office does that nobody else does is six day delivery. i don't know why we will want to take away that one advantage that they have in the marketplace. i have run a few businesses in my day. i've sat on a few corporate boards. i look to what i'm doing and no one else is doing an ally can leverage the opportunity.

i feel pretty strongly about 60 delivery. as an opportunity for the post office, not as an economic burden on the post office. and so i am not going to put a target date in year. as i understand the senator has been able to secure a commitment i would move this amendment because what it does is provide accountability, responsiveness to the consuming public and to the people who expect there mail to be delivered on a timely basis and people who expect there mail carrier to be responsible and show up. just one point about the service centers, that is a critical part of delivery of the mail. you know how i know? because when the service center does not process are male and it does not get delivered to the dickenson post office until two in the afternoon, i've got postal carriers who are delivering the mail at 11:00 tonight on icy streets.

and so this is tell -- we cannot just say let's fix the post office without looking at some of the problems that we have. i want accountability. that is what this amendment does . >> senator, thank you for your hard work on this, very hard work, you and your staff working with dr. coburn and his folks. >> mr. chairman -- >> appreciate the input of others. that may yield. go ahead. a couple of points i would like to make. >> i would like to offer a second-degree amendment to the high capital and. >> go ahead. >> this amendment will address the carrying of guns in parking lots and in the post office and it will be amended different from the previous amendment that i have had in that the enactment of the amendment will take effect one day after the enactment of this act and i would like to presented to the chairman for a vote on the

second-degree amendment. >> can i just ask the gentleman just to withhold your amendment for a few minutes. there has been an effort to try to craft an amendment on this subject. >> as long as we have unanimous consent that my amendment will be voted on, i don't mind when we do it or whether it is paired with another amendment will but this is my last chance to know that i will have a vote right now. so i will relinquish it as long as we agreed by unanimous consent that there will be a vote on my amendment as worded bias. >> can i just say, does someone have the amendment? >> it is very similar to what has been presented other than an enactment. >> consensus.

[inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> all right. let's resume this conversation. we talked a little bit. and what i think i am going to ask, if you will, is to withdraw the second-degree amendment so that we can debated and voted up or down. i would ask unanimous consent to that once we have done at that we have the opportunity to consider two amendments, one offered by senator paul which could be the amendment to redraw

or original. and we have another amendment that deals with the parking lot issue. and we have a chance to debate both. but i think we want to vote. >> as long as the unanimous consent that we are considering is to straight up or down votes on my amendment and another amendment, but not as second degree that cancels out or sidesteps the issue. as long as the agreement is a black surely vote up or down on my language and there will be a substitute. we are agreeing basically not to second-degree my amendment. and happy to agree not to second-degree the other amendment. >> i need unanimous consent. would you just withdraw? >> yes. we will withdraw. >> we are back to you. i think senator levin one to comment. >> i would make an offer of two amendments. one is the the estimate, i think, of the chair and the ranking member -- i have to get

the right language in front of me. under the trigger approach of 140 billion pieces for four straight quarters in a row, the estimate -- >> it would be page 21 of the amendment. >> i'm not sure. >> yes, 21. >> but under the documents given to us that would, under this estimate, be reached in the fourth quarter of fyi 18. and i would say in order to give all little certainty that we say in no event, leaving that trigger in there, the trigger would remain just the way that it is in the language, but to have little greater certainty in protection here for the confidence that the language

would be added no earlier than the fourth quarter of f-117. in other words, there would be in any event no earlier than. now, the best estimate is that it is not going to be reached until a year after that. so i don't see that this -- and not trying to suggest that we put in long the estimate exactly. that would be the last quarter of f18. it seems to me it would produce greater confidence in this process where those of us who strongly support the six day delivery that in any event it is no earlier than one year before that estimate which would be the fourth quarter of f-117. i would offer that as a second-degree amendment. i think that based upon discussions i hope this might be excepted. >> that is acceptable to us. because hopefully we're not

going to get to 140 billion pieces of mail. does the whole goal, to not get down to that. so what this does is build san some assurance that this is not going happen earlier even know if it does it will hurt the post office, but to move the bill i am willing to give on that. >> and so am i. >> senator, can you live with this. >> mr. chairman, i have been asking for some kind of shirty in this amendment for quite a few days. i think this is an excellent addition to the men. >> senator levin. >> yes. it is good. >> and i wanted thank the senator for tenacity in getting some confidence level here beyond the trigger which is specific, but it does not give the kind of confidence which this candidate would. i thank her for her great efforts year. >> i would just say, senator high camp, i've made this

commitment to you before. i am going to come from north dakota. i want to have a chance to go around your state and actually see what kind of services being provided and see for myself. i am one of those people who learns by being involved. i look forward to being with you. i don't want to go this month, but i might be willing deal in april. april would be just fine. >> mr. chairman, you are assuming april would be different in this month. >> late april. late april. any more discussion on the live-in proposal here? all right. all in favor. opposed. it is agreed to. senator. >> well, i have an amendment. >> i think we have to -- one vote. >> suggest a change. >> go ahead please. by the way, we would love to have our chairman come to the

upper peninsula after north dakota. snelling on the upper peninsula until east german @booktv at least ten. >> i will go to the upper peninsula right after you have been. i might add one week from today pitchers and catchers report. the tigers and a bunch of other places around the country. >> happily no one else in renault's le we're talking about . he is a tiger fan, that is the bottom line. mr. chairman, i would suggest that the high camp languages after the gao comes up with their report that there be 30 days, if i read this correct that before the postal service could then act. it just is a little bit of possibility here that the congress could respond to that decision if this is not at all practical. i would just suggest that it be

60 days. i think senator high camp would have, but it is a practical matter. i suggest that this be a 60 day summary guess some possibility of congressional action. otherwise there is almost no point putting it in. >> mr. chairman, i totally agree i would go for 90. whenever we can resolve your. >> i am willing to accept 60. can you live with that? thank you very much. this is essentially -- well, let's make this unanimous consent. is there objection? is there objection to this? now we have to go back to the amendment that is not another amendment. >> i think our chairman. >> oh, sure. >> it is really, really very appreciated. >> i yield back. thank you for your constructive comments. i yield to final passage. any more comments?

hearing none, all in favor. the ayes appear to have it. the amendment is incorporated. do you have an amendment? >> , number four. it goes to the issue. postal delivery rural areas. these services are organized under a thing called the alternative means of transportation. in june the postal service unilaterally implemented the pilot program in the northern plains. that reduces the contract use and reduces mail delivery standards below standards in other parts of the country. all sorts of stories out there. will this give you one quick one.

the fair shot away. police and overnight delivery, it did not get there for nine days. overnight delivery, u.s. ps. the reason is because they had to truck it, not air service. we have been here before. great adoption of this amendment >> let me just say -- we will lead dr. cockburn comment. he is mentioning. he can support -- i can support it at this time either. i would ask you to consider -- you can certainly make your own decision. i would ask you to consider what is wrong with the men at this time. we will be happy to try to do that. >> i appreciate that.

quite frankly this is pretty simple. pretty clear-cut. i would assume have a vote on it. if it goes down, it goes down. the passes which i hope it does i can live with that even better >> with that in mind, any other comment on this? not drinking member just for a second. >> we really don't need to hear from them. >> ex-convict silver in the mail. [laughter] >> chicken and it is with anybody she wants. >> i offered the opportunity.

asked if he would consider withdrawing his amendment to give us a chance to work with them. i think he makes some good points. he said he would rather go ahead and vote up or down. .. it got there eight days later and that is not acceptable and quite frankly people will look for alternative means of use. that only has to happen once and it will never happen again

because they will never use the post office again. we need a vote on this and if it is it is and if it is and it isn't that like i said i preferred to pass. >> one question. are there any other states with the same service that was canceled? >> it was the state's pilot program in the northern plains montana nebraska north dakota and south dakota. >> that covers all the states with that service? >> that's correct, that's right. >> all right, with the clerk call the roll on this tester amendment please? [roll call] >> senator pryor i have his proxy and he is an i. >> she votes aye by proxy. [roll call]

>> senator baldwin votes aye by proxy. >> senator mccain. >> no by proxy. [roll call] >> no by proxy. >> senator carper. >> i vote no.

mr. chairman of the vote of those present the a's are four and the nazar four. on the boat by proxy the are four and the nazar three. on this that the a's or eight in the nazar seven and the motion is agreed to. >> okay. did we win that? it sure sounds like it. i want to thank the chair. [laughter] i don't know what the order is. i have another amendment if you need one. i am going to ask you to hold that for just a moment if you will. i think we are in a position now consider two amendments senator paul's amendment and a side-by-side if you will on the same subject. senator paul would you like to

go first? >> this amendment has been debated pretty well and i won't go into long. i would just say our amendment was supported by the nra the gun owners of america as well as the association of gun rights. what we don't want people as to be caught up in a berkeley you are trying to obey the law and are going to jail for something they never intended to do wrong which is perfectly legal by the state law. many states have concealed carry and a lot of people do carry a weapon with them for self-defense as well as other reasons. i would say that this is important and that we not be trapped into limiting it just to parking lots because there are a lot of in between is. where's the sidewalk and wears one's foot on the sidewalk? there will be a lot of in between some icy nothing unique about the post office that leads me to believe there'll be more violence committed in a post office than anywhere else. the only violence we can point to and fortunately came from some mental illness with postal workers at one point in time and

it actually has been a while since that but there hasn't been any kind of brash violence by any citizens i hope people will support my amendment. >> we are getting in up-or-down vote on your amendment. i think it might be helpful for us to hear, i think senator begich is going to offer an amendment after we have a chance to vote on your amendment but can you give us a flavor. >> mr. chairman thank you very much and i recognize senator paul's broader issues and i think what we are trying to do is get to this issue. i know in my state of very rural state we have folks that are pulling up to the post office and probably have a gun in their car or we have the open concealed weapon law where you can have a permit and carry a gun on you and we have people and up in parking lots going to their post office to pick up their mail before example that's the only place, there is no home

delivery. that's the post office and that is where you go in many of our rural communities. you park in you go when and you may not realize that even though you stored your gun in that parking lot which is where the post office has lost this cart cart -- court case at least on one level and they think they should appeal it and they are doing it but i don't think they should appeal this issue. this solves the problem once and for all so that is what my amendment does. i will patiently wait while the process unfolds here. >> let's return to senator paul's amendment and we will vote first on that and then i will recognize senator begich but does anyone else want to make a comment or ask a question about senator paul's amendment? okay, i think with that why don't we just call the roll on senator paul's amendment please. [roll call]

>> no by proxy. [roll call] senator baldwin is a no by proxy. senator heitkamp. >> no. >> senator mccain. >> aye by proxy. >> senator johnson. >> aye. >> senator johnson. >> pass. senator paul. >> aye. >> senator enzi. >> aye by proxy. >> senator cardin. >> no.

mr. chairman on the vote the yeas are three and then azar six. on the vote by proxy the or three in the nays are three. on this vote the yeas yeas are six and then azar nine. the motion is not agreed to. >> let's move to the begich amendment. senator begich would you like to comment further? >> mr. chairman i don't know the amendment number but i think it might be number four so i will use that as the number for a placeholder. again this is highly focused on the issues that i know i hear a lot about making sure that people are not breaking the law as they going to get their mail and we have this problem all throughout alaska. the court case resolves that problem and i would encourage a yes vote on this mr. chairman. >> i have a quick question of senator begich. >> pleased. >> is this amendment say it's

permissible where it is consistent with state law? >> state and local law. >> any further discussion? on the begich amendment we will call it number four at this time with the clerk call the roll please? and clerk can you confirm the number. >> begich four. [roll call] [roll call] [roll call]

>> pass. >> senator paul. >> aye. >> senator enzi. >> aye by proxy. >> senator ayotte. >> aye. >> senator carper. >> aye. >> mr. chairman on the boats present the yeas are seven and the names are zero. on this vote the yeas are 15 and the nays are zero and the motion is agreed to. >> thank you very much. thank you senator begich and thank you all. are there other amendments? i understand we have ninth amendments for final passage. we have a handful of amendments that i think dr. coburn we are

in agreement on. heitkamp number one mccain number six paul number one and custard number one. i'm not aware of any objection to these amendments being considered en bloc. with that in mind i would ask for a voice vote. all in favor say aye. opposed, nay. the ayes habit. with that in mind i think we are ready. >> mr. chairman i have been amendment. >> i understand the chairman and ranking member of posted and i would like to continue to work on that with you. amendment number one addresses a problem where mid-management level employees within the u.s. postal service do not possess the right to appeal adverse personnel actions to the u.s. merit system detection board and we have had discussions with the postal service on this. i know mr. stroman is here right

now. i think at one point they expressed some concerns and had maybe an objection but my understanding is that would like to call in mr. stroman but my understanding is they now think is going to be in minimal cost if any at all and they are not opposing the amendment. >> we have no objection senator. >> thank you. we talked about this a week ago when we have this at without their objection it becomes fairly noncontroversial. >> any other comments? with that with no more discussion all in favor say aye. opposed nay. the ayes appeared to have it. the ayes habit. the ayes do have it. >> i am on a roll. tester number three.

mrs. a provision we talked about last year. this is a little different. this is row active as far as federal workers comp. the one last week took everybody in. this takes effects for folks who want passage of the bill basically so i think that this makes it still not perfect. i referred to in last week that makes it a little less bad and you know it would make the cuts perspective basically so they would only applied to federal workers after the date of enactment. it wouldn't apply to the ones before. it would be less of the savings but remember it's still 60% of the claims are other than the post office anyway. >> senator tester. i cannot supported at this time and we have had those conversations and i appreciated. i can't supported at this time.

>> i can't supported as well. this is the second bite at the apple and i understand her position. what i will tell you is we are we are probably going to resolve this where we have to meet with george miller and the house in terms of conference if we ever get this to the floor but i would say this. you said it the opposite way. 40% of all fica is postal. >> no, i said at it the right way. 60%. >> the point is this is a significant problem and are real goal ought to be putting these people back to work because they are going to earn a whole lot work -- more working. i'm i am adamantly opposed to this at this point in trying to keep what we have in here because i know we are going to get less only go forward and we really do need to have reform. >> senator coburn if you get this fixed i will buy you a pop

and that is on the record. >> has to be grape. >> please call the roll. [roll call] senator landrieu votes i go by proxy. >> senator tester. >> aye. >> senator begich. senator heitkamp. senator coburn. senator mccain. >> no by proxy. >> senator johnson. >> no. >> senator portman. >> past. >> senator paul. >> no by proxy. >> senator enzi. >> no by proxy. >> senator ayotte. >> no. >> senator carper. >> no.

>> mr. chairman on the boat of those present the yeas are five and then azar five. on the vote by proxy the yeas are to, the nays are three. on this vote the yeas are seven the nays are eight and the motion is not agreed to. >> any other amendments? >> i have one less thing i want to say. i'm going to vote for final passage on this to move it to the floor and the reason is because of your hard work and the work of senator coburn. i have total respect for you guys. you guys have spent so much time on this and work so hard. we still need to work on it and hopefully we will get it to the floor and hopefully have the amendment process there and work on the manager's amendment but i just want to say thank you both for your hard work. >> thank you for working with us. senator castor. >> ditto. [laughter] >> senator begich.

>> to you and the ranking member thank you for allowing me on the fly to do a few things and i appreciate that greatly. i do have other issues that we will deal with hopefully as the process goes forward. i'm still concerned on larger issues but i want to thank you for the work and how long it has taken to bring us together so again thank you very much. i will work on the other issues as we move forward. >> any other comments? >> it too want to thank the chairman and ranking member and i think there is obviously more work that needs to be done on this but i want to say this. i think both of you recognize the status quo is unacceptable for everyone. for the post office whether you work for the post office, the taxpayers everyone so i want to thank you for working together on this. >> but he say first of all thank you very much for those comments. i want to say to dr. coburn how

much i appreciate the way you have approached this. we basically made a blood oath that we would fix this problem and obviously we can't do it by ourselves but i think we made a big step today. i hope we have a good bipartisan vote on final passage. to our staff and everybody else that has been a part of this thank you and to the staffs of each member we are very grateful for the work that is undone. the key stakeholders and those representing the employees and the mailing community are grateful for the input and the good conversation. i would like to say the two keys to a long marriage communication and compromise. i would add a third to that, collaboration. we have had pretty good indication of fairmount of upper mice and good collaboration and i hope we can get the

collaboration. [roll call] >> i am sorry. >> senator landrieu. >> senator landrieu votes i go by proxy. >> senator mccaskill. >> aye. >> senator tester. >> hold it, just hold it. let's go back to senator landrieu on final passage. no by proxy. >> senator mccaskill. senator tester. senator begich. >> aye. >> no by proxy. >> senator heitkamp.

>> aye. >> senator coburn. >> aye. >> senator mccain. >> aye by proxy. >> senator johnson. >> aye. >> senator portman. >> no by proxy. >> senator paul. >> no by proxy. >> senator enzi. >> aye by proxy. >> senator carper. >> aye. mr. chairman on the vote of those present the yeas are nine and the nays are one. on the vote by proxy for the record only the yeas are 22 and the nays are for. on this vote the yeas are nine the nays are one and the motion is agreed to. >> i think that's a wrap on. thank you everybody. >> hold it, hold it. >> i ask unanimous consent the full committee by full agreement

make changes to the -- for working with us to put the postal service on a path to a more sound future. without objection. all right, that's it. [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> one of the things that we worry about obviously are the cyberattacks but physical dangers and what i always think is what keeps me up at night when i think about what can happen next and you know i wonder what your greatest fear is as to a physical attack here in our country. general?

>> i would answer by really two things. on the cyberside an attack against our critical infrastructure that would have potential damaging effects in our transportation health care clearly financial is an area that we have to pay very close attention to. our energy sector. on the kinetic side there is a range of things that keep me up at night. when you see these mumbai-style attacks and what happened in the mall in nairobi, what happened during the boston marathon, those are the kinds of things we have to continue to work together in the intelligence community to make sure that we are working as seamlessly as possible to share everything we have not only within the defense side and the national side but also the federal, state and local and tribal level. i think that is really an important aspect of what we are trying to do in the intelligence community which is to work on integration of our intelligence system.

on senator -- monday senators have to address the rising cost of higher education outline proposed legislation that would work create state-based systems and increase access to federal student aid. he was one of the many featured speakers at the heritage foundation. [inaudible conversations]

[inaudible] one of the reasons for this is the higher education system is controlled by something our next speaker referred to as the iron triangle of regional accreditation organizations school and federal bureaucrats. the reason i'm so excited is mike lee came here in the 2010 election will end within months of mike coming to washington we were working with him on some of the heritage foundation have put forth call their saving the american dream plan. mike would come by at mondays at 6:30 and sit down with her policy experts and steeped himself in the policy of this. i haven't met anybody in washington more interested in ideas than my khalid. that is why it's such a privilege to be able to work with him for the last three years. one of the themes you have heard

me refer to throughout this event from the morning straight through all afternoon is we will not be able to advance policy in this town until we are willing to take on the status quo bias of washington d.c. and trust old ideas to inspire americans to change washington from the outside in. part of the reason mike lee has been such a forceful advocate for the bold ideas is that he also recognizes that. he has not been afraid to take on the status quo in washington d.c. and in doing that has come forward with some of the most innovative proposals we have seen in washington in quite some time. mike is here to talk about higher education reform opportunity act. it's something i think would radically transform the way higher education works for the better and empower people a choice. i am pleased to share the stage was senator mike lee and he will take questions afterwards also. [applause] >> it's good to be with you

today. as i was on my way in he said to me are you all set to talk about railroad policy? [laughter] i had one of those brief moments of panic where he said maybe i got the wrong message and then i realized it was just mike mike being mike which reminded me of a story told by a former member of my staff david barlow who was my chief counsel a couple of years ago. he has a son named william who was sometimes restless during church. william was five years old and be sitting there in church one day. david said william, you need to be good during church and if you have a hard time holding still make you should stop for a minute and think about jesus. .. few

more minutes. and then the -- this part of church will be over and you can go to sunday school and you can see your friends. and that'll be fun. and he said, just to be clear, dad, i will not be thinking about jesus during sunday school either. i will still be thinking about trains. so one day as i was on my way to deliver a speech on the senate floor, actually, about railroad policy, my wife sent me a text message saying, i'm thinking about trains. before i began writing my remarks today, i want to thank heritage action. and all of the scholars at heritage that have made today possible. i think the conservative movement really is at its best when it's all about ideas. and i think 2014 is something that's likely to prove to be the beginning of an important and new era for our country.

an era in which americans are going to need conservatives to be at our best. and for decades, that's really what the heritage foundation has been all about. about making sure that conservatives are at our best. and as we begin the process of developing a new and long overdue conservative reform agenda, events like this are going to prove to be in an invaluable, indispensable part of the development of that very agenda that we so badly need. in 1861, abraham lincoln told the united states congress that to him, the leading object of government was to, quote, elevate the condition of men, to lift artificial weights from all shoulders, to clear the paths of laudable pursuit for all, to afford all an unfettered start

and a fair chance in the race of life. today, one of the great artic artificial weights on the shoulders of working families, hard working americans from one coast to the other, and one of the great obstacles blocking their paths of laudable pursuit is the rising cost of higher education. along with the narrowed access to that kind of education. and the uncertain value that that kind of education sometimes has attached to it. those problems are symptoms of the deep paradox that is at the heart of higher education policy in america today. and the challenge to policymakers is to overcome that paradox by reconciling two seemingly conflicting, seemingly contradictory, seemingly irreconcilable facts. on the one hand, as the united states continues to transition

from an industrial economy to an information-based, information-age economy, higher education is more important to social opportunity and to economic mobility than it ever has been at any time in our history. and, on the other hand, the standard credential of higher education in america, that is the bachelor's degree, is being progressively devalued by the diminishing quality and exploding cost of undergraduate education in america. how is it possible that higher education is becoming more valuable, and a bachelor's degree is becoming less valuable at the same time? well, i answer that question by pointing out that these are not the same thing. a higher education and a bachelor's degree are two different, distinct concepts. and i believe that to succeed in the 21st century global information age economy, the

vast majority of americans will need at least some post-secondary knowledge and skills. but a four-year so journ at a pra diggsal brick and mortar ivy residential institution is not necessarily any longer the only way to get those things. part of the problem is simple vocabula vocabulary. until very recently, the college campus was really the only game in town when it came to higher education. to make higher education cost effective, you needed a centralized location where students from far away could be close to eache teachers. where scholars from different fields could be close together so they could have an opportunity to work, one with another. and where all of the above could be in the immediate proximity of a common library that would be shared by the various constituent parts of the university. today, technology has made it

possible for students to take classes from professors in another state. for academics to conduct research with colleagues across oceans. and for anyone with an ipad to carry a library around in their backpack. for the first time in history, students don't have to go to college to go to college. today there are vocational programs and specialized training programs, especially in growing technological industries. there are apprenticeships in the skill trades. there are hybrid on campus and on the job models. there are public, private and for-profit colleges of varying tiers and emphasis. massive open online courses or moocs as they're sometimes described. unfortunately this innovative alternative market is being

cordoned off from the vast majority of students by an increasingly outdated federal policy governing higher education accreditation. here's how it works. federal student assistance, and i'm speaking here primarily of stafford loans and pell grants, are offered through title 4 of the federal higher education act. under the law, students are eligible for title 4 loans or title loan grants -- title 4 loans and grants only if they attend formally accredited schools. there's a good quality control argument for this kind of arrangement. except that's not where the restrictions end. the restrictions unfortunately and i believe unnecessarily go much further than that. under the law only degree issuing academic institutions are allowed to be accredited. and only the u.s. department of education can authorize accredit tors under this system.

furthermore, as you might remember, congress effectively killed the private student loan industry in 2009. taken together, these restrictive policies, artificially narrow america's path into the middle class and into economic opportunity. in effect, the federal government today operates a kind of higher education cartel. federally approved creditors operate as a gatekeeper to keep unwanted providers out of the market. this arrangement does not protect students from bad actors so much as it protects incumbent colleges from innovative competitors. inevitably, as government has closed, protected and subsidized this market, it has started to break down. the price of college has exploded. so it's now impossible for all but the wealthiest students to pay their own way through an undergraduate higher education

experience. meanwhile, the ubiquity of the b.a. degree has made it difficult to achieve middle class security. without that increasingly expensive and increasingly nebulous credential. however unintentionally, the current policies are creating three distinct classes of students. first, you have the affluent kids who attend the best public and private high schools. prior to going to college. who are then all but certain to graduate from college and simply have to decide which college they're going to attend. which college is ultimately going to announce them as graduates. next, you have high school graduates who certainly could go to college. but are reluctant to take on that much debt. the amount of debt that it will require them to incur as a condition for attending college. and some of them might prefer to explore a more tailored or

affordable option for their education or their training. and then there are the people that current policy all but locks out of the current higher education financing system. high school dropouts, students betrayed by the system who are socially promoted all the way to graduation in high school without being prepared for college level work. and others like single parents whose life circumstances might make it almost impossible for them to take enough courses at a time to qualify for federal assistance. in effect, washington's offer to most americans after high school is, go tens of thousands of dollars into nondischargeable debt to pursue an overpriced degree that there's no guarantee you'll ever even receive, or, alternatively, spend the rest of your life locked out of america's middle class. this is not a good choice.

most progressives think increasingly that increasing the level of taxpayer assistance will make up for any policy dysfuncti dysfunction. in this area as in so many others, they say let's throw more money at the problem and the problem will eventually go away. but we've tried that. just like in the housing market, just like in so many other areas where the government's just thrown more money at a problem, what we've done is to inflate the bubble. last summer outstanding student debt passed $1 trillion. now greater than total outstanding credit card debt throughout the country. it seems to me that the answer isn't more funding for existing title 4 programs. instead, i think the answer is to make more kinds of students and more kinds of educational experiences eligible for these kinds of programs. eligible for title 4 funding. that's what my bill, higher

education reform and opportunity act, would do. it would empower states to create alternative, parallel accreditation systems. to enable students in their respective states to get title 4 assistant in order to attend alternative post-secondary education providers. participation would be totally voluntary from state to state. and would in no way interfere with the current system. state-based accreditation would in this respect augment, it would supplement, but not replace the current existing accreditation regime. college presidents can rest assured that if they like their regional accreditor, they can keep their regional accredit tor. and i mean it. i'm absolutely sincere in that one. the key difference here would be that state-based accreditation would not be limited to traditional degree issuing,

brick and mortar academic institutions. title 4 aid would be available to students seeking specialized programs, apprenticeships, professional certifications, competency tests, and even individualized courses. nor would states be limited to authorizing incumbent akreding agencies. businesses, labor unions, trade associations, nonprofit groups and any other applicant that met the state's requirements could be empowered to accredit one of these programs. under state accreditation, america's higher education market would become as diverse and nimble as the job creating industries that are looking hire new workers. authorized businesses could accredit courses and programs to teach precisely the kinds of skills that they need. imagine, computer courses accredited by apple. or google. dow could accredit a chemistry

program. boeing could craft its own aerospace engineering major. hilton could accredit a hospitality training program specifically designed to meet current market needs. accrediting individual courses would give the student still weighing her options the chance to take a course or two without going thousands of dollars or te tens of thousands of dollars into debt. an entry-level employee who needed only to take a few classes to qualify for a promotion could find a program specifically tailored to match his individualized needs. accrediting competency exams would allow students to acquire skills on their own timelines. liberally from -- and in this respect, they would be freed from the arbitrary semester calendar. which is kind of a relic of a bygone era. it's something existing brick and mortar institutions would, of course, be free to hold on

to. but not everyone would have to remain wedded to it. high school graduates unprepared for college or for a career and left in this state of unpreparedness by their failing high schools could get assistance to start catching up in remedial classes or getting professional skills. single moms and parents pulling double shifts could finally become eligible for title 4 funds to build their transcripts at a personalized rate. and at a sustainable pace. labor unions and companies employing skilled workers could accredit innovative apprenticeship and training programs, potentially developing entirely new delivery models. that's another exciting feature of this plan. it opens doors for more students and for more teachers. for more types of students and more types of teachers. in innovating states, talented faculty who might be uninterested in esoteric publish

or perish types of research that are often required for tenure at a more traditional institution could instead focus their energy on classroom excellence. on being better teachers. rather than on the constant push for more research and more publication. groups of professors could strike out on their own, forming new business models like medical practices. they could offer high quality, higher education for a fraction of the cost of four years at a traditional university. states could finally start to level the playing field for new innovators like moocs. these massive open online courses. and see where empowered students and teachers could take that kind of technology. these reforms would begin to turn higher education into the cutting edge growth industry our information economy needs to be -- desperately needs to become. institutions of civil society could play a crucial role in this kind of system as well.

nonprofit groups like -- measuring exams for various courses. think of the proliferation of opportunities that could come from this. faith communities and civic organizations could begin to offer local students accredited college courses. they could do so for next to nothing. and they could do so as part of their missions for those that they represent and those that they're dedicated to serving. qualified individuals could make teaching higher education their form of tithing or their form of community volunteering. after all, properly considered, the retired mechanic who lives down the street and the stay at home mom with the master's degree and the civil war re-enacting enthusiast who has

encyclopedic knowledge of military history all are teachers that current policy tends to keep on the sidelines. alternative accreditation could start to get those kind of people into the game and more americans into the middle class, which is exactly what we want. after all, how long does one think that we really have to wait for heritage university? i'd like to see that some day. with professor needham teaching. seriously, we already know that people other than tenured academics can teach college-level material. adjunct professors, teaching assistants and high school advanced placement teachers do it every single day. some of the best courses i took in college and in law school were from adjunct professors. and we already know credentials other than the traditional degrees offered by brick and

mortar, higher learning institutions can be made to work perfectly well in fields that use them. accountants take the cpa exam. stockbrokers take the series 7. and skilled tradesmen have their various journeyman exams, just to name a few. and in the most important growth industry in our economy, high-technology, nonacademic professional certifications have already been in the marketplace where they've been flourishing and widely accepted for many, many years. the market is moving in this direction already. it's time for federal policy to catch up to the marketplace. there are too many valuable opportunities and invaluable people that current law, current policy, tends to exclude. it's time to law tends to exclude. it is time to decouple eligibility and enrollment at degree institution. my bill would begin that process. spurring innovation and

experimentation. creating jobs and opportunities for students, teachers and everyone in between. opening up the higher education market to new ideas and driving down costs while lowering barriers to the middle class. some reformers might want to go even further to open up the market with a national system based in washington or blow up the existing accreditation system altogether. but i submit that housing alternative accreditation in the states offers three conservative goals all at the same time. first it will protect the new market from the cronyism that almost inevitably targets centralized pour. it is harder for special interests to get to 50 competing states than to corrupt one single monopoly in one single city. second it will allow competitive

federalism to work its magic just as the founding fathers intend intended. neighbors could check on prudence and inaction if that arises and voters can have a say as higher education and innovation becomes more important in gubinatorial election. and it will preserve and reward what does work at today's colleges and universities. it is wrong to say that america's higher education system is -- failing. it isn't, in fact that system succeeds every day beyond any reasonable expectation that created it many generations ago. our best colleges remain the best colleges anywhere, anywhere in the world. that is why students from around the world come here to the united states to study. but federal higher education policy is failing the two thirds of americans who never get a b.a. and a large majority of

americans who never set foot on a college campus. those americans need access to skills that current colleges are not teaching. at prices that four year residential institutions can't afford to offer, on time lines the academic calendar can't accommodate. and the lower an income and the more pressing life circumstances, the more greater the need. in today's customizable world students should be able to build their transcripts a la carte, online and in campuses with offices, with traditional semester courses and alternative scenarios like competency testing. and it should follow them every step of the way. we don't need to dump our higher education system, we just need it open it to up to more students and teachers that can benefit from it. a little competition would be

good for everyone. but the goal of reform should be to build up, not to tear down. so instead of eliminating our current accreditation regime, my bill would simply allow 50 new ones to compete with it and to compete with each other. with enough quality control to protect students and taxpayers and enough flexibility to incentivize experimentation. in higher education as in so many areas, the greatest threats to equal opportunity, the obstacles that abraham lincoln references, are the unintended consequences of government policies. the current system has left a lot of people behind and also helped a lot of people. reform needs to circle back and make equal opportunity a reality for everyone.

so that it is not just there for the lucky ones. the point of higher education policy should be to enable good teachers to teach, wig willing students to learn, the economy to grow and civil society to flourish. and most of all, it should look out for those students that the current system is leaving behind. the american people are ready to meet that challenge. and accreditation reform, i believe, will start to give them that have very chance, the chance they need to succeed. thank you very much. >> the senator will take questions but to start off, you have gotten praise and what places are you getting from higher education and state governments? >> for those who are familiar with this proposal, the praise has been pretty consistent.

the only significant concerns that i've heard have been from a couple of people in the more traditional brick and mortar institutions that have been misinformed about what it would do. i've had some -- some college administrators who understandably, when they were under the mistaken impression this would tear down the existing system, they wanted to warn me that might not be such a good idea, but as soon as i explained what this does, that concern seemed to dissipate. so the response has been overwhelming good so far. >> hi. well first of all, the terms when i grew up were mentor and internship and things along those lines so it is not new concepts, just new ways of describing it. are you addressing the f 1 visas that are active on campus? a med a young girl from china

the other day and she was getting her social security card which she needed to have herrin turnship to get cap to go to the internment. when she is here she is eligible to get a credit card and driver's license, are you talking to the people who will want the life here and the job that will stay here. >> it doesn't address the f-1 visa system. i understand there is always need for reform in that area and that is not the focus of this bill. >> senate, colleagues and senators, are there others in the [ inaudible ]. >> we have a handful of co-sponsors and the idea is still new enough and novel to where people are getting their

arms around it. we are not under -- any kind of mistaken impression that this is going to pass within a matter of days or weeks. this is going to take some time. buff the good news -- but the good news is those who have reviewed it have been encouraged and i'm optimistic about where it is going. >> [ inaudible question ] >> harry reid has yet to sign on as a co-sponsor but i'll let you know when he does. >> so the reauthorization coming up this summer, how do you see that impacting the kind of dialogue? >> that is one of the many reasons why in the senate we need to restore the regular order amendment process. because any time we're dealing with some kind of reauthorization of an existing program, a reauthorization that needs to occur, we need to consider options along with it.

things like this, have a much higher likelihood of getting to a vote and therefore of being debated and considered and having the relative various policy merits discussed and debated when they come up with a vote and that is more likely to occur if we have an open amendment process. the way things have been functioning lately, that would seem like more or less an impossibility. from july of last year through the end of january of this year, we had a total of four role call votes in the senate. four -- one, two, three, four. on measures introduced by republicans. why the majority fills the amendment tree and blocks all of the amendments other than those

that he personally benefits. and we think this is neither a democrat or republican issue, not conservative or republican issue. the american people do send us there and expect us to take votes and not just what the majority leader in his infinity wisdom deems to grand us. >> having conservations with [ inaudible ] at purdue and he's done -- obviously he would need more flexibility with a bill such as yours, but there is a gl up purdue index that is going to try to come up with a new gage of college students saying degrees not necessarily equate e. being prepared in the work i was >> yeah, i have heard of that, and i think what we're doing rises out of a similar pattern

of thinking. i have not yet met with ms. daniels. i have to do so sometime in the near future. think is like learn from that. >> one more. >> this is a great first up for higher ed reform, but i imagine it is just a first debt. where do you think other opportunities are for reforming the higher ed world, maybe more metrics for increased transparency so people know what their dollars will buy the long term as far as career prospects. were d.c. is other opportunities ? >> metrics and sort of the buyer notifications that often come with the product, you know, this is how much this refrigerator will costard operate for an entire year. you know that when you buy a refrigerator. you know that the miles per gallon rating that a car receives before you buy the car.

a lot of people have suggested that we require similar and permission to be disclosed when comes to higher education. and especially were federal funds are involved they're ought to be some kind of metric produced and made available to the consumer or the students. .. there ought to be some kind of metrics produced and made available to the consumer -- the student -- about what the graduation rates are, about what the employment rates are post graduation, about what the salary rangers are