then we will have randi weingarten, the president of the national federation of teachers, talking about budget cuts and legislative cuts to curtail union bargaining powers are affecting teachers across the country. we will wrap up the program with sheila krumholz talking about political movement's and advertisements around the country with an eye toward the 2012 election. thank you very much for watching this edition of "washington journal." we will see you tomorrow morning at 7:00 a.m. eastern. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> next, a house oversight hearing on the u.s. postal service. then the president's 2012 budget request for nasa. it is followed by discussions with the crew of the space shuttle discovery. the u.s. postal service is on course to run a deficit of about $6.50 billion in the current fiscal year. this is after an $8.50 billion deficit last year. a subcommittee look at the financial state of the postal service with testimony by the postmaster general, the chair of the postal regulatory commission and the head of the national association of letter carriers. this is one hour, 55 minutes.

this is one hour, 55 minutes. >> we will do opening statements

from the ranking member and the whole committee. we may have to adjourn for votes in the metal. -- the middle. if we do, we will adjourn and continue. i will continue with my statements. the demand for first-class mail continues to decline. competition and benefit costs continue to account for approximately 80% of the postal service's operating expenses. they lack the necessary funds to fund its retiree health-care benefits due at the end of september. the imbalance between revenue and expenses means the taxpayers could be ultimately asked to bail out the postal service. this hearing is to hear

testimony on how best to strengthen the postal service. the postal service has delivered mail six days a week to every home in america, including over 170 billion mail pieces in 2010 along. the service suffered from an operating deficit of $8.50 billion in 2010 and predicts further losses in the future. the deep economic recession is the primary driver of the rapid, recent decline in mail volume. the need for work-force the need for work-force reductions and other cost- cutting measures must be the primary focus of the postal service. its labor union and this congress, in order to improve the financial stability of this institution -- everyone has a stake in the postal service and must work together to find solutions. the postmaster, pat donahoe,

recently submitted a report to return the service to profitability. i commend you on that report. you reviewed how best to provide retail postal services and implement automated services to deliver e efficiency. the postal service is negotiating labor contracts with postal employee unions. those efforts have not resulted in a self funding postal service. realigning the postal work force must be part of the strategy to improve the postal service fiscal foundation. congress has an obligation to make statutory changes that will allow the postal service to address its own imbalance. we need to empower you. proposals for providing short- term fiscal relief such as

modifying retiree health benefits, overpayments of civil service retirement systems to not address the long-term systemic problem and solvency issues that must be tackled in order to address the postal service achieving long-term financial stability. all aspects of the postal service business model -- the looming fiscal crisis of the cannot be ice kicked down the road. i thank the witnesses or appearing today. i look over to their testimony. i would like to recognize the making member from massachusetts, congressman lynch , for his opening statement.

>> i want to thank you for holding this hearing on the things that are currently confronting people to service. there are reports that suggest that standard mail is rebounding. it is no secret that as more americans use the internet and e-mail to conduct business is, the less they use hard copy mail. even in light of declining male violent -- mail volume, we would agree that there is great value in the mail system. they generated $67 million in revenue in 2010. they delivered 170 billion

pieces of mail to residents, businesses, and post office boxes six days a week. overall, the postal service is the cornerstone of a $1 chilean industry. industry. this highlights the -- $1 trillion industry. it is absolutely necessary that we collectively -- and by collectively i am referring to postal management and this congress -- come to the realization that there will have to be some difficult decisions made to address the postal service's current financial situation. as we tackle questions like changing delivery frequency and lay off hard-working americans, there are some more palatable actions we should consider first. we should we deliver the postal

schedule.payment requiring the postal service to tackle the obligations at such an aggressive pace is on heard of in the private sector and is the driving force behind the postal service's dismal fiscal performance. questions continue to remain regarding the postal service's actual civil service retirement program. for this reason, i intend to reintroduce legislation similar to what i offered in the last congress on these issues as well as a couple of other relevant postal matters. the postal service should lower expenditures, raise revenues, and good for fresh innovation.

the government accountability office has completed work on a report by completed in the last congress on foreign post and the lessons learned. it should provide novel ideas as we work on the postal service's long-term viability. i look forward to hearing from today's witnesses on solutions for how best to return the postal service to financial solvency after operating deficits in the last 20 years. we can no longer afford to kick this can down the road. i thank you for holding this hearing. i congratulate you on your chairmanship. i look forward to hearing from our witnesses. i yield back the balance of my time. >> thank you. i look forward to working with you in this regard. i would like to recognize the

distinguished chairman of this committee. , mr. issa. >> the oversight committee is the legacy committee of the's committee. it is a primary piece of legislative authority and responsibility. since 1970, this committee has overseen an independent agency responsible for its own balance sheet and profitability. there have been good years and bad years during that time. the decade has been harder on the post office than the last decade. there has been a 20% drop in postal volume. the post office has lost $20 billion, going from having a surplus. we are here to begin a process

with the postmaster and other stakeholders to find a way to maintain certain pre where it was is that this committee and the american people -- maintain certain prerequisites that this committee and the american people count on. the delivery of a level of service that americans have come to expect. if at all possible, we want that to include all categories of mail, all types, and all delivery days. six days of weak is a goal if we can achieve it. we have an obligation to the american people to deliver value. the cost of mail is a cost to commerce and the american people. every time there is an increase in postal rates, it is to the detriment of american efficiency and disposable income to the american people. this committee is dedicated to sustainability.

the post office has been there since our founding. it is a mandate of congress since our founding, in my opinion. it is memorialized in the constitution. no congress has ever suggested we do not need a post office. this will never be said in this committee. you have look a new at your predecessor's ideas. i have seen some worthwhile suggestions you have made. some of them are tough. as we were talking before, there are to post office that need to be closed in every congressional district in america. let's hope there is not one or three in mind. [laughter] i want to commend the post office legacy in finding ways to pare down 200,000 positions

through attrition and buyouts. today, there are examples that the american people, is aware of, would be surprised. there are postal workers over 65 years of age who are on disability and not expected to return. they are paid a full salary. that is an area that will be addressed during our negotiations. we want to be fair to these long working and longstanding employees. if you can no longer do the job and you are over 65, there is a reasonable expectation that your status will change and you will not be counted among the active members of the postal system. this is particularly good for union negotiations. we want workers who can be productively put to work. those who cannot, we want to be fair to in any transition whether they are under or over

65. i ask unanimous consent that mine washington times " will -- "washington times" op edge the as -- op-ed be added to the record. this committee is willing to hear about new services that create a value for the american people, opportunities for the post office to find savings with other agencies or the private sector. i believe we can be entrepreneurial on both sides of the aisle for the betterment of the american people. i look forward to your testimony. i appreciate all of you here testifying and the many stakeholders who are in the audience. mr. chairman, i yield back. >> i would like to recognize the

gentlewoman from the district of columbia. congresswoman norton, your opening statement. >> i am please do welcome our new postmaster. you read the mission. the mission applies most of the time. you said you want to make sure the money coming from washington is well spent. the post office has not gotten any money from washington for decades now and will not get any. the post offices like a business. the problem is that a report right here to the congress. they have never been given the kind of lassitude that their business has.

they probably do not feel it can do what a business can do. for example, let's take something that has been discussed over and over again. whether or not to reduce the six day week to a five day. that would cause hardship in some parts of the country. , it is a private business, they have to take that into account and do -- of course, it is a private business and they have to take that into account and do what they need to do. some people say they need a six day delivery. we have not even discussed it. at least in the parts of the country that do not need it, which looks like most of the country, why not at least then have a five day work week? what is frustrating to me as a member of this committee is that the steps, the baby steps,

which would not solve the problem -- which would solve the problem, seem difficult to take. no business would have to bother with that. i will be interested in the testimony and what you expect to be doing, mr. postmaster. this notion of a looming this notion of a looming crisis, which is what this hearing is called, is an interesting title. ever since i have been on this committee, it has been a looming crisis. i am not sure what we are waiting for. if the post office collapses, you will have people rushing to the floor saying pickup the post office. i cannot go home and tell people there will be no post office.

if excess payments to the trust fund are used for operational purposes, it would not be anything more than a stopgap measure. i have always thought we have to pull back and redesign what we mean by postal service of the united states of america. thank you, mr. chairman. >> thank you. congressman connolly? >> thank you, mr. chairman. i would also like to welcome you to this committee. i ask unanimous consent to introduce a copy of the testimony of the national letter carriers association. >> without objection. members will have seven days to submit opening statements and

extraneous information for the record. we have two panels. i like to refer to it as a double header. i would like to introduce our first panel. to my immediate right is pat donahoe. in the middle is ruth goldway, and phillip herr. we have your written statements before us. what i would like to do first is to swear everyone in. if i can ask you all to rise and raise your right hand. do you solemnly swear, a firm, that the testimony you are about to give to this committee will be the truth, the whole truth, and nothing but the truth? let the record show that all witnesses answered in the affirmative. please be seated. please limit your testimony to

five minutes. your entire testimony will be made parts of the record. i will recognize, mr. donahoe. >> that afternoon. -- good good afternoon. -- godd afternoon. i would like -- good afternoon. many of our challenges can be recast as opportunities to create a more profitable postal service that competes for and wins customers. the postal service remains at the heart of a crystal -- a the heart of a crystal -- a crucial part of our economy. we provide the platform for a

milling industry that pumps $1 trillion in the economy every year. we are not taxpayer funded. we generate our revenue from the sale of postage. if we are to be successful in our core function, we must operate by having a strong business model. the postal service is focus on managing what it controls. in 2010, we trent $3 billion in costs on top of -- we trimmed $3 billion in costs. our goal is to take another $2 billion out. billion out. our achievements in the workforce reduction have been accomplished through attrition. we are unsurpassed in public and private sectors in that manner. we have reduced our work force by 230,000 employees since the year 2000 and have dramatically

improved productivity. we have accomplished this without a sharp rise in service. those results lie squarely with our dedicated, knowledgeable, and committed employees. i cannot be more proud of them. we are aligning the postal service are around strategies. improving the customer experience by making every transaction a positive transaction. competing for the package business. and continuing to become leaner, faster, and smarter. we are committed to ensuring we will be successful in these business strategies and we will better serve the public as a result. without some important changes to the laws that shape our business model, we cannot survive as a self financing entity. this year, we are projected to

lose $6.40 billion. these results reflect the migrations to electronic communications and shifting customer habits. upon closer examination, our losses are a result of an inflexible business model due to the laws that govern the postal service. we have a unique obligation to pre fund retiree benefits. this places an incredible burden on the postal service. to understand the full effect, you have to look at the last two years before and after the postal accountability and enhancement act. the postal service showed a plausible net income every year. since then, we have seen losses every year. even during the two worst years of the recession, 2007 and 2008, had it not been for the spring on the requirement, the postal service would have

realized a net profit of $3 billion. this trend continues in 2011. we lost $329 million excluding retiree benefits. we would have had a neck income of 200 -- net income of $200 million. the federal retirement system has taken a significant toll on our finances. this year, the postal service will reach statutory debt limit. the quality concerns are looming because of the $5.50 billion payment due on september 30 of this year. the postal service will not have the cash available to make these payments. we need legislation this year to address that fact. i encourage the subcommittee to

address our proposed transition to a five day delivery schedule. several bills were introduced in the 111th congress. we look forward to working with each of you in the 112th congress. we must embrace fundamental change. our employees, our label you -- our labor unions, our customers and business partners play a constructive role in shaping our future. i am committed to this approach. the next year will bring significant change. i am account that we will be able to look back and say we took advantage of a challenging time to create a stronger organization and a stronger industry created a 21st century postal service. thank you for your efforts on behalf of the postal service. i look forward to working with

each of you and will be happy to enter your questions today. >> just push the button. >> thank you for inviting me to testify on the record on postal service finances. the pae has been a positive force for change. we provide stakeholders with information and the opportunity to participate in the process. the price cap serves as a powerful incentive to reduce costs, including $11 billion in the last three years. the requirement to measure service and report the results publicly insures that the postal service improves quality. seasonal pricing incentives,

experimental product markets, nd the expanded use of nsa's showed that the service is taking advantage of the pricing flexibility. along with some others, i have been concerned that there are some irreconcilable legislative requirements in the law, such as all products must cover the to below cost but no price freeze can be above the cpi cap. in the recent exigency case, the commission carefully reviewed the postal service's financial predicament and found it to be structural, related to the pre funding of health benefits premiums for future retirees. the postal service has paid nearly $21 billion into the retiree benefit fund while incurring net losses of $20 billion. with out the rhbs, the postal

service would have broken even despite the recession. when the paea was enacted, the postal service was strong. congressman davis the postal service to make 10 years of payments. the rhbs payments have brought the postal service deep into debt. even with continued cost cutting, the postal service cannot surmount its financial crisis without congressional action. in 2009, our expert review of the opm found that a recalculation could lower the postal service's liability by $35 billion. annual payments would be lower. it would address the postal

service's by net shortfall. last year, we undertook expert actuarial services to review the obligations to see if they had been properly calculated. we found that the postal service had been overcharged by $65 billion. the surplus, which came from postal revenues and not taxes, should be made available for the benefit of the postal rate payers and customers, perhaps to fund the rhbs. given the postal service record of cost cutting and recognizing the price cap restrictions and competition from electronic alternatives, significant cost cutting will continue. the commission will serve to guard against any ill considered cuts. any reduction in service could be viewed as an equivalent of a rate increase. that year, the commission issued

an advisory opinion to shut her up to 3200 stations and branches. we affirm the postal service's attempt to restructure the network. there must be enhanced due process for every citizen. the commission conducted an extensive review of another postal service proposal, to go from six date delivery 258 delivery. this has been the most difficult issue i have been asked to address -- to go from 5 day delivery to a six day delivery. we must maintain seven standards and ensure all efficient postal service operations. we are trying to maintain a

technical policy aspects of this case. we expect to complete our opinion shortly. we hope the opinion by the congress with the information you need to decide whether to lift the current since day delivery directed. the commission is conducting a five-year review of the paea to provide recommendations to improve the effectiveness of current postal laws. the historic you that the postal system itself is up in during the value to the nation still stand strong. we look forward to working with congress, the postal service, and all to keep and -- and all who depend on the mail to keep the postal service relevant for generations to come. that concludes my testimony. i would like to ask that the statement i made with regard to the exigency rate case be included in the record as well. >> without objection.

so ordered. mr. herr, you are recognized. >> thank you. i am pleased to be here to but this date in this hearing. i will discuss the postal service's and enter a condition and outlook. the condition has declined since fiscal year 2006. it remains on the high risk list. the challenges facing the postal service are linked to decreases in mail volumes as customers have shifted to the electronic communications and payment alternatives. more specifically, profitable first class mail has been declining. while male use that declining, the postal service delivers to 150 million addresses. it has 670,000 employees, about

80% of them work full time. compensation benefits comprised 80% of its costs. the postal service expects to reach its statutory debt limit this year while still facing a shortfall. unfunded liabilities for such things like workers' compensation and expenses and retiree health-care total $105 billion. these figures strongly suggest the post office's in this have reached a limit. the post office estimates that the dropping of a day of delivery could reduce costs by 3 billion -- by $3 billion annually.

postal operations, networks, and the work force need to be realigned to reduce excess capacity. how quickly can these networks be realized about the pace of change has been too slow. -- how quickly can these networks be realigned? the pace of change has been too slow. which is and benefits represent 80% of postal costs? that is $60 billion in 2010. congress to consider revisiting the statutory framework for collective bargaining to take the postal service's and a condition into account. outsourcing, or revising the life insurance premiums should also be considered. the postal service has asked

congress to diversify in non- postal areas. questions about this include, are there opportunities to introduce new postal products and in existing ones? and in existing ones? -- and ended existing ones? the payments through 2016 are steep. congress should consider modifying them in a fiscally responsible manner. we believe the postal service should refund these obligations to the maximum extent. thousands -- pre-fund these obligations to the maximum extent. we discussed how foreign post offices have modernize their operations. changes included strategic

operations -- strategic out to reach. an employee transition strategy was also crucial. the postal service needs to clarify its modernization plans, including when they will implement them and explaining improvements while insuring alternatives are available. in conclusion, modernizing and restructuring the postal service so it can be viable is imperative if it's connected condition. this will not be easy. >> i want to jump right in. at the time the paea was passed in 2006, we had certain

assumptions. 800,000 employees at the time. now we are down to 5.75000. a decline in first class mail. -- now we are down to 5.75000. -- down to 575,000. are there things that could reduce the obligation of the postal service being imposed by the paea? >> we think so. if you take a look at the attention behind the law passed in 2006, they were good intentions. the postal service, having a baseball idiom of 213 billion pieces of mail -- having a baseball him -- having a base

volume of 213 billion pieces of mail, it was a good idea. we have reduced headcount. in 2006, whenever we first -- when the law was passed, it was on the assumption of 750,000 employees. moving forward, we will break into the 400,000 range. going forward, we will not have the same burdens. we ask congress to take a look and ask the gao to examine what the liability is going for. we think the fund's existing in the civil service retirement fund that we have over pay by $75 billion could be used to

make that payment. if that is not available, we could look at other options. it has been suggested that we take a look at the option of taking a private sector model where you find at 30% versus 100%, which is what we are required to do now. there are hundreds of options on the table. >> do you have an idea of what the reduction could be? >> what we did in 2009 is look at the opm projections and factor in lower levels of employees and adjust the expectations of health-care cost increases that the opm had in that formula. in order to fund 100% of the health care retiree benefits, you could do it with $35 billion

less money than the opm estimated in to thousand six. that number might be lower today than it was in 2009. you could do it with $35 billion less money than opm estimated in 2006. instead of 5 billion, it would be -- $5 billion, it would be $2 billion. >> one side of the issue is the ongoing liability for the pre funding. the other side is the systematic change. how do we go about competing in the 21st century? how do we go about adapting to the digital age?

if we are able to do something and empower a social service to take care of the immediate need, how does it go on for year after so that it can exist without subsidies? >> we think there is a tremendous upside on the top line in our revenue in the postal service. we think there is plenty of growth available in the area of standard mail. standard mail is the best way to get in front of a customer's eyes. we also know there is growth in the package market. we have been working with the number of new products. you have seen our flat rate products come out. we brought along a copy of our free sample box, which they have approved at the regulatory commission. we think this is an opportunity for people to get into the sample business in an affordable way.

on first class mail, it is declining. we think that by using these nsa contract, we can slow down the pace of change with the drop off in the first class. congressman lynch mentioned opportunities in the digital. there are a number of other ideas we have been exploring with partners. digital to hard copy and hard copy to digital. the postal service provides tremendous opportunities and security in that entire market. we think there is plenty of opportunity for growth. >> my time is up. are we going in to vote? have they called us? with no objection, the ranking member or questions >>. .

>> thank you, mr. chairman. i have spoken with pitney bowes and other companies that operate in europe. they have system that you can pull up on your eylaptop or your laptop -- laptop or your ipad. you can click on things. it tells me that with technology, there will be further reductions in volume as people are given that option. i am not so sure i buy into the idea that we are going to increase volume. with that being said, let's go back to considering paea.

if we are over funding future retiree health benefits, what is the measurement of that overpayment? do we have a sense of that? i know they have to be pulled funded in advance -- fully funded in advance. i am just wondering with the overpayment is right now. >> there is no overpayment in the health-care retiree benefits right now. in the health service retirement benefits fund -- >> you have ordinary health benefit plans that are required to pay in annually. they are not required to preach on. if you compare decrease funding requirement to be -- they are not required to pre find. if you compare the pre-funding

requirement, what obligations would be in there that would not be required under a standard system? >> i am not sure i understand. what i think you mean is that a system pays out of its existing revenue what it needs to pay for the retiree health care system. that is about $2 billion per year. there is $42 billion in a fund. one could take that money to pay the existing retiree benefits or take some income to help pay that off. i think that is what you are referring to. >> another way to look at its is that the estimate for the prepayment that was made in 2006

-- the average pre pays at about 30%. you would owe about $30 billion. we pay $42 billion. so we are overfunded at that rate. >> that answers it. >> we report the data that the postal service had in its financial report. the unfunded liability is $48.60 billion. it is reported in the annual financial report. >> that is the part that our consultants bought could be lowered. >> that is for all future employees that are not going to tap into the fund in one year.

i know you are running out of money this year. with the obligations you have got for the health benefits and other obligations, you get a worker's compensation payments. when does that happen and when do you run out of money? >> september 30, when we finish the fiscal year, i will owe the government $30 billion. in another year, i will all $1.30 billion. i am up against the debt limit and there is no breathing room. we will pay employees and deliver mail. we will pay our suppliers. they are providing contract transportation. we would not be able to pay the federal government. that will have to be negotiated. we will talk to the board of governors. that is why it is so important that we address this.

>> thank you. i yield back. >> the subcommittee will stand in recess. for 30 minutes. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] random conversations and crowd noise] >> good afternoon.

i will call the subcommittee that to order. i recognize the gentleman from florida, congressman mack, four questions. >> i want to congratulate you for being the chair of this subcommittee and for being here in washington. we serve in the legislature in florida. he is a great friend and the committee is lucky to have you. before we left, something struck me. we keep asking, how can we help get to the postal service in the right direction? part of me is thinking, government does not know how to run a business. first of all, the idea that the

government is going to fix a business model has been proven over and over again -- they cannot do it. what we are really talking about is time. at some point, some drastic changes are going to have to be changes are going to have to be made to the postal service . the idea that government is going to fix this, i am not sure that government has a great track record. there was a study released that look at shifting costs from ratepayers to taxpayers. the study was clear that that was a way it would have to go to be solvent. are you ready, mr. donahoe, that

the only way to stay afloat is through a bailout by the taxpayers? >> first of all, i think i take umbrage with the fact that we cannot get our finances together. as a government entity, we provide universal service to the american public. we have done a pretty good job in the last 10 years from the standpoint of cost improvement in service improvement. we have some constraints around some of the revenue generation that we see. we also think we have a good thing going away. with a little freedom and flexibility, we think we can get there. the major issue we have is the issue of the prepayment of the retirement health issues. there is an opportunity to resolve that. on your statement, is that from our ig or from a different ig? >> it is a recently released

study. >> that is probably be opm. >> you are probably right. let me ask you this. you have admitted there are big problems. are you prepared to the meant that you are going to need a bailout to stay upload? >> we will not need a bailout. we have an overpayment into the retirement system. few minutes.a so the answer is, you think no. are there any obligations that would help in solvency? >> we have union contract discussions going on. we are having some good discussions about flexibility. >> what are they offering right now? >> we are talking about changes

in flexibility and compensation going forward. the postalgo to service work force -- does it go toward the postal service work force? >> compensation is a small portion of what we pay our people. we are working to come to the same level. >> do you think the unions will agree to come to the rest of the federal work force? >> the unions are already coming to that level. we have some kind -- we have seen progress in the last contract. what is being discussed will get us to that level in the next four years. >> they pay and the benefits? >> that is the compensation that we give our people in terms of health benefit contributions. our people pay about 81% -- we

pay 81% toward their benefits. >> i am have 25 seconds. do you believe the united states postal service is too big to fail? >> we are to bag big to fail. we are an important part of the american economy. >> and you are going to do that without a bailout? >> there are many solutions. one of them is not a bailout. >> that you mr. chairman. i want to thank you, mr. postmaster, for the improvement in delivery you personally made some years ago. you did something good then. look where you are now. i would like to know where we are headed. we have been talking about the

postal service model for some time. we see no alteration in the model. model. if you look at the assumption of the statute, when congress set up the postal service. it was said that you would be a profit-making business, is that true? >> we would break even. >> on page one of your testimony, you say our core business will always be delivered. that is one customer need that will not change. it is the essence of what we do day in and day out. i must ask you, if we make the kinds of assumptions we are making at this hearing, that perhaps you will pay but not

overpay into the trust fund. you calculated that to be $55 billion or $75 billion. deliveringe you are mail five days a week. can you say to us this afternoon that this model, which requires you to be a breath -- enterprisetable delive delivering the mail as you do now is a model, the model in the statute. it is the model of a profitable enterprise. it is a model that we can expect to survive, that you will be a profitable enterprise under the

assumptions of the statute that you are now held to. remember, you would not overpay into the trust fund. >> i think we can be profitable. there are a number of things we have to do. the postal service has undertaken a number of issues on our own that we deal was our own that we deal was possible toward and will work toward that point. we are also working with the unions going forward. we have responsible leadership there. we will take care of what we need to take care of. we are being required to prepay health benefits. this year, we will lose $6.40 billion. >> if we assume that is no longer a problem, then we will be back to a profitable enterprise under the assumptions of the statue from 1970. >> this year, if we were not

required to make that payment, we would break even. >> if you were required not to overpay? >> yes. our people have done a great job. >> that is important. you say but for this overpayment? -- i would like to ask one more question. i do not want false hopes here. i notice that on page 2 of your testimony, there was something i have not heard before in a long time. time. the first quarter showed a modest increase. to what do you attribute the increase. you save the christmas season was not good.

why is the first quarter showing a modest increase in first-class mail? >> the increase is in total volume. there is an increase in our package business of 5.9% in first class. first class pays the freight. that is why we are asking for consideration to go from six days to five days. if we can get a resolution around the health benefits and around the first payment and can get a resolution of brown they -- around the six to five >> i am marking that count. i would like to recognize mr. amash for five minutes.

>> thank you, mr. chair, and mr. donahoe, i enjoyed meeting you the other day. you said you guys would break even if you did not have to make the pre funding. >> this year, yes. >> i think your own plan shows an operating income loss. >> our plan shows an operating income loss of about $900 million, but we will continue to cut. we have a plan in place right now. we will get some of that right -- this year. our goal will be to make $100 million this year, if we were able to be forgiven from the pre it -- prepayment plan this year. >> i have a copy of the letter from the office of personnel management to former postmaster general john potter. it is from september, 2004, and it rejects the claim that usps says overpaid the retirement

system. it claims that the request for $75 billion in overpayment is not founded, and should not be granted by the congress. furthermore, the letter includes a statement from the board of actuaries in which it declares that opm has appropriately and accurately determine the financial obligations for the postal service. mr. chair, i ask unanimous consent to submit this letter for the record, and mr. donahoe, what is your response to the letter? >> here is my response. we have differing opinions. we have estimated that we have overpaid $75 billion. overpaid $75 billion. the postal regulatory commission has looked a the same information, and their outside information, and their outside actuaries have estimated that we paid some of -- overpaid somewhere between $50,000,000,000.50 $5 billion. $50,000,000,000.50 $5 billion. >> -- $50 billion, and $55 billion toward >> so, you

disagree part >> i disagree with the butter. >> the postal regulatory commission did what we believe it is in an objective analysis, bringing in a highly-respected third-party, an expert to review the situation. one could say you have the self- interest of the postal service, and the self-interest of the office of personnel management -- each one wanting to protect its funds. i want to assure you that the postal regulatory commission had no preconceptions, gave this study no prior direction, and we came up with what we believe is a fair and objective assessment, but there is, in fact, a $55 billion overpayment there to >> without objection, the letter referenced entered into the record. >> i have a question for mr. herr as well.

>> you recognize that a significant factor is 80% of costs going toward salaries and benefits. do think you as ps should be able to renegotiate collective bargaining agreements? >> we are asking congress reconsider whether contrast to go to binding arbitration, if there is an impasse, there be an investigation into their ability to pay, given the financial situation. i highlighted again in my statement >> the president has suggested giving usps some breathing room. will that make the problem worse by delaying it? >> one of the things we have been on the record for is to get some short-term relief for this payment. we have been saying that for two years. this would be a third year. where at the statutory debt limit. this is become the time to make

decisions about what the organization will look like going forward. the overall obligations are over $100 billion right now. it is time to take into consideration the changing needs of the mail, what kind of footprint the postal service needs, and to think about how that is always going to be -- going to be paid for. >> thank you for your testimony. i yield back. >> the distinguished gentleman from virginia, you're recognized for five minutes per >> thank you again, mr. chairman, and again, congratulations on your elevation. i think my good friend and colleague mr. lynch for his leadership in the past on these issues. we had some ground-breaking hearings in the past, and this being another contribution. welcome to the panelists. mr. her, let's start with the last point. the issue of breathing room -- i believe the president recommended $4 billion of

relief? >> yes, sir. >> is that not based and the assumption that there have been overpayments? >> that is predicated on the fact that there would be other efforts under way to restructure as well. >> right. >> this would be a deferment. >> i understand that, but is it not, by implication, a recognition that there is an issue -- there have been overpayments in the past? >> i guess i would have to look at the fine print. >> well, certainly, the president, hopefully in his budget was not trying to add to the postmaster's wolds fiscally. he was not trying to add to that debt. he was trying to provide relief. do you, does the gao have an opinion? >> we have not looked at it. i can assure you we have read

the reports. >> you would agree that if anywhere between $50 billion and $75 billion were verified, that that alone could provide significant relief to what is currently a significant imbalance in the operational revenues of the postal service? >> given the numbers we have discussed, yes the >> you would agree. as the gao, do you have plans to look at this? >> is requested by congress. >> mr. chairman, i would hope that this subcommittee would that this subcommittee would make such a request. that is not a trivial number. if we are going to talk about dire futures for the postal service, surely we want to look into an item that could provide relief fairly quickly, and i know, mr. chairman, you share my concern. i would urge the subcommittee to make a formal request for such a study to g.o.. let me ask you another question, mr. herr, and maybe miss

goldway, and mr. postmaster goldway, and mr. postmaster general, mr. donahoe, you as well. between 1990 and 2007, did overall volume for the postal service go up or down? >> it went up. >> at precisely the time the internet was coming into full play in the united states, is that correct? >> yes. >> the relationship between the internet and mail volume is not necessarily, always, inevitably a negative one. might one conclude that, given that statistic, miss goldway? >> my theory is that human beings have an insatiable appetite for communication, and everything will grow, but it grows in different stages. >> my time is limited but it went up? >> it went up. >> did it go up last year? did mail volume go or down last year? >> mail volume went down. >> it went down over the previous year? >> yes, slightly. >> slightly.

i think you made reference to the impact of the internet on your business, but the internet can also generate business, can it not? if i order a book from amazon, not only is that business for the postal service, but it is actually lucrative business for the postal service, is that correct? >> absolutely. >> miss goldway, have you had a chance to look at the draft legislation we have been working on, and do you by and large find that it is consistent with many of the findings the postal regulatory commission has brought before this subcommittee over the years? >> i certainly believe that many of the suggestions that have been discussed by other legislators to address the financial issues are included. i'm very pleased. in addition, there are specific items that you and i addressed the we think wimprove situation in the future, and position it as a more modern

agency with the rest of the government. i appreciate your efforts there. i'm sure it will be a valuable contribution to the conversation for legislation. >> we can only hope, and i am going to run out of time. quickly, do we not have a problem on top of everything else with the aging and costly vehicular fleet of the postal service? >> yes, we do. we have a fleet of about 185,000 delivery vehicles that are bought which are about 22 years old on average. -- that are about 22 years old on average. >> we invited to the office of budget and management to attend here, to address some of these questions. i would like to recognize the distinguished gentleman from illinois for five minutes, mr. davis. >> thank you very much, mr. chairman, and let me congratulate you on your elevation. as a matter of fact, we had a young fellow here yesterday

testifying, and he mentioned the colleges that he wanted to attend, and he railed off about 10, and all of them were in florida. [laughter] >> there must be something good about florida. >> as an auburn graduate, i take some difference to that. [laughter] >> let me welcome the witnesses. is a pleasure to have you with us. i've listened to the testimony, and i have listened to the questions. i am not one of these individuals who believes that government cannot get it right. i do not subscribe to that school of thought. i think that government can, in fact, get it right, and i guess, as one of the persons who helped put together the postal code

enhancement and accountability enhancement and accountability act, the postal it had the postal enhancement and accountability right -- postal enhancement and accountability right, we thought we were getting it right, providing opportunities for new products and new approaches, and we thought we were providing opportunity to make use of all of the resources that the postal service should have at its disposal. you were tempted a moment ago to talk about your vision in terms of how we can get it right, and how we can have the postal service be self sufficient -- how we can make sure we interact a certain way with our stakeholders and our unions. could you share that direction for us again?

>> thank you very much. i do believe the postal service is and will be a very viable part of the american economy and american society. if there are definitely changes going on, but we do provide the kind of content that people are looking for. if you look at what we offer from the standpoint of an ability to get in front of a ability to get in front of a customer's eyes, we are the most direct way, and there is plenty of opportunity there. you talk about the internet. there is often times no way you will find a web site unless you get a postcard in the mail that says come to our web site. we know we provide value there. we know we provide value for small businesses in the package- shipping business where they could go down to the local post office and put three or five packages again, and at a flat rate, it fits, it ships, and there is tremendous value there. we know people will continue to mail packages. we have valuable partnerships.

ups and fedex, we deliver the last mile for a lot of their packages. this holiday season, we delivered 16% more than we did delivered 16% more than we did the previous year. we know there is a lot of opportunity in that area. we also realize that there are costs we need to address. as i said before, we have responsible leadership from our unions. they understand this. they understand we need to make changes. there have been good discussions with the apwu. royal carriers have kept the contracts open, so we think there are opportunities to move in the right direction there. with our management associations, we have seen progress. if they have been supported in big changes we have had to make within the administrative staff to reduce costs. i am 100% positive that there is a ton of value in the postal service. from a government perspective, the postal service is proud of

the fact that we've taken most -- more cost out of this organization than any private firm, and we know we can continue to do that in the future. we need the aid of congress and a couple of issues. >> we have been talking about lost projections, and we hear $900 million -- have we ever handed in projections that were higher than that? >> higher in terms of losses? >> yes. >> absolutely. >> that means we are actually making some progress. >> if we can get resolution, we definitely can. the other thing that is important is with the uncertainty of all of this discussion about the postal service losing money year after year, that starts to make customers fearful of doing business with the. we need to get that behind despaired that needs to be resolved. >> i was always told that wherever there is a will, there is a way. it seems to me that you have both a will, and you are searching for the way.

i think you are refreshing, and i look forward to working with you can >> thank you, sir pitt >> thank you, mr. davis. -- >> thank you, sir. >> thank you, mr. davis. at this time, i want to thank our panelists. thank you for being here. we will have the clerk setup for the next panel. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] [unintelligible chatter]

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>> i, committee back to order. mr. sampey. seated to my left is the executive vice president. mr. sackler is the quorum needed for the 21st century -- coordinator for the 20% to postal service. mr. rolando is the president. gentleman, lsd to be sworn in. do you solemnly swear or affirm that the testimony you're about

to give will be the truth, the whole truth, and nothing but the truth? >> thank you. a the record reflect that all witnesses answered in the affirmative. please limit your testimony to five minutes. your written testimony has been entered into the record. with that, i will start with mr. sampey. you're recognized. >> chairman ross, ranking member twinge, and members of the south -- subcommittee, my name is jim sampey. we owned direct marketing systems, and are one of the systems, and are one of the largest direct mail firms in north america. thank you for this opportunity to testify on what we agree is a looming crisis. valupak has been in the business for 40 years. we are owned by one of the

largest media conglomerate enough united states. it is a franchise organization, with locations in every state. we represent more than 2000 direct and franchised employees. each year, we assist more than 54,000 small businesses, from local mom-and-pop, two large national companies. today, we deliver savings and values to about 40 million households each month, and each year, our familiar blue envelope carries some 20 million money-saving offers. just three years ago, we opened a facility in saint petersburg, florida, a tool, -- to accommodate our growth. we are also entering the digital space. this will allow us to reach new customers with our products, and continue to serve as a leader in

our industry. our digital strategies will continue to complement our mail volume. the nature of our business means that we watched the u.s. ps and its issues very closely. we believe that the post office under jack paar and now pat donahoe have the remarkable job in downsizing the post office to adjust for plummeting mail volume while maintaining high service levels. if you were to set aside the 5.5 billion to prepay future retiree health costs, which congress imposed, the post office had an operating profit of $601 million over the last four years. we believed the post office's march 7, 2010, action plan was well designed, and except for its proposal to reduce the role

of the postal regulatory commission, we support it in all respects. he seems the post office is constantly caught up in the political machinations of congress. it might not be popular to tell congress that the bill was ill- conceived, but look at what the peea did. it imposed a cap on prices and gave the post office and no new powers to cut costs. at the last minute, we were told that to get the bills scored properly, congress had to impose a $5.5 billion financial burden, a burden imposed no other agency or company. valpak, along with all mailers, urges congress to address the issue, by removing the annual burden on mailers to refund the

post-retirement health benefits, and to require a real calculation -- a real calculation of obligations using overpayments made -- a recalculation of obligations. on the cost-cutting items, we urge congress and the commission to allow the u.s. ps to move to five-day delivery. recent polls show two-thirds of the people did not care about saturday delivery, and it would allow the poster of this to save $3 billion annual. allow them to close stand-alone facilities. this is not to say we support all the postal service does. we are deeply frustrated with some of the pricing policies which have allowed it to lose $5 billion of the last four years

on underwater products. as a prosperous company would not choose to offer products lose money, and it is not acceptable the one on the brink of insolvency would continue to do so. lastly, we oppose the post office: tel efforts to go into competition with existing customers -- office's efforts to go into competition with existing customers. one example is a company called marketing mail made easy. this proposal has generated a lot of opposition. we did not believe cannibalize in the mail that is in the system is the right strategy for growth terror i look for to questions. >> thank you, mr. -- growth. >> i look forward to questions. >> thank you, mr. sampey. .mr. sackler

>> we are pleased to present our views of what we also agree is a looming price in -- crisis. the coalition's 33 trade associations represent a major swap. a trillion dollar industry that employs seven and a half million people, running the gamut of organizations from forestry and paper companies, to companies that create every type of mail. there is far more at stake in how the postal service fears that the postal service itself. the future -- fares than the postal service itself. we believe the postal insolvency, which could happen by the end of this fiscal year without action, will have consequences, not only for the postal service, but quite possibly for the nation. given the state of the industry, and potential insolvency, the coalition believes it is imperative to correct a core element of the

imbalance by eliminating a hidden tax assessed on postal rate payers that was used to reduce the deficit and effectively subsidize retirements of non--postal federal retirees. federal retirees. using that money over time , the 55 -- of $50 billion or more, and the nearly $7 billion or more, constitute a bass, hidden tax that would, if redirected, dramatically decrease the service. some believe repatriating this money would cost to the bailout. with great respect, we disagree. while the overpayments were caused by a good-faith actuarial interpretation, they were nonetheless paid. as the postmaster general pointed out, usps money comes almost exclusively from user

fees, postage, and 90% of that comes from businesses. we believe the right outcome is to use the money to benefit the postal service, and there by those who depend upon it. the alternative is insolvency on september 30, facing the choice to pay retiree benefits, or paying employees to keep the light side. they will sensibly opts for the letter. there will be no legal or other consequences, but it will be in a default of that obligation. questions about its viability will rise. overseas holders will treat this as a loose thread in unraveling the nation's financial ball of yarn and. what would that do for treasuries? after all, it remains the united states postal service, and solvency must be avoided, and if

it is not, the problems will not go away. obligations will fall to congress, and there will be a need for an actual, taxpayer- funded bailout. in our written statement we offer other recommendations we believe would help grapple with the answer related financial structure and elements of this looming crisis, which include addressing the high cost of compliance with mailing roles, giving the post office more flexibility to close facilities or offer certain non--postal products, or flexibility on agreements and more. without structural changes, financial transfers will only take the proverbial can down the road. merrill remained -- mail remains effective. remains effective. despite the challenge of

technology and the recession, our system is struggling. mailers and suppliers have undergone dramatic changes, collectively and during hundreds of thousands of layoffs, shotting of numerous businesses, and other dislocation. the result has been unprecedented pressure to reduce costs. no one can force anyone to mail. because of the internet, first- class, cash call, is no longer a -- cash cow, is no longer a monopoly. that a client in first-class britain's financial stability. -- threatens first class -- threaten stability. first-class mailers, they have choices by the internet, and other marketing channels.

the compounded effect is just as significant less mail means less paper, printing, and technology business. thank you, mr. chairman. we believe not all of this financial pressure on members opposite premium on prices, while maintaining service. we are prepared to work with you and your colleagues to stave off a decline of the postal service. it need not be inevitable. >> mr. rolando, you're recognized for five minutes. >> good afternoon, chairman ross parrot congratulations on your chairmanship, and the afternoon, ranking member of lynch, in greetings to the other members of the subcommittee. i am pleased to be here today on behalf of the nearly 290,000 members of the national association of letter carriers. we are honored to the public face of the debt is this postal service, an agency mandated by

the u.s. constitution, and one of the oldest, promised and essential institutions in betty united states. i've submitted a written i've submitted a written statement, but i would like to leave you with five points to consider, some of which, for conventional wisdom. it is worth noting that the figures i cited are from official sources. we can all for our own officials -- opinions, but we should start from shared fact. first, the postal service remains a vital part of our society and our economy. it provides the only truly universal communications network in the united states, serving every corner of this country, from the most rural areas of man. montana, to every city block of manhattan -- areas of montana, to every city block in manhattan six days a week. the postal service's a vital

infrastructure service that is not only an essential element of the country's financial payment system, but also a key facilitator of business and communications for the 150 million homes and businesses it serves. according to a 2009 study by the postal service, the annual value of transactions moving through the mail that exceeds $30 trillion, underlining the importance to the health of our nation's economy. second, there is a financial crisis that the postal service, and one we must address, for the sake of the economy and millions of workers employed by the milling industry. it is not the crisis you might think it is. let me explain. with the nation still suffering from the worst recession since the great depression, mail volume has fallen, and has been exacerbated -- that has been exacerbated by the internet. the postal service is running with profits.

you heard that correctly. postal operations had a profit of twitter $26 million in the most recent quarter, taking in more than $1 trillion and operating expenses. this has been achieved by increase productivity, labor- management partnership, there and flexible work adjustments, and performance and quality that listed customer satisfaction, all while maintaining the most affordable postal rates in the world. while the postal service's operating more smartly than ever, it faces a huge burden not related to its daily work. the 2006 congressional mandate to pre fund future retiree benefits for the next 75 years, and to do so within 10 years, that obligation faced by no public agency or private form in america, in perils' the postal

service. in the past four years, the postal service has made $20.9 million increase funding payment. it is that obligation during a recession that is plunged the postal service into a financial crisis. fortunately, there was a good solution. the postal service has a surplus in its pension funds between $50 billion and $75 billion, according to a financial audit. congressional approval make an internal transfer of its own money would lead both to pensions and retirement funds in better shape and all such accounts in this country virtually. why? not only have operations been. out efficiently, they have been highly responsible of future obligations, all without using any taxpayer money for over a quarter of a century.

we're simply asked that their all-out -- we simply ask that they would be allowed to use their own money. bipartisan agreement has been essential. i am happy to learn that rep connolly of this subcommittee is prepared -- has prepared a bill that addresses this bill and build some prior work by ranking member lynch. fourth, while this proposal backed by the postal service has no downside, it is not the case with some of the other usps ideas. eliminating saturday service would be disastrous. it would save about 5% of the postal budget, by sacrificing 17% of service. it would inconvenience millions of small-business owners who transact business on saturdays, and americans in need medicine on weekends.

it would imperil the postal office future by forcing customers to turn elsewhere. all of this would be to save an imam barely half the amount of annual payments -- save an amount nearly half the amount of annual payments. finally, the postal service has a bright future. the current challenges are not the first since benjamin franklin served as the first postmaster general, and nor will they be the last. the mail mix is shifting with two stamps these days. we need to watch the adoption. overall mail volume is rising for the first time in 40 years. we a lot of ideas and new services to offer the growing number of home-based businesses of expanding on work or adding

of expanding on work or adding to what letter carriers already do to protect the community and national security. i would like to conclude by congratulating all the new members of the subcommittee. we believe that these are nonpartisan issues, and the tradition is worth nurturing can we look forward to working with all of you on the issues, and to find bipartisan solutions. you have -- we have demonstrated the we are prepared to do our part to help preserve the long-term viability of the postal service, by serving the american people, and helping the businesses that rely on the universal service to grow and prosper -- prosper. >> thank you, mr. rolland. we have -- rolando. we have about 11 minutes. we have been called to votes. we will then recess and come back right after words, and fishermen.

-- and finished then. i will start with a series of questions. mr. rondeau -- rolando, one of the things pointed out by mr. herr in the first panel was that the united states postal service has costly capacity -- costly excess capacity, and is that something you can comment on? >> i do not know what you was referring >> with regard to another recommendation gao had in terms of collective bargaining and binding archer -- arbitration, he said the financial situation should be taking into consideration. >> his wish is granted because the financial condition has been considered in every arbitration we have ahead. the arbitrator is required to consider the arguments of both parties, and in every instance,

that issue has been coming up and been considered. >> to all three of you, you all recognize the recession has had an impact on mail. there was an increase in volume from 1990 until 2007, and we have seen a decrease. do you think the united states postal service has done enough to aggressively cut costs, and if not, what would you recommend a further do? >> i think they should continue >> i think they should continue to do what they are doing to work with unions on win-win solutions. my union has aggressively, for the last few years, where the unadjusted routes to the change in volumes, which has saved them $1 billion by their own numbers. numbers. >> mr. sackler? >> mr. chairman, and the postal service and its employees have indeed cut a lot of cost out of the system, but by definition,

looking at the situation is in, it is not big enough. to get your previous -- than enough. to get your priebus system, we think the -- previous question, we think that it is in excess by we think that it is in excess by a factor of two. there will need to be a some change in the law, and support from congress during >> you agree there is excess capacity? >> yes, we do. >> mr. sackler, with regard to cost? >> -- mr. sampey, with regard to cost? >> they have done a fantastic job to manage the cost, and i think there is more they can do it some legislative activities are taken to give them a little more room to work on the cost side of the house. we are supportive of the postal regulatory commission, especially on the pricing side to give some oversight, but i think the management and the union have a lot of opportunities to take additional dollars out of the business if

we give them a little bit of levity with legislative activities. next mr. sackler, back to you. -- >> mr. sackler, back to you. could you expand on what impact that would have, if we exceeded the expectation, what is the outcome? >> as we understand, there are no legal, operational, or practical consequences for the this is postal service or its managers. but, the implications in the way people look at the service, and the fact that is functioning independently or not, it is still a hint of the the state's government, and to have them default -- is still an arm of the united states government,

and to have the default, what would those who are holding our bonds thinking? >> it could affect our credit rating. >> exactly. >> mr. sampey, you want to comment on that? >> i think the industry confidence in the post office, and some of the challenges they are having right now -- there are having right now -- there are a lot of folks saying should we move to digital, something else, for fear of were the post office is going to end up. i think whenever we'd do, we need to do it quickly. wheaton won this as a cohesive group, and work together to figure out how we get the confidence back the post office has done a great job, and the quality of service has been fantastic. >> thank you. >> i just want to make some qualifications. my friend from florida, mr. mack, commented that the

government does not have the ability to help business make the necessary reforms. i just want to remind the gentleman that the united states postal service is a unique business. it was actually created by the then states congress, and it is one of the few institutions that is explicitly provided for in the united states constitution. government has done a pretty good job over the last 236 years in guiding the post office in providing universal service six days a week. it is the night pretty good job -- has done a pretty good job, as some of our polling has indicated the postal employees are some the most trusted public employees in the united states today. i would like to point out with respect to the suggestion that opm is correct in their assertion that the overpayment

does not exist, for the benefit does not exist, for the benefit of new members and especially, i just want to lay out the history of opm de 9 obligations, and what the results have spent. going back to 2002, the fund was long to be overfunded by opm by $78 billion, and we, in congress, had to go back and tell them they had to straighten this out. then, in 2003, they attempted to make the postal service pick up the responsibility for military service pension obligations for postal service employees. his barry and the service, they one of the post office to pick up -- if they were in the postal service -- if they were in the service, they wanted them to pick up their pension obligations. we found that to not be right.

in 2009, we found that they used the inflation forecast and said of the 5% that is an industry standard. that resulted in overpayment by 2016. we ordered opm to use the industry standard, and they went back and changed. now, the postal service has been overcharged by $75 billion for its share of pension credits for folks before they became usps employees. these are pension credits for folks before they went to work for the post office, but they have been overcharged, and the post office is picking up the inflation of those costs. there is a history. everyone can make a mistake, but in every single case, opm over- charged the post office by tens of billions of dollars. that is the record we have here.

if those are the facts. there does not seem to be -- and, by the way, opm rode a gratuitous letter that they thought but the post office should have to refund their health-care obligations 100% -- pre fund their health-care obligations by 100%. but if you look at 0 p.m., they only go -- if you look at opm, they only go 40%. with respect to going from six the delivery to five delivery, -- six-day delivery, to five-day delivery, that expects your mail carriers dramatically. is there any information you

think congress should have before we make that decision? >> did not only affects members, it effects thousands and thousands of businesses across america who have contacted the nalc directly in terms of their objections. >> in fairness, i heard loud and clear from folks that have catalogs and magazines that are. with the use saturday as their delivery day because they want folks on their day off to read the products that they deliver. you are right. is not solely in your interests. >> that is what i wanted to sit. it will have an affect on the business part >> thank you. we will recess, the take our votes, and then return after this first vote, and then we should be able to finish up. thank you for your patience. we will be back.

x. i would now like to recognize the gentleman from the district of columbia, congresswoman norton. >> thank you for rushing back. i know you have to go back to the floor again. let me say how helpful all of your testimony has been. you have reinforced a lot of what the postal service has said. i have walked with my mail carrier.

he has an indispensable part to the american people far beyond the liver in the mail. there are -- far beyond delivering the mail. there are people that have no one to speak to. thank you for all you do. they are the best. your letter carriers are the best in inventory. i just want to say to do both things from my own thinking, certainly. -- two things from my own thinking, certainly. i am well aware of what collective bargaining does for those in trouble. there is nothing more valuable than to have the cooperation of level-headed unions when you have got to manage a downsizing of any kind, and everybody

ought to know that the reason the postal service has been able to do what it does is because its collective bargaining partners understand the business as well as the business with whom they are dealing. i congratulate you. i know the sacrifice you have taken. you do not see the postal workers out here hollering. they have been bargained. i agree with your testimony. if you want to mess up the situation, mess with collective bargaining. saturday delivery -- is it subject to collective bargaining? >> saturday delivery? >> it is them bargained over? >> no, it is not. >> you make a compelling case that there would be very little savings.

the thing that made me interested in saturday delivery is the overwhelming the amount of americans that say if that is what you have to do, that is what you could do, but you make a pretty compelling case. it is not simply about inconvenience to people. i understand that. people have to take that, but loss of business -- that bothers me. what do you mean about the loss of business if saturday delivery, in those locations, and let's assume, in my hypothetical, we had no saturday delivery in just some locations -- in any case, where would the business go, and what would that mean for future business for the postal service? >> first, if i could, i would like to comment on the 75%-80% you just alluded to.

you have to understand that it is dependent on what you ask people. if you ask people if they would rather have an increase on postal service been used a day of delivery, you will get one set -- than lose a day of delivery, you will get one set of answers. you could get a completely different answer. >> in mr. sampey pulled the testimony and from the first panel, -- sampey's testimony, and from the first panel, if you dealt with but delivery, you would have a profitable enterprise. so, that takes care of the question. now, what about the loss of business? >> there will always be a need for delivery on saturday. we talked about prescription drugs and other things the american people will need. somebody will fill that vacuum

appeared >. >> do you think that would affect future business, or what it carry over into your monday through friday business? >> absolutely. what effect the current business, and people shopping on-line, when people are home on saturday. it is not just a good idea. is it is just not a good idea. >> we have had testimony from thousands of postal workers there on workers' compensation that could be on retirement. would you clarify fedex wyatt that? -- why are they not just retired? >> i know there have been proposals with regard to workers' compensation, which we are willing to look at, but the

important thing is we do not punish our workers who were injured on the job. >> if there was some intention that they have no -- some mention that they have no intention of coming back to work. i wonder if the union will take a close look at that, because it will not sound good to the american people if you are carrying people who could then be. on their earned -- who could then be carried on their earned retirement pensions at >> we certainly want to look at the issue to treat these people fairly. >> thank you, miss norton. we are going to adjourn. i want to thank the gentleman from our second panel, and appreciate you being here. we are just scratched the surface. we look for to working with you on this issue. thank you very much, and have a

good day.

>> with the two week extension in place, republican and democratic leaders continue working on a spending bill for the rest of the year. watch the debate so far with the congressional chronicle. read transcripts of every session, and find a phone video archive for every member at c- ongres.g/cpm >> i find more and more of the behavior of professional sports owners to be unseemly in the effected by one of hundreds of millions of dollars from their communities but they did not to dissipate in the problems of their community. >> the sunday, on "q&a" sally jenkins on the intersection of sports and public policy. >> now, a house.

on the president's budget request for nasa. $5 billion for science, and $3.9 billion for future exploration systems -- this is two hours and 10 minutes. >> where am i here? >> here is your script part >> all right. the committee will come to order. i will say to you, good morning and thank you for being here. charlie, i think it is a good morning. i know you are a good guy, likable, and an admired hero. for some of the things i say about the administration, i am not talking about you directly, but you are a big guy, and i know you are going to handle it.

i welcome you to the hearing inside of the national aeronautics and space of administration fiscal year 2012 budget request. in front of you are packages containing the written testimony, biography, and truth and testimony disclosure for our witness. i recognize myself for five minutes for an opening statement. i want to thank administrator bolton for appearing before our committee today. there are a number of issues, and i look forward to a frank and open discussion. i am concerned that the future of law and -- of our space program has been in jeopardy. with the retirement of the space shuttle, nasa faces a critical time and needs to focus limited resources to sustain our

leadership in space. as everyone knows, we are in a challenging budget environment. in times like this, it is more important than ever for nasa to have credible, realistic plans that can be understood and defended. it must understand -- execute the programs it has and work closely with the congress to abide with congressional legislation. it is my opinion that someone at the white house seems to have little interest in working with the congress. the president made a speech in january and told all of us we have to work together. we even had to sit together that night. his speech was that -- was great, it was just two years too late. when his speech were shorter two years ago -- i counted the words. two years ago, he inherited down

to two words "we 1." i am concerned about having access to the international space station for the u.s. and our international partners so it can live up to its promise as a vital research laboratory. we authorize they follow home system called constellation. it was guided by safety regulations by the congressional action board. its last year, the president canceled the program without warning. there were no or very few details.

despite repeated requests, nasa has never provided the basis for its cost estimates or a credible plan showing how the needs of the u.s. or our international partners could be met at a lower cost or on a faster cycle than consolation. a tense and often contentious debate led to the nasa authorization act of 2010. the bill was a product of compromise and no one got everything they wanted, but that contained policy elements and funding guidelines that could allow the space program to move forward. it provided $10.8 billion over three years for the newly designed, multipurpose crew vehicle and space launch system to ensure capability and supply and support to the international space station for the united states and our international partners.

we urged nasa to capitalize on investments already made in the consolation program in order to save money, maintain a skilled workforce, and minimize further delays. the commercial crew was authorized $1.3 billion over three years in order to reduce risk, develop technologies and lead to advancements that will help determine the most effective and efficient means of a dancing the development of commercial crew services. the dick advancing the development of commercial crew services -- advancing the development of commercial crew services. this was not our first priority. our first priority was to continue with the space lunch system. but the administration's f12012 budget proposed completely eclipsed -- fiscal year 2012 budget proposed completely

flips his priorities the congress clearly intended to serve as our assured access to space. we in this committee have been some of nasa's most ardent supporters in the house. will it take the authorization act very seriously. we expect nasa to abide by the funding limitations in the law and to develop an access system. the new budget proposal does regards, yes ignores, our authorization law, knowing that we face a very difficult budget environment for years to come. it is more important than nasa execute well, and work with congress. we want to maintain our human space flight program. nasa should embrace the policy

direction that would help reduce the surprise, frustration and anger from those who have been your greatest supporters. i now recognize mrs. johnson for her opening remarks. grass is. i want to congratulate you on your successful launch. i look forward to the cruise savories aaron -- safe return. today is the congress's first opportunity to review the 2012 budget request for nasa. this is coming in a very challenging budget environment.

i can only imagine the challenges you're facing. i consider nasa to be a critical investment. one only has to look at all the new technology and inspiration nasa has delivered over the years as one of our nation's vital resources. we need to support them and they're important missions in space, aeronautics, and human

space exploration. i could spend my entire time listing some of the fruits of our past investments in assets that have become embedded in our daily life, whether it be a global satellite communications or smoke detectors, but the imaging -- body imaging and breathing systems. other nations recognize the benefits of space program can deliver. we see them willing to make the necessary investments to build these capabilities. however, i am worried that we here in america are forgetting how important these are to our future and how critical this skilled work force is to our future competitiveness.

the inspirational leadership that you bring to nasa is something i admire. i support the president, who wishes you to be successful, however, i am disappointed in the budget request before us today, especially in light of all the work congress undertook yesterday to forge a constructive path forward for the nation's space program. while last year's authorization act was by no means a perfect bill, it did clearly articulate congress's intent that nasa continue a meaningful space flight program that builds on all of the work that has been done over the past five years. i thought the administration agreed with compromise that was enacted into law, but i am afraid i do not see reflected in the proposed nasa budget request. the request cuts the overall

budget and human exploration budget even further than before. it eliminates the next generation of vehicles and many miles down beyond the national -- international space station. -- any miles down -- milestone beyond the international space station. the start-stop approach that we have seen over the past couple of years can only cause us to lose the best and brightest, and they will never be replaced. it will not be easy. we are not getting them ready, so we cannot afford to lose the ones we have.

i have great sympathy for the budget and the pressures that nasa faces. i am hoping and expecting the deal administration will provide some constancy of funding and direction -- that the administration will provide some constancy of funding and direction to the agency. where do we go from here? i think the most constructive approach for all of us is to consider your budget request the beginning of the discussion, not the end. you need to tell us what you can do with your budget, not what you cannot do. we need to know about spaceflight goals the have been set forth and successful authorization aspects. we need to know what is possible. we need to know not just what you cannot do. this is a critical time for

nasa. leadership and pre-eminence in space and aeronautics is at stake. resting on our laurels and briar accomplishments is not an option. sustained investment -- prioritr accomplishments is notn option. sustained investment is needed to foster the innovation needed to inspire young degenerations to pursue scientific and technical careers. er generationsung gir to pursues scientific and technical careers. the frontiers of knowledge through exploring and living in space, advancing science and developing innovative technology. i want to welcome new -- welcome

and i hope that we can work together to have a more positive nasa program. >> pimm there are members who wish to submit additional -- if there are members who wish to submit additional opening statements, your statements will be submitted to the record. the nasa administrator was appointed by president obama and sworn in in 2009. his astronauts have flown on four shuttle missions, including the mission the deployed the hubble space telescope. he was an aviator, having flown 100 missions in southeast asia during the vietnam war. he was a test by letting -- test

pilot to required -- retired with the rank of major general. he is also a friend of mine. i was with him a couple of weeks ago at the cemetery. i was with him last thursday on a day of pride when we launched successfully. he is a true patriot and we are very glad to have him before us today. i recognize you for five minutes, but we will be more lenient with you since i had to read all of these things. if you need more time, ticket. >> members of this committee, thank you very much. let me congratulate both of you on your new leadership roles. i want to thank all of the leaders on the committee for the longstanding support you have given to nasa.

we have a common passion for space relations and the benefits it brings our nation. as you take on your new responsibilities, i look forward to continuing our work together in the same collegial fashion that we have in the past. i would also like to thank you for getting space back into the name of this committee. it was missing for many years. i would like to show a very short video clips that we brought with us if that is okay. >> to would object? >> commander of the international space station along with my crew mates. our russian crew mates are working on other activities today during this busy time for us. we are honored to be a part of today's hearing. i would like to personally thank

the members of this committee and the entire congress for their thoughts and prayers this past week as my sister-in-law continues her remarkable recovery. my brother market and i know how much she appreciates the love and i knowt -- marke how much she appreciates the love and support of all of you and how badly she would like to be with you today. again, thank you for your continued prayers for our her miraculously covered. >> -- miraculousl recovery. >> all of us in the nason family continue to pray for speedy recovery. -- nasa family continue to pray for her speedy recovery.

we are delighted the with the authorization bill signed and passed into law last fall, we will continue to have resources for another 10 years. it is my privilege today to discuss the 2012 budget request for $18.7 billion to nasa. despite fiscal restraints, i am pleased the we are proposing to hold funding at a level appropriated in 2010, which continues to be our spending level under the continuing resolution. this budget request continues the agency focus on a reinvigorated path of technological discovery leading to an array of challenging destinations and missions that engage the public. reauthorization act of 2010 gave nasa clear direction. we are moving forward to implement a the details of that act for the 2012 budget. the president supported all

major elements of the act as well as a diverse portfolio of key programs. because these are difficult times, we had to make difficult choices. reductions were necessary in some areas, but we can invest in the future while living in our means. this agency maintains a strong commitment to space flight and the development of new technology. it invests in the aeronautics science and research programs that will help us win the future. it carries out innovations the support long-term job growth in a dynamic economy that will help us out-innovate, out-a is a case -- out-educate, and out- build all others in the world. we published a 2011 strategic plan. our core mission in support of this vision remains fundamentally the same as it has since its inception in 1958.

just this past week, we launched the shuttle discovery, one of the final flights to the international space station. along with supplies the will support the space station, a discovery has also delivered a robotic crewmember. the glory earth science mission will launch from california this week to help us understand the atmosphere and the variables affecting our client. our space program -- our climate. our space program continues to affect things in the near and long term. we provide jobs and bolster the economies and communities across this nation. this chart shows the scope of our activities for fiscal year 2012.

our priorities in human space flight are to maintain safe access for american astronauts as we fully utilize the international space station, facilitate safe, reliable, and cost-effective commercial access to lower or bid for american astronauts and supplies as soon as possible, begins to lay the groundwork for expanding human presence into deep space, the moon, acid to nine -- asteroids , and eventually mars. and, pursue technology development to carry humans farther into the solar system. these initiatives will enable america to retain its position as a leader in space exploration for generations to come. at the same time, and our other endeavors, our priority is to extend our reach with robots and

scientific observatories to learn more about our home planet and the solar system, and peer beyond that to the origins of the universe, pursue ground- breaking research into aviation technology, and caria dynamic education programs that help develop the next-generation -- carry out a dynamic education programs that help develop the next generation of scientists and engineers. that is a lot, but nasa thrives on doing a big things. we have greatly increased human knowledge and we have improved life on earth. there has been some concern that nasa is abandoning human space flight. this simply is not true. these charts illustrate the percentage of nasa's budget the support human space flight. as you can see, it is a substantial portion, 44% in this chart. if i remove the cost of facilities and other support, it is 57% of our budget.

here is human space flight broken out with its slice of the by a loan. we devote some resources in closing out to the shuttle program. as the centerpiece of human space flight and the critical anger of our future deep space exploration, the international space station gets the largest portion of funds. the next generation of vehicles, the multipurpose creepily calls -- crew vehicles, get 39% of our budget. the shuttle represents almost the smallest piece of our human space flight by. i want to congratulate contractors across the nation for their dedication to our mission during this time of transition and change. these workers are our greatest asset, and they make us all proud. they fully understand the risks of exploration and welcome the

challenge. they will be the ones making tomorrow happen. these other exciting and dynamic times at nasa. the challenges ahead are significant, but the opportunities are great. we have to achieve big things that will create a measurable impact on our economy, our world, and our way of life. thank you for the time to make my statement, i look forward to your questions. >> thank you. i think most of you know that our committee rules limit questioning to 5 minutes. i will recognize myself for five minutes. as i said in my opening remarks, i want us to have the safest possible assured access to the space station that makes the goals of the u.s. and our international partners. i know you want the same thing. trying to stimulate commercial competition is a worthy goal

that i support, but not that the expense of ensuring the safest, most robust system for our astronauts. the committee report said the while there may be potential benefits of commercial services that transport crews into low earth orbit, there are simply too many risks at the present time not to have a viable fall back option for risk mitigation. congress has taken these concerns to heart and expressed them in the policy and funding direction of the nasa authorization act. in subsequent appropriation measures, including the fiscal year 2011 continuing resolution. yet, the 2012 budget requests once again seeks to reverse congressional priorities by proposing increased funding for commercial crew activities and significant reductions in the multi purpose vehicle and space launch system.

we assure the we would have the capabilities to do the things in space betters -- leaping -- that art strategically a part of the united states. maybe you're listening to our message, and maybe your advice paulsen on receptive ears. i do not know what the problem is, but i think -- your it icefalls on non-receptive ears. -- your advice falls on non- receptive ears. >> i get your message loud and clear and so does the president. i think that the budget does follow this direction. these are difficult times. last year, we all thought we are on a certain path.

i took a look of the priorities established for us in human space flight. i remember in 2004 -- you will remember better than i, but i came here with the former astronaut's. we came up to brief you on potential human spacecraft when we were trying to decide what to execute the vision for space exploration. he cut down on your desk and started drawing guidelines and descriptions of why a certain spacecraft could not work or would not work. you made a statement that, understandable that, but you need to understand all this and take it back to nasa. we will not lose another crew in space flight, and if we do, someone will have held to pay. those words have stuck with me. i do not intend to pay any debt bond losing a group.

the crews -- debt on losing a crew. the crews are my number one priority. we can discuss this in the coming months, but the best, most efficient, perhaps fastest way to do that is by relying on the commercial entities that are well along in their development to provide access to lower earth orbit while nasa engages exploration, uses the crew exploration vehicle to go to exploration beyond lower earth orbit. i think we are complying with the major elements of the authorization act, and we made the adjustments inside? the now because the consternation because we wanted to make sure -- we made the adjustments inside the act that now cause consternation because we wanted to make sure that these could continue.

these commercial vehicles are not being billed to double else's -- to double in not being built -- not being built to double what we are have. that is inefficient and a waste of money. the system will have the capability of providing backup should any commercial entity fail. failure is not meant that they fail to produce. they will produce, because the commercial entities have produced for years. orbital is one of our competitors are now -- right now. they have announced that they intend to compete in commercial crew. orbital has a record of success since the 1980's, 1990's. they have launched 155 successful space launches. many of my satellites on orbit

today were put there by orbital scientists. they can produce. anyone who would try to convince you that american industry cannot produce is not being factual or truthful. they're being disingenuous. we have made the decision that the safety of the queue is the number one priority. the quickest, most -- safety of the crew is the number one priority. the quickest, most efficient way to get them there is through a commercial enterprise. >> i do not know how much more time i have, but 30 years ago, over 30 years ago, when i first came up here, i was lucky enough, first fortunate enough to be on this committee. many other brave men and women made -- you and many other brave

men and women made the program so successful. i had hoped at that time that the private sector could launch these things and take it away from government, knowing it took the tax bases of all the people of the united states to make it go. i realized that would be a long time coming. you are saying is basically year, or that we're hoping we can reach that. -- you are saying it is basically here, or that we can hope to reach that. some members agree with you 100%. you have support on this committee, and you have my support, but i want to get together with the people that can make it go and make sure they can make it go. i do not want to close the bidding to anyone in the world, but i want them to sign a contract, and i want them to show what their contract says

they can do, and not have them look back over their shoulder and say sorry. thank you for your answer. at this time, i recognize mrs. johnson. >> thank you. i am not really sure where to begin. you have indicated that nasa has planned the last shuttle mission and that funds are available. recognizing that the appropriations for 2011 have not even been finalized, what priority does this have relative to the prairies of nasa? >> is on my schedule, and i intend to fly it in june.

the launch date is june 28th. unless this congress does something that changes the fiscal status of present conditions -- and you can do that. i mean, if you take drastic action and significantly reduce the amount of money that we get whenever we get a 2011 budget, then it could change things. right now, i anticipate the recent -- anticipate that reasonable people can disagree in the congress will come to an agreement. >> less than a year ago, the president gave a speech and said that he actually wanted to increase nasa's budget by $6 billion. the white house budget is now $2.5 billion less than nasa's flat line budget. you imply in your testimony that

there are going to be sufficient resources for the rockets, crew vehicles and landing systems for missions to mars, a moon, and the asteroids. it seems to me that doing so with the resources is a fantasy, and that it is not really credible to say that you can complete all of those missions with the resources that have been designated. i just wondered if you would respond to that. there are a lot of nasa professionals that say it cannot be done. you and the administration are saying it can be done. >> you are the on the one i have heard in the last couple of weeks saying i am saying anything can be done. most are saying i am saying nothing can be done. >> so you believe you can do it with the resources designated?

>> baidu. >> daniel inouye -- i do. >> can you give me a timetable public -- can you give me a timetable? >> i am unable to give you a timetable at this particular time because we need to find out first what my 2011 budget is going to be. i'm spending right now the 2010 level hoping it does not get dramatically reduced. if it does, all bets are off. i do not intend to be preaching to the choir here, but i just want to remind everybody, the closer we get to the end of the fiscal year, if i get a dramatic reduction in my budget, it all hit the one time and all bets are off. we have to go back to the drawing board. i do not anticipate that that is going to happen. it is my hope that we will be able to continue spending at the 2010 level or higher, and we

are planning to bring to the congress in the summer a plan for a multipurpose crew vehicle, volatile, heavy lift system that will enable us to meet targets set by congress and the president. those targets to date are an asteroid in the timeframe of 2025 or so, and a mission to or around the moon with a landing some time in the 20 30's. those dates i still stand by. those other dates that you gave me in the authorization act, 2015 for a heavy lift the vehicle and a multipurpose crew module, those are difficult even under the proposed 2011 budget and the amount, the level of the authorization act. that is what i said in my 90-day report. i did not say we could not do it. what i said was, given the level of funding in the 2010 authorization act, even now made

a very difficult for me to be able to execute the development of a heavy lift launch system and a multipurpose crew vehicle that is flying in 2016. i have not said i cannot do that, but i do not want to mislead anyone and make them think that i am saying we can do it. there are a lot of industry representatives sitting behind me here that will tell you that we are going to be challenged no matter how much money you give us. we will make our efforts to do whatever it is the congress and the president -- >> let me squeeze in one more question. i was glad to see and 8% interest in the astrophysics program. much of that will be dedicated to the search for earth-like planets. what do you expect us to learn in the next couple of years? >> the results to date from the

kepler observatory have been next to phenomenal. we have identified -- and i cannot hold it in my brain the numbers -- but we have, just in the last year, we have identified literally hundreds if not thousands -- >> what about in the next couple of years? >> we are going to fly additional missions that will build upon the knowledge. kepler is not done, but we are looking at a follow-on -- i would love to fly something that goes around venus and looks back. i am not an astrophysicist, but my science experts tell me that if we could put a satellite in venus or bit looking back at earth, when it comes to near earth objects, things that threaten this planet, we will have a much better ability to make early determination

svanberg is eyeing trajectory. i know that this is kooky to -- on theirtermination's trajectory. i know this is a tricky stuff to some people and they will want to laugh me off the planet. >> i recognize ms. edwards. >> thank you. i have a question that goes to the consistency between the your budget. enand what i am trying to read is it the authorization we have only just recently approved a matches your budget priorities.

further, going into the details of the earth sciences. my concern is that, where we tried to step up our investment in our it sciences, it seems that some of that is being sciences,d -- incurre it seems that some of that is being sacrificed. i think we will see the evolution of that ever the next couple of weeks. could you address what the budget impact will be on the earth sciences component, stretching out some of these programs, and in some cases, i guess i wonder, once you begin to stretch out or cancel these programs, the investment that we have already made in the might cancel out any potential savings from canceling them, so i am a

little unclear about that. can you give us a little insight into those areas of the budget proposal? >> let me go back to last october. there was debate going on during the authorization act, and i was criticized for being out of the country. but i was on the phone with you every night. at that time, we have not had an election. the fiscal environment in the nation was a lot different than it was one month later when the president finally signed the bipartisan authorization act. things really changed between the time that this congress labored to develop the 2010 authorization act and the time that the president signed an

now. we have always faced the budgetary problems that we do today, but none of us had taken the time to sit down and say, ok, we are really going to deal with it. the 2012 budget was our first effort to say, we are really going to deal with the fiscal reality, so we took a cut. we make difficult choices in all of our programs. the earth sciences program which you questioned -- many went back to the date of launch the were planned when i became nasa administrator. if you remember, when we proposed -- the president's proposed 2011 budget, we were really happy. we had a significant amount of funding for a sciences. we're going to pull certain programs forward by two years. we had programs we did not even know we could put on the books.

today, things have really changed. those programs are now back to their original dates, which is now 2018. >> so if you add together in the investments that have already been made, are we really getting savings by canceling or stretching these out? >> we have no choice but to stretch out two of them, because we do not have the money available the we were going to use to bring them forward. it appears so we are stretching them out. we're taking them back to the original launch date. we are looking for other dark energy missions. the one that came out of the

astrophysics the cable survey was w-first. it may or may not be brought into this decade. i do not see any reason to take any of our earth science missions off the table right now. i am doing everything i can to preserve those missions. >> just answer this for the record when you can, but i really would appreciate a response from the administration on the effect that these kinda -- kind of programs have on the present, tracking tropical storms on the gulf coast, monitoring wildfires in california, tornadoes in the middle of the country, these have present-day impacts when you look at the kind of cuts being proposed. you are telling me that maybe we will not have any storms,

wildfires or tornadoes. that would be cool. you would be quite a projectionist. but the reality is we do not have the tools to look at these things in a way that could prevent the cost two lives and property periods -- two lives and property. >> we are in dire straits as a nation when it comes to weather and climate prediction. partnership between nasa and the department of defense is no longer there because of problems the we had. we do need to take a closer look a our earth science program so that we make sure we do not allow gaps to occur in coverage of things like whether. i need to get people thinking about earth science as the study of our planet, its atmosphere, its oceans, and that a biography, the land, so that we

do not do dumb things -- the theraphy, -- typogra land, so we do not do dumb things. i do not do global warming. i do earth science. >> thank you. i do not do global warming either. >> did somebody say global warming? [laughter] i want to thank you for mentioning near earth objects. too many people take this issue so lightly, and it would surprise no one if they discovered tomorrow that an object was heading toward the earth that could cause

tremendous loss of life and we would be caught flatfooted. those of us willing to take the laughs and scoffing are playing an important role in protecting a large number of people on this planet. you are taking care of usage of a telescope that will ensure that that important part of identifying objects that could threaten the year it stays in playing -- the earth states and play. -- stays in place. if we had run that one project, all of the money would have been available, but it has all been wasted. your most important job, general, is to make sure that never happens again, and that we never waste billions of dollars by having programs managed so

inefficiently as that program was managed. i would like to place in the record a letter signed by 50 leaders from the space community, including former nasa executives and former astronauts, and one former chairman of this very committee, talking basically -- i will submit this letter for the record. >> without objection. >> these credentialed experts are urging that nasa fully fund the use of commercial companies to carry crude to the space station because that in and of itself is a strategy that is critical for the nation's success in our space efforts. furthermore, they point out the funding of nasa's commercial

crew program would lower the cost of low earth orbit, and thus enabling more of nasa's budget to be applied to its focus on exploration beyond lower earth orbit, and better enable the kind of program laid out in the nasa authorization bill. let me know that it makes no more sense today to have government employees being the ones who manage and operate and build all the space transportation vehicles banned would be if we said 20 years ago or 30 years ago, no, i am sorry, but all of our our jet airliners have to be built and operated by a government-run airlines. no. we have reached a technological stage when indeed the private sector can play a major role in reducing the cost of what it takes for government employees and government programs to

operate. pye, number one, am one person i know of on this committee -- i, , m one person on this committee that wants to maximize the benefit the private sector can provide. the authorization painted a stark line between lower earth orbit operations, for which it demanded a commercial process, and the exploration application, for which it relied on a standard nasa development process. does this budget -- does your budget request support to this structure of having that between those two approaches? >> i am not sure i fully

understand the question, but i would like to say, i have been unfortunately remiss in effectively articulating the connection among all the nasa programs. we are trying to get rid of stovepipes because we are trying to stay within the budget, fulfill our obligation to live within the elements of the 2010 authorization act, and then when it comes to human space flight, keeping our crusade. the international space station, as i said earlier, is the anger for everything going on right now. anchor for everything going on right now. we are developing technologies to send humans beyond lower earth orbit.

>> how much money would we save, for example, if we would rely on this private, commercial transportation of crude to the space station as compared to if we simply -- of crew to the space station as compared to if we simply kept the space shuttle going for the next 10 years? >> i cannot answer that because it would be pure conjecture. >> let me conjecture. i would conjecture that we're talking about saving billions and billions of dollars as compared to keeping the shuttle boeing or developing other kind of craft -- shuttle going, or developing other kind of craft. these companies will be investing hundreds of millions of dollars of their own money. how much of private companies,

and which private companies, have invested their money? it is not coming from our budget. we have people coming in from the outside. it relieves people at nasa to do other thing. how much money are we expecting from the private sector? >> i will take the for the record comment -- for the record, but i know it is substantially much more than we have paid in our fixed costs program or will pay in our cargo resupply. they have party invested substantially more than we have. i will take it for an -- they have already invested substantially more than we have. i will take it for the record. >> thank you very much, general. >> the recognize mr. clarke, the general from michigan, for five minutes.

>> thank you for being here. i have a series of questions and all of them relate to the impact of the proposed cr and the president's budget on nasa's ability to produce technology that can create jobs. i do not have any space centers or rocket manufacturers in the district i represent. i am from detroit. we make cars. years ago, nasa is introduced some structural program technology that of the manufacturers were ultimately able to use to design better front ends and steering linkages. most recently, your research into advanced fuels until technology -- and fuel technology allowed us to make better alternative fuel vehicles. nasa technology has meant better

automotive technology, which means that detroit is able to sell better cars, and that creates more jobs for the people i represent. what, if any, is the impact of the proposed c are in the president's budget on these types of initiatives that can be used to create jobs in our country? >> it will allow us to continue the technological innovation that has always been the hallmark of this administration. i would suggest that you go back home and brag about a detroit park in -- part in sts-133. detroit is part that in the person, if you will, of our robot.

it was done on our nickel and general motors nicole, it was not in anyone's budget -- nickel, not in anyone's budget. general motors said they were having to pay high medical costs for the people responsible for installing rain panels on cars because it took so much to put them in place. we developed a robot that could take the place of humans in reducing injuries. general motors continues their work on the international space station now because the robot will be unfurled in the springtime, and then we will

continue to do a series of evolutions that will be both general motors projects and nasa projects. you and your people are on board the space station. >> thank you. that gives me even more reason to support your agency and serve on this committee. at a question about the refocus of your agency on commercial development. the president recently said that our economic crisis was a sputnik moment. decades ago, when the soviet union launched sputnik, that created a huge public and political support for nasa research and development investment, that ended up creating a lot of economic development and spurred investment in education. a lot of people went into math, science and technology fields.

as ranking member johnson noted, a lot of that resulted in technology that was applied to tabulators, the microchip, and other technology that we use in everyday life. how does your agencies reorientation, especially the focus on commercial development square with a long-term commitment to overall economic activity for our country? >> the president has said that the nation that out-educates wins. you probably know that education is a passion of mine. we have put serious investment into education programs. we now have an office of chief technologists. his focus is on working with

academia and general researchers in trying to find innovative ways to bring value to our own economy, to grow our economy, if you will. those things are still covered in the president's 2012 budget, not to the extent that they were in the 2011 budget, but still, i think, effectively covered. we'll do demonstrate that we can do what we say we can do. -- we have to demonstrate that we can do what we say we can do. nasa has a history of promising then squandering the money. we intend to stop doing that. we intend to work with research centers and actually bring some of this technology development to the four where industry and academia are participating. if you go to colorado, where one of our competitors in the commercial food program is

building rockets, they bring college students in, and they work alongside students. that is not nasa, but that is an entity supporting nasa and the future of commercial space flight. students in tog get them excited about being part of this program. >> in my brief eight weeks as chairman of this committee, i have my first real problem. we recognize those whom i am to call upon by the time they got here. there are two that got here at exactly the same time. not only that, they set down at exactly the same time. knowing that he is a gentleman, and she is a lovely lady, i'm going to recognize miss adams 45, 6, 7, 8 minutes, whatever she wants.

>> i want to reemphasize that the safety of our crew members is a priority. i do not think there is anyone here that disagrees with the statement. i want to go back to the authorization bill and the budget request. nasa said there was no way to meet the 2015 flight scheduled deadline for a multi group purpose vehicle -- multipurpose crew vehicle and spatial on -- space launch system. i am concerned that you are not interested in meeting this deadline. think about it as a decade if you want to put a time stamp honoring -- time stamp on it.

is this your timetable? do you believe this is what congress has authorized? you think the multi-purpose crew vehicles should act as a backup in case commercial vehicles are not ready in time. is this true? you said this would not be productive use of cost and time and ability of nasa. something similar to that. it struck me as interesting that you said that we would not use this as a capability of this vehicle. . .

three years from the day they sign a contract they will be able to fly commercially crew

to orbit. so the sooner i can get them through the early stages where we are now, the sooner we can sign a contract and make it possible for them to fly. >> i want to get in as many questions because i have a lot of questions. you state the request supports the next two years with about 40 u.s. and international mission force science and support of agencies. can you please tell the committee how many of those are nasa flights. >> those are all nasa related flights. >> nasa flights. >> i will get back to you on that. >> page 2 you outline the 2012 priorities for human space flight. will you please tell committee where those were. >> the priority for human space flight has been on the record for a number of years as we developed the sbration -- international space station that schedule is already laid out relatively firm.

>> through the authorization bill? >> long before the bill was thought of. >> you said something about global climate change and i want to ask you, i know that you referenced global change. that is not climate change? >> change in the climate is could be global warming it could be global freezing. >> what is global change in your eyes then? >> change is what we're experiencing today. when you go out in the middle of the summer and it's blistering hot and you come in in the middle of the winter and it's the coldest winter, that's climate change. >> but you have global change in your testimony so i'm trying to determine is that. >> the testimony probably says global climate change. >> it's tpwhrobal change. >> i'll go back and check. we missed a word. >> thank you. >> yes, ma'am. >> thank you. and i now recognize mrs. fudge, the gentlelady from ohio for five minutes.

>> good to see you again. >> always good. >> administrator bolden, as you glenn.

impacting nasa glenn if government continues operating under the cr and will it have similar effects? on others? >> if i understood correctly if you're talking about the amendment to the cr that took the cross agency support out. i don't want to speculate on what would happen to any single center and i really i'm going to violate my rule and i'm not going to speculate. i'm going to tell you what that amount of money equals. that amount of money equals a couple of nasa centers. so if in fact the congress were to pass that cr, i would have to find a way to either stretch money around or we're talking about the funds to run two nasa centers. >> correct. >> but that is not what i

expect to happen. as i said earlier, i expect that reasonable people can disagree and come to an ultimate agreement that is best for the nation. and so we continue to expect that we will be operating at a 2010 level through the end of fiscal year 2011 and then that we will work to reach an agreement on a 2012 budget that follows along the lines of the budget proposed by the president and i introduced two weeks ago that will fund nasa and allow us to do the things that you want us to do. >> so there is in fact a commitment to make sure that when we have discussions about the fy 12 budget that we are still talking about the same level proposed in the president's budget as we go forward. >> congresswoman that is correct if i understand the correct question correctly. and when we look specifically at glenn, glenn will do well under the proposed fiscal year 2012 budget and i think you

have had this conversation with ray lugeo and ray is very conservative. ray does not like to go out and brag about things for fear that someone will take them away. ray understands as do most of our center directors that the money to the community does not come with a program office designation. the money to the community comes with projects and task orders through that program. so the fact that a center does -- i don't have enough programs to make sure that every center has a program but it really doesn't matter to the people of the center. it may matter for people who are looking for titles but to the workers in that community it is really important that they get projects and task orders. and glenn will do well. budget.

million. we're going to remain at this fy 2010 budget is a problem. expected as we go into the fy 12. >> i agree. >> thank you very much. >> thank you. >> now, the gentleman from virginia mr. ridgeo. testify. i appreciate your service to nasa. in your opening statement you mentioned that there was i

think you characterized it as some concern about nasa's commitment to man space flight or human space flight. and i would say that doesn't capture my view. i'm deeply troubled and really disturbed by it. i think the figure that you referenced, you said look we're allocating 44% of our budget to human space flight. well, i come to the exact opposite conclusion. that doesn't reinforce the idea that we're commited to human space flight. that number in my view indicates that we're not as commited as we were and nor are we as commited as we should be to human space flight. i see human space flight really as the essential dna of nasa. and i would like for us to get back on a path of really investing in human space flight i think as you said, reasonable

people can disagree over these matters but i'm here today to petition you and to move back in the direction of allocating more toward human space flight. we can talk about the proper allocation between commercial and actual nasa flights. but i still think we need to move in the other direction. you mentioned also in response to a question offered today that the savings of commercial space flight versus nasa, human space flight, i believe, and your response was, i believe, was i don't know. and it seems to me that that's an essential question that is really fundamental to some of have to deal with here on the committee. would you please just expound on that answer a bit? >> i'm glad you asked the question because it gives me the opportunity to elaborate. when we talk about connecting all the aspects of nasa, the nasa portfolio, we cannot separate human space flight

from science. our science missions may in the future utilize the same launch vehicle that we use to launch astronauts into space. today my science budget is under attack because of the rising cost of a launch vehicle. if i can find a way to get a cheaper launch vehicle i can fly more science. that same launch vehicle that would take humans to lower orbit. so the integrated advantage of going to commercial carriers to adding competition to the mix where as today -- i mean, if you look at orbital sciences, the design, the taur us 2 not to take humans to orbit, they designed it for a market being there which is a medium lift market. that's where the science market is. that's the way that they targeted it. we have done a little bit of

conversation and some analysis of the market so they are very comfortable that whether they participate in human space flight or not they have hit the tarkt because that's where the market lie. if they can win in being one of the carriers for humans to lower orbit they have multiply magnified their profit. they are decreased the cost to orbit for me because now all i do is buy service. i don't operate it, i don't carry the infrastructure cost. and there is some debate now about how much i am really spending on the kennedy space center. there is disagreement even among my own people. we spend a lot of money every day, every month, every year just maintaining the infrastructure of the kennedy space center whether i fly a shuttle or not. i am trying to get rid of that. >> well, on this point i think we're in full agreement. i think that there is a place for a commercial role here and i think that having as a

businessman ho is now a representative in our congress, i am intinctiontively drawn to the statement about competition and having companies compete here. but the question specifically is, and i think one that i more information for the particular, is the ability to that legitimate question of what are the relative costs of nasa putting a human in flight versus the private sector. and i think that merits more exploration. >> i will get you that answer. and the word you just used, that requires more exploration, the reason i can't give you the answer is exploration is just that. it is something that we pursue having no idea what we're going to find. if i looked at putting a dollar value on the a train, it's a

five earth satellites that orbit earth near portal orbit every day, what's the dollar value on having the a train there to the people in haiti who many of whom were saved because one of the satellites revealed three areas of the country that were subject to land slides with the big earth quake that we would have never found for weeks. what's the value of the people on the gulf coast for what came out of the atrain to help us understand the gulf oil spill. i can't put a dollar value on that. so i appreciate your question and we'll try to get you an answer. >> thank you. my time has expired. thank you very much. >> thank you mr. chairman. recognize the gentlelady from alabama for five minutes. >> thank you, mr. chairman. thank you. nasa's proposed budget indicates that there will be 138 million for education initiatives u including the space grant and minority university research programs.

these are valuable partnerships that exist in the state of alabama where i'm from for institutions such as uah and alabama a and m and uab and university of alabama. this is a 5.1% decrease from the nearly 146 million for fy 2001. how will this anticipate a decrease in funding impact these valuable educational initiatives? i like you am quite concerned about educating the next generation and would like to see those partnerships continue. >> come, like every other agency in the government and company in america, we are looking for ways to streamline the way we do business. my new associate administer for education once chaired and now he is 2 administrator he oversees the education design team and we have gone out and are working with professional educators, sterkedry educators to determine how we can better implement our education program within nasa so that we get the

same value that we get right now for less money. so the 138 million is a significant amount of money for our education efforts. we are also trying to collaborate much more with other agencies. we are working with the first ladies' white house initiative for things such as helping military families, an aspect of that is education for military families. we have content that we can offer that we don't spend another dime on. it's already there. whether it's talking to astronauts from the international space station. one of the best things i did when i was flying was we used to do something called saur x where you get on a ham radio and talk to kids in schools. that's incredible and that comes at almost no cost. so we're trying to find better ways that we can can complement what we have at lower cost. >> the proposed budget for fy 12 also prosupposes $1.8 million to help deletch a

streck that will launch the crew. marshall space center in huntsville, alabama will likely be a very major contributor in designing that heavy left vehicle. and fy 12 the funding request for this project significantly is it sufficient, i would say, to fully fund and sustain the development of the heavy lift vehicle through 2016 which is the desired timetable? and are you commited to making sure that those funding levels stay about the same? >> i am committed to making sure they stay about the same. and one of the things that you will see in our congressional justifications is beginning in 2013 i have asked and i think i have been granted it remains to be seen, whether the congress agrees, that we put it in one budget line. so that as we go with the development of an evolveable heavy lift system and

multipurpose crew vehicle that we can move the crews around as necessary and each year so that we marry those programs up when we need them. you know, that being the 2020 time frame is when we will need a heavy lift launch vehicle and crew vehicle that can go beyond lower orbit. there may be available systems before that time but i don't need one for beyond lower earth orbit until 2020. >> thank you. >> thank you. the chair now recognizes the chairman of the space and aeronautics subcommittee, mr. the gentleman from mississippi. >> thank you, mr. chairman. thank you mr. bolden for being here. and like my colleague, thank you for your 23 years of service to the -- 34 years to the marine corps. after saying that you've been in vietnam and had over 100 missions i doubt there's much that i can >> absolutely. i do have some questions for

you. and one is you have often made the argument that access to low earth orbit is well understood enough that we can turn this over to commercial providers. how can you be confident that the commercial crew and cargo is sufficiently mature enough to justify firm fixed contract? and if so can you explain the significant days and time and cost that are in the cots in the crs program today? >> i am certain that the commercial entities can deliver because in the past if you look at the two that i'm working with right now at least one of them has been doing it for more than 20 years. orbital has been delivering satellites to orbit since their inception. and if i look at just one of the rockets that they prepare for us, minator, which is a government rocket that we prepare and surplus and is given to orbital to prepare.

i'm not concerned about their ability to deliver. in terms of why have we have had setbacks, we are now trying to take in some cases existing systems or emerging systems and certify them for human space flight. so the companies are trying to get as much information data as they can while they are doing the cuts in crs programs that can be transferred into a commercial crew program so that it cuts down on the amount of time that they have to invest in development of techniques and procedures and the like for them. and like in the development program, they experience setbacks. i give the example of -- i'll make it quick. if i had a failure or a problem reich orbital had last december last month before they launched the dragon capsule on falcon 9 where they had a crack in the engine belt i would still be

sitting on the ground. we would not have lauched. i took me four months to get discovery off the ground successfully after we found a small crack in foam which revealed a structural problem that we had in the external tank. commercial entities do we do. they just don't have the bureaucracy that we have. so we will learn from them and we will be able to speed up the time, decrease the amount of time we have when we do experience a delay. >> we're going to be watching closely so it will be nice if they can come in under budget and not on time and within cost. now, nasa has not always been forth coming with details of its acquisition strategy for commercial cargo but the key to both is to open with a space act agreement devoid of any meaningful checks and balances followed by an overlapping fixed price contract to the same contractors it's hard to see how there can be a true full and open competition.

under those circumstances when space selectees are already under contract. why is nasa proceeding in this manner? and why avoid using a traditional far acquisition process? >> congressman, we have not decided on the acquisition strategy yet. i have not approved it. so it's not that we're not being forthcoming. i am pushing my people now to get to the point where we develop an acquisition strategy for commercial crew. so the holdup is us. it's not the commercial entities. they are asking for our acquisition strategy we have given them what we call human rating stasheds. we gave it to them in the draft form. they utilized that. we now have a -- now we have published our human ratings standards. so we're making as much as possible available as quickly as we can. >> as nasa moves forward, i want to know if there will be

any impact on stenice and their leadership. and will they remain the leader for nasa and commercial rocket propulsion? >> we made an announcement yesterday that mar shall space flight center will be the home of the program office for the sls, the space launch system. a sister center used to be a part of marshall and is now its own agency is stenice. which is the center for propulsion test. it is where people go. and we're trying to encourage the commercial entities to come and fully utilize the facilities at stennist to a much greater extent than they are now. and we're trying starting to get over turs to look at the facilities and use that. ideally, everyone will come to sten nis to test engines. you had been there the day before, i went doub down for the test firing for orbital.

it was incredible. i mean, the morale of the people there was absolutely incredible. and they now have completed the test on two engines for a commercial entity that will now put those two rockets on the taurruss 2 that will be orbital entries. >> i have one last brief question. many of nasa's facilities are going to require the upgrades to continue providing their mission for nasa's future work. are you committed to providing the necessary resources to upgrade the test facilities at stennis? >> i am. and my commitment to complete the work on the test stand is an example. >> thank you. >> thank you. now recognize the gentleman from california mr. mcnerny, five minutes. >> thank you, mr. chairman. mr. bolton thanks for coming and testifying this morning. certainly an issue that i think everybody is interested in in this country. i had the opportunity to viity

the space reception here in d.c. a couple weeks ago. apparently they sent up a vehicle that launched orbitted and reentered successfully. what's your assessment of that mission? was it very successful? >> awesome. in one word. >> you have to understand what the significance of that was. three nations up until now only three nations up until now, and there are many who want to be able to do this. india is one. the three nations are china, russia, and the united states that have successfully launched something from the planet, put it into orbit and then safely deorbitted it and recovered it intact. the fourth became space x in december when they launched falcon 9 and dragon. i understand what you saw was the dragon capsule that had been pulled out and you could tell for yourself what condition it was in. their intent is for it to be a

reuseable capsule. >> some of these have been asked before. you expect this sort of mission to be more cost effective than nasa could do it for reasons that you mentioned. how about compared to russia or some of the other countries that we've heard nasa may use once the space shuttle stops operating? >> we will continue to use the space craft to get our astronauts to and from the space shuttle as we have done since the columbia accident. my hope is as soon as possible we will finally have american-made rockets by american-made companies that will be available to take our astronauts back and forth. do it safely and efficiently. so that's why i made the tough decision to take some of the funding away from heavy lift and mpcv and put it toward commercial development because i have to have a way to get my

crews safely to the international space station as soon as possible. i don't think anybody on this committee wants to have to rely -- the russians are an incredible partner. they have been with us through thick and thin. they rescued us after the columbia accident and until we were flying shuten again they took our crews back and forth. they continue to do that. i don't want to have to do that forever. i want to have american made rockets and cap sulls that take our crews to lower earth orbit. and i have been ineffective in explaining the critical value of making that possible as soon as possible. i don't have enough money to give them to bring it in -- i'm trying to buy down the risk on that. every time i can put towards the effort buys down the risk. >> i was in industry before i came here and i understand the importance of having multiple suppliers. because if you just have one you're at their mercy. what's the prospects for having multiple private companies in this country capable of

carrying out these missions? >> i will give you my guess. and that is only a guess. and with all due respect to everybody on this committee, i don't run a company. i have never run a company. but i talk to people who run companies and they have boards that they have to convince that it is worth the investment. so i think some of my interested partners are still back here they will tell you that they have had to fight to to convince their boards that what we are about to do is worth the risk. it is a big risk for these companies and they have convinced their boards that they have to put assets against this. and i am going with them. >> are there foreign companies doing the same thing? >> there are foreign countries teaming with american companies in everything we do. it is hard to find any effort where people are not teaming with international partners. our own space policy emphasizes the importance of teaming with international partners. the hubble space telescope

which i helped deploy in 1990 would have never been possible without the cooperation of the european space agency as a partner. the solar rays came from the british aerospace. >> the last question i have is are there going to be any restrictions on these companies in terms of carrying out commercial missions that may have some harm to our national security? >> there are always restrictions. and that's where you have to help me. you are probably, i'm not sure which committees you're on but the secretary of defense, the secretary of state the president all of us are pleading for help from the congress in streamlining the export/import laws so that we don't continue to penalize american industry. you hurt nasa because i have to rely on my industry partners. when they are held to very strict standards, under incsna, and you name it, they could give you a whole list of

import/export laws, there is is a happy medium somewhere and we are not there right now. we have driven business off shore. and we've got to get it back. just having commercial launch services available is not going to bring the business back. we have got to make some changes in our export-import laws. >> thank you mr. chairman. >> i thank you. and the chair recognizes now the chairman of research and science education subcommittee, mr. brooks, the gentleman from alabama, for five minutes. >> thank you, mr. chairman. mr. bolden, were you aware that a couple of weeks ago when the house was debating a continuing resolution for this fiscal year, that there was an amendment proposed to cut roughly $300 million from the nasa budget and divert that to the cops program? >> oh, yes, sir. i am very much aware of that. we talked about it quite a bit. >> and what harm would be done to nasa, if any, by the

diversion of this $300 million if it's left to stand in the senate? >> congressman, you know, if we talk just about that amendment to the provision and nothing else, i might be able to give you an answer. but because i don't know what is going to be the final result of a cr it would be conjecktur for me to guess. there may be some offsettings made in the final cr that puts all that money back. so i don't want to run the risk on guessing on something that is not there yet. >> would the loss of that $300 million adversely affect nasa's capability? >> i think i answered a little bit earlier. that amount of money, i think what you're asking is a couple of nasa centers maybe in terms of day-to-day operations. >> i'm a freshman but that sounds pretty significant to me. would you agree that that's a significant adverse effect? >> that would be a significant adverse effect. but again, i'm thot going to speculate because that is a

decision that had not been made by the congress yet. the house has passed and the senate will still have a say. so i -- you're asking me to guess on something that the other house of this congress is going to -- >> i'm not asking you to guess about what the senate may or may not do. i'm asking you to testifies if there is an adverse effect on what the house's position has been and that's a loss of $300 million to nasa. do you have a position? >> there is always an adverse impact about any decrease in funding. if i look at the contract, the effect on contractors, i am told that that's about 4,000 contractor jobs. so that's an adverse impact. >> what effort did either nasso or the white house undertake to communicate that adverse impact to congressmen before they voted in order to help protect the nasa budget?

>> i don't know what effort the white house made. and i just know that when ever we came to the hill and we were asked about it, we generally said it would have an adverse impact but we tried not to -- we tried not to second guess what the congress was going to do, as we always try to the do. >> i'm not aware of any effort by nasa or the white house to communicate any adverse impact to the members of the house of representatives from nasso to local police and deputy program. are you aware of any effort by the white house or nasa to communicate that to house members before the vote? >> i am not personally aware. but let me take it for the record and i will get back to you for any actions that our folks took because we have been up here over the last several weeks or months and i will find out for you. >> i am pleased to report that 70% of the republicans in the house tried to protect the nasa budget. unfortunately, 83% of the

democrats tried to undermine the nasa budget by diverting the programs to a local police function of the federal government, while certainly nasa is a function of the so i would appreciate anything members or senators as the case may be when these kinds of impact on nasa, on 4,000 contractors and their jobs, or brought up. moving on to a different matter. going back to april 15, 2010, the president made public remarks at the kennedy space flight center that suggested the moon was no longer a destination for future manned missions when he said, the simple fact is, we have been there before. explore. end quote. comments today, i'm thankful that on page 2 of your official

statement you mention that the moon is a target. is that correct? >> sir, the moon is a continuing target for nasa. we have ongoing missions to the moon all the time. so it remains lunar exploration remains in our portfolio. >> what is the targeted date for landing on the moon? >> human landing object moon? we don't have a target date because that at present that is not one of the missions that i think is essential for us to be >> so if i'm clear on this, scientific instruments. plans to have any human space activity on the moon. >> i have no plans that i have brought forth to the congress or anyone. that does not say what is going on inside the agency does not include human lunar missions. we're developing a lunar rover right now that would completely do away with any need for has

been tats on the surface of the moon. so we are always looking at where we can go in the future. that's a part of being prepared >> my time has expired. thank you for your assistance. >> thank you. if you're short of people you want to send to the moon, i've got several that we can volunteer for you. next, the gentlelady and one of my very favorites from california ms. woolsie for three minutes. five minutes. >> thank you, mr. chairman. last week, i had the privilege of attending a conference on the subject of energy security, and it was attended, it was bipartisan, buy cam ral, and it was clear in our discussions with scientists and experts that the decision makers in our country, which is all of us,

and others, have to come to terms with climate change. call it global warming, climate change. and so i want to go on record and have always been one that is willing to talk climate change and know that we have to start addressing it and doing something about it. and i appreciate that nasa's view is going to be very helpful in that regard. that is -- and that leads me directly to what i want to talk about and that's about being educated and having the right support in order to be able to do what you need to do as an agency. the president, president obama has set a goal of recruiting 10,000 teachers in stem fields. he calls these subjects

essential to competing in the 21st global economy. yet, his proposal for his budget drastically cuts funding for nasa's education programs including the stem education programs. so i ask you, how are we supposed to increase participation in stem if we are cutting the very programs that foster interest in stem in the first place? and how are you, how is your agency adjusting to this? you need those smart people. >> congresswoman, the amount, the difference between what you see in the 2012 budget and what you saw in previous budgets is actually the result of action on the part of, thanksfully, on the part of the congress. the proposed amount of funding for education from this administration has been consistent.

and it usually is at about the $140 million level each year, give or take. and that has been consistent. but what happens, thankfully, is that the congress usually adds money back on to that. so when you look at, if you say that we have cut spending on education, that, we didn't cut it. we just didn't -- we didn't add back in what the congress chose to put on in previous years, if that's not too confusing. >> well, it's not confusing because we worked very, very hard to get that additional funding for stem. and chairman gordon was a leader in it and he worked with chairman hall when they were in reverse positions. and really made something positive happen for nasa and for stem programs. >> yes, ma'am. and congresswoman, as i mentioned before, our focus is on stem education. the summer of innovation

targets middle school children and most importantly their teachers because we want to make middle school teachers very comfortable with teaching math and science. we want them not to run away from it. that pilot program last year we understand was very successful. if we can reach 1,000 teachers multiply that times the number of students in a class room. that's our big focus. the design team that we put in place is trying, as i mentioned to the congresswoman, i think i can do a better job with $138 million than we have done in the past because we're going to take the recommendations from the design team and we're going to redo the way that we do education in nasa. people will have to trust us, though, because if everybody makes me go back to doing education the way i've always done education, it's $138 and we'll get the same. you know, insanity is doing the same thing over and over and assuming something is going to be different. if somebody makes me spend my $138 million the same way year after year, i can't have any

effect. >> one of the recommendations i would have is in reevaluating your programs that you put an extra effort into women and minorities joining the stem fields. >> that is a point of effort emphasis for us. we are active on the president's council on women in everywhere. i have three grand daughters and a daur. i have a son, too. but i try to take care of the women in my life. so education of women and minorities is pretty important since i happen to be one. >> and therefore they can take care of themselves if they -- >> i want them to take care of me years from now. so they need to be very well educated and be astronauts and doctors and engineers. >> thank you very much. >> i thank the lady. now, i recognize the congressman from illinois, got a chance to know randy very well.

he accompanied the codel to watch the discovery launch last week. thanks for that. recognize you for five minutes. >> thank you, chairman hall. administrator, thank you so much. but i want to just say we really appreciate your being here. it really was a privilege to be down for the launch with chairman hall and other members of the committee last week and to steal or borrow one of your words, it was awesome. so it was great and helpful for us. everybody there was so informative and really helping us understand the mission and was so exciting to be a part of that. so thank you for your work. i want to shift gears quickly. oftentimes we wear different hats here. i want to get your perspective on something. i also serve on the transportation aviation subcommittee one of the areas we talked about is nesm jen looking at its next generation air transportation system. i know nasa has had a

significant part along with other departments. i want to get your thoughts on nexgen along with key partners. what does nasa see as some of the biggest challenges? and from your perspective how do you feel like this mult agency collaboration is going? what can we do to impro that eral i goian, is nasa will incur with respect to commercial space flight, you know, over time. >> if i go back to the very beginning of our efforts, the cots program, the commercial orbital transportation system, which is just getting cargo to orbit, that was a space act agreement with a defined amount of money. like a fixed price contract, for all purposes. nasa paid a certain amount -- nasa pays a certain amount as milestones are met by the two companies that won were space x

and orbital. so we will pay them a pre-determined amount of money for each milestone they meet. when we move into the crs, cargo resupply portion, that is where we get into a contractual arrangement and we have made arrangements with those two companies since they were the winners. so they get paid again as they meet certain milestones. but once they start delivering cargo for a set price we will buy the ride to the international space station or wherever else we take i it. when you get into commercial crew, that is the area that has 1078 vagueness right now because those prices are not yet determined. there are things that need to be determined. i have to present for the, to industry, a procurement strategy. you know, that is what we talked about a little bit earlier and that's -- an acquisition strategy. that's not fully developed yet. once we have a fully developed

acquisition strategy, we can sit down with the competitors and say this is what we're going to do. these are the types of contracts, whether it is fixed price contracts, cost plus, you name it. and here are some of the requirements that you're going to have to meet. we can then sit down and say what are nasa's percentage of investment in this enterprise? that once we decide what that is, then i will have essentially a fixed price, a cost that i will -- >> let me ask another question. my time is about to expire and i no longer want to go beyond a lot of time if i can help it. there's a lot of focus on nasa helping to support and develop commercialization with respect to human space flight. but what are some other areas of what nasa does where you see this kind of commercial partnering effort going on that maybe don't get discussed so much? >> the ones that don't get discussed are the ones we do

all of the time. we were talking with a representative from detroit, r 2 is a human yoid robot now on the international space station taken there last week. r 2 is the result of a collaboration in a space act agreement between general motors in detroit and i will get in trouble because they'll say well it was general motors in chicago or something. but general motors and the automobile manufacturing arm of general motors and nasa where general motors needed a robot that could relieve some of the problems they were having with injuries to workers. nasa needed a robot to help offset some of the risk to space walk crew members that things that a robot could do that we wouldn't have to send an astronaut outside to do. that is one example. there are a number of examples like that where we have done it on a shoe string because it's technology development. we turn a few guys loose in a laboratory somewhere somewhere around the country and they go

off and pick an industrial partner and pick up something that comes into play. how many are successful? i couldn't tell you. most don't work. but that's the good part about it that scientists and engineers love it because they bring college kids in. we have something now called small sets or microsets. colleges and urts around the country and even secondary school kids now are getting involved in small sets or microsets, something that nasa and d.o.d. developed and now we utilize to try to reach kids adged help them understand that they can participate in space exploration from their classroom. >> thank you very much mr. chairman. i yield back. well, i have no more time. so thank you. >> you're right on the dot. at this time recognize a very, very very patient mr. mccall, the gentleman from texas. >> thank you, mr. chairman. and i have been sitting here patiently and i as14ur you next time i will arrive before the gavel comes down. >> when i was first up, i was

the second one here always. i didn't want to wait until the end to talk. >> i guess i will close out the proceedings possibly. plan to attend the april shuttle launch and i think that's going to be an historic mission. i know gabby's husband mark will be leading that effort. you mentioned her in your testimony very affectionately. i think we all look forward to the day that she will be serving back on this committee. and there is no greater champion for the human space flight program i think than gabby. and i remember working with her on the reauthorization. she was obviously opposed to the president's decision to cancel the consfellation program. one of the last conversations i had with her, in fact the last one, was we were walking on to the house floor just a day or two before the tragic event and she talked about nasa.

she was just such a staunch advocate for the human space flight program. and so as am i. and i represent a district that was once held by linden johnson. and on the houston end of my district in the suburbs i represent many johnson space center employees and contractors. i know in our reauthorization we were a lot of funding for human space flight in spite of this administration's attempt to kill that and i guess as you present 24 budget and as i go back home to my district, they will want to know what is the future? and so i guess what i'm asking you is what am i to tell them when they ask me about contracts related to human space flight, about the future of human space flight program? and i know these are some of your dearest friends. but what am i to tell my

constituents who are part of the johnson space center? >> congressman, you should tell them that the future of human space flight is bright and robust and we need their help in rapidly developing new systems so that keck go explore. this nation has not ventured beyond the moon with humans. we've been saying we were going to do it forever. i get chastised when i talk about wanting to go to mars. when i came in in 1980 i thought i would fly on the shuttle a couple of times and i would be among those returning to the moon. and then challenger happened and my dream of ever going to another planet went away. i don't want that for my grandkids. so i need their help. we have got to develop commercial capability to get to lower earth orbit so that we can continue to support the international space station. that's our moon right now. that's where we do technology development. that's where we do medical research.

that's where we do things to make life better on earth. contrary to what people think, nasa doesn't do stuff just for astronauts. most of what we do is return to earth in terms of benefits for human kind. and i can go down, you all can do it yourselves. you can look at an emt ambulance that has the developments that were put in blace for the apollo program. wireless communications, the congresswoman johnson listed a whole bunch of them in her opening remarks. the nation needs to become unafraid of exploration. we need to become unafraid of taking risks. is it a risk to go with commercial entities? for me no more risk than anything else because i've always, when every rocket i've flown on, and i've only flown on three. four times but three. was built by a commercial entity. you know? it was rock well when it started. and when i finished i think it was boeing maintained by u.s.a., united space alliances.

>> my time is running out. and i appreciate your passion. i know you're very passionate about returning to the moon. and i would hope that i could work with you in terms of restoring the morale of some of the employees at the johnson space center and assure them that there is a bright future ahead. and i think we in the congress have a responsibility to make sure you have the resources to do this. you mentioned in your testimony as if i'm correct that it would be 30e before we could get back to the moon. it's been 4 years since we land -- 42 years since we landed on the moon. president kennedy set the goal that less than ten years we were on the moon in 1969. i think a lot of people wonder why now it will take almost 20 years to get back the moon. most americans don't understand when we landed there, you know, so long ago, why has it taken so long to get back?

because like you, i agree with, and you're very passionate, with the goal that we are going to have to go back to the moon and beyond. so perhaps if you could explain that to me and the american people. >> congressman i need to correct one thing. it will not take us to 2030 that we wanted to go to the moon. if we decided that potentially could be done by the end of this present.comade. but that is not one of the targets that has been produced either by the congress or the president. what has been set forth as targets are 2025 to an astroid and 2030 to get to mars. the reason we have not been there is because that's not been a goal of the nation. and we were content to stay in lower earth orbit. which is hard. but the nation has not -- it has thot been something that the nation thought was important. >> the prior administration president bush did set that as a goal, the moon mars and

beyond. so i think that was at point in time the goal for nasa. mr. chairman, i hope we can work together to perhaps restore that strigs and that goal in the congress, which i think is so violetly important and i know administrator you agree with. so with na i yield back. thank you. >> i thank you and the ranking member would have a final question for the chairman, please. >> thank you, mr. chairman. and administrator bolden, thank you very much for your time here and you're passion, your here and you're passion, your interest and your ability.