the postal service. under our legislation it says if you haven't figured out, the flexibility that we provide, if we haven't gotten there, you haven't gotten there. in two years you can go from 60 -- that's it. but we provide two years to see if this will work. and i think actually that's a pretty smart approach. i said earlier what it does is git i haves labor and management the opportunity to see if they did what the uaw and the auto industry did and that's to benefit a different wage structure to maintain the business in this country and to start to grow it. so with all due respect, i appreciate the arguments that our colleagues are making. i think when you actually see what we have done in the legislation, i don't expect -- it's a huge thing and i'm still getting my arms around it as well. but i think when you get your head around it and understand the flexibility and what we do in terms of doing what the postal service needs to do,

you'll feel a little bit better about what's before us. i hope a lot better. thank you. >> thanks, senator. just very briefly, i'm going to propose senator mccain's amendment number five. i have reached a conclusion personally before we begin the negotiations that we should go to the five-day delivery right away. i was convinced by my colleagues there's some disadvantages to the five-day delivery and therefore that the better part of wisdom here, the way i read the provision in the bill is that we're going to five-day delivery after two years. unless the postal service can reach the level of savings without it that is their goal. i'm personally doubtful that it can do that without going to the five-day delivery. so to me this is easing into something that we're probably

going to have to do in the end. i think it's a reasonable compromise. is there further discussion on this one? >> well, let me just say, is there any argument that we could save $3 billion a year? is there any argument that the president of the united states believes that's the right way to go? is there any argument that the u.s. postal service in their wisdom believes it's the way to go? so let's kick the can down the road for a couple of years. >> there's some fact and argument about the cost. the postal regulatory commission did an in depth review of this issue and challenged the postal service's $3 billion estimate. they found that the savings were much less than the postal service had anticipated. and they also found that doing away with six-day delivery would have a disproportionate impact on rural americans who do not

have access to broadcast services. so in fact, there is a counteranalysis from the regulator, from the postal commission. they also warned that it would cause a decrease in volume for the postal service as the advertisers, newspapers and other companies sought other means of delivering their notices on saturdays. >> senator johnson? >> let me chime in here. the postal service doesn't have the up otion whether it's going to compete in the private market system. it has to. it already is. so i think the two principles that are guiding my votes is to recognize that fact and what we need is we need to make sure that we have excellent management of the post office. people that know how to compete in the pro -- private sector and

we need to give them the ultimate flexibility. if we try to micromanage from congress i don't think that's going to work. as i read the amendment, it allows the postal service to choose. i think that's exactly the kind of flexibility we need to give those managers in recognizing the fact that we are down from over 200 billion pieces of mail down to 67 billion and the design -- we forced them to design a system that could handle 300 billion pieces of mail and we're at half that level right now. we have to give them flexibility to right size their organization so they compete in the private sector. that's again -- all i see here doesn't demand that they do it. i realize that's their intention. but we should give them the flexibility that would allow them to compete with the private sector. >> senator moran? >> thank you. i guess i just have a question. a broad question and maybe this

evolves throughout or discussion today. i don't have a clear understanding of the role of the postal service. the arguments that senator coburn, senator mccain make appeal to me in the private sector if i was talking about what senator carper was talking about, general motors and ford, it's not my role to make a decision about the management labor decisions or the right size or their ability to compete, whether five days of a production line is better than six days of a production line. that's for the private sector to decide. government ought not to be involved. but my question is. convey to me as a new member of this committee who's never dealt with postal issues, is there something different about the postal service? is this not a function of the government to deliver the mail? and is it not some -- a role for congress to play in determining what the basic standards of that service should be? or is this just a private sector issue that we turn it over to

the postal service and let them decide? i know as -- i know my answer to that when i'm dealing with the private sector, but this is a bit of a hybrid for me. decisions were made some time ago that suggest the postal service i guess is supposed to be self-sufficient. if that's the case, then i guess the decision is made, they make the decisions but is there something unique about the postal service that says we do have a role in determining what the standard should be so that americans across the country have access to postal service? i just don't -- i'm not comfortable yet in understanding what my role here is as a member of the united states senate in determining policies for the postal service. >> senator moran, i appreciate that statement. i think it's a very important statement. because the postal service is difference. it's not a private business. it's very unique. it was actually established in the constitution.

you can't say that about any private business. now, over the years there was an attempt at an earlier reform to -- to essentially make it quasi public, to create a certain independence given its own government, but the interaction as part of the federal employees health plan, et cetera, is deep. it's also just a fact that it's performing, though e-mail has undercut the volume, it carries out what most americans would say is a public function. delivering the mail. the local post office is in a lot of places are really community institutions, but people depend on the mail. and even though the volume has been going down, obviously our population fortunately has been going up. and therefore, the post office has to deliver to more and more people and it has -- we have given it -- now, maybe somebody

wants to change this and we have given it by law a very unique responsibility which is universal service and that's a big responsibility. it has been deemed over our history to be very important. in other words, we're going to deliver the mail to you, the postal service is going to deliver the mail wherever you are in the country. whether or not it's -- it's profitable. whether or not it makes sense. so if you have a certain sense of uncertainty about it it's justified because it's certainly not a private corporation. it's not totally a public function but it's more public than private. and we're trying -- like the rest of our government now we're trying to get it back in the fiscal balance. because otherwise it's going to go under. >> mr. chairman, thank you for that conversation. you know, my question in a sense is so we allow them to go to

five-day delivery. that doesn't work. they go to three-day delivery. my question is there some basic standard by which we expect them to provide mail service to the american people or is it just simply whatever the market will bear? and i'm trying to figure out what that role is for the congress. >> i think we all are. i think for myself it's a important principle that the postal service to anyone in this country wherever they live and we're trying to do it in the most cost effective way that we can. >> am i allowed to respond to the senator's -- >> i was going to -- are you going to yield? >> i mean, if you want to back up what he said, go ahead. >> and then senator mccain. >> i'll yield to you, senator. >> the reason why the post office is in difficulty today is because of competition from the private sector.

that's why they are experiencing these massive deficits. they want to continue to be able to serve. they know that there has to be savings and efficiencies enacted because of the overwhelming deficits that they are running. by the way, less around less real mail is being delivered and more and more junk mail as we know it is being delivered by the post office because more and more people are using these devices rather than sitting down and writing a letter. so the postal service itself has said that they can be more efficient, they can get on a path towards less and less cost to the taxpayers of america if they go to the five-day delivery. now, i'm sure there's people who believe that it was the obligation of the government to bail out the horse and buggy

industry. and when automobiles were invented. we are in an era of changing technology. now, if you believe that the federal government's responsibility is to stick with methods of communication and provision of information through the postal service and rather adjusting to the new realities of the information age, that's fine. if you believe that's the obligation of government. i don't. i don't think the taxpayers should be on the hook for between $1.6 billion annually because we're going to stick with six-day postal delivery. so it's obviously as you said it's a question of what you believe the role of government is in our society. and if you think that it's -- maintains six-day delivery no matter what, whether it's necessary or not in the view of the postal service and the

president of the united states and most observers, fine. it's obvious how you're going to vote. >> okay, we're at the fundamentals here and it's an important discussion, but i want to usual the colleagues, and we have 40 amendments. i want to move to this. the question is on mccain amendment number five. would you like a roll call vote, senator mccain? >> yes. >> senator levin? >> no. >> senator ca-ca? >> no. >> senator carper? >> no by proxy. >> senator pryor? >> no. >> senator landrieu? >> no. >> senator mccaskill? >> no. >> senator tester? >> no. >> senator begich? >> no. >> senator collins? >> no. >> senator coburn? >> yes. >> senator brown? >> no. >> senator mccain? >> yes. >> senator johnson? >> aye.

>> senator portman? >> aye by proxy. >> senator paul? >> yes. >> senator moran? >> no. >> senator lieberman? >> no. >> mr. chairman on the vote of those present, the ayes are five, the nays are 12. and the amendment is not agreed to. >> okay. senator akaka. you're next. >> thank you, very much, mr. chairman. i want to offer akaka amendment number one, to strike title three regarding governmentwide workers compensation or feca reform. let me tell you why i'm offering this. feca reform should not be done in postal reform. most of the employees affected by this are not postal

employees. and the savings expected from these changes would have very little effect on the postal service's deficit. feca has not been reformed in close to 40 years. we need to take a closer look at comprehensive reforms to make shush we get it right and we -- to make sure we get it right and we can include adequate measures to reduce waste. there are complex issues related to the appropriate benefit levels that deserve more analysis before we cut benefits. at a hearing i held in july, witnesses raised serious concerns with reducing feca benefits especially at retirement age. disabled employees may not be able to save for a reduction in income because they miss out on wage growth, social security and

the thrift savings plans. at the request of a bipartisan group of members on the house education and work force committee, which has jurisdiction over feca in the house, gao is reviewing both pre and post retirement benefits to determine the fair amounts. understand that gao is working on two are equests from senator collins, including a review of best practices in state workers comp programs which could inform changes to the federal program. if we act prematurely, we may set benefit levels too low. seriously harming disabled employees or even too high.

we must be extremely cautious not to make arbitrary cuts to benefits that could harm employees, disabled by injuries sustained in service to their country. this is especially important in discussing cuts for elderly, disabled employees. if we pass this section as part of postal reform, it also will create jurisdictional problems in the house where oversight and government reform is jurisdictional postal service, while educational work force is jurisdiction over the feca program. it could also benefit from the input of house education and work force committee staff who have been focusing on this issue. and these are reasons why i am asking that we strike it. mr. chairman, i offer the

amendment number one. >> thanks, senator akaka. we worked very hard on this part of the proposal. senator collins played a really important part. interestingly, the administration through the department of labor actually thought the proposal that we made was moving in so much the right direction to reduce unnecessary cost without compromising reasonable expectations for employees of workers' compensation that this particular provision of this legislation relates to all federal employees. not just to employees of the postal service. this is numerically justified because the u.s. -- and this is again, senator moran, one of the ways in which it's quasi

independent and is interconnected to the postal service because we're part of the -- as the postal service is part of the federal workers' compensation program, it happens to be the largest participant in the federal government workers' compensation program responsible for about 40% of the caseload. and as i know senator collins will note for the record, we just feel that the program is now -- it needs tightening. it's more generous than we can afford and i think we have done it in a way that doesn't fall below the standard of most workers' compensation programs in america, including most states and still will save some money. senator collins, thank you for your leadership on this one. >> thank you, mr. chairman. first of all, i want to point out that the reason this is a government wide reform is that

the direct -- at the direct request of the obama administration. the postal service makes up the largest number of workers' comp claims in the system, but it's a government wide system and t the -- and the obama administration ark -- argued that they did not want to treat postal workers different from the other federal employees. so that's why the rationale for why it's applied across the board. we've needed workers' comp reforms for many years. that has been documented by countless reports. there's a gao investigation going on right now. the department of labor i.g. has estimated that each time you take a fraudulent case off of the rolls it saves between

300,000 and 500,000 dollars. the reforms that we're making are fair and modest reforms. i have mentioned the number of people who are over age 70 that are on the system, including two that are 99 years old. that creates real inequities between postal and other federal workers who work their whole lives and then retire and get a lesser benefit than someone who stays on workers' comp, past retirement age and is able to get a higher benefit that is tax free. that's why virtually the vast majority of states do not allow this. i would note to my colleague and friend from hawaii that the especially of 66 2/3 that we are

proposing in the law is identical to the percentage that is paid for a benefit in hawaii. and in 39 other states. so these are not draconian changes. many of them, nine of the substantive changes are identical to what was proposed by the obama administration. and i want to point out since i know there was a letter that was circulated this morning as an example of a person whom senator akaka was concerned about would be somehow treated unfairly, that under the provisions of our bill, the prison guard case that you have circulated, this person would be grandfathered and would see no reduction in benefits whatsoever. so we've worked very hard to come up with a fair approach,

and this involves substantial money. the postal service which strongly supports these changes pays out more than $1 billion each year. for workers' comp claims. we need better programs to rehabilitate people and to get them back to work. and those provisions are included in this bill as well. because that should be our goal, is to help people be out for the shortest possible time and to help them get the recovery and the rehabilitation that they need. so that they can return to work and that's what our bill does and i think it's important that we enact it. so i oppose the amendment. >> thanks, senator collins. further debate? >> question for senator collins.

what would the savings be each year? >> the estimate is it would in the hundreds of thousands of dollars. >> hundreds of thousands? >> across the board. i'm sorry. hundreds of millions. i can't believe i said hundreds of thousands. hundreds of millions. no wonder you looked shocked. and one of the reasons for that is the finding in 2002 by the dod ig, each person you can return, the long-term savings are between $300,000 and $500,000. those are the figures in my mind. >> who is grandfathered? >> we would grandfather totally people who are currently on the roles who are totally disabled and have what's called a permanent total disability. so there would be no change. >> and what -- if you know, if

your staff knows, what percentage of people currently on the roles would fit that grandfather? >> about a quarter of the people on the roles. i also want you to know that president obama's proposal, much of which we have incorporated, the omb estimate is that it saves $500 million over ten years. >> over ten years. >> yes. >> was the billion each year, so that's about $50 million a year, so maybe 5% reduction in cost. does that sound about right? you said 500 -- >> $500 million over ten years. >> that was the obama administration's estimate for across the board savings. >> across the board. >> we actually believe that this proposal will save more than that. although it hasn't been financially estimated yet.

>> right. >> and actually, in that regard, we're kind of giving something to the supercommittee as it does its work to try to bring this back in balance. >> keep in mind, the postal employees are disproportionately represented in that poll. that's why there are more savings that will accrue to the postal service. >> right. >> further debate? hearing none, senator carper, would you like to respond? >> mr. chairman, in the case of reductions at retirement age, i find that 38 states do not have any reduction at retirement age, but there are complex issues related to the appropriate benefit levels that should be analyzed before we act. while there was discussion of

workers' compensation during the debate, or the postal reform in 2006, since that time this committee has not considered a single bill on workers' compensation reform. nor have there been any hearings on workers' compensation reform until an ogm hearing as i mentioned was held this july where i was the only member that participated. there are three different gao reports pending which would help inform changes to feca including two that senator collins requested from this congress. another one by bipartisan group as i mentioned of congressman from the house education work force committee which has the jurisdiction over fica in the house is looking at the precise

questions regarding benefit levels that this bill would address. so i'm eker -- eager, mr. chairman, it's time to work with you and workers and with the committee on workers' compensation reform. but we cannot hold the survival of the postal service hostage, workers' compensation on compensation changes. so if we act prematurely, we may set benefit level as i mentioned too low, seriously harming disabled employees or even too high. and i feel strongly that we must be extremely cautious not to make arbitrary cuts to benefits or disable due to injuries sustained in the service of the country and the reason why, mr. chairman, that i offer this

amendment to strike the entire title of the bill. >> thanks, senator akaka. senator collins? >> mr. chairman, just three quick points. the inspector general of the department of labor has reviewed this program every single year since 2002, and has said that these reforms -- that reforming the system is needed. second, the reason that states don't have a retirement problem for what to do when the person reaches retirement age is the vast majority of states limit the number of weeks that you can receive workers' comp. so it's very rare for someone to reach retirement age. there's a weekly limit, which we do not have in the federal system. and are not proposing. finally, the treatment for

people over retirement age for new people coming on to the system when they reach retirement age in this bill is identical to the proposal of president obama. so this isn't just a republican idea. it is the president's proposal. >> president obama is getting a lot of bipartisan support here this morning. this is really very heartening. senator akaka? >> let me add that the department of labor has admitted that the changes to the benefit amounts and their proposal is somewhat arbitrary. round numbers based on rough calculations hardly the basis to determine what elderly disabled people will have to live on in the rest of their lives. as i have mentioned gao has a bipartisan