>> in regard to eliminating saturday service as you know we are concerned about this in a variety of reasons the world component but also as a small-business person but it will impact a small-business owner who really depends on as much as possible they are not corporate, they don't have male runners to a package of their stuff and should it over to the post office the owner has to do it and they have to go do it and the small business been on the delivery as well as making sure they get their mail coming in for the supplies. how do you respond to that? >> that small business owner, i'm talking small, 1500 employees >> as we have looked at what will be the best day if any to eliminate the delivery saturday is it generally the volume is

about ten to 15% lower on saturday and the rest of the week we will keep post offices open on saturday so people will have access to our 30,000 plus post offices. >> shipping packages and so forth. >> and we would be able to provide that service. now we will not be running what we call outgoing mail that might set a would go out on monday but they would have the access to the services. >> i have questions i will submit for the record and go from there. >> thank you, senator begich. previously as somebody mentioned the 3 billion-dollar figures of savings annually for eliminating the saturday delivery is that your number also? >> that is our number, yes. >> next, senator pryor. >> let me start with the federal employee health benefit program i am curious about the numbers that you think you can save a

else tell the committee once again about how much you think can save. >> we've been frustrated to resolve this retiree health benefit payment going forward and truthfully like i said in my opening statement any other company would have been bankrupt so what we've come is gone back and taken a different look and what we did is we sat down and thought rather than arguing about whether or not we can get the money back from them we will present a different approach and that approach was how he eliminates the need for the prepayment by changing the cost and the health benefit program savitt lagat with any other company would do and this is the way that it breaks down. number one we think with 1 million people in that plan we can pull the costs down. our experts told us between eight to 10%. i will write a check this year for $7.2 billion for health care

without refunding money and it's almost 13 billion. so you pull the cost down eight to 10%. second thing is medicare. we are one of the largest contributors to medicare in this country we do not require people to use medicare and we have about an 80% usage for medicare and about 75% for bea. we knew that the current retirees in the future retirees using medicare will pull those numbers down jerry to the tune of around $20 billion over the course of time. the third part of the proposal is changing the way that we provide health benefits to the current retiree is what we would do is not take anything away from the current retiree is what we would freeze them at a certain level and increase, we would increase the money going to them to pay the retiree health benefits based on the cost for the plan so we would have very good control. the fourth thing would be for

people like me. capped payments going forward so when i retire i will not have the same percentage that you see the federal government, 72%. it might be 60, 55, the way we work through this we've been able to completely eliminate the need for the refunding. it's about $46 billion at the same time, the overall cost. >> has understand your proposal, you would actually lead? >> that's our proposal. >> you know what impact that would have on the rest? >> i would have to believe that optimistic. >> in terms of the dollar impact would not be significant. islamic what about on medicare? tell him again about the impact you think he would have on medicare. >> we think that right now we

will spend and add about $1.1 billion of the medicare fund this year. we spent about 24 billion. we know who increased medicare and it's our feeling we pay into medicare now we should have full benefits of it. >> let me ask about workers' compensation i think that's an important issue that sometimes gets overlooked and we have some ideas on the worker's comp reform. >> we are in agreement with what is being proposed by senator collins and we also like to explore what a lot of the states do we are proud of the fact of the last ten years we've improved the safety rate and we are the number one voluntary protection plan as far as we have more facilities certified and the accident rates have gone down from the problem is the costs continue to go up so we need some way to control the

costs. senator collins is a very helpful and we would like to be able to take a wide look just like we've been looking at the health care how does the private sector do it that is what we would like to do. >> why mtv, one bit of warning you have to remember when you're doing the workers' comp reform people, state and federal government should do from time to time remember the goal of the workers' comp is to compensate the workers and sometimes in an effort to find a lot of savings the workers can get left out. >> improve the accident rates and do the right thing that reduces the accidents and then go on a worker's comp. >> it sounds like you've had a fair amount of success in reducing your accident rates. >> we've done a good job, a lot of programs and we are proud of that fact and i think it to the cut from an employee's standpoint when you have a person come to work every day he

we look at how to find savings and cut our spending and% term mccaskill part of this is to make sure that every single sacred cows that everything >> everything is on the table. >> including executive stuff as well as facilities and vehicles? >> we have a proposal that we are going to be implementing reductions in health care contributions for the executives. we would be at the federal rate in three years, 10% a year and that is one of the recommendations made where we >> the relocation expenses for employees, have you taken care of that? >> yes, sir. estimates before mr. chairman. >> thank you, senator pryor. senator carper? and then senator coburn.

>> you have a meeting at 3:30, d want to go ahead? >> no, no, go ahead. >> please, go ahead. it's been a call is the operative word. >> we put back to the restrictive business model. i sit here and think about we're talking about the editorial changes of the $55 billion over 40 years how does it take 40 years to figure out $55 billion off in terms of what was compensated? the absolute stupidity of congress and what we've done is totally amazing to me.

>> the other thing i've heard and i've had this discussion with every postmaster general since i've been in congress is the revenue estimates. the revenue estimates we have for 2020 are absolutely in exaggeration that means 401st class pieces of mail nine years from now will go to every household in this country i don't believe it. i don't believe that its half of that so unless you are going to double the rate on the first class mail the revenue estimates are totally bogus and every of revenue estimate that i've heard over the last 12 years has been bogus coming from the postal service so we're looking at the numbers of 39 billion pieces of mail first-class mail i would bet you $1,000 right now mr. postmaster that it won't be half of that nine years from now. >> the technological change is coming and unless we anticipate we are going to be six years

from now doing the same thing >> the third point i would raise is standard mail and partial service is important to the business and i know that you are worried about the impact of pricing on the business but the first class mail is going away and unless the business model adapt to that it doesn't matter what we do senator collins or senator carper's bills it's going to be a short-term fix that is going to be short-lived. and so i would caution us to think challenge the assumptions that are being made like mr. o'hare, challenge the assumptions being made and when we think we figured it out then go to war three measurements again before we cut to make sure we are not like we were in 2006 and i will remind my colleagues in 2006i predicted we would be

back here. i actually voted against postal reform bill because we did not anticipate. we did not fix what we knew and as a matter of fact you always said we did at the time so do we sit five years later not having fixed the problem because we didn't measure three times and then cut. i'm not blaming anybody for that. it's because the assumption change because the scenario we laid out were too rosy. we fixed a lot of things and if things would have been worse had we not done at now we find ourselves here again. just as you said taking the economy out of the equation, first-class mail is going to go away anyway regardless of the recession. the technological changes. so i would caution us i think that we are going to come together with a great bipartisan agreement on how we offer the things that are needed.

this isn't a partisan issue in front of us but i think we certainly need to think way down the road and we certainly need to provide the postal service with the effective means of running a business that allows them to make changes based on dynamic changes that they are going to experience in their business and if we don't do that, we will not have fixed the problem and with that high yield and will submit questions for the record. >> thank you, senator coburn. senator carper? islamic it is the lack of certainty and predictability, a great deal of uncertainty. a couple of years ago when chrysler and gm were going to go out of business people stopped buying cars and the first question i have mr. postmaster general was given the uncertainty and is the post office are going to be around another year when our three or four months from now what kind

of impact do you think that lack of certainty and predictability is having on your business and the devotee to book more business? >> i think that uncertainty has a tremendous impact just this weekend i got an e-mail from my chief marketing officer and he was asking about a couple customers who were worried about doing business with us in the small package area and i told them i said i will call the company's and reassure them myself that we will be okay. we have to get stability in the systems and we've got to address these issues long term to senator colburn's point and i agree 100% this cannot be a short-term fix. we have to not only look at revenue through 2020 we have to look at the revenue beyond that and make sure from the postal service standpoint we resolve this issue now to give the postal service the flexibility to manage going out in the future. >> i would say to the colleagues what we need here is not the

dealing with the symptoms of the problem. what we need to do is solve the problem. as didier as the situation as i certainly believe it is not a hopeless situation. this is a problem that can be fixed and there is it can be provided. from the folks that work with you at the postal service but may be a greater extent to the congress and the administration and working with you and the other stakeholders. i'm going to go back and talk about the auto industry for a moment. it's not a perfect comparison but there are some points that are relevant. number one the auto industry two or three years ago had more workers than they needed given the demand for the product. number two, the benefit structure for the folks working for them was too high. number three they had more plants than we needed, and what happened is a lot of people think about the federal bailout to the auto industry. as tax payers we go back every

dime that we invested in chrysler and gm. we are not talking about a bailout in the postal service. we are talking to that is whether the postal service will have access to 50 or 55 or $60 billion that appears to have overpaid their retirement system to a federal employees retirement system it's not a bailout. should the postal service have access to the money a lot of people from the group believe arguably could be drawn back and returned to the postal service allowing the postal service to pay down their very conservative retirement schedule for the retiree benefits. very conservative approach. but here as i said before the three things the auto industry needed to do. there were three things the postal service needs to do and the question is are we going to let them? i'm not interested in laying off

you or anyone else lead off the tens of thousands or hundreds of thousands of postal the employees but i think that you resist by about a quarter of the last six or seven years that's a lot of people and maybe 200,000 or so you have about another 100,000 folks that will probably leave through attrition and people retire and say that's enough i'm ready to go on with my life and about 120,000 or so who if incentivized would have encouraged to retire would actually encourage or retire and the question is are we going to make sure we have the resources and the cash to incentivize those people but run the numbers and think about this just run the numbers for what it cost to incentivize 120,000 people to retire we can look at the auto industry and they had more people who to go for the retirement than they expected. but if you offer the retirees say $20,000 may be 10,000 over the period of time to take over the retirement to go ahead and

retire early how much will that cost? if you're trying to get 120,000 people to take early retirement that works out to about $2.4 billion. the overpayment to the federal and please retirement system is about $7 billion. we are talking about using one-third of the overpayment to the system that would enable you arguably to reduce your headcount by another 120,000 people beyond the 100,000 that would bring your headcount down if i'm not mistaken i think close to 400,000 people, something like that and my sense is that would be an ongoing enterprise much as the auto industry is going forward. the other thing the auto industry has done is they've put on their thinking caps and how to come up with great looking vehicles and electronically it is much smarter vehicles and in your testimony when you talk

about how to use the digital approach and things like that that would enable you to actually capture some new business and my friend tom coburn is gone. he talks about first class mail going away and will continue to be. the question is are we smart enough for the postal service to come up with new products, and new innovations and are we smart enough and the congress to let them market those when they come to work? but me ask you if i can the company drawn into this and thank you very much for coming. i'm glad you are able to come on short notice when i was the governor and treasurer we used the company a lot and thank you for that service and this service as well. >> [inaudible] >> thank you. we used the group a lot helping with our personnel and issues in the state and obviously they are

one of the company's. so here we have independent sources both highly regarded siegel and hagel and the inspector general which has a different view there's been this overpayment. we don't ask the gao would you take a look at this? would you take a look and see the work the group has done and the auditors within opm. >> that is an offer we might want to take advantage of. >> have you had the chance to meet with the folks to understand what their assumptions are? >> i know ever staff has and there has been communication not only with them the the other studies done and we welcome the gao's participation in the sand

with the committee staff in helping the committee decide what that fair and equitable standard should be. >> i'm over. let me stop there and say thanks for giving me a few extra seconds and thanks for the response. >> cementer mccaskill. >> we were in the middle of hearing the 167 post office closings being proposed in my state 85% of those are in the counties of less than 50,000 residents. i spent a lot of time in my state going around outside of the urban area the last month i worry that the transparency of the process and the last time you testified before us senator pryor asked the question to my knowledge that question hasn't been fully answered has there been time places have been removed from the list following the public comment and the

comment process ever had an impact on the decisions, the initial decisions to close. >> i would have to double check on that as far as there have been cases i will double check. >> if you could get back on that i want to make sure this isn't a dog and pony show for these folks some of their hearts are breaking over this the other post offices are going away and i want to make sure the process is fair and transparent. the other thing i want to talk about is the five day delivery and i am one that is in the camp of first of all several members of the savings as you know there hasn't been a consistent number you quote one number the regulatory folks said it was half of that and i'm somebody who is worried about the spiral of the five day delivery. it's a marketing advantage the postal service has a six day delivery and it seems to me that we ought to be focusing on how to get better advantage of the

marketing advantage that mitch we have in the market and no one else has that saturday delivery is something nobody else can offer and have you consulted with the newspaper magazine folks about the impact that will have on their business model? >> we've spoken to the newspaper and magazine and there was some concern on their part about the smaller town newspapers that have saturday delivery generally one day a week. >> the other thing is coming and i know this may sound corny and 90 and frattali initial that i had the opportunity to go through a box of letters that my mother had from my grandmother's house that were my letters i sent to her in college and as we went through these letters i remember through history how many times in history courses i had taken the gaps in history were filled in with letters.

we had a lot of best-selling books that were letters between everything from the founding fathers to the soldiers in the battlefield, and i am not sure that there's been a marketing campaign about the value of their written letter and what it means and how it is preserved and what it means to families. my kids are in college. i don't have a box like that. i had to impose the will you can't get money by text message. [laughter] they didn't even -- we were not even having conversations. i was getting gibberish spellings need money 2day. it was ridiculous. it is a longing in these uncertain times for some of the things that have provided stability over the years and just as we have a place in our

hearts for the reliability of the service there's also something special about that piece of first-class mail knowing that it's come from somebody you care about its bringing you news, and i think that while you have done a great job with the flat rate delivery i'm sick of that guy. [laughter] >> we love that guy. one price, one price. it works. has your business model shown this works? haven't you increased the amount of packages that your handle on that one price? stat absolutely. >> so i really believe if somebody would begin to market the value of sending a written letter to somebody that you loved you might be suppressed redican for your christmas season. i know the christmas will help, christmas cards are part of the culture that we value, but i think that to give up i disagree dr. colburn. i don't think we should give up

on the notion we are going to sit down and write a letter and put thoughts and prayers and hopes for somebody that we care about and we are going to just be electronic from here on out. i refuse to let go of that and i think that if you do that you might be surprised on how you can stabilize first class mail. it's more than bill paying. >> we agree 100%. let me just say moving away from any of the traditions we have in the sixth day delivery to the post office, they are all terribly hard decisions because we touch american lives every day six days a week. we have programs we deliver one we run in schools where we try to teach the kids how to write letters. it's been successful but it's something we have to keep pushing on because a lot of times the schools are interested in teaching computer skills versus writing skills but i will take that under advisement. the other thing we won't be

advertising mail this fall we are going to put advertisements on tv talking about the volume of mail, the physical connection and that somebody comes to see you every day and there's a lot of value in that. the unfortunate thing we do face is just the technology behind the bill payment. that pays so much of our overhead and so much of what we do every day and i think if we don't look at all these changes that we will never be able to recover financially. >> and i get that and i know we have to make painful decisions but i just think it's important that we continue to look at the processing network and maybe moving to the curbside delivery. that is a huge amount of savings estimated also. i would rather be eliminate everything we can that is realistic before we get at the essence of the six day delivery and i feel strongly about that and i know others disagree but i want to go on the record i feel strongly about it.

thank you mr. postmaster. >> thank you senator mccaskill. we are open to all suggestions and yours is wonderful. passionate letters for those we love. >> [inaudible] [laughter] that was meant to be positive actually. we had a great time in the last committee for your efforts there and i don't know if it was mentioned i've been wrapping up meetings in my office but i

think it's important to note the devotee of the postal employees for the work they do every day. they seem to be getting lost in this mess and i think it's important to note we have a lot of hard-working people in my home town and i know every person there i've known for 22, 23 years and i have been to many retirements and other communities, new postmasters' coming and being there and they are so thrilled to go through the chain and be a hint of something very special, and i don't want that lost in everything we are trying to do and i never said the challenge. we have met everybody here and often this we met in my office in both the real fiscal challenges and it is unfortunate. it's kind of sad and i feel melancholy in that we have an institution like the post office going through these changes but here we are and that being said i'm wondering if the 2015

deadline that you've given yourself to meet the changes is to mcginn dishes or you feel is just about right and what pushback you think you will be getting along the way. >> first of all let me just comment on your statement about the employees they do a great job as people would have looked just in the past couple of weeks with her rican aye reena and we give people the next day making sure the male got delivered and the process through the bad winter this year so i appreciate your comment and it's something we take very seriously. from the standpoint of our plans we laid out a plan that includes changes both operational with of the benefits it is an aggressive plan what we are looking at is trying to get profitable by 2013 when i say profitable is about a billion or $2 billion but that does is allow us to start paying

down the debt and allows us to eventually get in the position where we will be able to make important investments. we need to do something about vehicles. there were other investments we need to make but more importantly than that is the fact that we need to stabilize our finances. a good stable postal service as i testified earlier is critical for the american economy. critical for the way people feel about the postal service. every corner i have to report lost and go through the same discussion and they can't get their head above the water and their antiquated. none of that helps because it potentially scarce the business away so i'm very focused on getting the profitable, getting the changes made in the network's, getting the changes made in the flexibility with employees. it's critical that we get to that point as quick as we can because the revenue will continue to go down so it's important we get to the point where we can stabilize and then

continue to work the way forward from that point. spry i appreciate one of the things i'd appreciate about this issue and i've only been here about a year and a half now but i have appreciated the full full approach and i just a lot of tough questions privately in the office with folks that have come in and i feel very direct dancers and it's important to have that coastal's to understand the problem and get up to speed so we can make a proper decision here. do you think a lot of these changes will such as eliminating the saturday service will prevent -- i want to see because it is on my notes a death spiral or just such reduction in consumer usage it will get out of control and you won't get to the profitability breakeven point? >> i think the failure to act on

these issues to get stable will result in a death spiral. i think that if we continue to try to make incremental changes going in with one swoop and making big changes we will cause every year we will be in the situation we are reporting losses said you have to make this cut and move on from there. >> thank you for coming today. how do you view the postal service proposed plans in line with getting the network work force and competitive do you think based on the volume of the mail and etc? >> we've been talking about the need for the network realignment for several years now and that's an important step in the proposal to cut plans from 500 to 200 is a noteworthy step. >> is the time for inappropriate for the aggressiveness? >> it's going to be tough by 2015. a lot of stakeholders are

involved, a lot of plans. it will take a plan and everybody coming together saying we think this is important and we are all going to get behind it. >> the timeframe and anyone can ship them on this comegys think we need to move? i've been here a year and a half and i discussed about the way things are done here, the lack of bipartisanship and come artery. it's gotten better with certain people but all in all we should be doing a lot better. what is the time frame? i don't see us moving too quickly on the host of things and i hoping it doesn't come down to -- from all the postal service shutting down and we are going to be in the tenth hour 1159 trying to ram something through that doesn't make sense to you have an indication mr. chairman or ranking member what is your time frame that you need to get this done? >> as we proposed, we would like to see the long-term comprehensive legislation by the end of september.

we have asked for the ability to take over the health care benefit we can resolve the pre-funding issue that way. it's a tough decision but it has to be made. let us move to get our money back. it will stabilize the finances. i'm offering right now with a week's worth of cash a 65 billion-dollar business. nobody would be doing something like that. >> you need congress to move by the end of this month. so mr. chairman whatever we can do. we have to figure this out to the line type of waiting until the last second. i hope we could work on a bipartisan manner and in a manner that the president will sign the bill to get this done. come on. this is a no-brainer, folks. >> i agree with you don't know that we can meet that schedule will the postmaster has given that is you have that

comprehensive legislation by the end of september and i don't think we can and interested he said in his testimony that the president will submit a plan to meet the postal service fiscal crisis along with his recommendation for the joint special committee of 12. i still would like our committee to market a bill that responds to both with the postmaster has proposed and other proposals because i feel we've got particularly but senator collins and senator carper has much or more expertise as most people in the congress to and i know that you're the ranking in the subcommittee, so i am committed to moving this along and the postmaster has been pretty clear that even assuming that he defaults on his 5.5 billion

summer, 2012, he's not going to what i'm saying is i agree. we should put together the legislation, pass it and give before that so you are not the point we are saying tomorrow the male is not going to be delivered. >> are we going to fight by the post office, too? >> i hope not. on the agree. >> i know you agree. you are one of them trying to work together as was the gentleman to my left and the leedy to my left. so we need to kind of push our colleagues and leaders to put this and make this a priority. thank you. >> thank you i know if you had another hearing and i appreciate that you've been able to return to ask questions of the panel. >> thank you very much, mr. chairman.

i will say a few words before going to the questions. in 2006, congress passed a bipartisan legislation to modernize the postal service. now as the economy faces the challenges nearly $5 billion per year, pre-funding payments required by the 2006 law threatens the postal service with insolvency. the core of any proposal post service must address the refunding issue while eliminating or offsetting the payment. other reforms likely will be needed, some of which are under the postal service's control and some which we may need to enact the legislation. i express my concerns over the past proposals including

delivery reductions arbitration changes and facility closing. s chairman of the federal work force committee i also have concerns over new proposals released by the postal service on health and retirement programs and lay off. congress must be cautious when affecting contracts negotiated in good faith. the house oversight committee is also released legislation. however, i do not believe it is a responsible way pleasing one of the nation's largest employers into receivership by stripping the postal management of its authority will not address the fundamental problems. the postal service needs more flexibility, not more

bureaucracy. the postal service is operating on borrowed time because congress has not yet acted on any proposals. failure on our part to the enact legislation could have negative consequences affecting the nation's economic recovery. i remain committed to ensuring a viable future for the postal service and i look forward to continuing to work with my colleagues to craft legislation to achieve those goals. i have a longer statement, mr. chairman, which i will submit for the record. director barry come in the 1980's the six federal agents have had their own health insurance plan available to employees in addition and

eliminated their plans most notably the federal department insurance corporation in 1998 the fdic had to pay millions of dollars to bring employees back to the sehb after they found that the plan was more costly. my question to you, director, is how feasible is breaking the postal employees breaking off from the sehb and what would be the consequences if they ever wanted to come back? >> mr. chairman, think you for your question and it's always good to be with you serve with the agencies that you described that of broke away from the fbhp

and came back and found that the savings they projected or not to be had this is one of the reasons that the administration is proposing that we move extremely cautiously and carefully in this area. the administrative overhead cost of our .08%. we provide choices and plans in all 50 states and including urban and rural areas. to provide health care. currently, the co-payment cost share for the postal service is less than provided by the federal employees for the same plan. so that is negotiated, but it is a 10% differential.

in other words, the postal service pays 10% more than the federal government pays. the employees in the federal plans pay a higher co-payment percentage. so when you look at all those choices i fink we need to move very carefully before we would remove. we have over 9 million employees in the market pulled now in the federal plan. each year we consistently deliver a rate increase that is below the market rate increase in the country and we will do that again this year. i don't see how with 600,000 to a million employees going off on their own with an age that is higher than the pool they are going to achieve the savings the postmaster general with all due respect has projected so i think

we need to move extremely carefully and be very cautious and study this extremely carefully before we would recommend moving forward. >> the postal service also considered leaving the program in the 1990's but nevertheless my question is didn't the postal service leave at that time? and what those reasons apply today? >> thank you, senator. in the 90's we looked at leading but there was a decision i think it is pretty much the same decision that happened to the fdic the fasb economy rules would have required us to put the health care cost on our books. since then the fact that we are pretending, that issue is no longer an issue than it was back

then. what we decided to do with exploring the option is to see if we would be able to take the cost down through the plan. i do not disagree at all with the director. this is something we have to study carefully and i think we have to study it jury quickly because what we are proposing is not unlike what any other large corporation does when you go out on to the open market and get the best price for the health care plan. let me assure you this i do not want to do anything that would have a negative effect on the employees or their retirees. we want to the right thing and we are trying to figure out how to manage the cost going forward and this is one of the ideas we had. >> i know my time is expired. i have one more question. >> how can i say no to you, senator. >> thank you. your testimony once again brought the issue of modifying the collective bargaining

process to require that they consider the financial health of the postal service. the cbo analysis in the last conference continued this provision did not project any savings on this issue. my understanding is that the trade is routinely considered the postal service finance. my question is how has the gao done in the analysis suggesting there would be cost savings from this change to the arbitration process? >> in the work i did not refer to it in my statement today but we did in the business model issue dillinger rego we said that would be an issue for congress to consider going forward as it thinks about collective bargaining

agreements, what's affordable for the servicing the situation where the contracts go to arbitration to ensure that would be put on the table because the precedent in the past has been that there is in mail volume and revenue to pay for the cost increases and things of that nature. we are looking at a very different scenario now and it is s testified as the postmaster general testified has been discussed here today that we look forward as a bright one there would be the letter-writing campaign and people would begin to write more letters that the fact is many bills are now going to be prepared and distributed electronically and that has been the lifeblood and a lot of the financial literature as well, the czechs and things of that nature from the banks, those are all moving digitally now, so it is in that spirit we made the discussion for the congress to consider. >> thank you very much. >> thank you. finally, senator moran. >> i know you're disappointed i

returned to the committee. [laughter] >> it's always a pleasure to see you. >> you're so kind. >> i can't speak on behalf of the witnesses on the second panel but no, we are glad you came back. >> i have been to a corporation subcommittee hearing on the homeland security, and do want to ask the postmaster general a couple questions. first i would like to commend him for his efforts to find solvency in the united states postal service and want to be an ally working with him to do so and hope that he is asking his staff tall levels of the service for suggestions about efficiency many times i think the best and brightest ideas come from the people who work at the postal service for their suggestions about how to improve the bottom line. 3700 post offices is something certainly that caught my attention 134 of them are in kansas and i don't want to be

overly provincial here but i always want to make certain that rural america doesn't get just forgotten decisions made in the nation's capital. .. the refunding of the insurance and health benefits. not that i mind that, but i would love to know if there are things that community members can say, evidence that can be

garnered, facts that can be told that will alter the decision of the post office that this community post office would continue to be in existence. my impression is that almost without exception, the post office has already made up their minds. they're going through the motions. we never get any indication there is anything we could do to cause them to -- different conclusion than closing the post office. what are they missing? what am i missing? >> the key thing is to make sure that our people understand what the communique is faced with. when you look at what we have gotten proposed, our criteria, offices that have two hours of work on a daily basis. it is generally under $20,000 in revenue. one of the things we have to

keep our eye on is make access impossible for people in states like kansas. you do not want have two or three post offices within a certain area to get consolidated and have people driving 20 miles or 30 miles to get postal services. that is the key thing. the constituents need to make sure that whatever we are proposing is reasonable for them, meaning, a couple of miles, 5 miles to drive to the post office. we take universal service very seriously. we want to make sure that we are not shutting customers off. the other thing i would encourage that if customers have ideas, we are all out years. we encourage businesses to step up to write a contract to provide services. a lot of times we can provide access seven days a week where they may only get a couple of hours a day in a post office.

those of the things i would encourage. >> if there is a written criteria, and checklists that they can come back from the community meeting, i would love to see what that criteria is. so that there is an opportunity for the communities to make the case that matters to the post office. i am an ally of yours and finding that when-when combination of the village post office shinnying -- sharing personnel with a grocery store or drug store. they matter a lot to the community. i wrote you a letter, mr. postmaster general, on august 10 and you have responded. i thank you for that. one of the things i want to raise that i did not understand or see the answer to, is, the united states code provisions as the postal service shall provide regular postal services to rural communities and small towns where post offices are not

self sustaining. no post office shabby clothes solely for operating at a deficit. it needs to be assured to residents of rural and urban communities. when you have a list of 3700 post offices, my experience in 14 years as a member of the house and just eight months as a member of the senate, the post office i worry about the most about when the postmaster is about to retire in a small building -- in a small town or the building has deteriorated. what you expect to be able to do with this legislative language -- what do you expect to be able to do with his legislative language? in the absence of that elimination, how can you close to 3700 post offices? >> we do not want to ask you to make changes in the language just because -- there are post offices out there that lose money that are very large post offices and serve thousands and

thousands of people. most of our offices do lose money. what we are looking to do from a standpoint of reviewing offices is to come up with a fair and standard criteria. that was the idea of post offices that have less than two hours of businesse coming across the counter. when you have that criteria, then you can look at it very objectively and like we mentioned earlier, the geography. is there a place we can consolidate? is there a store that we can contract with? that is the way we want to approach it very we do not want to have a situation where a postmaster is afraid to retire because we will close the post office. in the past, had problems. we want much more transparent criteria said that the community knows where we're coming from.

>> i just came from a homeland security appropriations subcommittee worrying about the people who have suffered from disaster. one kansas town was struck by turning it appear now that the building is damage, they are having a community meeting. this is the wrong kind of message to tell a town trying to figure out how to recover from significant damage from a tornado, and now that they have suffered this natural disaster, the post office is contemplating closing the post office. >> i will look into that right away. office. >> i'll look into that right away. >> thank you, sir. thank you, chairman. he might do much to make a brief statement before we move onto the next? >> thank you, mr. chairman. i know all of us have so many more questions than we have a panel that we've been waiting for for an hour. i just wanted to make a comment and also give another assignment

to mr. trini. -- mr. herr. first, it's important to realize that if they postal service defaults on the $5.5 billion payment for what the retiree health benefits fund, that unfunded liability does not go away. and in fact, there is an unfunded liability in the fund that i believe is in the neighborhood of $56 billion. and i think that is important because even if we restructure and they really salute the postmaster general for his sweeping proposals. i think they are very construct days. whether i agree with them all or not, they are very construct it on what they need. but the fact is that postal

service has huge unfunded liabilities and i can see general agreement with that. so, my assignment or request to you, mr. herr is, if we were reinventing the postal service from scratch, a de novo approach, how would restructure? would we have a chilling with the federal government's retiree health programs, employee health programs, pension programs? would we give it access to prior work to $15 billion from the treasury, which is obviously an advantage that private enterprise doesn't have. would we give it hard to launch in setting rates and if they deemed who it delivers to acquire i would like you to help us figure out what would be the

ideal while still ensuring that we are providing this absolutely vital linchpin to our economy, a linchpin that is not only important to the 8.7 million people who work in the mailing industry, but also has to bring this together as a country. after all, that is why the constitution mentions the postal service. so i would like your ideas on if we were starting from scratch, how would we sat forth this vital institution? thank you, mr. chairman. >> thanks, senator collins. i will send a request to gao. thank you to the panel. you've been very informative and very start. i want to say again, there is a clock ticking.

$5.5 billion, the postal service owes. you're not going to be sued clearly today that by next summer or, if nothing else is postal service, you're going to effectively have to start delivering the mail. and that should get a spyware can come even across party lines. thank you very much. second panel please come to the table. cliff guffey, president of the american postal workers union. louis atkins from the postal [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> a reminder that you can see this hearing in its entirety at our video library at c-span.org. the center for strategic and international studies is hosting an all-day forum on intelligence and the terror threat. it begins with remarks by janet napolitano in about an hour at 8:00 eastern on our companion network, c-span3. in a few moments, today's headlines and your calls live on "washington journal." the nomination of wendy sherman. and about 45 minutes, we will focus on jobs, the economy, and the president's upcoming speech to congress with karen kerrigan, president and ceo of the small business and entrepreneurship council. dr. francis collins