why you need an outside agency to look at we have, again, for delta dental yet we could put these in a post office, a grocery store to say if you had a pending application in va through years 2000 and 2014, contact such and such number. the same effort we put in

getting senior leadership bonuses and the same interest we put in attaching ourselves to high-profile projects is what the same amount of attention that needs to go to veterans. so i encourage you guys if nothing else, please make sure that we move to a system that has more data integrity. require the people who come here and sit on these panels to sign off on the information they turn into congress. this way when they come back, they can't say that report was done by somebody else. that's the only way. hold them accountable and do it in public and while the cameras are on. >> thank you. thank you, mr. chairman.

committee come to order. and that includes the former senator from connecticut, who is sitting in the audience behind senator markey. chris, nice to see you. i think all of us were forward thinking until you and eddie showed up. it will be a close call now. see if we can't get it through. try to get it done. senator markey, i don't know what kind of time frame you're on.

if you can give me something, i want to be respectful of your time. i'm going to give a statement for probably the next 45 minutes. probably the next five or six minutes and then introduce our witnesses, our nominees and at some point in time if you'd like, you can go first in introducing ms. kennedy or you can go later. what works for you? >> whatever is most convenient for you, mr. chairman. honestly. i'm here at your discretion. >> all right. that was very senatorial. all righty. let me give my statement and senator coburn is flying in from oklahoma. i think his plane will be in around, a little before 3:30 and he'll join us as quickly as he can. but we're meeting today to consider four nominations to fill vacancies in the postal service's board of governors. important positions. we're considering these nominations at what is a very

challenging time for the postal service. i would like to quote albert einstein who used to say inadversity lies opportunity. while there's adversity for the post office, there's great opportunity as well. and we'll talk a little bit about that when we get under way. the postal service operates at the center of a massive printing, delivery and logistics industry that employs millions of people. i've heard as many as 7 mill io or 8 million. even greetsing cards and wedding invitations are lost to many other forms of communication, i think the future is bright in many ways. advertising mail is still a popular and effective opt kwn for mailers. i'm reminded every day when we check our mail. e-commerce and package delivery are booming make 7 postal service a vital partner for businesses both large and small. even the postal service's traditional competitors rely on it to carry out the last five miles or the last ten miles or

even further to rural communities around our country. for many -- for years, many people have questioned whether the postal service has a future. these developments i've mentioned tell me at least that it does. and potentially a very bright one. but all of this is at risk if those of us here in congress continue to prove incapable of making the kind of tough decisions necessary to make the postal service competitive in the years to come. as important as the board of governors is, congress holds the keys to the postal service's future. the men and women on the board, including those before us today, should they be confirmed have little chance of success unless we do our jobs and pass comprehensive postal reform legislation. the postal service today carries barely enough cash to make payroll. its line of credit with the treasury is maxed out at $15 billion. and has been incapable for years of making capital investments. including the technological investments necessary to compete

with a u.p.s. or a fedex. things are so bad, that the postal service has letter carriers an the streets today driving inefficient, sometimes unsafe vehicles that guzzle gas, that break down and are older than a lot of members of my staff. that's just -- that is just not acceptable. some observers point to the boom and package delivery in thed fact the postal service occasionally makes a small operating profit and say things are okay. they argue that tough decisions aren't necessary and that we should be happy with the postal service that just limps along. for me, that's not acceptable. for dr. coburn, far be it for me to speak from him, that's not acceptable to him either. postal service is not acceptable to a majority of this committee either. postal service is just one major international crisis, one recession or one big spike in gas prices away from failure. on top of that, with a few tools at their disposal and efforts to

keep the postal service afloat, postal management announced just the other week that it would be closing an additional 82 mail processing plants across our country and further slowing down mail delivery in every community in the country. this comes after the loss of about half the postal service's mail processing capacity in recent years. at a time when the future holds so much promise for the postal service, this is a potentially devastating blow that will further sap the confidence, the public has in the postal service and its ability to remain relevant. if we a postal service that our constituents can rely on, that families can rely on, that businesses can rely on, and one that has a chance of continued progress we see in package delivery, we need to pass a bill. not just any bill. a bill that looks like the one that's been reported out by a strong margin in this committee and sent to the full senate. i think our committee has done its work on this issue to date.

in february, we sent a bill to the full committee that would save the postal service billions of dollars in pension and health care costs, including by allowing it to take full advantage of the investment in its employers have made over the years in medicare. postal service pays more money into medicare than i think any employer in the country. they don't get full value for that. and it's not fair. there's a serious equity problem there. our legislation would also give -- provide the postal service with immediate cash infusion through refund of its overpayment in the federal employee retiree system and free it to compete in new lines of business. more important lie, our legislation would preserve existing service standards, including the 82 plants and saturday mail delivery for the time being to allow the reforms to bear fruit, to raise revenues and hopefully provide a profitable future for the postal service. i think our legislation is solid, comprehensive and realistic response to a very real crisis. in my opinion it's the only one

introduced in the house or senate in recent years that would actually work. and dr. coburn and i, i think a majority of our committee, are interested, are committed to fixing this problem. this is one that can be fixed. and we're determined to do that. working with all the key stakeholders in -- who care about this issue. the postal service indicated there would give the legislation would give it the cash needed to pay down debt. account for its pension and health care obligations, sflft capital and still have as much as $7 billion in -- or more in cash on hand after ten years. i think that's a huge step forward. huge step forward. especially when you are thinking about a fleet of vehicles across the country. a couple hundred thousand vehicles in the fleet. the average age is over 20 years. they are energy inefficient. not configured to be able to carry a lot of packages and parcels. the mail processing equipment, a lot of mail processing centers, it's not well suited for

packages and parcels. we need to help recapitalize the postal service. and the legislation we've reported out of here would do that with $30 billion available in capital investments for the next ten years or so. i look forward to -- we look ford talk with our nominees today about what they think needs to be done to address the challenges facing the postal service and the skills they think they bring to the table. if confirmed, this group of nomes would nearly double the size of the current board. there's an opportunity with this new injection of title combined with the enact of a postal reform bill to make significant process in the very near future. and that having been said, what i think i'll do is just introduce mr. miller, dr. miller. and go first with him and steven crawford and then when i come to ms. kennedy, we'll ask you to introduce her and make a couple of ad libs and audibles on top of what you already say. let me start off by just saying thanks very much for your willingness to take on this

important responsibility. james miller is currently a senior adviser at the international firm of -- hush, blackwell. he's a member of the board of americans for prosperity and a senior fellow at the hoover institution at the stanford university. earlier in his career he was the director of omb and the first administrator of omb's office of information and regulatory affairs. for you know purgatory. straight to heaven. mr. miller has eight years of prior experience in the field he's nominated for today. he's itching to get back into the game. i don't know that. he's willing to get back into the game. steven crawford, nice to see you. how are you? he's a research professor at george washington institute of public policy at gwu and previously served as vice president at the corporation for

enterprise development. from 2008 to 2009 he stefshed as deputy director of the metropolitan policy program at the brookings institution. mr. crawford is a u.s. army veteran. received a bronze star for his service as an infantry officer in vietnam. somebody who has been a couple years over there myself, a naval flight officer, welcome home. thanks for that service and for your willingness to serve us in this capacity. david michael bennett usenior vice president of information management and chief information officer of bae systems. a position he's held since 2010. previously practiced law in various positions with northrup grumman and the u.s. department of commerce. 2012 he received minority business leader award from the washington business journal. great to see you. thanks for your willingness to be with us today and assume this responsibility if confirmed. and to introduce our fourth nominee, victoria reggie

kennedy, is my friend, my colleague, senator ed markey. >> thank you, mr. chairman. and thank you for allowing me to introduce my great friend, the incredibly talented victoria reggie kennedy. who has been nominated by president obama to serve on the board of governors of the united states postal service. vickie kennedy is a public service powerhouse for our country. a brilliant, gifted attorney, adviser and public servant. vickie will be an outstanding member of the postal service board of governors. she will bring intellectual rigor, innovative and ideas, leadership and her endless energy to this post. indeed, vickie's career is singularly suited to the postal service board at a time when it needs public servants as dedicated and creative as vickie. from our first postmaster benjamin franck lynn to today, the postal service has been an

integral part of our democracy. it pushes the frontiers of communication, rain or shine through war time and peace. vickie will bring that same steadfast service to the board and a wealth of expertise. when she was a partner at a major law firm, she helped banks reorganize and recapitalize. at a time when efficiency n funding are both issues for the usps, her experience will be invaluable. today, vickie helps organizations develop strategies to resolve complex issues and today's postal service has no durth of similar business matters to resolve. like her husband, our beloved colleague the legendary senator ted kennedy, vickie believes in the importance of helping government work at its best to serve the american people. and that's why she is the president of the board and co-founder of the edward m.

condition kennedy institute. under vickie's leadership, this innovative hub of industry will open next year adjacent to the john f. kennedy library. the institute will provide visitors a state of the art high-tech interactive opportunity to learn lessons from america's past and develop new ideas that can help shape a better future. she can do the same thing for the united states postal service. she is also a trustee of the kennedy center for the performing arts, a member of the board of overseers of the museum of fine arts in boston and a member of the board of directors of the national leadership roundtable on church management. she is a soumah cum laude graduate of tulane university school of law. a five beta kappa graduate of tulane and she's received honorary degrees from boston university, northeastern, university of massachusetts, suffolk university, on and on, and that is an impressive list

of accolades and a test toomt her intelligence. her character and her accomplishments. the postal service needs vickie kennedy. the board needs talented proven leaders who can assess the problems facing the usps and help the postal service resolve those challenges. that's exactly who vickie kennedy is. we all greatly admire vickie and have complete confidence in her. vickie kennedy will shine on the board of governors and our country will be the better for her service. i thank you, mr. chairman. >> thank you, senator markey. all i can say is after listening to that introduction to our nominees, whenever i'm nominated by some president some day, i want ed markey to introduce me, too. i think even i could get confirmed with an introduction like that. senator markey, thank you so much. it's great to see you. and over to your left shoulder, my old friend crise.

tha chris. thanks for joining us. i always feel like i should ask you to come and sit here, senator dodd. i'm told it's against the rules. that's where my shattheart is. senator markey if you need to leave, we should be done here by 9:00 tonight, but if you need to slip out before then, feel free to do that. before we proceed with your statements, we have this thing about committee rules. committee rules require that all witnesses at nomination hearings like this one give their testimony under oath. i'm going to ask if you would all please stand and raise your right hand. here we go. do you swear the testimony you will give before this subcommittee, this committee will be the truth, the whole truths and nothing but the truth, so help you god? >> i do. >> please be seated.

is it dr. miller? >> yes it is. >> dr. miller. my staff keeps wanting to call you mr. miller. we're going to call you doctor. but you are welcome to proceed with your statement. and if you want to introduce any family or friends here with you today, i would -- i invite you to do that. please feel free. we're delighted you are here and willing to serve once more in this capacity. thank you. make sure your mike is on. >> i should point out that mr. jefferson once said there's no higher honor you can pay a man but to call him mister and mean it.

so, mr. chairman, thank you for inviting us here today. i have a prepared statement. i asked to be included in the record. >> without objection. >> one of my other favorite jefferson quotes is, if the people know the truth, they won't make a mistake. isn't that good? that's good for these days. if people know the truth they won't make a mistake. >> thank you for holding this hearing. thank you for your interest in the postal service. as you point out, the stress of the postal service brings forth opportunities. and the things you can do with this committee and the senate can do and the house can do can make the difference between restoring the postal service to a solid footing and seeing it become a very expensive ward of the state. and i commend you for the progress on s-1486. it's a very large step forward

toward the goal of restoring the postal service. and if you confirm me, i will work to obtain that end. i hope the house will pass a bill and that a conference bill will become law. i want to thank president obama for nominating me. thank majority leader -- minority leader mcconnell for recommending me. >> you are getting ahead of yourself just a little bit. >> and i would like to acknowledge the three distinguished individuals with whom i share this table, whom i've gotten to know in the last several months and admire. they will make splendid additions to the board. as budget director for president reagan, i think i knew the hill pretty well, and i think almost -- or most members of

congress knew me or knew of me. but that was over a quarter of a century ago. so let me tell you a little bit about myself. and i have pursued, since graduate school, i've pursued really four different careers. sometimes at the same time. the first was academic. i was trained as a college professor. i taught at two major universities. taught full time. then part time at several other universities. i've been associated with major think tanks, as you noted, the hoover institution but also brookings and the american enterprise institute. i was on the boards of the air force academy and also the board of george mason university. along the way, i have written nine books and over 100 articles in professional journals. the second career was in the federal government.

at the department of transportation, i contributed to airline regulatory reform. at the council of economic advisers, i wrote the chapter on regulation in the 1974 economic report of the president. at the council on wage and price stability, i made transparent the cost and benefits of regulation. back to your quote, mr. chairman. at the beginning of the reagan administration, i co-authored executive order 12291 which established the regulatory review program. i went turnover the federal trade commission, chaired the federal trade commission for four years and we put that agency back on the traditional path of law enforcement. i came back to chair -- to be the director of omb and member of the president's cabinet. helped negotiate graham ruddman hollings which brought the deficit down significantly. and did other things there as well. as you know, as you mentioned, i did serve a term at the board of

governors, the u.s. postal service, where during the three years of my chairmanship, my colleagues and i -- my colleagues and i produced the forever stamp which i think has been a great success. i had a career in effected politics that was not particularly successful. i ran for the senate, u.s. senate in virginia in 1994 and 1996. and i helped my wife's campaign for the house of representatives for the 8th district of virginia in 1998 and the year 2000. i have had a career in business. i have been on several boards of directors of companies. i have had a consulting practice of my own. i headed a consulting firm for a -- consulting group for a major law firm. i'm on the boards of three major neutral funds. i'm on the board of clean energy

fuels, the largest provider of natural gas for vehicles in america. i am in the audit -- chairman of the audit committee and designated financial expert for those firms. i am, as you mentioned, here with hush blackwell and also chairman of the executive committee of the u.s. tax and investment center. today i ask you to confirm me for this port of post. my wife of more than 50 years, demarus miller, asked me, why are you doing this? you've been there, done that. the answer is, it's unfinished business. when i was at the board of governors, i worked very hard trying to obtain the kinds of reform that you have outlined that are needed. but without success. and i would like to go back and working with you, working with other members of congress, working with management, working with the stakeholders of this great institution, make those

kinds of changes happen and restore the financial integrity and the viability of this important organization. thank you, mr. chairman. >> dr. miller, mr. miller, i sat here listening to you talk about your -- what you've been involved in in your life. what a life. what a life. and still going strong. >> thank you, sir. >> thanks for your willingness to take this on and hups fix this problem. steven crawford, mr. crawford, you were in the army, right? >> i was. >> go ahead and turn on your mike if you will. >> and tell us about your service, just very briefly, please. >> i served for 3 and a quarter years, the last of which i served in vietnam as an infantry officer. as an adviser to an arvin infantry battalion in the delta. lost a good friend in the tet offensive. so i think we all have mixed feelings about difficult years there. but certainly a learning

experience. >> i have been back a number of times since then. led a congressional delegation back there in '91 to find out what happened to a lot of our men. mostly men. some women. senator mccain, senator kerry were involved in that effort in the senate. and i feel very good about that. and have been back a couple eof times since. every time i talk to those who served, i ask them if they've been back. most haven't. >> i applaud that. my wife and i adopted a child from vietnam who is now 14. and she's off at summer camp or she would be here today cheering for uand i could introduce her to you. but, yes, we went back to get her and then we went back to visit with her family when she was about 9. >> that's great. >> it's been a good experience. >> thank you for that service. and if there's anyone in the audience you'd like to introduce, feel free and then proceed. thanks so much. >> so good afternoon, chairman carper and thank you for the

opportunity to testify today. and to second what jim, a hard act to follow, but what jim -- >> i wouldn't want to have to follow that statement. i would say skip over me. >> yeah, right. thank you for your leadership on postal reform legislation. it's been a long, hard struggle, but we are -- i am excited about as 1486 and commend the committee for advancing it this far. i'm truly honored to be nominated by president obama to serve on the board of governors of the united states postal service. and i am pleased to share with the committee how, if confirmed, i would approach the responsibilities involved. as you know, the postal service faces enormous challenges. it is in these dire straits i believe for three main reasons. one, the growth of electronic communications and the resulting diversion of first-class mail. two, the recent recession and

lingering impact. and three, and perhaps most importantly, the unique regulatory environment in which it operates. while there seems to be broad agreement anesthes causes of the postal service's problems and deficits there is considerably disagreement about how to fix them. some emphasize cutting costs by consolidating facilities, reducing delivery frequency and changing service standards. some emphasize increasing revenues by adding new products and services. some call for adjusting the price cap and many call for changing the current requirements for prefunding the health benefits of future retirees. i believe that the challenges are so severe that the postal service should explore all the above and i applaud the committee for crafting and passing a bill that does so. i believe that my prior

experience has prepared me to serve well on the board and to make a distinctive and significant contributions. to be sure, i have never managed an organization of more than 50,000 employees. however, i have advised and worked closely with the top leaders of such organizations, especially state governors, but also corporate ceos and university presidents. i have also served on various boards and commissions and at present, i am a member of the board of directors of the american national standards institute. whose nearly 1,000 members include trade associations, professional societies, unions, consumer organizations, universities, government agencies and such companies as apple, ibm, caterpillar, exxonmobil, netflix, verizon, et cetera. firms and organizations that represent more than 3.5 million

professionals. finally, as a member of the obama/biden transition team and later as a consultant to the postal service, i had exceptional opportunities to get acquainted with the problems and potential solutions facing the postal service. the mailing industry and such related agencies as the prc and the inspector general's office. in closing, i would like to thank the committee for its efforts to -- over many years to provide the policy framework needed to enable the postal service to accomplish its vital mission. it is clearly a difficult task in today's rapidly and changing environment. but i am optimistic that good solutions are within reach. i look forward, if confirmed, to working with you and all the postal services' stakeholders on crafting and implementing such solutions. i appreciate the opportunity to testify today and welcome your

questions. >> thank you, very, very much. that's a very strong resume as well. and different from that of dr. miller, but you all have different backgrounds. i think all of you do. bringing different strengths to the board. thank you for all of that. david, is it michael? >> david michael bennett. and mr. bennett -- great to see you. >> we have a guy named michael bennett here. serves in the u.s. senate from colorado. i don't think he spells it with two ts. his family could only afford one. but -- >> well, i brought the t in my e-mail address. >> it's good to know. >> nice to see you. nice for your willingness to serve. thank you. >> i think my son michael bennett is here. where? >> he's back there. >> he looks like he might be pretty tall. is he? >> he's pretty fast.

he's a track guy. >> really? what are his events? >> he's a 400 hurdler. tough race. >> what level. is he college? >> he's out of college. he's a personal trainer now. and coaching track. just got back from his certification of coaching. and my mom jonny evans is here. >> where? >> right here. >> hi. how are you? nice to see you, ma'am. >> my pleasure. >> and my partner pam jackson is here. >> is it pam? >> yes. >> hi, pam. >> which one is your mom? >> good joke today. >> i'll hear about that when i get home. >> you are both -- thank you for coming in. thank you for being here to have your dad's back. it's great. >> well, i will say good afternoon, chairman carper and also one of your staff said the

other day at the end their session with me said, well, we have four very different nominees. and that's true. and all four of us have had a chance to get to know one another. i am the corporate guy. i'm the guy who spent 95% of his career in corporate america, even in the years i was practicing law, i was inside of a corporation. but let me say good afternoon to you chairman carper and a good afternoon also to dr. coburn when he arrives. so i have a prepared statement i'd like to go through if i may. >> each of your entire statement will be made part of the record. feel free to summarize as you wish. >> it is my pleasure to be here before you this afternoon. i want to thank president obama for his decision to nominate me to become a member of the united states postal service board of governors. i believe that the board of governors is a critical role in our postal service and ultimately to the american people. so with integrity, pride and diligence, will i serve on the

board. i'm committed to exercising every aspect of my legal, business and technology experience to help the united states postal service continue to evolve with america. a long time resident of our nation's capital and native north carolinian, proud -- >> native north carolinian? >> yes. >> where? >> charlotte. >> ever hear of boone? >> yes. >> my wife is from there. >> okay. so i'm a north carolinian, prior graduate of duke university and the george washington university law school, which my colleague is a professor. and most importantly, i'm someone who uses mail services an a very regular basis. i still pay all my bills by mail n send cards out and letters. i believe in the mission of the post service. my previous experience of 100,000 multinational company of

course specifically gives me the skills necessary to drive change in our ever-changing world. i'm honored to have an opportunity to serve my fellow citizens through one of the most important institutions in america. some of the changes in our culture have caused many to question the intrinsic value of the postal service. i believe that our postal service is an essential part of the fabric of our nation. a vital part of our economy and material force in our personal lives. it is sometimes a sole option for businesses in remote areas to receive products that are essential to maintain manufacturing machinery or state a product for resale. postal services have personal impact for many who are unable to travel to a pharmacy, for instance. for various reasons. and essential medications are delivered to their doorsteps by united states postal service carrier. it is the only institution in this country that can touch every single american every day. that's an incredible national asset. and that turns me on for some reason. i find that incredible that you

have an institution that can touch 300 million people every single day. there is probably no other country on the planet that has an institution with the capabilities of our united states postal service. unfortunately some take this 200-plus-year-old national treasure for granted. i recognize this treasure and want to be a part of creating even more value in it for the american people. i'm honored, yes, but i'm also excited about what is possible for the postal service. i am eager to explore all of the various ways this institution can serve the american people through a vast network of facilities, distribution networks and most importantly the employees. i think about how many companies have transformed themselves over the past decade to drive eofficieffi efficiency in and solve challenging business problems, i get excited thinking about the possibleities for transformination the united states postal service. transformation is driven by

innovation. i look forward to working with the board -- with other board members and challenging management on various innovative ideas to drive value throughout the enterprise. throughout my career i have led transformational business programs which have led to cost savings, streamlined business processes and ultmaltly greater value to customers, employees and shareholders alike. i look forward to sharing my experience as a result of leading large technology centered innovation initiatives to create greater value for america. and finally, we should continue to look for ways to leverage the knowledge and skills of our incredible workforce. our people are our largest and most valuable asset. when i was growing up, my stepfather was a postal service mail carrier in charlotte, north carolina. there wasn't anything he didn't know about locations and getting around charlotte. we can leverage these human cape ibls to continue transforming the post office to be the business current and future america needs and wants.

i want to get started. thank you for this opportunity. i look forward to your questions. >> i like that. i want to get started. that's good. we have a fellow who is a u.s. secretary of department of transportation who is a former mayor of charlotte. anthony gay fox. fox with two xs. >> i do. in fact, he used to go to the doctor that my mother was the receptionist for when he was a little kid. >> no kidding. >> so he knows my mother well. >> so your mom was a director of first impressions at that office? >> absolutely. >> that's great. so thanks for your testimony. ms. kennedy, great to see you. thank you for your willingness to serve and please proceed. your entire statement will be made part of the record. >> i'm pleased to join james mill esteven crawford and michael bennet to appear before you this afternoon as president obama's nominees to the board of governors of the united states postal service. and i am honored and humbled by the confidence and trust that president obama has placed in

me. i look forward to answering your questions and hearing firsthand your thoughts and concerns about the postal service. and if confirmed, i look forward to working with the committee and with other members of congress to strengthen the postal service in a long-term and comprehensive way. i would also like to thank my family for their support. and some of them are here today. my mother doris reggie, my son -- >> your mom is here? >> my mom is here. doris reggie. my son kern rackland. my son patrick kennedy and his wife amy and their two little ones were also here but they've stepped out for a few minutes. they are very tiny. >> do they realize they are missing your testimony? >> yes, i think that food has won out. and my daughter caroline rackland is working in the philippines and ted kennedy jr. has a campaign in connecticut but they are here in spirit. >> i call those excused absences. >> i want to thank in a very personal way, my senator ed

markey for such a gracious and warm introduction and my friend senator chris dodd for being here. it really means the world to me that they are here. and i have other dear friends in the audience. >> let the record show, i can barely see chris dodd's lips moving when senator markey was speaking. >> so the postal service is a vital public asset. as my friend michael bennett said it has near daily contact with every american household and business. there are more than 31,000 post offices, stations and branches across this country, many of which serve as a focal point of local identity. and a center of community interaction. with 500,000 hard-working and dedicated employees earning a solid middle class income, the postal service is an essential part of the fabric of american life. because of the governing principle of universal severance, no matter where you live in the united states, you are entitled to the same postal

service as every other american. and without a doubt, as our founding fathers understood when they included the postal clause in article 1 of the constitution, universal service unifies us as a nation. as we meet today, however, and as we've been discussing, the postal service is facing a serious financial crisis. if confirmed, i would work with my fellow board members to look at comprehensive ways to address this crisis. i would likewise work with them to listen to the concerns and ideas of key constituency groups to craft long-term solutions to long-term problems. to position the postal service to be nimble and ready to take advantage of opportunities for growth in its core business, letter and package delivery, and not to undermine its essential strengths. i think it also important to look at the possibility of expanding and into related business lines while always maintaining timely, universal service and protecting and

nurturing the core business of the postal service. the mailing industry in this country generates $800 billion in economic activity and the postal service is a key part of the distribution network for that activity. its comtet pors even rely on its exceptional distribution infrastructure for the key last mile delivery to connect the smallest towns and rural areas to e-commerce. a recent inspector general report has concluded that preserving that infrastructure could allow the postal service to reap as much as $500 million of additional revenue in the near future because of private sector manufacturing innovations such as 3d printing that will need the sophisticated full-service delivery infrastructure that the postal service has in place. i believe that the postal service can and should be at the leading edge of innovation and envisioning the new ways that americans communicate with each other and with the rest of the world. i also believe it should have

the regulatory flexibility to take advantage of opportunity and innovation when it is in the public interest. if confirmed, i believe that my skills and experience can make a positive contribution. i would keep always paramount if confirmed a focus on the public interest, the board of governors should set policy to ensure the long-term financial well-being of the postal service and it should assure that senior management follows and executes that policy. i believe in a full airing of the issues and a robust dialogue with all interested parties. as we seek in the public interest the best way to return the postal service to a safe and secure financial footing. i look ford discussing these and other issues with this committee today and, if confirmed, with the committee and congress in the future. in closing, i again want to ng my nomination, and i look forward to answering your questions. thank you. >> you know, you used exactly five minutes. that doesn't happen every day.

>> thank you. >> it was good. >> thank you. thank you all. now i am supposed to start, i usually forget this, but i'm supposed to start my questioning with three standard questions that we ask of all nominees. and i am going to ask if you would just please answer after each question. is there anything that you are aware of in your background that might present a conflict of interest with the duties of the office to which you've been nominated. dr. miller? >> nothing other than what i indicated in response to the questions to this committee. >> thank you, mr. crawford. >> nothing. >> mr. bennett? >> no, mr. chairman. >> mr. kennedy? >> no, mr. chairman, i'm not aware of anything. >> number two, do you know of anything personal or otherwise that would prevent you from fully and honorably discharging your responsibilities of the office to which you've been nominated? dr. miller? >> no, sir. >> no, sir, mr. chairman. >> no, mr. chairman. >> ms. kennedy? >> no, mr. chairman. >> and do you agree with our

reservation to respond to any reasonable summons to appear and testify before any duly constituted committee if you are confirmed? dr. miller? >> absolutely. >> i do. >> yes, i will. >> yes, i will. >> great. thank you. thanks for your testimony. interesting testimony. very well prepared. well presented. i just want to start off by saying, mr. bennett said about he still sends, pays his bills by mail. he still sends out cards and letters. so do i. and you are probably better at technology than i am. but i'm not bad and i have two sons, 24 and 25 who coach me so i can get even better over time. but i was reminded of the service, the u.s. postal service on saturday. i was home for a bit. and the post -- the letter carrier delivers our mail.

delivered our mail just a little before 5:00 p.m. sometimes it's later if he has a whole lot to deliver and sometimes not quite that late. but it's 95 degrees outside and he was delivering mail, cheerful, going about his work. and he's there when it's 95 degrees. he's there when it's 5 degrees. he's there when the sun is shining as it was on saturday and he's there when it's raining, sleeting, snowing and we're grateful for his service and those of hundreds of thousands of postal employees across the country who have served us for years, served us today and will serve us for a whole lot longer time to come. we had sitting right here, i think, ms. kennedy, where you were sitting, a couple years ooh was a fellow from -- was it wisconsin, john? a very successful business person from wisconsin. he runs a company called quad

graphics. and he sat before us that day and he talked about his business which was -- is it a paper business? or printing business? paper and printing business, if you will. and he talked about how they ou when a lot of businesses in that industry had closed, had fallen and eventually been ended and how he talked about his business sort of just the opposite and instead of failing, faltering, going out of business, they've gotten stronger over time. and what has happened is they've taken a legacy business, paper, printing business, and figured out how to be successful in the digital age. that's what they've done. and what i've been hoping for with respect to the postal service is the ability to do something like that. find that intersect between maybe one of the longest lived organizations, living organizations in our country,

that's our postal service, and how to make an operation like that not just relevant in the digital age but significant. it's not that we'll make them successful but we'll enable them to be successful. i think we can do that. we've had testimony here before when folks have come in from different stakeholders, people like you, and they said to us in terms of the things we need to do, one of the things we need to do is to focus on the main thing. an old methodist minister in a town called seaford, passed away a couple of years ago. when i was governor, before that congressman, now later in the senate, he's always given me great advice when i was down in sussex county. let me be a lay speaker in his church.

it was a special treat. he used to say this. he used to say the main thing is to keep the main thing the main thing. that's what he would say. the main thing is to keep the main thing the main thing. for some of the folks that have testified before us, they've said in terms of -- i don't know if it's a main thing, but a big thing for us to consider is health care costs of retirees. when we worked on legislation in 2006-2007 senator collins and i and others, one of the requirements, if you will, from the administration, president george w. bush was to not only recognize there's a large liability that's owed by the postal service and the liability is for retired health care costs. some people think that's not liability, something we don't need to be mindful of.

when i was elected state treasurer at the age of 29, just a pup, the state of delaware had the worst credit rating in the country. we were the best at over estimating revenues and underestimating spending. think about that. we were the best in the country in overestimating revenues and underestimating spending. we had no cash management system. we had no pension fund. and we had a lot of state banks about to go under. we were the lowest startup of new businesses of any state in the country. and in fact we used to sell revenue anticipation notes. revenue anticipation notes in order to meet payroll and pay pension checks. we were not a model of financial respectability. and nobody else wanted to run for straight treasurer. we won. pete dupont was elected governor. he did a great job. mike cassill after him and i succeeded mike cassill. we started off with the worst

credit rating in the country in 1977 and we ended up in my second term as governor with aaas across the board, aaas. i'll never forget that. the rating agencies told us what they had done and why. they said, you've got a big liability out there that you've not recognized, you've not addressed at all. we said, what is that? they said you have a lot of pensioners. i said, well, we have a strong pension fund. it's admired for how fully invested it is. they said, no, no, that's not it. they said, your problem is all the pension ners out there, they have enormous health care costs attached to it, each of them, and you've not recognized that and you've not set money aside for that. they still gave us an aaa rating. we addressed that. we acknowledged it as a liability and we started to address that. the problem from our 2006-2007

legislation is we agreed with george w. bush in order to get the president to sign the bill we had to agree to i think a very aggressive schedule to pay down debt liability for retired health care costs. what we found out in the years since then is that the postal service pays more into medicare than any employer in the country. nobody else. my wife retired from dupont. hard to believe to look at it. she just turned 65 and when she turned 65 the dupont company said to her, martha, we love you but for now on you have to sign up for medicare, part a, part b, maybe part d and we'll provide wrap-around coverage for you. they expected that for all employees -- retirees, rather. there are thousands of companies in this country who say that's what we expect. they'll do the wrap-around but they expect retirees to sign up for a, b, maybe part d.

medicare, postal service competes with fedex, ups. postal service pays more money to medicare than anybody else. they don't get equal value and it's not fair. it's not fair. and as one of the chief provisions in our bill is we call it medicare integration. medicare integration. it's -- it enables the postal service to pay down this obligation in a more timely way. let me just ask, we'll start off with dr. miller. this probably sounds familiar to you. may or may not sound familiar to our other nominees. in terms of the main thing, if we don't do this, if we somehow don't do this, i think we're going to be very disappointed in our inability to get anything done. dr. miller. >> mr. chairman, i -- actually i thought maybe mr. marky might say a few words on my behalf. i need that kind of help.

mr. chairman, i am not surprised at your insightful analysis because i know you have a degree in economics from the ohio state -- >> i tell people i studied economics at ohio state. my professors would say not nearly enough. >> you're spot on in my judgment. >> thank you. mr. cart wright. >> yes, i wholeheartedly endorse the plan in s 1486 to have -- require postal retirees once they reach 65 and are eligible for medicare to make medicare their primary coverage. as you say, it's almost universal in the corporate world and my understanding is that 10% of postal retirees who are eligible don't take part a and 24% don't take part b and i haven't done the numbers to figure out sort of what the cost implications are but those are especially that second number, that's huge. >> all right. thank you. mr. bennett?

>> senator, i agree. i think, one, you're right. the main thing needs to stay the main thing. in my company and in the previous company i was with, norfolk grummond that's the route we've done. there's no way you can continue on this path. the postal service can't continue on this path. large companies have decided to do that a long time ago. i would agree completely. >> miss kennedy, please, will you react to this? >> yes, certainly. obviously the issue of health care and health care costs is something that's a great concern. it's my understanding that there's widespread support, both with the collective bargaining units and with management at the postal service, for the plan that you describe and it's something that i look forward to learning a lot more about. it seems to make a lot of sense but i'd like to understand it in more depth as we go forward. >> fair enough. let's talk a little bit about

this intersection between the, if you will, analog -- i'll use analog as an example of what we do at the postal service today, we deliver packages, parcels, pieces of mail. we do it door to door, five to six days a week, do it all over the country. use vehicles to do it. meanwhile, you have a lot of folks that are ordering stuff today as we speak that they want to have delivered tomorrow. they'll look for somebody to deliver it, there are some good business opportunities there, including on sundays. and the postal service is starting to take advantage of this. i don't know if it's miss kennedy, somebody mentioned innovation in our legislation. ironically one of the provisions in the legislation that we have is it was legislation lifted from senator bernie sanders and most people wouldn't think of bernie as the chief innovation officer or the guy to be the most entrepreneurial guy in the senate.

marky, you're smiling. he's right on -- spot on when it comes to the postal service. how do you figure out, how do we help enable the postal service to use this legacy organization to find new ways to generate revenues and provide a service that's needed without stepping on the toes in an inappropriate way in the private sector? there's a call in our legislation the creation of what i'll call a chief innovation officer. we call for a summit with all kinds of people, including people from the digital world to come in and say to the postal service, have you ever thought of doing this or that or the other? we're going to do a similar kind of approach with the census. the next time we do the census we won't be doing it with a pen and paper, smarter, less expensively and hopefully more effectively. talk to us about innovation and things that you'd like to see the post office or you think might be good ways for them to provide a service and make some money while they're doing it. again, i'll ask dr. miller if you would just lead off with this please. >> mr. chairman, the movement to

the digital -- the digital revolution has cost the postal service inasmuch as first class mail has diminished. on the other hand, it's created opportunities as well. that's the major reason you see the growth in the packaging. people ordering through ebay and other ways, that has generated a great deal of increase in mail volume. i think that mr. bennett's becoming a member of the board would be a very positive thing to stimulate a lot of thinking at the postal service because he has the kinds of -- those kinds of responsibilities at bae. and there are other opportunities, i think steve has talked about it and vicky have talked about it as well. i think there are many opportunities there that need to be explored -- that are being explored, frankly, at the postal service but i think there are many opportunities as you have identified. >> thank you. mr. crawford?

>> mr. chairman, i'm -- i enjoy reading the white papers at that the inspector general's office produces. some of them are simply stimulating. i'm not sure that they're politically or otherwise always going to survive and be implemented, but i would like to see the postal service have the flexibility to run pilots and experiments and tryout. let's take non-bank financial services. we see a lot of foreign postal services make some money on that. whether it makes sense for the u.s. postal service to get into that is a huge question. the issue though it seems to me is to have the opportunity to experiment, whether it's that, whether it's the implications for 3-d printing.

there is just so much in the world of technology that's unfolding now. and this can't be all or nothing. we're now going to implement this. now the postal service, to be fair, already does do some studies and trials. i just -- i -- if i were on the board, that's an area that i would give special attention to. >> what about the -- well, let me let you finish and i'll throw out a couple of ideas and let you react to them. thank you. mr. bennett? >> this is really, mr. chairman, my sweet spot. i have led a number of innovation initiatives in my company, particularly from a technology perspective, but i really get excited thinking about the different things that you can do with this incredible infrastructure that we have, with all these people, with all this logistics that we deal with as a postal service every single day that nobody else knows how to do. imagine if you start partnering with a company like sysco and

take the kinds of things that they do from a networking perspective and connect those to our postal infrastructure. we've talked about 3-d printing. imagine being able to have the companies who produce these 3-d printers, at no cost to the postal service, put those printers in various locations in the postal service and have opportunities where they're able to fax, if you will, the model of a shoe and they want that to get to a particular customer in an hour. the postal service says, great, we'll get that there within an hour. there are so many different things and opportunities. the moment i was nominated i had the coo of sysco, senior executive at microsoft, various people from different technology companies talk to me about things they would like to consider and to talk to the u.s. postal service about but haven't had an opportunity to get in. this is -- i mean, this is just

right in the area that i would love to have an opportunity to help the postal service evolve and do a number of different innovative things over the course of the next decade. >> did you say fax someone a pair of shoes? >> yeah. absolutely. absolutely. the technology exists. it's there. >> i -- let me just say before you speak, vicky. i don't know if they have like the boy has a committee or subcommittee on innovation, but if you get confirmed, mr. bennett, i sure hope they put you on that committee. that would be good. thanks. miss kennedy. >> i understand there are athletic shoe manufacturers that are going to be taking orders for athletic shoes with your specifications and doing 3-d printing of your shoes in your exact size and with your specs and they're going to want to distribute them. the distribution network that exists right now for the united

states postal service is an incredible asset. that's something that i believe we have to maintain to be able to take advantage of that kind of innovation, to be able to reach people. when you talk about doing what we do, that's what the postal service does. it knows how to deliver. it has an infrastructure and that's why one of the wonderful things in the last few months of waiting for this hearing is that we've all gotten to know each other, all of the nominees here. >> how did you -- if you don't mind, how have you all gotten to know each other? >> we've had lunch. it's a great thing. talking. regular lunch, talking, e-mailing. so we've gotten to know each other. >> facebook? >> no. no, not facebook, but it's been a very good thing. you know, collegiality and sharing ideas. it's been a very positive thing. so if we're confirmed, i think we'll hit the ground running. and, you know, talking about, you know, what's out there in the future, being able to take

advantage of that kind of innovation. one of the things that steve crawford just said in his opening statement though is will the regulatory structure restrict your being able to take advantage of innovation in other ways? there might be some 18-year-old in a garage right now who's coming up with some great new innovation. will the postal service be able to take advantage of that or will it not? i believe we need to be nimble and able to take advantage of innovations that we don't know about as we're sitting at this table right now and be reg gu la tore rally nimble while building on the strength. >> that's very encouraging testimony. i want to turn, if i cohere for a little bit, to the pricing for postage. as you know, the postal service

current inflation base postal rate structure was set in place seven years ago. and before the beginning of the drastic drop in mail volume that continues today. you saw that, dr. miller, firsthand. late last year the postal regulatory commission allowed the postal service to temporarily increase its pricing for postage above that normally allowed to make up for the losses in mail volume attributable to the great recession. an increase is a 4%. we call it an exigent rate increase. the prc said let's put that in place interim, a period of time. dr. coburn and i in our proposal to the committee said let's make that the new base and then we'll worry about other increases as we go or not increases to go as we go forward. in light of the postal services current financial difficulties, let me just ask, again i don't want to pick on you, dr. miller,

but let me just start with you. your thoughts on the postal rate structure as we have it currently and how it would be under our bill. >> as i said in my response to question from the committee, i think that the inflation adjusted cap needs to be liberalized a great deal, if not eliminated entirely because it just means that the postal service will start searching for ways to change, alter the rate structure to try to raise additional revenue and that further perverts the structure prices. there's an analogy with how the railroads performed under the interstate commerce act and squeezing revenue here and there. give the postal service the discretion to make rate changes. there is a natural limit to how much a postal service would want to increase certain rates

because of the falloff in volume so it's not as though it's going to change the stamp price from 49 cents or 55 cents to $1.80 or something like that. it really is an impediment. there are other ways in which the postal rate commission, despite having some very good people who work there who are, you know, just as publicly spirited as we are where it inevitably slows down the process of introducing innovations and changes and experiments of the sort that steve was talking about. so we need to have that kind of freedom to have the postal regulatory system intervene when they see a real danger of the postal service violating the law or about to violate the law. that and you've addressed that in s 1486 and i hope that

provision prevails in any conference bill. >> thank you, sir. mr. cartwright? >> thank you, mr. chairman. i agree with dr. miller's analysis. i think the mail volume, especially for the standard mail, is so sensitive to prices that the postal service is not about to try to jack up that price. you know, the notion of a monopoly position is -- it's not as much, it's not as hard a monopoly as some monopolies are. i applaud s 1486 for the reforms in the price cap. i'm on record in previous writings for lifting the price cap and making adjustments. i think the postal service needs that flexibility. i think the postal regulatory commission has a role to play in reviewing the reasonableness of those, but to do it ahead of time is just, as vicky kennedy was saying, we need to be nimble

enough, the postal service does, to make the adjustments. fuel costs can go up. we saw surcharges put on fed ex and ups when there was a spike in gasoline prices. the postal service doesn't have that flexibility. i think they need it. i think it's fine to review it after the fact and i think the new legislation has that exactly right. >> thank you, sir. mr. brennan? >> i won't repeat what my colleagues have said, but i do agree with the provision in s 1486 relative to rates. one of the things that came up in the session with your staff last thursday was there was a comment in the private sector that you can -- you know, you don't have any caps on pricing. well, that's really not true, i mean, because if you price yourself out of the market and you don't sell anything, then you're out of business. i think the postal service needs the same level of flexibility that you have in the private sector. the kind of flexibility that will allow us to be market

driven. in fact, when that happens i think oftentimes prices ind up going down because you're not driving volume up and you end up driving prices down and you increase value in that institution and increasing value for the american public. i agree with that particular section. i agree with my colleagues. they have more flex bimt. >> -- flexibility. >> at the urging of mr. coburn, dr. coburn has had an incredible career. he was a very successful business person. did he that for a number of years. he decided i'd like to be a doctor. he became an ob-gyn. very successful there. given birth to -- delivered thousands of ban babies. not given birth to them. he said, i think i'd like to be a congressman. he became a congressman from oklahoma. did that for a while. he said, no, maybe i'd like to be a senator. he's done that now for ten years. he has a signal he will step down two years early before the

end of his term this year. god only knows what he is he'll do next. maybe he's going to land the plane. he should be here before too much longer. miss kennedy, same line of thought we have. let me just say before you -- one of the things that dr. coburn really insisted on, pushed for when we introduced our initial bill a year ago this past august, he basically said the postal service is not foolish, not stupid, they're not deaf to the marketplace. let's get the flexibility to set rates. if they charge too much, customers will stop using them. and if they eventually find a sweet spot. in the end we didn't do that. there was huge push back for the original proposal as you can imagine from the mailing industry, printers and so forth. we thought we had found a pretty good medium here with the exigent rate increase becoming

the baseline and having the cpi cap going forward. then in 2017 the opportunity to revisit this. if you're on the board of governors you'll have an opportunity to participate in that. miss kennedy? >> thank you. as a general rule, i believe in flexibility and being able to be nimble. on the specific issue of rates i also believe in being cautious and not answering something that i am not as deeply familiar with as my colleagues here. it's something i would like to understand in a deeper and fuller way. it sounds great. i think what they've said makes a lot of sense to me but i'd like to understand it more. i understand. just a little bit of background. what we've done with the exigent rate case, folks that are nonprofit, i think under -- before the exigent rate case the cost of mailing an envelope is about 10 cents and with the

exigent rate case it goes up i think a penny to 11 cents. for folks that are mailing magazines i think the price is about 27 cents and with the exigent rate case becoming the baseline it comes up to 28 cents. i think i might be wrong, but -- correct me if i'm wrong, john, but for catalogs the price is 45, 46 cents and it would go by 2 cents. it's not -- there is not an outrageous increase. it strengthens the economy. >> i'm familiar with what the provisions are. that's not -- that was not the issue. it's just the whole underlying philosophy and theory behind them being set that i wanted to be -- >> okay. good enough. dr. miller, did you want to say something else? no? all right. i think i mentioned in my opening statement today the board of governors, postmaster general announced a week or so ago that if we don't do something, if we don't do our

job here in the senate and the house to pass hopefully thoughtful, effective postal reform legislation this year, put it in place signed by the president, then they will feel compelled to go ahead and take a next step in closing mail processing plants. it wasn't that long ago we had 600, few more than 600. we're down today, gosh, six or seven years ago i recall, we're down today to about 325. the postal service is saying unless we do our job that they may be compelled with no help from congress and the president to close another 80 or so starting at the beginning of next calendar year. from our point of view, in our legislation we have a stipulation that says two years after the inactment the postal service may move forward to reduce the number of mail processing centers. we had a similar provision from

two years ago, 62 senators, mostly democrats voted for, some republicans. i would like each of you to give your thoughts to closing plants. what we tried to do is lay the groundwork so that the postal service can pay off the obligations, recognize the liabilities and pay them down. have money for capital investment, have money for pay races, have money for pay raises. have money in the bank when all is said and done ten years from now. but i'm not interested in seeing a lot of additional plants close or any additional plants close, i just want to make sure that the postal service is profitable and viable. dr. miller, if you could just lead us off on this, i'd appreciate it please. >> mr. chairman, first let me say that i have not done an analysis of these 82 and the specifics. some may apply to the points i'm making and some not. my impression based on my work

on the board of governors ending two years ago or three years ago is that a number of mail processing facilities are there and have not -- that under ordinary market circumstances would have been relocated, would have been changed but for the fact that there would be the impediments from congress, displeasure from members of congress, restraints put in appropriations bills, nimby provisions have not been changed. that leads interestingly to a perverted outcome because when you think there's going to be a change you want to make as many changes as you can on all -- in one fell swoop. so it is just an inefficient system unless you give the postal service some freedom to streamline and rationalize its logistical network, you're going to get these back and forth, and i think inefficient decision making about these various installations. >> okay.

thank you. mr. coffman. >> mr. chairman, i largely agree with jim's points. i think that the devil's in the details here. it's not for the board to dig into them. it's for the board to set criteria and policy. but i think, you know, in general the postal service has been right. it needed to consolidate some of its facilities. it's already done a great deal. whether it needs to do more or not i'm not capable of sitting here and saying yes or no, but -- and each time they do that's painful for somebody somewhere, but as jim says, you just are pushing these problems to the future. automation has made it easier to do a lot of this high volume mail processing so on balance without trying to avoid commitment, i would just say this -- it would be premature for me given my level of understanding of the issue to

say anything about the next round of closings and consolidations of processing centers or plants but i do think that it was appropriate to make some moves along those directions over the last few years. >> all right. thank you. mr. bennett please? >> sure. chairman, i am very familiar with the issue. i'm not familiar with the details as to whether or not these specific plants should or should not be closed, however, what i would say though is that i think in this environment where we do have this incredible infrastructure that is in place, whether or not that facility is operationally efficient or not, the rest of the facilities that you're talking about, i think you have to be very careful when you start taking away some of your assets to make sure that those assets couldn't drive future revenue. one of the things that i think that a lot of major corporations

make a big mistake, particularly the very large ones, is when you start trying to cut costs. because you're so big you start looking at your costs in silos and you don't think about how those costs impact revenue someplace else. and so you really have to be careful to make sure that you consider the whole prior to doing these individual silo cuts. so i don't have an answer to your questions other than if i were looking at this more carefully, that's what i would do. i would consider how does it impact the whole enterprise versus just the silos that we often look at in budget cuts. >> thank you. miss kennedy? >> i echo the concerns michael bennett just set forth. i worry that i don't think you can cut your way to prosperity. i think you have to look at what the long-term implications are of closing these facilities. i don't know what those particular facilities are. i also worry about the impact on the universal service

obligation. i don't know what it means for rural communities. i don't know -- i believe that universal service doesn't mean universal service some day, it means timely universal service. so what delays will happen by that many consolidations and closings? i think that matters because the postal service is a life line for so many communities, and i think that's something that needs to be looked at. and i think you also have to be poised to take advantage with this terrific infrastructure that's in existence for innovation, poised to take advantage of the next great opportunity. i think all of those issues need to be considered. >> i'll probably ask you to answer this next question for the record but i may ask you to comment very, very briefly. it relates to the potential closure of additional mail processing centers. the question i have, think about it outloud for a minute each maybe, is the service delivery standards. as some of you will recall, it wasn't that long ago that the

postal service had delivery standards and delivered the mail and one day, sort of like the same metropolitan region, geographic region one day outside if you couldn't do that, the postal service was expected to deliver within two days. the mailer and the mailee are in the same 48 contiguous states, it was one, two, three. at our encouragement the postal service have changed the standard of -- if you will, the standard of delivery. it's gone from one, two, three day to a modified one. if you're in the same metropolitan area, if you live in one side of washington, d.c., i don't, i live in delaware. i mail it to you today, you should get it tomorrow. that's modified one. if we're outside the metropolitan area, you might get it, you may not. modified one, two, three. and i like -- i think the postal

service would like to go to two, three. two day even in the same metropolitan area could be in one but two would be the expectation and then three. in terms of what's appropriate for us, i'm not comfortable with the postal service saying this is how many mail processing centers we should have. maybe with the involvement of the postal regulatory commission and the board of governors and the postal service is to consider whether modified one, two, three days of service is appropriate, one, two, three is better or two, three is just fine. i welcome any comments you have in this regard. miss kennedy, i picked on dr. miller all afternoon. >> my first thought of that is if we have declining first class mail volume to have more delayed first class mail delivery doesn't make sense. i mean, if possible, i personally would like to see us

have the fast er faster standar delivery. that concerns me. you would have fewer people mailing letters. >> just off the cuff i think the faster form of delivery would be better. it is the postal service. this is a service organization. every company that's focused on service is focused on how to provide a better service to the customer than somebody else and having deliveries two, three days after you've put it in the post is probably not a good way to make sure your customers are happy. if you have customers happy on one end, then they're going to want to use you for something else. so i would focus on how do i make my customers most happy and i would think that would be more of a faster service to help my business. >> okay. thanks. mr. crawford? >> what strikes me when i think about this question, mr. chairman, is my daughter who's 14 lives on her iphone when she's not at camp, and she finds

e-mail to be slow and cumbersome. instant messaging is so much quicker, she tells me. to me, e-mail's just so rapid it's incredible. but the new generation is accustomed and expects what they want to arrive on the door, you know, within minutes and instant sort of gratification. we worry about that in some respects, but in other respects it's a tribute to the new communications and transportation capabilities that we've developed. and given that shifting culture, those expectations for speed and on time delivery i'm reluctant. you know, you have to look at the economics of all of this and the tradeoffs and costs, but i hate to see the postal service give up one, two, three. >> all right. thank you. dr. miller? >> mr. chairman, two things.

one, as i recollect, the rationale for this change in service standards was developed after i left. i don't know the details of it and i hesitate to answer without having time to analyze the data. second, there is a tradeoff obviously. you can't do all things for all people and you have to make some choices here. service standards should be an input into the question of plant and logistical rationalization seems to me. i just don't have -- i don't have my hands on the information necessary. >> i understand. >> everything else equal, there's something nice about having a -- as you characterize, one, two, three kind of standard and you would deviate that only for good reason, but i don't -- whether there's a good reason there or not, i just simply cannot say at this time.

>> all right. thank you. i think i mentioned earlier on saturday i was home for a little bit and about 5:00 in the afternoon our letter carrier came and delivered our mail on saturday. and it turned out there were some things in the mail that we actually very much wanted to receive. it's not always the case, but it certainly was on that saturday. part of the debate that surrounds postal reform these days is should we continue to have 6-day a week service except when we have a holiday that mixes in, like july 4th it was on a friday maybe. or should we allow postal service at some point in time to go from six to five-day a week service. when we passed our legislation two years ago, 62 senators voted for it, but the -- in that bill you may recall there was a provision that said the postal service could eventually go from six to five day service if they chose to, but you have to wait for at least two -- they have to wait for two years after

enactment of our -- of that legislation. well, that legislation if it had been enacted, that means the postal service would have been free this year to go from six to five-day a week service in 2014 and to do the same thing in terms of closing additional mail processing centers. in this year, 2014. the bill didn't get enacted. now we're grappling with the same issues. standards delivery and six or five-day a week service. we've taken a different approach as you may know this year in respect to our legislation from six to five. for years i have sat here with our labor friends from the postal union especially to the letter carriers and urged them to work with the postal service to find a way to continue to deliver mail on saturday and with a wage agabenefit structur that makes them as competitive that doesn't lose as much money. we were told going from six to

five day a week service would save $5 billion a year and we're told now that that -- because of the changes in the wage benefit structure that have been negotiated between the postal service and the letter carriers, that that's no longer $3 billion savings. it's 1.5 to $2 billion a year which makes the postal service -- they lose money but there's a tradeoff between service delivery and labor costs. our legislation, we took a different approach, dr. coburn and i have brought to the committee and the committee has reported out. our legislation says we're not going to say to the postal service for two years you're forbidden to go to five day a week service. what we say is let's look at a volume trigger and postal service last year i think delivered about 150 -- 158

billion pieces of mail give or take. what we've put in is a volume trigger that says if that number drops below 140 billion pieces of mail, then the postal service would be free to go from six to five day a week delivery. didn't have to. they're losing money. they're making money hand over fist, maybe they wouldn't want to. maybe they're continuing to find ways to make that internet, digital connection, to make money. the reason why we decided to take this approach to use a volume trigger instead of somebody going to five-day a week service in two years is because we want to realign the incentives. we want to incentive advise postal employees to work harder, sell products. if you happen to be on a rural route or happen to be in a post office or a town or city or community, but we want them to be incentivized to sell harder and sell more. we want to incentive advise the mailers, whatever they happen to be mailing, whether it's catalog folks, magazines, we want to

incentive advise them to mail more in order to keep the six day a week delivery if that's what you want. what we put in our bill two years ago we said you can't do that as opposed to some volume trigger today. what do you like about it or not. please, dr. miller. >> mr. chairman, as i said in my response to questions from the committee, i think the postal service made a mistake in trying to obtain permission or first stated it would accomplish this without congressional acquiescence but then tried to obtain permission to go from six day to five-day delivery. i think they should have asked for delivery flexibility. there are a lot of places where six daze day delivery makes eminently good sense. some places seven day delivery

makes good sense. other places five day delivery, other places still two or three day delivery per week. the postal service needs to have that kind of flexibility. i think the postal service can provide what any reasonable person would say is universal service to some places in america at two days or three days where the costs are just extraordinary of doing six days a week. the postal service did couple its proposal with provision that the post office would remain open on saturdays as some were expecting a bill or payment or box of medicine or something like that, they could come to the post office and get it. i live on a lane. i have to go 1/3 or half a mile every day to pick up my mail at my mailbox. a lot of people go pick up their mail at the postal -- post office. so, you know -- and i know a will the of people are very

remote locations, et cetera, et cetera, especially rural communities, more rural than mine, but i think with some flexibility the postal service could inconvenience a few people somewhat but save a lot of money, money that is being provided by other postal ratepayers. for the most part what we're talking about in terms of the postal service's revenue base is not money from the taxpayer, it's money from other postal patrons. they are paying for the losses that are ascribed to service that is just economically prohibited. >> all right. thank you very much for that insight. mr. crawford please? >> just to add to those very thoughtful comments, jim, that i see it as a last resort.

when i was on the transition team the volume was 200 billion pieces. 158 billion this year from second quarter results. it will be 151 million -- billion pieces or so in 2014. that 240 -- we're approaching some of the thresholds that are in the bill. but what has struck me since i was here two years ago, and i learned this from the reform legislation that you and dr. coburn have introduced, is the potential savings in retirement and health care expenses which exceed even what i imagined when i had done earlier examinations. and i think in light of the really large possibilities there, that it may not be necessary to go to five-day delivery. i think jim makes a good point about it depends on where you are and what makes sense.

i do believe the postal service should have the flexibility. it would be better if it weren't just legislated. they had that capability, but at the same time as a governor i view any reduction in service, it's a little like one, two, three. and service standards highly regrettable and should only be taken as a last resort if we can show, and i think the numbers show that there would be some savings, as you say, 2 or 3 billion a year. that's not chicken feed, but next to what we're talking about in the health care and retirement expenses it may not be necessary. and for a lot of people who deliver catalogs i get my "economist" most weeks on a saturday. that would be a loss to have to wait for monday or tuesday on a

holiday week. i would like to see us keep six-day delivery but to have the flexibility to reduce if we need to. >> all right. thank you very much. mr. bennett please. >> i think six-day delivery is something that is a foundation at the post office and that people expect that. i think that customer service would probably almost demand it in most cases, however, that said, i think that this is -- i think we have to be careful to try and have a one size fits all fix for all the various problems. as jim pointed out, that sometimes there may be some areas where five-day delivery is just fine and some area where seven-day delivery is most important, but at the end of the day i think we've got to be very, very careful not to try to fix the -- i have a one size fits all kind of solution to the various challenges. this is just about the financial

issues. i think as stephen crawford said, there are other ways that you've included in the bill to address the major financial issues. so just to make that change for the purpose of financials, as big of a savings as it would have, i'm not sure that that's the right thing. and, again, if you go back and think about the model i talked about earlier where you've got these various silos of costs, you start driving costs down in one area, you may end up driving costs up in some other areas. ending saturday delivery while we have this trigger of 140 billion pieces of mail before you can drop saturday delivery, if you drop it and all of a sudden your pieces of mail starts to fall further. so the savings impact could end up causing revenue losses in other areas that we haven't thought about. so i think that there needs to be careful analysis in that area

to look at what the impact is across the enterprise. >> thank you. miss kennedy? >> i really support what my colleagues said. i really don't need to repeat it, only to say that i think we need to project a postal service that's working and that is available for people to want to use and any time, and i really reiterate strongly what steve crawford said, any time you have a cutback in service in any way, whether it's delivery standards, whether it's daily delivery, six days a week, i think it's a black eye. i think it hurts us. and we want people to feel that the postal service is excellent in every way, that the mail when they drop that letter in the mailbox when it's picked up by their postal carrier, that it's going to get where they want it to go, that it's going to get there in a timely fashion, that they can rely on the united states postal service.

that's the image we want to project. that's what we want to see happen. i would love for us to find other ways to keep our finances robust and to maintain the postal service. >> thank you. i just want to reflect on this for a moment. the legislation that was reported out of this committee a couple of months ago allows the postal service to consider whether or not to reducer advice from six to five with a number of caveats, including post office has to be open on the weekends. people have to have access to their mailboxes and that kind of thing. certain kinds of items still had to be delivered, including pharmaceuticals, medication, that type of thing. but we at the encouragement of senator levin, we didn't use a straight trigger $148 billion trigger to say when the mail

volume drops below 140 billion, even if that's next year, you can go to five-day delivery. we said you can't do it before 2007. effectively the postal board of governors, if you see it plum t plummet, i don't think you will with the economy coming back. but the effect of what we've put in our legislation at the earliest, we could go from six to five in 2000 i think 18. we'll see how it works out. the challenge for us, the postal service and the employees is to figure out how to get more people to use the service. how do we make saturday delivery? maybe not something that loses $1.8 billion a year, actually make it profitable? that's the key. how do we do that?

as we figure out with the digital intersection figured out, mr. bennett if you get on the committee and the board of governors, i know you're going to help us do that. i think that's a challenge for us. how do we do this, take this legacy organization and make money with it and do so without encroaching inappropriate ways on the private sector. we're still hoping dr. coburn's going to join us. he's flying in from tulsa. you know the old song, jean p pitney song, only 24 hours from tulsa. doesn't take quite that long to get here from tulsa. his flight has been delayed somewhat. fritz, do you have any updates for us? all right.

>> i have some bad news for you. that's dr. coburn's flight has been delayed further and he's not going to be able to be here until 8:00 so we'll have dinner and you guys can get to know each other even better. no, i think we're going to wrap it up and knowing dr. coburn he'll have plenty of questions for the record. if he hasn't had a chance to meet with you, my guess is he would want to do so. try to make time to do that. he's very thoughtful, creative person. he's saddled with not very good staff -- no, he's blessed with good staff, so am i, they keep us out of trouble most of the time. i -- well, a lot of times what i'll do with a hearing if we

have an opportunity, we're invited to make an opening statement and i thought you had very good ones and sometimes when we have time i like to give our witnesses a chance to give a closing statement. not five minutes. just sort of reflect on what you've heard, what you've said and what others have said. some questions that were asked. but if you would just take a moment, think about it. a closing statement, take a minute or so to do that. i'll make a couple of comments and then we'll call it a day. miss kennedy, would you like to lead off? >> sure. thank you so much, mr. chairman. thank you for giving us the opportunity to be here today, and thank you for your very thoughtful questions. i think the challenges are there, but i think they're great opportunities. the united states postal service is a tremendously vital asset for this nation, and i look forward to having the opportunity to serve and if

confirmed i look forward to getting my -- serving with these magnificent gentlemen here to my right and having a great continuing conversation with you and with dr. coburn and the rest of the members of the committee. thank you very much. >> thank you, ma'am. david michael bennett. >> all right. >> from charlotte, north carolina. >> absolutely. this is a really neat process. thank you so much for the opportunity to be here. >> confirmation hearings aren't normally this much fun. >> i've had a good time. >> sometimes they can be downright -- as dr. miller knows, very awful. >> i've had a great time. >> it's been a good one. >> more of a comment on my personality than anything else. this is a real opportunity i look forward to having a chance to tackle. the problems that the postal service has and that we talked about at our lunches are really challenging, but they're the same kinds of problems that other businesses have faced for the -- for the last decade.

ibm transformed themselves. sysco's having to transform themselves now. company after -- at&t. company after company, they've had to transform themselves. they've come out on the other side better than they were before. i think we have an opportunity to take this 200 plus-year-old organization and make it better than it was before. do some things that are different. i mean, maybe in a year we're not even talking about the number of pieces of mail that we've delivered. maybe we're talking about the number of shoes or the number of other items that have been faxed that we've had a chance to deliver. i mean, so they're -- the world is changing and we have an opportunity, i think, now at this critical juncture, we have an opportunity to take the most unique organization in the world in terms of logistics and moving things around and make it something really special for the american people. i look forward to the opportunity and i hope i get the

opportunity to serve on the board of governors and help make that happen. >> thank you. i hope you will, too. thank you. dr. crawford, not mr. crawford, the closing statement i want to recognize dr. crawford. >> thank you. >> i kept asking my staff, is he mr. or a dr. they told me you were dr. all those times i called you mr., i apologize. dr. crawford. >> i'll take this opportunity to say, you know, i was here two years ago almost to the day for my hearing the first time around and 1789 -- s 1789 had actually passed in the senate. since then my wife has said to me this classic question that we've all been asked, why do you want to do this? the board can't fix what's wrong with the postal service, congress seems to be reluctant

to act, and to be perfectly frank, i had -- i had to ask myself, does this make good sense? and it has been so gratifying to come back this time because s 1486 has been reported out of the committee and i have -- i am just so impressed by the changes that it -- that it holds forth and am hopeful enough that those will -- something like those will be enacted that i find myself almost sharing michael david bennett's enthusiasm. and the fact that there are four of us together here now with such an interesting background, i have to confess that i, too, and it's not like a cynical old

professor and army officer, but i, too, am enormously enthusiastic about this opportunity because of the legislation that's underway and because of the team that's here together. so thank you >> you're welcome. dr. crawford thank you for your willingness to take this on, yet again. we'll try to get it done this time. okay. thank you. dr. miller, please. >> thank you, mr. chairman. i appreciate the opportunity of being here today, and i appreciate also the opportunity of a prospect of serving with these three individuals whom, as i say, i've gotten to know and respect. i think great things could come from the postal services being led by them, as well as the current governors. i concur with what dr. crawford has just said about the two legislative vehicles. i think the current one is much improved over the former one.

a matter which i gave rise, i think, to some lack of cohesion last two years ago. i think mr. bennett, michael, summarized things well, and made the case for something i have been saying, and all along, and that is i think the postal service really needs the freedom, the flexibility, to operate like a business. those businesses that have remade themselves have been able to do that because they had the freedom to experiment and to do things of a sort that steven mentioned earlier. all along we have to be cog nizant of the public service mandate the postal service has. as articulated by mrs. kennedy. i think we can do that.

i think working with congress, both houses, as you know, the other body has not come with a proposal that is quite similar to the one that you have, there's more work to be done. i think, though, that the prospects are reasonably good. because the situation for the postal service is so dire. and i congratulate you on the progress that this committee has made, and i urge your prompt attention to the nominations and to the prospect of a full board operating in high gear. thank you, mr. chair. >> thank you all. it was a wonderful, wonderful closing statements. let me add a couple things. one humorous.

one more serious. not long ago my wife and i were driving by a cemetery. she's always after me to wrup date our wills. and i have no intention of dying any time soon, but she said oh, we need to update our wills. and one day she said to me driving by a cemetery she said you ever think about what you'd like to have like on your tombstone? what would you like to have on your tombstone? and i thought about it for a moment. i said, you know, i have. and i think i would like to have these words. return to sender. return to sender. and it's not just a great song. but a pretty good -- pretty good something to put on a tombstone. fits nicely, too, i think. the leaders are many things. you've always been leaders

throughout your lives. leaders, i think to think of leaders are humble not haughty. we lead by examples. not do as i say, but do as i do. i like to think as leaders as those who have the courage to keep out of step when everyone else is marching to the wrong tune. leaders are also purveyors of hope. leaders are purveyors of hope. this is not a hopeless situation. this is actually quite a hopeful situation. i've been up here drinking water, sometimes have to be careful not to drink too much. but this is a glass half full situation. this is definitely a glass half full situation. and if we can get our act together, we're in this body, on capitol hill, working with the president, all the key stake holders, you know, this can -- this can turn out a whole lot better than some are willing to believe just a few years ago. and part of the key to this is

having folks on the board of governors. when people say to me what's your all-time favorite job, i tell them, my best job i ever had was at ohio state university, where i was the pots and pans man. at the delta gamma sorority house. that was a great job. close second would be governor of delaware. i loved being governor. but which to serve -- i love being governor. i tell people i'm a recovering governor when they ask what i do. people who don't know me, i say i'm a recovering governor. some day i hope i have a chance to say you're recovering governors, too. you've been age to say this for awhile but i think you'll be a great addition to the board of governors. and we're going to try, dr. coburn, have a chance to talk tomorrow, and talk about how -- how he'd like to move forward and how we'd like to move forward and do it in a timely, timely way.

with that say we're deeply grateful to each of you for your time and preparation today, for meeting with our half, for all the responses to their respective bigraph can and financial questionnaires, answering freely the hearing questions submitted by our committee. you've had your financial statements reviewed by the office of government ethics, without objection this information will be made part of the hearing record, with the exception of the financial data which are on file and available for public inspection in the committee offices. without objection, the record will be kept open until 5:00 p.m. tomorrow for the submission of any written questions or statements for the records and i'm sure dr. coburn will have some additional questions and my guess is some of our colleagues will, too. and with that, it's a wrap. and we'll adjourn this hearing today. thank you again so much. >> thank you, mr. chairman.

the house rules committee meets today at 5:00 p.m. eastern time to consider debate rules for the highway and transportation funding bill. the measure is expected to come up later this week on the house floor. money runs out for the program at the end of august. live coverage coming up shortly right here on c-span3. the house begins its legislative work this evening, and the senate, meanwhile, not conducting any votes today but is in session.ot more now on the week ahead in both chambers, with the capitol hill reporter. thajoining >> on the phone now to give us e little bit more context on ext n what's going on w on capitol hi this week is ian swanson, a news editor at the hill newspaper.tot thanks for being with us. " >> thanks for having me.er >> we've been talking this ng morning about the republican l lawsuit against president barac. obama. walk us through that a little sot and what action we could see

soon, even this week. >> sure.guest: well, what we'll see we believe on wednesday is that the house rules committee will vote on whether to move forward with th. lawsuit. we fullyec expect that to happen. the rules committee is dominated by republicans. that will bring the lawsuit to the floor. i'm not sure that we'll get a vote on the floor this week on t the lawsuit. that could happen, but certainla within the last three weeks, thn congress will be in before the august recess we're going to seh the house vote on whether to go forward with the lawsuit, and li again we fully expect them to vote to move forward with the ae lawsuit, because the house has a majority of republicans. >> ian wanson, from your perspective, are republicans rb united on this lawsuit? are there any dissenters who say maybe this isn't the right way to go? disse >> i think that republicans arey toetty united on it. i think there's a couple of gu things going on.re a one thing you do have a division among republicans over whether the president should be e impe impeached. there are somee republicans thaa want to go that far.o

many more who don't, who think that would be something that doing at all becauseould it would go nowhere and they think that it could also bounceb back, hurt them politically.so m so some people see this lawsuit as a way to sort of contain that fire for impeachment that could actually, you know, maybe backfire and hurt republicans rc ahead of the midterm elections.t there's also a lot of general ag anger at the president among the republican party, republicans in the house in particular, and ia this is a way of sort of answer answering thatin anger with wha kind of an action.t has >> another topic that has been in the news and on the minds of congress this idea that nding emergency supplementary fundingo to address thepl border crisis.. people on both sides of the aisle talking about that s the >> that's the other huge story of july that we'll be covering. the question is whether congress can get that supplemental to the president's desk before they all leave town for the august re.