make it possible in a depression case. in a pain case there are people who absolutely need not to go where they mean to go into opiates or come opof them. they believe is this is what will work with me. we need to start where the veteran is. with my patients i have said i have a lot of different therapies, talk therapies and medication. these are the good and bad, what makes sense to you. by the way we can do both. and in most cases we end up doing both, but onften in a stepped way. >> in an ig report from 2013 it was recommended that va insure that facilities take action to improve post discharge follow up for mental health patients, particularly those who are identified as high risk for suicide. what is being done to insure this process is being followed? >> a few years ago, va put out

as a performance measure that veterans must be seen in person or at least by phone in the first seven days after leaving a psychiatric hospital. this is based on statistics that show is the most vulnerable time for a suicide attempt. we've been monitoring this. we are not perfect in this. we have -- we -- i can't give you a number now, i can provide it later. we are at a point when all across the nation we're tracking this. we have automatic alerts. we have teams that do this work with people. and we've taken it miles further. i wish i could give you the right number now. >> from what we're hearing on the ground and on this committee, it is a world apart. and if for what we're hearing in this committee were true we wouldn't be here today having this discussion. >> mr. chairman if i might we're not saying everything is fine. and i acknowledge that at the outset. what i did want to tell you is

we are committed to getting it right. this is tough work. and we have a lot to improve on. we very much welcome your support and help. >> very hard to get it right if you're not acknowledging the depth of the problem. ranking member custer. >> thank you mr. chair and the committee and our panel for coming forward and all the comments from the committee. i just want to follow up on how -- where we go from here in terms of sharing best practices. we've now heard the doctor -- i really appreciate again your commentary and your expertise in this area and to the team from the va. we've heard about visn 1. i talked about some examples in white river junction. how do these best practices get shared and the research that's underway, how do we move forward with this to make sure that more veterans and their families will be served by this? and in particular the clinician

education, because i think we've got to change some of the parameters and some of the you know, sort of go to answers that some of the clinicians have. where do we go from here with this, and how can this committee best stay on top of that and continue to work with the va to make sure that we are serving these veterans all across the country? and i'll bring el paso up. obviously, one of the challenges is that this involves a very case management intensive approach. and you're right, the worst case scenario is to cancel somebody's medication without follow up. because as we all know that's why people are turning to heroin on the streets. so how do we get this right and how do we get it right across the board in the va and what's the follow up? >> so what i might suggest is that you invite back for a

briefing. we would give you a follow up. you pick inthe frequency. i didn't get a chance to say before to congressman oroerk i do have people monitoring for the abrupt discontinuation of medications. i'm worried about it when people change providers if we're sending out a message that says we want to see fewer veterans on onopeioids. that is absolutely not acceptable. that is no definition of success here. i wanted to be very, very clear on this point. some of these challenges are areas where u.s. medicine is struggling in general. chronic pain in particular. and for mental health we've had to blaze some trails. there is no clear cut blood tests that one can do like a blood sugar blood pressure whatever to double check on the diagnosis or assessment. it depends a lot on the use of standardized questions. in some cases and -- this we are

working very hard on right now. we are changing how we schedule appointments and simplifying it. so that it is much easier to get veterans in for that follow up assessment. but you should hold us accountable and i would like forward to showing you where we've been and where we're going. in no way do i not want to say that we have problems to solve. we do. we own them. and we're stepping up to them. and look forward to your support. where you can help is helping to work with us on reducing stigma. i mean, this remains a huge huge problem. and, also, i think sending a sense that you are supporting the efforts to get better care for veterans. one of our challenges is that a lot of young people are not choosing to go into these fields. that is the ultimate recruitment problem. we have terrific incentives thanks to the clay hunt act in terms of debt reduction and

veteran's choice act and so forth. those are great tools. someone has to actually make the decision to go down that path. >> thank you very much. >> thank you ranking member custer. dr. clancy i want to stress again the need for you to turn over documents that have been requested by congress. your failure to do so makes our job very difficult. mr. oroerk, texas. >> dr. clancy, thank you for addressing the el paso issue and the larger issue within the va to insure you're monitoring those veterans who are going to be coming off of opiates. but, again the feedback stands because i'm hearing it directly from veterans that's apparently not happening in el paso. we both must conclude for every veteran who takes the time to go down to a town hall meeting to tell their congressman they are having this problem and are receiving opiates and are doing without that there are -- that that person represents who have

just given up and says why should i bother. we have a problem in el paso, perhaps nationally in terms of ramping people down or finding an alterative therapy to pair it with. i would like you to respond to something that we've heard the secretary say and read about in the press that he's got 28,000 positions to fill in the vha. it's something that under secretary sloan gibson reiterated three weeks ago, four weeks ago in a hearing here. when the ranking member and i and some other members of congress and the senate were in your command and control center on the eighth floor a few weeks back, we heard the number was not 28,000 it was 50,000 positions to be filled at the vha. could you confirm that number and tell me how you're prioritizing those hires? i'm getting to if we have a crisis in mental health and we're treelting all hires the same. if you're prioritizing mental

health here is your chance to tell the committee. >> i did not hear the number 50,000. i'm going to have to check on that and get back to you directly i think would probably be the easiest way to say that. with 300,000 employees sorting out normal turnover which is something around 7% 8% from all disciplines. areas we're trying to fill is a little bit challenging. we have identified five areas that are the highest priority. physicians nurses mental health professionals physician assistants. i'm blocking on the fifth one. mental health officials is on that. we have been ahead of the curve in terms of the rest of the country in terms of hiring mental health employees. trying to do everything to make

it almost impossible to seek assistance and get it. if you actually do get care from one of our facilities, we have a long way to go. i was commenting on the overall pipeline problem. the other area where we are beginning -- where we do a lot now but i think could do much more is intel mental health. big spring texas they tried very hard to recruit psychiatrists and had a problem. recently recruited one from wisconsin who is not moving. that individual is providing all virtual care. so we're working with them to try to figure out how to make that business process work as smoothly as possible. many veterans prefer that. they find it a bit less confrontational. >> i appreciate that. as i yield my time i'll conclude you have asked for an additional briefing or hearing to follow up. i hope when you come back, you come back with a plan for el

paso or any underserved community. you say you know what we're paying psychiatrists and psychologists and counselors x, i'm going to pay them x plus 20% to get them to el paso or that underserved kmaentcommunity and retain them. you have a huge problem with retention as well. that's a suggestion. or some other plan that really treats this as the crisis that it is versus the, you know we're making this a priority. we're going to do this that and the other. i need dollars on the table specific offers deals that will get that psychiatrist or mental health professional there in the first place and keep them thereafter. i hope to hear specifics next time. appreciate your answers to our questions today. mr. chair and ranking member, thank you for holding this hearing. really important thanks. >> ranking member custer? >> thank you mr. chair. just briefly i want to follow up for my colleague that we will do a follow up hearing.

and not only on the types of pain management and techniques that do seem to be working. in particular i'd like to include telemental health. maybe we could do a short demonstration. just for you that that might be an alternative in this crisis situation you have. i want to make sure we stay on top of this so that our colleague -- we can get served. thank you. >> thank you ranking member custer. our thanks to the witnesses. you are now excused. today we have had a chance to hear about problems that exist within the department of veteran's affairs. with regard to prescription management and veteran suicides. this hearing was necessary to accomplish a number of items. to demonstrate the lack of care and follow up for veterans prescribed medications for mental disorders, to demonstrate the inaccuracies and discrepancies in the data

collected by va regarding veteran suicides. and those diagnosed with mental disorders and, three to allow va to inform this subcommittee. what it plans to do to improve these glaring deficiencies in order to insure veterans are receiving the care they deserve. i ask unanimous consent all members have five days to revise and extend their remarks and include materials. without objection so ordered i would like to once again thank you all of our witnesses and audience members for joining in today's conversation. with that this hearing is a adjourned adjourned.

tonight on the communicators. research founder austin meyer and democratic representative from george hank johnson talk about technology issues and patent legislation before congress. >> 97% of the people that are sued by patent trolls have to settle because they don't have the $3 million to defend themselves. 97% settle. they pay an average of $300 to the patent troll that's suing them. when they pay the assessment, they are locked up under what's called a non-disclosure agreement which is a contract that says they are never allowed to tell anybody what happened to them. >> so far this new government seems very excited to have a legislation on the topic. we're going to speak to as many

congressman possible. >> patent reform we are concerned with currently has to do with closing the courthouse door. to those who create making it more difficult for them to actually use the courts to enforce their property rights. so that's the big divide. that's a hurdle we will have to overcome. >> tonight, at 8:00 on the communicators on c span 2. tonight c span's road to the white house coverage continues with jeb bush making his 2016 presidential announcement in miami. we'll show it to you tonight at 8:30 p.m. eastern on c span 2. and after it's over we'll get your reaction with your phone calls, facebook comments and tweets. and tomorrow another campaign announcement, this one from

donald trump. on whether or not he plans to run for president in 2016. he'll speak in new york city and you can see his comments live at 11:00 a.m. eastern here on c span 3. trade legislation was the main topic at today's when you say briefing. president obama remains confident that the trade promotion authorities will be approved by congress. here is more now. i do not have any announcements at the top so we can go straight to questions. >> a couple subjects, i wanted to start with the trade. and see what the administration strategy is at this point. given that it seems highly unlikely you can recapture the lost democratic votes on the trade assistance side of things. are you guys counting on republicans flipping on that vote, or is this likely to be something that goes on until the

end of summer as was one option that the house majority leader suggested? >> there have been a number of conversations over the weekend and already today. about the legislative path forward. the president and the rest of us here at the white house continue to be confident that there is strong bipartisan support for this approach. and we just have to figure out how to untangle the legislative snafu in the house. it's not the first time that members of the house have been presented with trying to navigate problems like this. but the white house will certainly be engaged in trying to help democrats and republicans on the hill figure this out. >> do you see this -- is there going to be a short term solution or do you see this as extending perhaps into the end of the summer early spring, and what does that do to the

prospects for negotiating a trade deal with the pacific --? >> jim i thought that mccartney did a news conference earlier today where he indicated something we agree with, which is that the longer that this process plays out the harder it is to build a bipartisan support for it. the fact is we believe we have momentum. in the last several weeks we've seen both tpa pass bipartisan support in the senate. we saw the senate do something that many people thought was not possible which was to build a legitimate bipartisan majority for tpa in the house. that's good nudesews. we want to build on that momentum to complete what the president thinks is necessary to negotiating an agreement that is in the best interest of the economy and middle class workers. >> does the white house think the two issues have to be joined together in order to get success? >> all of these kinds of

procedural questions are ones that members of the house will have to encounter. obviously, the speaker of the house will have a lot to say about this. i wouldn't be surprised if the president has the opportunity to speak to speaker boehner today to discuss the issue. but ultimately he will have more to say about this than anybody because he's one that's responsible for determining the calendar on the floor. so he'll work that out. and we're hopeful they'll do it soon. >> on saturday in his radio address the president called for democrats to support taa. later, former secretary of state hillary clinton sided with democratic leader nancy pelosi. did the president find that unhelpful? >> i didn't speak to the president about it. what hillary clinton said over the weekend is a view she's not in favor of trade agreements or

against them. she indicated that her test would be to examine an agreement and determine whether or not it was in the best interest of our national security and determine whether or not it was in the best interest of american workers. those -- that criteria may sound a little familiar to you because it's similar to the criteria the president has established. it's not surprising to anybody here that secretary clinton might identify the criteria considering she served as secretary of state under president obama. so there the overlap, if you will, in their views, is not surprising. >> on another subject i wanted to raise a question about an event and actually raise some concerns about an event here in the white house this weekend. the white house did not verify a gathering here of about 500

people, musicians. even after this had gained widespread notice on social media. i wonder why the white house did not verify it. >> i don't have a lot to tell you about non-public events that occur at the white house. i think we have confirmed for you that the president and first lady did hold a private party here at the white house over the weekend. given the private nature of the event, i don't have a lot of details to discuss from here. >> even after it had been widely noted on social media, even by people like al sharpton? >> what's the question? >> it's just once information about the event is in the public domain, i find it interesting that the white house would not add least acknowledge what was in the public domain. >> that's what i just did. the president and first lady did host a private event at the white house over the weekend. but given the fact it was a private event they didn't spend a lot of time talking about it

publicly. >> were there any lawmakers at the private event over the weekend? >> i don't have a guest list for you. >> suggested she would be more amenable to trade if the -- i am wondered if the white house is open to discussing and what kind of discussion work is going on? >> you know the president has certainly been a strong advocate for making smart investments on our infrastructure because of the impact it would have on job creation, as well as the long term health of our economy. the president has put forward a very specific plan for how he believes we can close loop holes that only benefit the wealthy and well-connected. and use revenue from those loop hole closings to invest in our infrastructure that everybody bfrts

benefits from. that's a strategy we have championed for a long time. in terms of the legislative procedure that's something the house speaker will have to determine. i don't have a legislative procedure to advocate for from here. >> what did the president do over the weekend to make his case to house democrats? particularly on taa. >> i think you've heard the president and the rest of us make a pretty compelling case. about how trade adjustment assistance is slated to end. if congress doesn't act by the end of september we'll see a program that has significant benefits for middle class families all across the country expire. the president has long champion championed trade assistance. even outside the context of traindrad agreements. about 40% of workers in this country that benefitted from trade adjustment assistance got

assistance in the form of job training principally. were workers that had not been affected by trade agreements. these were workers who could trade -- trace the loss of their job back to decisions that were made by companies to relocate operations into india and china. those are countries we don't have free trade agreements. that's an indication that the president make forceally to house democrats when he visited the caucus petemeeting on froididay. there is a broader question for policymakers here in washington, d.c. about what can we do to make sure that we are preparing or helping american workers weather the challenging forces of globalization. and the fact is it is impossible to insulate the u.s. economy and workers from those broader forces of globalization. and the question that the president has in his mind is

what are we going to do about it. the mind of the president has a two pronged approach. let's advocate for a trade deal with countries that are doing business in the most economically dynamic region of the world, southeast asia and make sure those countries are raising labor standards raising environmental standards and respecting intellectual property rights. that they are writing into that agreement protections for basic human rights. and giving u.s. businesses the opportunity to do business in their countries. that is -- part of that strategy. the second part is make associateing sure we're helping workers that have been affected by broader globalization trends. that's why you've seen strong support from democrats for this kind of program in the past. the president is concerned about the program expiring. he believed we should expand it

[ inaudible question ] >> i don't have any specific conversations to read out to you. there are senior administration officials that were in touch with members of congress both in the house and senate over the weekend. i don't have any specific conversations to tell you about. >> getting back to trade you said the president and secretary clinton's views overlap on trade. you said you weren't surprised by that. she said there should be no deal. so is the president open to making changes? >> jim you know that tpp has not been completed. this isn't an agreement that is still under negotiation. and the president is determined to make sure that whatever the final agreement is, that it's clearly in the best interest of our national security and in the best interest of middle class families in this country. and that's the standard that the president has set. that's the standard the president will expect if an agreement like that cannot be reached, there won't be an agreement. >> secretary clinton seal of

approval on it? >> the president is hoping is to garner a bipartisan majority in the house and senate for a trade agreement if one can be reached. >> how big is this opm pack now? we know during the investigation of the original opm act a separate intrusion was detected and the senior administration officials were confirming that late friday. that occurred after the briefing when we were catching wind of this after the briefing. how big is it now? is it more than 4.1 million people that was originally estimated? >> you know the precise scope of these intrusions are continues to be under investigation by the fbi dhs and other technology professionals. and the administration continues to be committeed to making sure we are communicating as much as information as possible to those individuals who may have been affected by these particular intrusions. you recall at the beginning of last week the administration began notifying some federal

employees. that their information may have been compromised. and if there is a need for us to communicate with more either current or former federal employees, then we'll do that. >> the senior administration officials saying in addition to current and former federal employees that even prospective employees might have been affected in this separate intrusion. so i suppose those are people who were just applying for a job, went through the process, and perhaps did not land a job with the federal government i would imagine that even though you can't put a precise number on it,ing the scope of this has expanded fairly dramatically? >> i think what the announcement over the weekend indicated was that there was a second intrusion, that was under investigation. it involved a different system and a different set of data. and i think you could logically conclude there is a likelihood that the amount of data and

information was -- that a larger amount of data and information was affected. this is something that continues to be under investigation by the fbi and dhs. >> getting back to the party on saturday night you said it was a private function. does that mean the president and first lady will be paying for that event with their own funds? >> yes. >> that includes the entertainment, the staff who is staffing the event? was it white house staff was it catering staff? >> i don't have all the details other than to tell you that the president and first lady paid for the event. okay, all right? victoria? >> house government reform committee is saying that office of personnel management officials are being very reluctant to testify before this committee tomorrow on the hack. in fact, that they -- say they

won't testify. what is the white house's position on whether they should testify tomorrow? >> i don't think we have one. i would refer you to opm to confirm their participation or to explain why they don't if they don't. >> do you think the officials should testify about the hack? >> the thing i can tell you i know there have been a number of senior administration officials over the last number of weeks have travelled to capitol hill to make sure members of congress have been briefed in some detail about this incident. there is obviously more that we're able to disclose in those types of confidential and classified settings than we can publicly. there are many conversations with the relevant over sight committees on this issue. carol? [ inaudible question ]

>> carol i think that what i can just describe to you is that the president and first lady hosted a private social event at the white house on saturday night. and it was not something that -- it was a private event. and something they paid for. >> well, you guys disclosed private events presumably that don't have coverage for instance when the president hosts a screening in the white house movie theater. this was 500 people, lobbyists corporate executives and international celebrity and it wasn't on the przesident's schedule. how do you justify that and how is that in line with the president's commitment to transparency? >> i think the fact we're talking about a private event and the fact that details of this are known is an indication that the president is committed to being transparent. at the same time the president and first lady are going to reserve the right to host a private party at the white house. and they did it on their own

dime. i think that's consistent with the kinds of things they had talked about. >> the raid in libya that killed a top member of al qaeda are you -- i decided not to try -- >> i have been relishing the opportunity to discuss this. >> what is the response that, are you confirming that and how does that advance the president's fight against terrorism. >> i can tell you the department of defense has confirmed that he was in fact the target of a counterterrorism strike that was taken in libya over the weekend. he has a long history of leading terrorist activities as a member of aqim. he is an al qaeda associated terrorist. and the operational leader of an organization called al mir

bitoon. i am not able to confirm the results of the strike. when we have details on that we'll try to share it with you. >> just on the party one more time. i'm relatively new around here. >> it's okay. nobody else here is invited either. there will be some angst about that? >> why wouldn't we invited? it sounds like to follow up on her question, it's private if you just say it's private. based on whatever criteria an event can be. if you say it's private it's private. is that it? >> i think we're on the point is that the president and first lady -- i think most people across the country would acknowledge this is an appropriate thing for the president and first lady to do. which is to open up their house to guests. and to host a private party on a saturday night. and the fact that they paid for it on their own dime is an indication this was an private event that's not part of the

regular responsibilities of the president of the united states or the first lady. rather as an interest in hosting a private party. >> so there really are no criteria. it's for whatever reason if they deem it private? >> again i think the fact we're talking about a private event paid for by the president and first lady that occurred in their own home on a saturday night. i think most people would recognize that understandably as a private event. >> on the trade thing you describe what happened there as a procedural thing as a snafu. yet, this is something that the president invested a lot of personal capital time, why would he invest so much time and energy into something that is essentially -- it was a procedural matter. this is much more than a procedural fight between him and the members of his own party. it seems it's clearly a difference in ideology and belief about -- >> i disagree with that, ron. the fact is the president and

democrats share a view. that policymakers in washington d.c. should be focused on the best interest of middle class families. those are shared values. and the fact is that's exactly why the president is so strongly advocates for the passage of trade adjustment assistensance because of the impact it has on the middle class. you recall the last time it went up on the floor of the house of representatives. it was supported by every single democrat that cast a vote. 125 members are still in the house of representatives today. we'll continue to make the case. trade adjustment assistance is assistance that actually matters. we're not talking about just continuing the program we're talking about significantly expanding it. there are 24 -- i'm sorry up to 30,000 individuals who would benefit from this expansion. >> you can see a scenario and the labor secretary over the weekend said something to the effect there are numerous

pathways to get where we want to go. there's a way to turn 90 votes in a couple of days? what are those pathways? can you -- >> well, as we kuxdiscussed here before. i'm not legislative experts. in terms of the mechanics involved i would encourage you to check with your sources on capitol hill that can explain those kinds of details better than i can. we continue to be committed to the idea that this is critically important business for us to get done on behalf of the american people and on behalf of middle class families in this country. we continue to be confident that it's possible to get it done. the reason again the reason that i would point out to you that this is a procedural issue we have to manage is there's a bipartisan majority in the house of representatives for trade adjustment assistance. a bipartisan majority of members of congress recognize this is

something that's critically important to middle class families and middle class workers. and the reason it's not -- it didn't mass at the end of last week is because there are some procedural differences that have to be ironed out. that's what we're working out right now. >> this isn't about the broad issue of whether the trade deal is good bad or indifferent. >> it's hard to judge because the trade deal hasn't been adopted yet. >> that's what i was going to say. is there anything specific in the package as it exists now or any specific revisions the president is insisting on in that package that would give the democrats and the house more reassurance they'll get what they want? >> the final deal that the president hopes to present, if we're able to reach one will be an agreement that he believes will clearly be in the best interest of our national security and clearly in the best interest of american workers and businesses. >> anything specific you can

point to? >> there is no final agreement. once there is a final agreement there will be a variety of things we'll be able to point to. >> there is information that the fda is planning to announce a ban on transfats? >> i don't work for the fda. >> first question u.s., canada has been involved in the assurance merthsasure operations in eastern europe poland and baltic states. you repeat several times the u.s. is not going to go to war for ukraine. i'd like to know the valuation at the border of the two countries, you know along the russian border, what is the valuation? >> we continue to be concerned about the fact we see the steady flow of material and personnel from the russian side of the border into ukraine. and there are -- there's lots of evidence to indicate the russian

military continues to provide critically important weapons and assistance to russian backed separatists in eastern ukraine. there is ample evidence to indicate russian personnel are actively involved in that effort. and that's been the source of significant concern, not just on the part of the united states, but by our partners in europe and around the world. it's certainly that continued activity flies in the face that commitments that russia has made. and that's -- this is a situation we continue to be concerned about. >> considering ways to help ukraine in face of what you're describing? >> there's been assistance united states has already provided ukraine. we stand by the ukrainian people

and military as they face the threat. the united states has provided economic assistance. this is something that the president indicated was a priority back at the g 7 meetings in germany last week. that it's important for the international community to come forward and support the government of ukraine and the economy of ukraine. even as they face this challenge in the eastern part of their country. the united states has mobilized substantial economic assistance to the people of ukraine. we've been gratified to see other organization oz have provided economic support. that's support is going to be critically important to the success of the ukrainian government as they try to de-escalate the situation in the eastern part of the country. >> i've seen several years ago one of the president's daughters play soccer in my neighborhood actually. is the president following the women's world cup in the great white north? >> i haven't spoken to him about

it. but i do expect that the president is cheering on the u.s. women as they compete in that tournament. >> on the opm hack, someone in this room asked you on friday i think whether it had affected the private information of any cabinet members. i'd like to ask that question today and add to it whether the president and vice president's information was ever in any danger or was it had by any one who did the breach? >> we know it's highly likely some sensitive data was affected. the scope of data and scope of data is something that's continues to be investigated. >> on a different topic, mentioned in 2001 amuf as a legal justification for

operations in iraq. i'm wondering whether you think -- whether the administration things that you have legal justification to strike syrian government forces if they threaten the forces that americans and others are training in? if you reinsert some of these trained groups back into the syrian theater are american military forces prepared and legally authorized to strike? >> let me take that question, just to make sure we get you the precise legal answer. april? >> i want to ask a couple different questions on two different subjects. one, the president is in a very interesting situation during this presidential election. he has friends as you have mentioned that are running. and now he has friends who are either family members -- well, a son of a president and a brother of a president and wife of president. what kind of position would this put this president in when it comes to the 2016 election

cycle? >> it puts him in the role of interested observer. that's why he certainly is following the race and aware of the discussion and debates that's taking place and the context of this election. but at this point, the president is not weighed in. i don't anticipate he will anytime soon. >> i understand. but he is a president, who is a friend of president from other parties, the bushes, and then he's the friend of bill clinton the former president of his own party. in a real istic -- we understand he will follow his party and along party leansines. how does he handle the friendships when it's going to be war amongst these candidates friends? >> the people that -- the former presidents you just listed are also quite interested observers in the presidential election. some more so than others. i guess. but there's no doubt that the --

president obama would not expect that the robust debate that's ongoing, even in the earlary stages of this presidential election would have any impact whatsoever on the close personal relationships he feels with the former presidents. he has spoken at length about his admiration and respect and affection for president george h.w. bush. i don't know they've had the opportunity to see each other recently. the president did have an opportunity to visit with president george w. bush and mrs. bush down at selma. the president enjoyed the opportunity he had to spend time with them there. and you know, obviously, the president and first lady have a close personal relationship with both president clinton and secretary clinton. and at this point it's too early to weigh in. >> the next subject, the prince concert this weekend. everyone is asking about why wasn't it on the public schedule as it relates to the white house. i want to ask it on the other

side, did press specifically ask for it not to be announced? >> i don't know the answer to that. >> i ask that for a serious reason. because of his religious beliefs, the issue of politics and that's why i ask. >> i don't know the answer to that. >> lastly in 2005 i just watched a video with the image of war naacp image awards prince received an award and president obama is on the front row dancing up a storm. how long have the obamas been trying to get prince? >> i'm not aware of the specific efforts to enlist the support of prince in the presidential campaign. but -- >> was it hard to say that? >> no, it wasn't hard. john? >> on trade you said the president continues to be confident there is a strange

bipartisan support. does he continue to remain confident it will pass? >> yes. the president continues to be confident that we will navigate this particular proceduresal snafu and move this across the finish line. >> okay. so i want to come back to the question of exactly what he did over the weekend in light of this repudiation in the house or snafu as you called it. he played golf, i believe on saturday, right? >> the president did play golf on saturday with some of his friends that were in town. >> did he play with any member of congress or anybody with influence in congress or anybody that would be -- >> the president did not play with any members of congress. i don't know the degree of any influence the president's golf partners had. >> you saw the hillary clinton offer some advice to the president, saying the president should listen to and work with his allies and colleagues, starting with nancy pelosi.

did the president listen to nancy pelosi or speak with nancy pelosi this weekend? >> i'm not aware of any conversations between the two. i know the president's chief of staff had an opportunity to speak with leader pelosi today. >> can you tell us about this conversation? >> i believe i just did. i don't have any details of the conversation to share. they were focused on this issue. >> how big a deal would it be to this president, how big a blow would it be to this president and to the united states in terms of our relations with our asian allies if this deal were to go down? >> i tell you the president's concern is not with his own political standing or even our relationship with our allies in asia. his concern is the impact that this would have on middle class families in this country. again, as we've talked about, there is no possible way to inflate the american economy or workers from the forces of globalization. and we've seen that in many

communities across the country those forces of globalization have had a negative impact on the economy. the question i think facing leaders in this country particularly leaders in washington, d.c. is what are we going to do about it? and the president has articulated a clear strategy about what he thinks. the president believes the united states needs to use our influence around the globe to engage. and to seek to level the playing field so that american businesses and workers can compete on a level playing field. he's confident they're given that opportunity that they'll win. for the workers that's been affected by the broader global forces in a negative way. we know what works. we know through trade adjustment assistance workers can get the training they need to go and get a good job. according to data from just this last fiscal year about 77% of workers that have gotten trade adjustment assistance and gone through a job training program have gotten a good paying job within six months. six months later 90% are still

in that job. that's an indication that we do know what we can do to offer assistance to workers that are struggling with globalization. a lot of these are workers who weren't negatively affected by trade deals, that the united states had signed. these are workers who were affected by broader global forces including the shifting of some jobs to china and india where the united states doesn't have free trade agreements. the president's concern is these agreements are going to expire. the question for democrats and republicans is what are you going to do to prevent it from expiring? >> you suggested earlier that hillary clinton's statements were directly in line with the president's. are we to understand -- it hasn't been clear necessarily from what she has said publicly. is it the president's understanding that hillary clinton is lock step in support of his view on trade? >> i think for -- a clear

disilation of her views on this topic, i encourage you to contact a spokesman for her presidential campaign. >> you did suggest the criteria she outlined agreed with the president. >> based on what she said over the weekend. with the impact it would have on middle class workers -- >> have you spoken with her about this since this issue has come up? >> i don't know they've had a conversation about this issue. >> one last question you remember larry sumers? >> of course, very well. very well. enjoyed the opportunity to work with him here at the white house. >> very important advisor to the president over the years member of his cab isn't. >> widely regarded economist. >> he said the repudiation of the trade deal would neuter the u.s. presidency for the next 19 months. is he right?

>> well i guess that's his assessment to try to reach. the president's focus is on making sure that we're doing every single can we can for middle class families. >> i didn't ask what the president's focus. do we're doing every single thing we can for middle class families. >> i didn't ask the president's focus. do you agree that the -- >> what i agree is that our priority here what we're spending most our time focused on, is trying to help middle class families. the president said he's going to use his remaining time to advance the interest of middle class families. we face the broader global forces. the question is what are we going to do about it? the president has a clear strategy to allow the united states to use the influence in the world to level the play field in a way that will be advantageous to american businesses and american workers. that's what we're focused on. and there's ample opportunity for those in the outside to draw their on political conclusions. >> i didn't hear a no. >> well, again, i think what you heard is a clear annunciation of what our strategy s it's focused

on looking out for the interest of middle class families. margaret? >> congressman bill shuster who is the chair of the house transportation and infrastructure committee has got a plan that would spin off usair traffic control system into a nonprofit corporation is out today. where does the white house stand on a deal like this? >> i had an opportunity to review the details of his chairman shuster's proposal. it is the goal to continue the air traffic control system outstanding safety record. and to take steps to make the system more innovative and efficient. and the administration, you know, is committed to working with congress on reauthorizing legislation and improves and strengthens the faa. >> you would consider -- you haven't fully engaged on this yet. are you open minded about this or your instinct is not so much? >> i think the first thing to consider is safety record.

obviously, the current air traffic control system has an outstanding safety record. but we consider this proposal and others that involve the re-authorization of faa, we'll be in touch with congress about. >> i'd like to go back to the prince concert. this is about twice the size of your average state dinner. so i guess maybe you're surprised that there are this many questions if the press briefing. >> mildly. >> or maybe not surprised at all. but is there like a size threshold at which a private event just clearly becomes something that has to be disclosed and in light of the fact that there are now so many questions about it i know you come with a guest list, but there are a lot of corporate folks, administration -- influencers, not just like just come and people who make stuff happen in new york and washington, you would consider now disclosing a guest list? and what was the surprise? was it a birthday party or whatever, it's june, let's have a party?

>> it was a private event and opportunity for the president and first lady to host their friends at the white house with a party that they paid for. >> wasn't it like 500 people? they're not like close friends with 500 people. >> i don't think i describe them as close friends. i just describe therapy as friends. and, yeah, i think it's fair to say that president and first lady obviously have the opportunity to meet lots of people and make lots of friends. and manufacture them were invited to the white house on saturday night. >> would you consider releasing now a guest list? >> no. >> could you give us an update on the hostage review that white house is considering? are you expecting -- should we expect anything this week, perhaps? >> yeah, i don't have a specific time frame. this is obviously work that's been done over the last several months. and i would just indicate to you that we're nearing completion of

this particular document, some of this review will remain classified and we won't be in position to talk about publicly. i know part of the working team that is conducting this review has been to ensure that there is a document that we can discuss publicly to help the american public understand the great length that's the federal government goes to help rescue the americans being held hostage overseas. we'll have more to -- more detail we can talk about on this but relatively soon. >> not this week? >> eliminativee relatively soon. >> at the end of the meeting, the venezuelan leader said the meeting was aimed at normalizing diplomatic relations. is the administration considering returning ambassadors to the two countries

or any similar steps to build ties? >> i'm not aware of this particular meeting. let me see if i can get back you to. maybe you can pose your question to the state department. they may have more questions. major? >> josh, the stocks are down this morning partly in relationship to the volatility and fear associated with the inability to work out an arrangement for international bankers and creditors with the greek government when we were in austria, you spoke a week ago and hopeful terms that conversation was lead to a productive outcome and both sides would give a little and volatility would be oavoided. what has the administration done over the weekend if anything to try to bring this to a resolution? >> major, we do consider to be hopeful that all sides will be able to come to an agreement without adding undue volatility to the financial markets. >> no, undue volatility.

>> well, i guess this is an acknowledgment of what said has volatility and reaction to sort of a tea leaf reading of the on going negotiations. we've been clear about what our position is. they have endured a long hardship and have taken difficult but important steps to lay the groundwork for a sustainable economic refer recovery. the international partners need to work together to lay a foundation for long term growth within the euro zone. and the reason that we have continued to be optimistic, a favorable outcome and by favorable, i mean an outcome that doesn't have undue volatility to the financial markets, is that all of the partners that sit around the table conducting the associations recognize the stakes of resolving this negotiation in a satisfactory way. it is clearly in the trf all those around the table negotiating to reach the same

result. >> that was not the epgs the president placed on this subject matter last week. he said clearly the greeks have to make more tough political choices placing the onus principle pally on the greek government. is that still the position of this administration? >> well, it's our position that, frankly, both sides need to engage in the conversations in a way that leads to a compromise agreement. and we have indicated that it is important for the greek government to follow-through on the critical structural reforms that they've committed to implement them. i know that's what the financial creditors are interested in seeing. and i think any sort of final agreement will require a commitment along those lines. that is ultimately something that all sides will have to work out. you know, secretary lu has been chiefly responsible for engaging with the greeks and other members of the euro zone and

other international organizations to try to encourage a resolution. so for updates in terms of conversations the united states has had, i refer you to the treasury department. >> there was an announcement of commanding military engagement in the baltics. how did that come about? did the president let other nations know this was coming? what message does this send? >> major, i'm not aware of any specific conversations the president had with the g-7 partners on this specific topic. i will say that the -- even early stories indicated this is -- that this proposal is still working through the policy process and in the early stages of the policy process. it is consistent with what we previously indicated about the

united states commitment to fulfilling our article 5 responsibilities and ensuring that all of our allies are committed to that agreement. and, you know, we want to make sure that nato allies are defending their territory on a 24/7 basis and will continue to support them and exercise vigilence in that regard. this is something that was discussed extensively at the wales nato summit that president participated in last year. and there was agreement among the allies of the need to enhance the readinessst nato response. >> like manufacture us first families take vacation time. and like presidents and first ladies, a good read can be the perfect companion for your summer journeys. what better book than one that peers inside the personal life of every first lady in american history. "first ladies: presidential

historians on the lives of 45 iconic women." inspiring stories of fascinating women that survived the scrutiny of the white house. a great summer time reading. available as an hard cover or e-book. next, the senate confirmation hearing for an appointment to the postal board of governors. and then we talk about the muz lick ethnic develop. in myanmar. and then julian castro received against about the agenda for his department. >> on wednesday david shah peera appeared before the homeland security committee on his nomination to the u.s. postal service board of governors. mr. shah peera served as sikh and chairman of the giant eagles supermarket chain from 1980 until 2012 an now the executive

chairman of giant eagle incorporated. this is about an hour. >> we can continue on the hearing. mr. shapira is the director of giant eagle. his leadership they saw huge growth, expansion in the pittsburgh area to ohio, ind indiana, west virginia and maryland. there is decreasing volume and in fiscal year 2014 with net loss of 5.a$5.5 billion. they need to counter the loss in revenue by changing consumer behavior. the ability to expand to customer preference that giant eagle has shown is something that postal service vitally needs plchlt schapiro, welcome.

we welcome forward to your testimony. we have bob casey from pennsylvania that would tlik say a few words prior to your testimony. >> before we speak let me just say we don't trust senator casey. >> that's why we were hoping senator toomey would be here. >> maybe pat will show up too. seriously, great to see you, bob. thanks for coming. this is great. >> i want to thank the chairman and the ranking nobody give me this opportunity to introduce david shapira. mr. chairman you read -- or you highlight the some of his business background. and that's i think one of the most significant parts of his record and resume. i won't dwell on the details of his background. but i do want to say something about his character. i think that's what i'll start with. we all know the challenges of

being in lekted service. appointed public service comes with challenges as well. the process itself is substantial challenge and i'm always amazed and gratified that we have people willing to put themselves forward for public service even though the process to get there to be confirmed or even to be considered is challenging. david willing to do this is an indication of his character and commitment to our country. he is the ceo and chairman or has been from 1980 until 2012 of giant eagle. since 2012 he served as executive chairman of giant eagle, one of the most successful businesses that i know he went to stanford. behave a lot of that around

here. we could use more of that with the economics. he's on the board of directors of the allegheny conference and community development extra mileage education foundation, the academy at pittsburgh, pittsburgh symphony united jewish federation, the united way of allegheny county and i can go on and on but i won't. he's also a member of the carnegie melon university board of trustees. i believe his experience and his success will be of great benefit to the postal service serving as a member of the board of governors. again, i come back to his character. this is a person of integrity and someone who truly believes that what he's doing if he were to be confirmed would be public service. we have an inscription on the finance building in our state capital. it reads as follows all public service is a trust given in

faith and accepted in honor. i think david understands that. if he takes this opportunity, he accepts it with honor and the best way to demonstrate you accepted it in that fashion is to do quality public service with integrity. he doll that. i have no doubt about that. so david we're grateful you're willing to serve and i'm honored to be part of this nomination process for you. >> thank you senator casey. appreciate those words of support. i know senator toomey wanted to come here. i'm not sure if he'll make. that we'll offer him that sunt. i would ask unanimous consent that his statement of support be entered into the record. >> i will not object. if mr. casey will repeat one time those words inscribed in the capital? >> all public service is a trust given in faith and accepted in honor. >> i do not object. thank you. >> i wish they were my words. >> those are great words.

>> thank you senator casey. it is tradition to swear witnesses in. so if you'll please rise and raise your right hand. you swear the testimony you give before this committee will be the truth, the whole truth and nothing but the truth so help you god? >> i do. >> thank you very much. >> i could read your introduction but we read it before. we'll just listen to your testimony. >> thank you very much, chairman johnson. if i can just say i'm blown away by senator casey coming and saying what he did and i really thank you for that. chairman johnson ranking member carver, members of the committee, thank you for the honor of appearing today and for the privilege to be considered for nomination to the united states postal services board of governors. i want to thank president obama for this honor and for the vote

of confidence that it represents. it is truly humbling and if confirmed, i will work diligently to show that this confidence and your consent is well deserved. i also want to thank my wife cindy and my family for supporting this undertaking. the responsibility and opportunity for national public service will require sacrifice and if i'm confirmed they will be my partners. my family is truly my greatest gift and nothing i've accomplish wod have been possible or even desirable without them. >> he is sht young woman sitting over your left shoelder? >> she's this very young beautiful woman, yes. >> we thank you for your willingness to share your husband with our country. >> though my written testimony provides details for more than 30 years i was the chairman, ceo and president of giant eagle markets. senator. >> sorry. >> this is what we call a walk

on. this is a walk on. >> i'm really now completely blown away. >> during that time, our chain of stores grew from 50 stores to over 400 stores. i was doing a little bit under $10 billion in volume 36,000 americans. i don't want to take credit for. this i was always surrounded by smart, capable people and the achievement is theirs, not mine. large organizations like giant eagle only succeed when they tap and inspire the talents of a diverse workforce and i'm immensely proud to -- of the team that i helped to lead. when i stepped away from day-to-day operations in 2013 i left the company in very capable hands. actually, at the hands of my daughter, laura who is now the ceo and her executive and

extended team. i always had an interesting in giving back to my community and have served on boards and lay leadership positions and number of civic organizations over the years. but i hope will be a second career and community service and full an philanthropy. such service is foundation of our country and major component of our democratic society. every citizen to the extent that he or she is able should look for opportunities to serve. now president obama has offered me a new opportunity one with a truly national and international scope. the united states postal service epitomizes a key tenant that underlines -- underlies our unique government of the people. the right of everyone, rich or

poor, rural or urban, of every creed, faith, and race to efficient, affordable and reliable communications. so critically important to the founding fathers was this concept that they established the u.s. post office at the second continental congress of 1775. this is a political thought and messaging. perhaps most important it is a bedrock to people everywhere to remain connected to family friends, community and the greater world around them. other communications have come disrupting the paradigm and creating new challenges and opportunity the mail still remains and has the significant place as an essential government service.

looking deeper, the most profitable product first class mail is in decline but it is achieving growth in the delivery of packages. the post office is undertaking an ambitious effort to cut costs but it faces the real risk of degrading service which could lead it worse off in the long run. >> to address the challenges, my business experience tells me that given the postal service's size, the answer is multifaceted. it must preserve and enhance the current products while seeking out new opportunities to expand. must look for ways to be more efficient but also must preserve those assets which will enable it to have long term growth.

if confirmed, i look forward to exploring these issues and much greater depth and i believe that my business background experience and commitment to public service can help push this work forward. thank you, members of the committee, for your attention and i look forward to answering your questions. >> thank you, mr. shapira. we welcome pat toomey. he has a few words of support as well. >> i do. thank you very much, chairman johnson and ranking member carper. i appreciate you giving me this chance. apologize that i was not here at the beginning but you know, there is a rule in the senate that requires conflicting simultaneous scheduled meetings. but it's a pleasure for me to be here and to just say a few words on behalf of mr. shapira with respect to his nominee to be a governor of the u.s. postal service. i'll be brief. let me just say the postal

service and the united states are very very fortunate that a man of his accomplishments and capabilities is willing to serve in this capacity. i am delighted that he's willing to do this. we will benefit enormously from his wisdom his experience and the very hard work that i know he'll do here. i think mr. shapira was way too modest in describing his accomplishments in building giant eagle. it has become a very, very large business, employing tens of thousands of people and really doing great work. he developed a terrific range of experiences and really acquired great knowledge about so many

different business activities and models. his philanthropic work with his wife cindy has been absolutely terrific and very, very important, especially in western pennsylvania and beyond. so i just think that david shapira represents the best that pennsylvania and pittsburgh has to offer this country. he's an extremely talented and accomplished business and philanthropic leader and we're just very fortunate to have his services. i fully support his confirmation. >> thank you senator toomey and senator casey for taking time to offer the words of support to the nominee. mr. shapira it is tradition to ask you a series questions prior to my questions. allow the senators to retreat. let me start with is there anything you're aware inform your background that might

present a conflict of interest with the duties of the office with which you've been nominated? >> no. and if anything should arise, i would recuse myself from any possible decisions about that. >> okay. thank you. >> do you know if anything personal or otherwise that would in any way -- that would in any way prevent you from honorably discharging the office to which you've been nominated? >> no. >> do you agree with our reservation to comply with any request for summons to appear and testify before any duelly constituted committee of congress if confirmed? >> yes. >> okay. thank you. >> i'm obviously intrigued by your business background. i started my business in 1979. you started a year later. you just did a whole lot better than i did. obviously, you have some real talents. you talk about opportunities for the post office. can you tell me that your concern or whether you're concerned or not concerned about

the postal system competing with the private sector and, you know, how you try and set up guidelines if you have concerns? >> as i was getting prepared for this hearing i realized that during my career at giant eagle, we faced a situation which is very -- we faced then and continue to face actually a situation which is very similar to what the post office does. and that is the rise of new competitors and new technologies. ch threaten various parts of our business. there's an enormous lifestyle shift from eating at home to eating out. and in the supermarket business we serve food to eat at home.

so every meal that that switches from the home to a restaurant takes business away from us. and so the way we adopted -- or adapted to that was to continue to do what we did but also to be in to diversify what we sold. and as i was saying at the staff hearing yesterday or monday, we started going in the new business. but within our stores. so that not only did the new business bring in revenue but the fact that we had the new business reinforce the old business. and some examples of that are getting into the business like pharmacy. when i started in the supermarket business there really was no such thing as pharmacies in supermarkets. and today -- well giant eeg

until particulareeg until particular, but all good supermarkets have successful pharmacies. the second to that is gasoline. where, you know, whoever would imagine that you get your gas at the same place you get your groceries? i think the post office has the same kind of problem. it's got a severe technological threat and competitive threat to its best product which is first class mail. i think the way to defend that is to continuously try to improve first class mail but also to develop other projects -- products which can bring in revenue and hopefully reinforce the use of first class mail at the same time. and actually as i look at what the post office has been doing, it has been doing those things. so i don't think it needs a radical change. it needs an emphasis on

continuing to change its format over time. you know in terms of competing with private -- with private businesses or at least governmental businesses is the right word which i think is the essence of your question it's a very interesting question. the post office has a mission. needs to carry out the mission. its competitors have a different mission. that gives them certain advantages and certain disadvantages. but -- and clearly the post office competes against them as they compete against the post office and, frankly i think competition is a good thing. so i am in favor of seeing new products and being aggressive about building the business

model. >> having been in the business, i imagine you did a lot of strategic planning. i found and have great value in business called a swat analysis. people are not really familiar with that in washington. i'm sure you are. strengths, weaknesses, opportunities and threats. can you go through a quick analysis of the postal system? let's start with strengths. what are the primary strengths of the postal service? >> well the primary strengths are the system and the employees. and the history. the post office has a system which calls on every single address every day. that's an enormous strength. the second strength is brand

equity equity. everyone understands the post office. everyone understands how to mail a letter how you go about getting a stamp putting it on. so there's -- in this case, a brand equity is sort of an institutional memory not only of the post office but the whole population of the country. i think the weakness is it is strained as it might by law. an example of that is the necessity to prefund the retiree health benefit which is something that i'm not aware of any other company or institution does. and a second weakness is it's in

some ways constrained from introducing new products. i mean any understanding is the law says the post office can't introduce a new product that doesn't use the post box, the mail box. in a day like today where technology is changing so quickly, the inability to adapt to changing technology is a big weakness. in terms of first class -- even second class bulk mail is enormous. and i know as a company like giant eagle, we're trying to

move as fast as we can. it's nice to dream about it you can't just carry it off. i'm sure i'm leaving some out. but those are the strengths and weaknesses. the threat is i think a number of things. clearly technology is an enormous threat. that's sort of one reason i'm happy i'm retired these days is technology is changing so fast and very hard to keep up with.

the need to get mail to one place to another is only going to grow. we're increasingly interconnected world. and the question is how can the post office my experience says that whenever there is disruption like will is today, that it's an enormous threat and is also an enormous opportunity and the question is can the post office figure out how to take advantage of that. >> okay. thank you, senator carper. >> thank you mr. chairman. again, very nice to have a chance to meet you and to meet cindy as well. i understand i used a basketball term talking with mr. shapira about the role his wife played

in encouraging him to be named about it president. i described her role as getting an assist on the play. so we thank you for your encouragement. i was born in beckly, west virginia, a coal mining town in southern west virginia. and back there a couple months ago for a funeral of my 98-year-old aunt hazel. and she was married to my mother's oldest brother. and back in the -- about 1950 he started a little supermarket in beckly west virginia on harper road right off the turnpike. it is called panda's market. he they sold groceries and gasoline gasoline. >> everything that goes around comes around. >> there you go. as i grew up i would go back --

i grew up in virginia in roanoke. i would go back in the summers with my sister just to be with my grandparents, our cousins. and i would work a little bit not a lot, but summers and at the mom and pop supermarket. my uncle died early. but his brother michael jim and his wife took it over. and they had it down the road from them harper road, a culver opened up. they said our market was doomed. they weren't. and then an a & p opened up and they said that pat's market is doomed. but they weren't. and they continued to do reasonably well right up into my augt aunt and uncle reached retirement age. they didn't have a chain of mom and pops but they had theirs. over time they changed the way they did business. and to adjust to the competition that they had just down the road.

they offered people a chance to buy food on credit. folks that wanted to have groceries delivered, they delivered. if my grandfather was a butcher. he had parkinson's disease. he drove the mountain roads until he was 81. and he would go to that butcher shop and cut meat. when he was in those shop, his hands would be like a rock. it was amazing what he would go through. people wanted a special cut of meat, they got it. they wanted produce they got it. folks walked in the store the staff knew the name of the people that were coming in, even their children. and they continued to be a supermarket. a little supermarket. but over time they became a catering service as well. you mentioned people change the way they eat and they decide well, you want to have somebody prepare your food. we'll help with that. i learned so much from my aunlt and uncle and from their

business in terms of customer service and being a servant. our job is to serve. talk about the lessons that you -- life lessons that you learned from starting and growing your business that might be appropriate or applicable to the post that you've been nominated for. >> thank you for the question. that's a great question. at giant eagle we feel we serve four constituencies. and the four constituencies are our customers, our team members or employees the communities we live in and our shareholders. and when i talk about this i like to say that those four are not in any particular order except for the last one. that doesn't mean that we don't

think our shareholders are important. obviously, they're important and we know we have to make money and we have to grow the business and we have to pay dividends otherwise the shareholders will say we don't need you. so why do i say the other three are more important? the reason is we take a long run view of our business. and we think if we serve those other three constituencies well and that we're good financially responsible business people that in the long run the shareholders will be better off and, of course, so will everybody else of all those constituencies. i think in an organization like the post office, which is a little different because in this case the customers actually are the shareholders, we're all the shareholders.

but i think if we concentrate on serving our customers, taking care of the workforce and making sure that workforce is well trained, well motivated understands why they're here. it was interesting listening to the admiral who i thought spoke beautifully on the subject. if we remember that part of our mission is to serve communities, big or small near or far, and if we are freed from some of the constraints that we operate under, that post office can be very successful and adapt over time and change. >> i should know the answer to this question but i don't. in the postal service there are

four labor unions that are organized and represent different employees and employee groups within the postal service. and we have the opportunity to work with them, the board of governors and folks who are leaders at the post officeal service have the opportunity to work with them as well. i find them to be more often than not constructive and trying to be helpful to enable postal service to survive and thrive and go on to service for hundreds of more years in this country. i don't though to what extent in your business you had a chance to wshg with collective bargaining units. but if you have you could share with us some of what you learned from that? >> giant is a union company. we have some small nonunion

companies. we deal with -- we have dozens of different union contracts. i think dealing with -- assuming that the unions have reasonably good leadership and in many ways it's better to be a union company. it gives you an ability to communicate with people that you don't necessarily have if you're nonunion. my view on dealing with employees is you have to respect him. you have to listen to them. you have to get feedback from them. you have to include them in the process. you have to train them.

some of the admirals you have to have a clear mission. you have to explain it to people. when there's a problem you have to be open and honest about what the problem is. you have to make people understand what the problem is. my experience is in most cases not all but in most cases you can -- unions are cooperative and can help solve the problem. you have to respect their point of view, too. it takes me back to when i talked about our constituencies. one of the most important constituencies is the employees. and union represents the employees. so you should respect i. just like you would if they weren't in the union actually. >> thanks. >> thank you, senator carper. have you really studied the financial situation of the post

office? are you pretty well versed in that? >> when you use the word really studied, i would say no. but i -- >> casually studied? >> well, more than casually. i did prepare for this. and so i would say i'm reasonably familiar with it. zblipd it >> i find it rather confusing. did you see the preparation is relatively confusing or straight forward? >> both. when you look at the prefunding requirement of the retirement health benefits that seems to me to be very straight forward. in fact, it's what essentially goes on as we put a dep it against our earnings for the amount we put a dep it.

we put it in our debit balance and then we don't pay. >> right. >> it's like a joke. >> this is just one of the liabilities? >> right. there is pension liabilities. there are all kinds of liabilities. the prefunding and the connection to whether the employees have to use medicare seems to me that that should be an obvious and very easy fix. and in looking at the financial statement the prefunding is just very slightly smaller than the loss. the total loss of the system. so if the prefunding were eliminated we wouldn't be

losing -- well we would still be losing money but not very much. >> but we still have this overhang of unfunded liability. i looked at the balance sheet as best i can reconstruct it and something close to gap versus other large bankruptcies and looks like a bankrupt to me. do you have a similar type of conclusion? >> it's -- if you're just looking at a straight up and down look, it seems like we're bankrupt. but the liabilities are paid out over many many years. this is a discounted value of the future liability. so bankruptcy, can you look at a balance sheet and say you're bankrupt or look at a cash flow statement and say you're

bankrupt. cash flow statement, i don't believe we're bankrupt. and so the question is by the way, this is not just a post office question. had is a question for private industry. this is a question for the government. we have enormous pension liabilities and the question is what are we going to do about it? i don't think we're bankrupt in the sense that i think we still have time to deal with it. but we are bankrupt in the sense that if we don't deal with it it's clear what the end is going to be. so i think it's a better dif in addition of the terms. but it's clearly a serious problem and one that i won't say all -- i know giant eagle faces it. we are members of collective bargaining agreements that have employer joint pension funds

where the funds are horribly underwater. they're on, i think it's called a red list. the question is what are you going to do about it? >> the problem is, and senator carper led the way with this, trying to come to some political resolution of this which was not successful. you spoke about all the constraints on the post office. constraints because congress is trying to in some way or shape or form manage and direct what should be a, you know, what i think the goal was to make the post office a more autonomous type of organization. but they don't have that autonomy. both operationally or financially. so american taxpayer in the end is still on the hook for this. raet the constitution. i realize the post office is a basic power. article one, section eight, to establish post offices and post roads. do you think it's really a governmental imperative or constitutional imparity that

that no matter what the post office is, you know, we have to maintain a post office as opposed to we have to perform the constitutional duty of delivering mail? when delivery of mail is less and less obsolete, do we have to come up with different things for the post office to do just to have a post office? even if it's way outside the mission of delivering mail? >> i'm not sure i know the answer. i would say this. there's a big question within your question which is what is the definition of delivering the mail? and it doesn't say you have to deliver the mail two times a day, seven times a week. it says you have to deliver the mail. now does that mean every day? does it mean every other day?

does it mean two times a day? the function is important. the question of how we define the function is also very important. so it seems to me that the answer to your question it would really have to define what it is we want to maintain. and generally terms are'very helpful in doing that which i think is what causes the controversy. >> i agree with you. we need to find what the post office should do what is the constitutional power of it and we really need to ask ourselves a serious question with a bankrupt organization, do we need to maintain this organization at all cost and have it expand into different areas that just might compete with private sector companies with an implicit taxpayer guarantee with taxpayers on the hook for growing liabilities? i mean, i think these are very serious questions the board of

governors is asking themselves and we have to ask ourselves the same questions. but i appreciate your answers. >> senator can i just add that to that? i was -- this is the first time i've ever been in a hearing like. this i've seen them on television. but i was fascinated by the questions of the admiral who was sitting here before me. and it was obvious to me you were all impressed and i was equally impressed with the answers he gave. one of the things i really liked about the questions and answers was the willingness of the committee to have his back. and at least what appeared to be the desire on both sides, his side and the committee's side to cooperate on helping to solve the problem.

the post office can't solve these problems itself. it needs you. it needs the congress. there needs to be a cooperative solution to the problem. i like to take the attitude there are no problems that are knoll insolvable if you have good people with common objectives that are trying to solve. i think that cooperation of this committee is crucial. >> i completely agree. coming from a manufacturer background, i solved a lot of

problems. this is a process. it starts with the definition of the problem. defining what it is you're trying to accomplish. laying out the reality of the situation which is why i was asking you you know, your understanding of the financial situation of the post office which, you know trust me the political environment gets all jumbled up. people don't really completely understand it. i'm having a hard time. again, i'm trained accountant. i've looked at a lot of balance sheets and it's still confusing to me. i'm getting a little bit better handle. it starts with reality situation, then base ond that defining the problem, defining exactly what the achievable goal is. then start setting strategies. we oftentimes bypass that process. i think that's what you're hearing in the earlier part of our committee hearing is we were really trying to get to what was definition of the problem? are we admitting we are having one? are we looking at this honestly? i think you'll have the right

type of mind. you're answering the questions from my stand point correctly wlachlt is the definition? but we have to as the right questions. >> so again, i appreciate the input and we absolutely want to cooperate with the board of governors and the post master general. it is not fixed. i have real questions whether we can resolve this through a political process. we haven't been able to do that in the past. i know harper is dedicated to this. senator carper? >> thank you chair. thank you for your support and for what you just said. in term of what is a role of the postal service what should our role be? i look back to abraham lincoln. i asked what is the role of government in our lives? he said the role of government is to do for the people what they cannot do for themselves. and there is actually a constitutional system p stipulation that we have a postal service. one reason we have is our

forefathers said we have this experiment. this experiment called the united states of america. might be helpful if becould communicate. it may be important to facilitate commerce and maybe the postal service and other countries are helpful. maybe we can find the help for them in this country. and as you said in your own business over time, the demand of your customers is changing the needs of your cuffs hasstomers changed. and i think the same is true with the postal service. some of the folks that we work with in order to try to enable -- we're an enabler. i think the congress is an enabler. it's like the chairman talks about one my last trips down to honduras. i place that i soon hope to visit with him. we're trying to figure out why all these people coming up here in the u.s. and trying to get into our country from honduras

and salvador p it's because they live very difficult lives which we contribute to making even more difficult. but i -- my last time down there was press conference at the end of it asked a bunch of questions by the press there. one guy said, you guys have home depots? and they said we have them. and i said we them in america, too. and their advertising, the way they advertise in america has been for years is home depot's advertisement. you can do it. we can help. and i said to the folks in honduras honduras. i said can you do it. we can help. just like colombia. colombia helped pull poland back. can you do this, we can help. they adopted the alliance with prosperity with three countries. the same is true with the postal service. the postal service can do it. there is a need for the services to be offered.

postal service is going to the mailboxes. it is a nice bit of service for the postal service. this he can help fly and move some of the postal service's products around the country. one hand sort of washes the other. on the issue of everybody -- a lot of people keep coming back to and it's the issue of this unflooded liability for retiree health care. and the question is, is it real liability? i think it is. and my last year as governor we just -- we grou upew up with on -- not fedex, but a meeting with the folks from moodies, standard and poor and fitch trying to get a aaa credit rating. and we had done eight years balanced budgets, paid down some

of our debt. strong employment numbers. and we went really made the case my last year as governor for triple-a credit rating. and lowe and and behold, we got aaas. we still have it. they said to us at the time, they said you have a liability that you're not addressing. and i said what is that? and they said we used to have -- when i became state treasurer we had no money in our pension fund for employees, for our retirees, none. we used to sell revenue anticipation of the taxes and revenue anticipation to raise money to be able to pay -- make pension checks every month. and we fixed that. fully funded in ten years. but they said you have all this big liability for health care and you not set aside any money. you said you need to do something about that. they still gave us a aaa rating. and we tried to address that. it's a real liability.

but in order to get president bush to sign into law postal legislation, we had to not only recognize that liability but they had to pay it off over ten years. which is i don't know of any company in america that has been asked to do something that aggressively. when you look at the liability the money that the -- the money that postal service pays into medicare trust fund is greater i believe, than any other employer in america. they pay more money into medicare trust fund than any other employer. they don't get full value for what they pay. and most postal retirees 65 and over sign up for part a. majority sign up for part b. i think almost none sign up for med medicare part d. so the postal service is by

overpaying into medicare they're subsidizing competitors so they can underpay. and my wife required from dupont when she was 65. folks at med quar reached out to her and said, turned 65, she still looks 45, they said you have to sign up for medicare part a., b. d. and they signed her up and the post office can't do that and that is one of the things we can do to fix this issue. to still have the liability and it still must be met but level the playing field and that is part of our enabling responsibility. let me ask a question that i've -- after that diatribe there. let me ask a question about the post office used to try to reduce costs while maintaining fast and reliable service and here is the question how would you, as a member of the board of

governors, try to find the right balance on this challenge maintaining fast and reliable service and growing your business? it is a little bit like the question i asked the rear admiral? >> i think it is the responsibility of all businesses to keep their costs as low as possiblement possible. i also have a strong belief that you cannot cut costs and make yourself successful in the long run. you have to grow revenue. so the concept that we can cut our costs to become profitability, while i believe it is important to cut costs to me is a doomed strategy. you need to be able to look at a growing business to be successful.

and if you can't do that, then cutting costs works in the short run. but you can only cut it so far. and what inevitably costs and it starts effecting the service and the sales go down even more. so my view is absolutely pay attention to costs, be as efficient as you can, but it is not a successful business strategy in and of itself. you have to have a treat that draws the top line. >> one of the things mr. shapira and i talked about on the phone was one of the three round tables that we talked about and we invited people to come in from the post office and other walks of life from the post office and we said what are your ideas and i was delighted to hear how much creative ideas

there are and this was just scratching the surface. it can't just be cut, cut, cut. i think they have reduced by half of the part-time employees and they reduced by half and -- by a third the number of full time post offices around the country and down right-sizing and now there are ways to help them in pays like the preretirement pension to make it fair. but we have some great opportunities and we're going to have to fun fixing this and i look forward to doing that. and one of the best things i learned in life was from my failures and not so much from my successes. and we've all had failures. and when you look at the dissolution and the bankruptcy of your company's former subsidiary, was it farmer --

could you give us onnia of what you -- idea of what you learned from that that might be applicable from here. >> i learned so much from that it would take me an hour. >> well, we don't have that long. >> well, first place i agree with you. i've come to the conclusion, if one is looking at success, however one might define it, that the biggest successes come from having failures and then recovering from them. and one of the things i learned from the farmor debacle, can't call it anything other than that -- was that you can recover. you have to fight your way out of any problem you are and you have to take the lessons that you learn from that and apply them as you go forward in the future.

so just as an example, farmor's failure which not only bankrupted farmor but came close to bankrupting giant eagle as well caused giant eagle to become a much more focused on the bottom line cutting assets and cutting debt and being a much more secure and safe company. so i don't have any doubt that having gone through farmor that that changes the way we managed giant eagle. the second thing i learned, which as an accountant, senator you will know this, one of the things you're always looking for is fraud. and every accountant i've ever talked to, when you talk about fraud, they say if you get a conspiracy of just a few key people it is very hard to

detect. and that is actually what happened at farmor. the whole conspiracy was four people. and so one of the things that i have become more vigilant about since then is looking at the financial statements looking at how they pulled off the fraud at farmor and asking is there anything that is going on in our current company that issing in-- that is something like that? and i've taken that and applied it in a larger sense whenever i am, as a director or a chief executive. whenever somebody goes wrong in a company that is like ours, the first thing i do is i call in the top executives and i say,

first thing is thank god is wasn't us and second place, let's find out what happened and why it happened and are we vulnerable to that. the last thing i learned -- well i learned lots of things, but i've often wondered to myself how did i survive that crisis. i was the chief executive. it was a natural question to ask. did you know? should he have known et cetera? and i know myself when you read about one of the frauds the first thing everybody thinks is the chief executive must have known. i didn't know. i was the one that discovered the fraud, actually. but what i learned is the most important thing is to really be totally honest and open all of the time. and to make sure that when there

is bad news, that you don't make any effort to hide it and that it comes from you. and i think taking that and applying it to the situation at the post office, there is a lot of bad news at the post office. and i think we ought to recognize the bad news and we ought to try and figure out -- i mean, you're never going to deal with it unless you recognize it and then we ought to come up with plans to say this situation is bad, that situation is bad, how are we going to deal with it? and to me, if you identify what the problems are no matter what people's going in assumptions are, if you can get them to understand the problems, you can generally get them to agree on solutions, assuming there are solutions.

but the solutions are often very tough. and require changes that a lot of people don't want to make. so if you want to accomplish those kinds of changes people have to have a shared understanding of the problem. >> thank you very much mr. -- mr. president and general, we've been blessed by the testimony of two nominees that i think are exceptional and i close where i start off and we're lucky that we're willing to do this and cindy is willing to give you up to seven the people of our country. and last thing to say the slaegs that dr. coburn and i worked on focused on innovation and foster and encourage innovation and the other people nominated as presidents to serve a couple of them are good on the

innovative front as well and i hope the legislation that we pass foster innovation and that we'll have a chance to work with you on that and frankly the rest of us. i went way over my time. thank you for your patience mr. chairman. >> thank you mr. carper. i'll tell you one thing right off the bat, the solutions for the post office and the fiscal solutions for this country will not be easy. so i want to thank you for again coming here for your testimony, your willingness to serve. thank you for being an example of a great american. someone serving your community and your state and your nation by doing what americans do. aspiring building something, building something successfully with some adversity. unfortunately in today's society we too often demonize and demo god people and we need to