night with the leaves falling and the various towns, one can literally wonder about such things, but i am not aware of such. host: our guest has been patrick halinan, superintendent of arlington national cemetery. also joining us is kathryn condon, the executive director. both of us think you for telling us about the work of arlington. -- thank you for telling us about the work of arlington. this segment part of a series of segment looking at military week. you can find more information on our web site, c-span.org. arlington national cemetery just one of many segments planned. tomorrow we will look at the coast guard. later on we will take a look at information regards to the armed forces. you are looking right now at a senate homeland security committee markup, a hearing on the u.s. postal service, the overall. it is set to start at 10:00.

the senate governmental affairs committee will look at a proposal to help the u.s. postal service avoid bankruptcy. it lost 8 billion last year and likely to post larger losses when the 2011 budget report comes out in mid-november. that hearing will take place at 10:00, and it will start shortly.

>> good morning. welcome to this markup. we don't have six required for a formal quorum to begin. but i thought perhaps we would be able to expedite the proceeding if we begin with some opening statements on the main though not only item on our agenda today, which is s. 1789, the 21st century postal service

act of 2011. i have a statement i'm going to include in the record without objection. just thought i'd speak for a few moments. it's been a real honor for me since i came to the senate in 1989 to serve on this committee first in its earlier iteration as the governmental affairs committee, and then now for the last several years as to homeland security and governmental affairs committee. i would say that some of the most productive work that i have had the privilege to do has happened in this committee because, i think, of a couple of things. one, it has a very strong and real and i'd say proud tradition of bipartisanship. the second is that the committee has not shrunk from confronting real problems and presenting to our colleagues in the full senate solutions that are

bipartisan. and that therefore more often than not have gone on to be adopted by both houses. notable among the list of, as i look back, just in the last decade, after 9/11, this committee, the attacks against america, 9/11, this committee originated the legislation that led to the creation of the department of homeland security. we also raised the bill that was adopted that created the 9/11 commission which did, as we all know, an extraordinary independent, nonpartisan investigation of that attack n us to 9/11/01, and reform legislation to make sure as much as we could that nothing like that would ever happen again. then this committee adopted that

legislation in two iterations over the next three or four years which constituted together the most, i believe, the most significant reforms in our national security, homeland security apparatus since the end of the second world war. and a lot of other bills, we have a bill on cybersecurity that's now working its way through confronting another big challenge to our country. i'm very proud and grateful for the work that this committee has done and i am in -- and in particular the last couple years to work with senator collins as closely and productively as we have. today this committee confronts another big problem facing our country, and i'm very proud that we are, four of us, the ranking member, the chair of the subcommittee that overseas -- oversees postal, senator carper, and the ranking member of that subcommittee are presenting a bipartisan solution, we believe,

to the crisis that the postal service is facing today. in some sense i was thinking this morning this is a -- it's not small. it's not a small problem. but it is a kind of mini version of the macroproblem that we are wrestling with now which is regarding our entire federal government and the increasing debt that we are accumulating that will shackle and diminish our future as a country unless we deal with it. of course that's being played out now in the so-called supercommittee. but the postal service is a -- really an extraordinary american institution. begun really right at the beginning of the country in the 18th century. and yet it's not a relic. it is a great national asset and it -- there's well over $1

trillion of our national economy that's dependent on the u.s. postal service. but the sad reality is that it's gone into what i fear will be a death spiral unless we do something together to rescue it. this year the budget of the u.s. postal service will be $65 billion, approximately. its expected losses this year are going to be about $10 billion. it's just not going to be able to continue operating in that way and be the postal service that this country has depended on, including the promise of universal service. $10 billion deficit. why has this happened? there are a lot of reasons. a lot of them may be internal about the management of the

organization and the postmaster himself has asked for authority to make the operation more efficient. i think we have given him a lot of that authority in the bill we bring before you today, but the world has changed. and particularly with the advent of the internet and electronic mail, the volume of mail that the post office is asked to carry and deliver has diminished greatly. and obviously in recent years the post office, like every other economic entity, has been affected by the economic recession that we have been in and some sense are still fighting our way out of. so the status quo is not going to work. and therefore senator collins, senator carper, senator brown, and i worked together very hard across party lines really without regard to party lines to

see if we could come up with a solution to this problem that would change the postal service so that it could survive the 21st century and go on in a healthy way to the 22nd century. i think we've got a substantial proposal to make to you today that authorizes changes in the post office -- postal service that really will reduce cost by reducing the work force, reforming the benefit plans of employees of the postal service, and by consolidating services that the post office offers the american people and american business. we explicitly do not do what some people are asking us to do which is to allow an increase in the price that the postal service charges.

so-called exigent increase. there were some who were urging we legislatively override the postal regulatory commission's denial of the post office's request for an increase of that kind. and basically our judgment was that if you -- the last thing you want to do with a business when it's in trouble is to raise prizes because -- prices because you'll end up having less business than you had before. so we think that this proposal we have made will enable the postal service to save billions of dollars by one estimate, credible estimate that i have seen, without any change, if the postal service just goes along on the status quo, by the year 2020, it will be spending $85 billion a year. if this bill is enacted and the powers would give the postmaster to work cooperatively with his

employees and others are enacted, this estimate says that the postal service will be spending $65 billion a year which obviously is a $20 billion saving and i think enough to allow it to go on into the future. i know that there are parts of our proposal that are controversial. frankly from both perspectives. some people think parts of it are too tough. some people think it's not tough enough. we think the four of us that we are presenting to our colleagues on this committee a bipartisan solution to a big national problem that can pass both houses of congress and be signed by the president. of course to say the obvious, it's not perfect. there are a lot of amendments that have been filed with the committee that can help to -- some of which can help to make it better, some of which we think will not. we oppose them. we look forward to the good debate.

if possible i would like to finish our consideration of the bill today. i know that our staffs have asked your staffs to see if we could have the option of reconvening at 2:30 this afternoon if we can't finish this morning. we'll follow a process that i think worked well with the department of homeland security authorization bill where we'll go back and forth from democrat to republican and back with amendments in the order of seniority until we are finished. with that it's my pleasure to call on senator collins. >> thank you, mr. chairman. let me begin by thanking all of our members. every single member of this committee has expressed an interest in the postal service's financial crisis. many of you have put together suggestions, have offered amendments, and i think it's a

tribute to this committee that all of our members have been so engaged on this very important issue. but i do particularly want to salute the leadership of senator lieberman and senator carper and senator brown who have worked very hard, the four of us, have spent countless hours in coming up with a bipartisan agreement that will put the postal service back on a sound financial footing. this bipartisan bill gives the postal service the authority that it needs to restructure, modernize, survive, and thrive. and i want to point out and unassailable fact, and that is that the postal service literally will not survive without fundamental legislative

and administrative reforms. the postmaster general has been very clear on this. he has told us that a year from now the postal service will be unable to meet its payroll. those dedicated postal workers will not be able to be paid. and that means that the mail will not be delivered. in fiscal year 2010, the postal service losses were $8.5 billion. in fiscal year 2009, they were $3.8 billion. in fiscal year 2008, they were $2.8 billion. as you can see we are going in the wrong direction. and if nothing changes, the projected losses for this fiscal year are $10 billion. and again that means that this

crisis would result in the postal service being unable to meet its payroll. jobs are at stake. i think many people when they think of the postal service think of their local post office . they have great affection toward their local post office. if they are a business they may be aware of the postal processing facilities, but the fact is that the postal service is the linchpin of a $1.1 trillion mailing and mail related industry that employs approximately 8.7 million americans in fields as diverse as direct mail, printing, catalog companies, paper manufacturing. the list goes on and on. in our bill we are asking, no, we are directing the postal service to make painful choices

to reduce its costs and not simply slash services and raise prices which would only add to its death spiral. the solution to the postal service's financial crisis is not easy. but it must involve tackling significant expenses in ways that do not drive away customers and further depress its volume. the postal service's mission is to provide the american public with affordable universal service. and -- but as operating costs have increased and volume and revenue have plummeted, we need to allow the postal service more flexibility and give it more tools to remain solvent. no one, least of all the four sponsors of this bill, none of

us is happy with every provision in this bill. it's a compromise. and that is the nature of a compromise. but nevertheless it does not avoid the difficult issues. it tackles the very tough issues in a responsible way. let me just comment on some of those issues. 80% of the postal service's costs are work force related. and that means that painful though it is you cannot solve the postal service's problems without giving the tools that are necessary to confront some of the work force problems. and those are difficult ones because all of us have the deepest of respect for our postal employees, but the fact

is that the work force is too large for the volume that remains. our plan gives the postal service the -- gives the postmaster general the authority to offer a compassionaterlyly -- compassionate early retirement incentive to encourage tens of thousands of eligible employees to retire. the postmaster general's estimate is that 100,000 workers would take advantage of this program. it would be financed in part by the return of a $7 billion overpayment made by the postal service to one of the federal retirement programs. this is a refund that everyone who has looked at this issue agrees is warranted. we had g.a.o. do the final call

on this, and g.a.o. has substaniated that there is, in fact, an overpayment to the first program -- to the fers program. we have not included a provision that was in earlier drafts to refund $55 billion from the c.s.r.s. retirement program because g.a.o. determined that that was not, in fact, an overpayment. there's lots of disagreement on that, but we drop that. we are only refunding the $7 billion overpayment that all parties from independent actuaries, the administration, c.b.o. go -- g.a.o., the inspector general have verified as being a true overpayment. this buyout program will help to right size the work force which again is driving 80% of the postal service's costs. the bill also includes long

overdue reforms to the federal workers' compensation programs. these reforms, too, will save hundreds of millions of dollars and help put more individuals back on the path to work. unfortunately the current program has become an alternative retirement program for too many workers. the postal service which is responsible for some 60% of the claims in the federal employees compensation program now has 2,000 employees, age 70 and older, receiving workers comp. two of them are now age 99. those individuals are never coming back to work. and it does not make sense for them to be on a workers'

compensation program which is intended to be a safety net program temporarily for workers who are injured and then are returning to work. and that's why the obama administration has proposed sweeping changes in the workers comp program. our bill reflects the changes advocated by the obama administration, by the g.a.o. in numerous reports by the i.a.g. of the department of labor which administers the program. on other issues we have provided a -- we have included a two-year prohibition on moving to five-day delivery. our belief that it is important for the postal service to squeeze out all of the costs in

the system before doing this dramatic reduction from six day to five day delivery, and that reduction could come about only if g.a.o. certifies that the savings have been made and the p.r.c. also ratifies that finding, and the savings are still not adequate to return the postal service to solvency. i think this is so important. one company has told me that 18% of our seniors receive their prescription drugs through the mail on saturdays. there are newspapers that rely on saturday delivery. and if we lose those businesses, they will turn to alternative forms of delivery causing a further decline in the postal service's volume. but, again, we are taking a

realistic view. we are saying that if the costs reductions included in our bill are not sufficient, then the postal service would reduce the number of days of delivery. but this should be a last resort not the first option. on another controversial issue, i'm sure all of you have heard from constituents who are very upset about the closure of small post offices in their communities. we'll have more discussion on that later. i know a number of members have been working very hard on an amendment in that area, so i will wait to talk more about that later. there are many other provisions in this bill. it is a comprehensive approach, and i believe that it will accomplish the goal of putting

the postal service back on a sound financial footing. but again, the changes are going to be painful and decisions are difficult ones and i thank my colleagues for working so hard to bring us to this point. >> thank you, senator collins, and thank you for your hard work. before i call on senator carper and senator brown, with the committee's permission, the rest of the agenda is totally noncontroversial. so i would like at this point to move that we consider the following items on the agenda en bloc. and if no member objects report them favorably to the senate. they are the five nominations listed on the agenda and one legislative item s. res. 296, a resolution commemorating the 50th anniversary of the combined federal campaign. is there any objection? hearing none, the committee will proceed to considering en bloc the items. all in favor please say aye. those opposed, no. the ayes have it.

motion carries, and the resolution and nominations are reported. yes. without objection, senator's remarks relating to one of the items on the agenda will be included in the record. senator carper and senator collins have been the leaders in postal reform over the years. did really great work earlier. it's just that the -- which has basically helped to keep the postal service ambulatory if i can put it that way, and -- but the business environment has changed and that's led to this what i call instead of postal reform, postal rescue legislation. so with real thanks to senator carper and senator collins, i call on senator carper who continues to be the chair of the subcommittee of this committee that oversees the postal service, thank you. >> thank you, mr. chairman. thank you very much for the great leadership that you provided and really for i think encouraging the rest of us to

work the way the senate used to. where democrats and republicans and occasional independent actually setaside partisan differences and we try to figure out how to fix things, get results, and results the american people are looking for right now. they want to mike sure we can still govern around here. and the business community is provide certainty, provide predictibility, because without that we'll continue to muddle our way through the economy. and what we do here as much as anything, we provide some predictibility, some certainty. the postal service will be around. it will be around in a different size and different form and fashion to some extent than it used to be. some of you heard, used to be vice chairman of the federal reserve when alan greenspan was chairman. he came and testified before us on the finance committee on deficit reduction. and one of his -- he was talking about health care. if we don't do something about health care. reducing the costs, we are doomed. because everything else is window dressing. i said to him, i said, what

would be your recommendation on health care? senator coburn may remember this conversation? what would be your recommendation on health care? how do you save money. he said i'm not an expert. here's what i would do. find out what works and do more of that. that's what he said. i'd find out what works and do more of that. you mean what find out what doesn't work and do less? that's right. we have actually seen this movie a coum years ago, we saw it with the auto industry. what the auto industry has done is right size the enterprise. they had too many employees. more than needed. more plants. their wage benefit structure bought was out of kilter with the market share they held. they went from market share from 1970 to 2009, from 85% to 45%. they weren't making cars people wanted to buy. all that's changed. two days ago we saw great news reports, auto industry, chrysler, ford, market share up. quality of vehicles up. we have seen this movie how an industry in this country a lot

of people thought was dying has come back. a lot of people think maybe the postal service is a relic of a bygone era and doesn't have relevance. i think it does. i think it has a lot of relevance. senator collins alluded to seven million jobs still are related to the postal industry and need for the postal service to be viable and to do its job in a more cost-effective way. just as the auto industry has right sized, the postal service needs to right size its enterprise. that's what we try to do. they have more employees than we need. they want to bring their head count down. down from 800,000 to about 550. they want to bring it down by maybe 100,000 over the next couple years. this legislation will help them. not by foreign people, laying -- firing people, laying people off, but by incentivizing people to retire. there's 125,000 more postal service employees eligible to retire. we want to incentivize them. and i am a guy who is interested in how do we learning everybody around this table. how do we leverage and get more

with less? and what we are doing here is making sure that the $7 billion overpayment to the federal employee retirement system can be used in part, maybe a quarter, to incentivize 100,000 people to retire. over the next year or two. senator collins said, 80% of the cost of the postal service is people. they just have more employees than they need. this will help them get their head count down to where it needs. they got 33,000 postal services. that's more than they need. it's hard for us to d.e.a. fend the idea -- for us to defend we are paying $60,000 for a postmaster and sell $15,000 worth of stamps. there is a way to make sure that community gets the service they need and may not be with a full-time postmaster there but somebody who will be in and out several times a day. and he they provide the mailing needs of that community. people are looking for to us do senator things. get better results for less money. the other two points i want to make, a lot of health care costs

are involved here. and what we allow the postal service to do is to -- they pay for medicare. they pay for medicare for its employees. they contribute to the federal employee health benefit plan. they are paying twice for health care costs what we allow them to do is have primary source of health care coverage for the retirees who come from medicare. and then create through the federal employee health benefit plan a medigap plan to cover the differences. i think that's a smart thing to do. we give them the authority to norblete the postal and labor unions to see if they can come up with a stand alone, maybe pull out of benefit plan. set up the deal like the auto workers and get better results for less money. senator collins, curb side deliverry. smart idea. we have to work into it slowly. where it does, that might be save -- it might save money. from six days to five days, what we -- we say here if we don't realize the postal service the

kind of cost savings that is needed, that two years from now they are free to go from six to five. in the meantime i urge the postal service to continue negotiateation with the labor unions and see if it's possible to come up with a wage structure so saturday service we could have it. make -- save some money in doing that. the last thing i want to say, it's not enough, i like to say for facing a budget deficit problems in this country, it's not enough just to cut or raise taxes or revenues, we got to find ways to be -- grow the economy. and the postal service has to find ways to grow their business. they have to be even more entrepreneurial. examples, flat rate boxes, partnering with u.p.s., fedex to deliver -- for them the mail of the last month for a lot of packages delivered around the country makes money. this legislation we allow the postal service to do what u.p.s. and fedex does, deliver wine and beer. we allow them to co-locate

service was state and local governments. there are a lot of other ideas, entrepreneurial ideas. one is virtual mailboxes. there are a lot of ideas that they need to consider that are close to their business strategy but make sense. when they do those things we can't get in the way. no ad campaign with home depot, can you do it, we can help. they can do this, pretty good idea what needs to be done. we need to be able to help. the last thing i want to say is this, we have tried, the four of us, in working on this legislation, with our staffs, and all of you, have tried to abide by the golden rule. how would we want to be treated? how would we want to be treated if we were the business customer? as presidential customers? how would we want to be treated if we worked for the postal service? how woo we want to be treated if we are the taxpayers? we try to be -- keep that in mind and be humane to those key stakeholders. i think we can -- can this bill be improved? sure. it will be improved here in the next couple hours. everything i do, i know i can do

better. i think that's true for this legislation. as we go through this markup and to the floor, the idea is to make sure the end of the day, end of the year we haven't just kicked the can down the road. we have actually given them the tools to fix this problem. to solve a problem and restore the confidence that the american people, not just in the postal service but our ability to govern. thank you. >> thank you, senator carper. thanks for all the work you did. senator brown had all the dynamism and creativity of youth to this fearsome foursome. and i thank you, senator brown. >> thank you, i'll be brief, because there's not much more to say. failure is not an option. what i wanted to do is make sure we can make the post office viable. treat the employees with the respect they deserve and try to come up with opportunities to not only retire and reduce the work force but also continue to be employed. as susan mentioned, if we do nothing, it's going to close. in a very short period of time.

all the ancillary jobs that go along with it. i went in it with an open mind. obviously new to the issue unlike senator carper and collins and now you, so that being said, i was impressed by the compromise, the give and take, i know senator carper came in really hard on one particular issue, wanted to focus on one particular issue, and susan, gave a little bit and vice versa. so that was important. i thought was appropriate. i'm looking forward to the amendments. >> thanks, senator brown. let's go, first i'd like to offer a substitute for consideration at this time. and use it as our base text as we debate the bill today. this is offered on behalf of senator collins, carper, brown, and myself. several technical, a few substantive changes. but i believe it's been distributed to the members and the staff. by way of announcement the

deputy postmaster general, ron astroman, is good enough to be here. we asked him to be here specifically so there may be at some point in the discussion fact questions that come up that he will be able to answer that perhaps even our extraordinarily smart and hardworking staffs might not. so i just wanted everybody to know that. if you have questions as this goes on. as i indicated earlier we'll go side to side. beginning -- going on the basis of skennorg. you can pick -- if you have more than one amendment, which amendment you want to take up first. we'll begin with senator levin. every now and then i think you're a rookie, but -- ok. senator brown seconds the substitute.

all in favor. just for the sake of having it be the base, please say aye. those opposed, no. that is adopted. senator levin, do you want to begin? you always have the possibility to defer if you want. >> begin with an amendment. >> ok. >> i think it's amendment number 3, it has to do with the transparency of contracts between the postal service and people with whom they deal. >> that is correct. >> very much supportive of the provisions. first, let me extend my thanks to the four of you, the four horsemen, who have brought this to where we are. the -- one of the provisions in

the bill has to do with the transparency to make sure that we know what the postal service is doing. i was interested in what their contracts were with the folks that they deliver mail for. and that they transport mail for. and that's fedex and u.p.s., and i just thought i'd take a look at those contracts. was told i can't look at the contracts. that the only -- only one person in congress under those contracts is allowed to look at the contracts. they are redacted. and it reads that, the only person who can get it is the chairman of the house subcommittee with oversight responsibility. >> there's a story here.

>> i know there is. >> we don't know it yet, but there's a story. >> that's what i want to find out. i have never seen a provision like this. it's not just offensive to the senate, but it's offensive to congressional oversight. i think it's offensive to the taxpayers of the united states. i just want to see what the deal is. i think senator coburn mentioned that we ought to be delivering the last mile of mail for u.p.s. and fedex. we do. in many, many places as i understand it we do deliver the last mile for them. just fine. i'm all in favor of that. providing it's a fair deal and we have some oversight responsibility to make sure it is. apparently they transport most of the mail that goes by air now . it is not by our traditional airlines which is what i kind of assumed from boy hood is still being done, it's not. it's being done by fedex and u.p.s. and that's fine. it's probably a very identify fishent way to do it. i want to see the contract. so, what i did with the approval

of our chair and our ranking member was notified folks i was going to issue a subpoena and my wonderful ranking member on permanent subcommittee on investigations, mr. coburn, and just to let him know we are going to issue a subpoena to get hold of the contracts. and at that point i was told, oh, ok, you can see the contract. well, with this -- what this amendment does very simply is to provide that u.p.s. will not enter into a contract which prohibits congressional oversight. >> second. >> yeah. second by senator brown. further discussion? senator levin, as we all know, is a very persistent, hardworking member of the senate and he follows matters down trails to which sometimes lead to surprising places. and this one did. is there further discussion? i thank you, carl, for pursuing

this to come to really a totally unacceptable place which we can change with this amendment. if there is no further debate. all in favor of levin amendment number 3 say aye. those opposed, no. aye vs. it. the amendment's adopted. senator coburn. >> thank you, mr. chairman. i'd just like to make a couple comments and then i would like to defer my first amendment and allow senator mccain to take a position. you-all worked really hard on this and there's some good things. but i remember five years ago. >> tom, is your microphone on? >> it's on. i'm not close enough. and i remember what we said then. this is fixes it. i mean that's what we said. the chairman said it, the ranking member said it. you were chairman then, by the way. and we were going to fix it. and the one thing we didn't do in that bill was give the post office the flexibility to run as

a business. and we are making the same mistake again. we are telling them what they can and can't do. there's a lot of positives in this bill. hopefully it will get better as we move through the amendment process. i will predict to you the bill as it's writ yield back the balance of my time now won't fix the postal service. we'll do this again. we don't have the luxury of not fixing it this time. and i have co-sponsored senator mccain's bill not because it's the best solution but i think it's a better one than what has been negotiated. so i wanted to say, i don't lack an appreciation for what you have come up with as a compromise. i think there's a lot of great stuff in it. if you want to get the post office out of business, you got to let them do what they have to do. they have to go to five day delivery quickly. the president says that. the postmaster says that. it's $3.1 billion a year. if you want to get them out of trouble, that's what you got to

do. the other thing you have to recognize is people will adjust to five-day delivery. they are going to come in on friday, all that will adjust. the question is is do we want to wait five years and allow them to continue to lose money, maybe less, until we finally get to the point where we are going to finally say you can run this as a business that meets the products you have and demand you have out there and do it in an efficient and effective way to create viability to recognize and compensate those that serve in the post office? to recognize and compensate and keep the commitments that they have to all the people. this is a slow death. and what -- we have an opportunity to really fix things, give them the power to do what they need to do. i just think we are not going far enough. and that's my worry. and i know my view as a minority . i understand that. but i will predict to you i

probably won't be here when we are doing this again, but you'll be doing it again if this bill becomes law. so the real thing is, we ought to fix it. and that means there's a lot of unpleasantness for us to not allow the post office to close the facilities that they and their management capability think they need to close, no matter where they are, no matter how much heat we as politicians take over that, is saying we don't want you to succeed. you are not capable of making smart management decisions based on volume and delivery. we are saying we'd rather have -- not have the political heat and then fail. so there are two real components. one is you got to go to five-day delivery and quickly. two, you got to give them the capability to do what they need to do to control their costs. if you do that, and you give them what tom has -- other ways to increase their revenue, they'll solve the problem. and we won't micromanage it. and so with that i defer to senator mccain for his first

amendment. >> senator collins, want to respond to that? >> thank you. i just want to very quickly respond to one point that my friend and colleague made. sin he was critical of the 2006 act which senator carper and i were the lead sponsors of. in 2005 the g.a.o. put the postal service on its high-risk list. as a result of the bill that became law that we authored in 2006, the g.a.o. took the postal service off its high-risk list. and indeed if you look at the revenue figures for the years immediately following, the postal service did do better as a result of those reforms, and for the first time we started tackling the huge unfunded

liabilities of the postal service which had never been tackled before. are we back in a worse situation now? absolutely. there's a lot of reasons for that. but the fact is the g.a.o. thought that our law was sufficient to remove the postal service from the high-risk list. now, put it back on in a few -- in a few years. >> my point was not to be critical. there is no question, lots of positive things came out of that, but it didn't fix the problem because we didn't go far enough. and you're doing exactly the same thing again. if you want the postal service to survive, give them the ability to make the decisions that they need to make to survive. and one of those, both from the postmaster general and the president is let them go to five-day delivery and let them have the flexibility to open and close the -- facilities that they know need to be opened or closed. anything short of that will --

doesn't mean it won't help, it will help, but we are going to be right back here again. if we want them to be a business and compete in the market, give them the tools to do that and the management authority to make the changes they need to do. and that doesn't mean they don't have to have great relationship with their labor contracts. it doesn't mean that they can skimp on the things -- but what we are doing is not giving them the ability to make the critical decisions for them to survive. >> thanks, senator coburn, i can't resist saying two things briefly. one is that i think the postal reform of 2006 was actually a substantial accomplishment, but something else happened which is that email took off. and the postal service has seen the volume of mail drop 22% in the last three years. most of that is the movement of all sorts of activity to email.

some of it is the result of the bad economy. so i think that postal reform would achieve more if it wasn't for the change in the environment. also i think that we are giving the postmaster more authority in this bill than the earlier reform act. and i think he'll use it. senator mccain, you've got an amendment. >> i just got to say to senator leeberman, it was a lot of us in 2006 that predicted that email and other means of communication were -- would be dramatically on the rise. it didn't surprise some of us. and that really brings up the whole problem here. the problem is that we are seeing an industry that was incredibly important for americans to be able to communicate with one another for a couple of centuries that now is being overtaken by

technology. the same way the horse and buggy business was taken over by the automobile. the same way the bridal business went out of business -- briddle business went out of business because we are seeing technology and means of communications that will no longer require us to use the postal service. and the only way that the postal service will survive is to adjust to the times and be able to make the decisions that every other industry in america had to make as we go to this new technology and information technology that has changed america. that has given rise to dramatically new industries such as google and facebook and all of the other things. in fact it's what -- major factors in the arab spring. so to somehow place into law prohibitions for this industry

toe make the necessary moves in order to survive and even thrive because there is certainly a role for the postal service in the 21st century, but it's not the old role. so when you say that they can't go to five days a week, when you say that they can't close facilities that absolutely need closing, what you're doing is preventing from them to keep up with the 21st century. so i appreciate the 2006 reforms that were made, but the predictions at the time, and i'll be glad to get you the congressional record, were that we would never have to address this issue again. well, here we are. so i'm trying to help the postal service. i'm trying to help -- just as -- make them make the decisions that every major industry in america is making today to adjust to the new information age and when you put into law that they can't make those

decisions, anybody that believes that they wouldn't save money by going to a five-day workweek, can't they decide whether they think that's best for the future of the postal service? or do we in our wisdom, dictate to them, well, no, you have to keep delivering mail on saturday. well, it's $3 billion. what's $3 billion? probably not much in the way we do business around here today, but to most americans it's a fairly sizable sum and they believe that savings of $3 billion would be important in getting the postal service back on its feet. so, the only thing, by the way, the congressional mandate in 1984 is the only thing that's prevented the postal service from moving to five-day mail delivery and still be able to provide universal service. the postal service has to, as i say, adopt to changing times.

again to make my point, the average household five years ago received five pieces, it now gets four pieces of mail today, and by 2020 they'll get three pieces of mail a day. total mail volume is down 46 billion pieces since 2006. first class mail volume will be 50% off its peak by the year 2020. mail volume is declining because of the permanent shift to e-commerce. let the postal service recognize that and make the necessary adjustments. that's what they want to do. that's what the president wants to do. as usual i'm on the side of the president of the united states. half of the postal service work service is involved in delivery and 80% of the costs are for pay

and benefit. again, u. usps estimates it will save $3 billion every year, $30 billion over 10 years. the g.a.o. we use with incredible regularity and frequency and has more credibility than any other organization in washington today says on march 2011 report, moving to five-day mail delivery, quote, would improve usps' financial condition by reducing costs, increasing efficiency, and better aligning its delivery operations with reduced mail volumes. i would point out keep post offices open on saturday, deliver mail to p.o. boxes on saturday, and deliver express mail seven days a week.

so, i go to town hall meetings as we all do all the time. and, you know, not one town hall meeting have i been where the top priority has been to keep saturday mail delivery. it's been about the fact that we continue to tax and spend and borrow and we are on the hook. the taxpayers of america are on the hook for the postal service as we all know in a variety of ways. i hope my colleagues will give the postal service the flexibility to do what's necessary to get back on the path of fiscal stability in very difficult circumstances in light of a changing and a rap padly -- rapidly changing technology. i just got one of these new phones. call cindy, that's all you have to do. even i can figure that one out. >> i know cindy, and i think

she'd like to get a note from you. >> thank you, pal. so could i ask for consideration of amendment number five which is five-day mail delivery? >> he why, indeed. let me respond briefly and then -- just to clarify, senator mccain, this would authorize the the -- the five day -- six-day delivery -- senator carper. >> is it possible for me to speak out of order? we are doing markup on the transportation bill. >> go right ahead. >> about to go to a vote. >> go ahead. >> let me go back to my friend, senator mccain, what i said earlier, like the auto industry, too many employees, too many

plants, postal service very similar situation. what they need to be able to do is right size the enterprise. there are different ways to do that. senator issa, whose legislation you introduced as an option here, as their approach. while we share their goals, the way we get there is different. i understand from the issa legislation it will allow for the abrogation of labor contracts. we have been strong supporters of brac in the house and senate, but we don't need that structure to figure out how to close postboxes. how to collate services in grocery stores and pharmacies and places like that.

dey can figure it out. they can put somebody in there on a part-time basis. brac-likeeed a system. we need savings. if we have non-consent gotten there and you have not gotten there with an three years, you can go from 65. we provided a bill years to see if this works. that is a pretty smart approach. it gives labor and management the opportunity to see if they can do with the uaw and automotive industry did, which is a different wage benefit structure to not just maintain business in this country but to start to grow. i appreciate the arguments that my colleagues of may.

when you see what we have done in the legislation, it is a huge thing, i'm still trying to get my arms around it as well. and i think when you understand the kind of flexibility of what we do in terms of letting the postal service do what they need to do, you will feel a little better about is what -- about what is put forward. >> thank you. briefly, i will post senator mccain's amendment, which is no. 5. i was convinced by my colleagues that there are some disadvantages to the five-day delivery and the better part of wisdom. the way that i read the division in the bill is we are going to five-day delivery after two years unless the postal service can reached the level of

savings without it that is their goal. personally, i am doubtful that it can do that without going to the five-day delivery. so this is easing into something we will probably have to do to in the end. i think it's a reasonable compromise. is there further discussion? >> let me just say is there any argument that we could save $3 billion a year? it is an argument and the president of the u.s. believes that the way to go. is there any argument that the u.s. postal service believes this is the way to go? so let's take the can down the road for a couple years. >> there is an argument about the cost. the postal regulatory commission did an in-depth review of this issue cannot and to challenge the postal service's $3 billion estimate. they found that the savings or much less than the postal

service had anticipated. they also found that doing away with six-day delivery would have a disproportionate impact on rural americans who do not have access to broadband services. in fact, there is encounter analysis from the regulator, from the postal regulatory commission -- there is a c ounter. they also warned that it would cause a decrease in volume for the post office as advertisers, newspapers, and other companies sought other means of delivering their notices on saturday. >> senator johnson. >> mr. chairman,? fact of the matter is the postal system and does not have the option of whether it will

compete in the private market system. it already is. it has to. we need to recognize that fact. what we need is to make sure we have expert management in the post office, people that know how to compete in the private sector. we need to give those managers the ultimate flexibility. if we try to micromanage from congress, i don't think that this amendment says that allows the social-service to choose. that is exactly the kind of flexibility we need to give those managers and recognizing the fact that we are down from over 200 billion pieces of mail per year down to 167. we forced them to design a system that could handle 300 billion pieces of mail. we have to give them some stability to size their organization so they can compete for the private sector. all i see here does not demand but they do it.

i realize that is probably the intention, but we should give them to the stability that will allow them to compete in the private sector. >> center mor andan. -- senator moran. >> i don't have a clear understanding of the role of the postal service. the arguments that senator coburn and senator mccain and senator johnson may appeal to in the private sector. if i would talk about general motors and ford motors, it's not my role to make a decision about management and labor decisions or whether five days of production line is better than six days. that is for the private sector to decided. my question is this. as a new member of the committee who's never dealt with postal issues, is there something different about the postal

service? is this not a function of the government to deliver the mail? and is it not some role for congress to play in determining " the basic standards of that service should be? or is this just a private-sector issue that we turn it over to the postal service and let them decide? i know my answer to that when i'm dealing with the private sector, but this is a hybrid for me. decisions were made some time ago to suggest the postal service is supposed to be self- sufficient, i guess. if that is the case, then i guess the decision is made that they make the decisions. but if there is something unique about pull services as we do have a role in determining what the standard should be so that americans across the country have access to the postal service. i just am not comfortable yet in understanding what my role here is as a member of the u.s. senate in determining policies for the postal service.

>> senator, i appreciate that statement. it is an important statement, because the postal service is different. it is not a private business. it is very unique. it was actually established in the constitution. you cannot say that about any private business. over the years there was an attempt at an earlier reform is essentially to make it because i public, to create their independence, giving it its own board of governors -- to meggett quasi public. e-mail has undercut the of volume. the local post offices in a lot of places are really community institutions. people depend on the mail.

even though the volume has been going down, obviously our population has been going upcom --going up. there for the post of disaster delivered to more people. we have given it by law, and really derived from the constitution, a very unique responsibility, which is universal service. that is a big responsibility. it has been deemed over our history to be very important. we will deliver the mail to you -- the postal service will deliver the mail wherever you are in the country. whether or not it is profitable, whether or not it makes sense. if you have a certain sense of uncertainty about it, it is justified, because it is certainly not a private corporation. it is not totally a public function, but it is more public and private.

like the rest of our parliament, now we are trying to get it back into the fiscal balance. otherwise it will go under. >> mr. chairman, thank you for that conversation. my question is, we allow them to go to five-day delivery and that does not work and they go down to three days, my question is, is there some basic standard that we expect the postal service to provide mail service to the american people? or is it simply whatever the market will bear? i'm trying to figure out that role for congress. >> i think we all are. for myself, it is a very important principle that the postal service will provide mail to anyone in this country wherever they live. we are trying to do in the most cost-effective way we possibly can. >> i would like to respond to the senator. >> are you going to yield? >> if you would like to back up

what he said, go ahead. >> and then senator mccain. >> i will yield to you. >> the reason why the post office is in difficulty today is because of competition from the private-sector. that is why they are experiencing these massive deficits. they want to continue to be able to surf. -- serve. they know that there has to be savings and efficiency because of the overwhelming deficits that they are running. by the way, less and less real mail is being delivered and more and more job mail is being delivered to buy the post mail. -- jumnk it's because people are using these devices instead of writing a letter. the postal service itself has said that they can be more

efficient, they can get on a path towards less and less cost to the taxpayers of america if they go to a five-day delivery. i am sure there are people who believe it was the obligation of the government to bail out the horse and buggy industry and when automobiles were invented. we are in an era of changing technology. if you believe the total government responsibility is to stick with communication and provision of information to the postal service and rather than adjusting to the new technology age, that's fine. but i don't think the taxpayers should be on the books for 1.7 billion up to $3 billion annually because we will stick with six-day postal delivery. it is obviously a question of what you believe the role

government is in our society. if you to think it is to maintain six-day delivery no matter what, no matter whether or the continued decline in mail delivery goes on, whether it is necessary or not, fine. it is obvious how you are going to vote. >> we are at the fundamentals. it is an important discussion. i want to urge my colleagues, we have about 40 amendments. i would like to move to this one. the question is on amendment no. 5, john mccain. the clerk will call the roll. [clerk calling roll]

senator mccain? >> aye. senator moran? >> no. >> senator lieberman? >> no. >> yeas are 5, the nays are 12. the amendment is not agreed to. >> senator, your next. >> thank you very much, mr. chairman. i want to offer amendment no. 1. to strikes idled three regarding government-wide workers' compensation or fica

reform. let me tell you why i am offering this. fica reform should not be done postal reform.rm most employees affected by this are not postal employees. the savings from these changes would have very little effect on the postal service deficits. fica has not performed in close to 40 years. we need to take a closer look at a comprehensive reform to make sure we get it right and we could include adequate measures to reduce waste and fraud. there are complex issues related to the appropriate benefit levels that deserve more analysis before we cut benefits. at a hearing that i held in july

a witness raised serious concerns with reducing fia benefits especially at retirement age -- fica benefits. disabled employees may not be able to and save for a reduction in income because they have missed out on wage growth, social security, and approved savings plan. at the request of a bipartisan group of members in the house education and resource committee, which has jurisdiction over fica in the house, gao is reviewing the retirement and post retirement age benefits to determine fair benefit amounts. 'by a understand that it's also working on two requests from senator collins, including a review of best practices in state workers' compensation programs, which could inform changes to the federal program.

if we act prematurely, we may still benefit levels too low, seriously harming disabled employees or even too high. we must be extremely cautious not to make arbitrary cuts to benefits that could harm employees disabled by centuries sustained in service to their country -- disabled by injuries sustained in service to their country. if we pass this section as part of postal reform, it will also create a jurisdictional problems in the house, where oversight and government reform has jurisdiction with the postal service, while education and work force jurisdiction has -- has jurisdiction over the

program. it could affect staff who have been working on this issue. these are reasons why i am asking that we strike exit. mr. chairman, i offer an amendment number one. >> thanks, senator akaka. we worked very hard on this part of the proposal. senator collins played a really important part. the administration through the department of labor selected the proposal -- thought the proposal means that we made was moving in the right direction to reduce unnecessary cost without compromising reasonable expectations of employees for compensation, that this particular provision of this legislation relates to all federal employees, and not just employees of the postal service.

this is numerically justified because -- and this is one of the ways in which the postal service is somewhat independent and a separate corporation, nonetheless is interconnected to the postal service, because we are part of -- the postal service is part of the federal workers' compensation program, it happens to be via largest participant in the federal government workers' compensation program responsible for about 40% of the caseload. as senator collins will note for the record, and we feel that the program needs tightening. it is more generous than we can afford. i the we have done it in a way that does not fall below the standard of most workers compensation programs in america, including most states

and still will save some money. thanks for your leadership, senator collins. >> thank you, mr. chairman. first of all, i want to point out that there reason this is a government-wide reform is that the direct request -- is at the direct request of the obama administration during the postal service makes up the largest number of workers' compensation claims in this system, but it's a government-wide system. the obama administration argued that they did not want to pre postal workers differently from other federal employees, so that is the rationale for why it applies across the board. we have needed workers, performed in the federal systems for many years. -- we have needed workers' compensation reform.

there's a gao investigation going on right now, the department of labor ig has estimated that each time you take a fraudulent case off the rolls, it saves between $300,000.500000 dollars. the reforms -- $300,000 and $500,000. there are two people on the books 99 years old. that creates inequity between postal and other federal workers who worked their whole lives and then retire and get a lesser benefits than someone who stays on workers' compensation past retirement age can and is able to get a higher benefit that is tax-free. that is why the vast majority of

states do not allow them. i would note to my friend from hawaii that the percentage of 66 2/3 that we are proposing in the law is identical to the percentage that is paid for a benefit in hawaii and in 39 other states. so these are not draconian changes. many of them, and nine of the substantive changes are identical to what was proposed by the obama administration. i want to point out, since there was a letter that was circulated this monica, as an example of a akakan whom senator of was concerned about would somehow be treated unfairly, but

under the provisions of our bill, this person would be grandfathered and would see no reduction in benefits whatsoever. so we have worked very hard to come up with a fair approach. this involves substantial moneys. the postal service strongly supports these changes. it pays out more than a billion dollars each year for workers compensation claims. we need better programs to rehabilitate people and to get them back to work. those provisions are included in this bill as well, because that should be our goal, to help people be out for the shortest possible time and to help them get the recovery and rehabilitation that they need so that they can return to work. that is what our bill does and i

think it is important that we enact it. so i oppose the amendment. >> question for senator collins. what would the savings be of the 1 billion per year? >> the estimates is that it would be in the hundreds of thousands of dollars. >across the board. i am sorry. the hundreds of millions of dollars. [laughter] no wonder you looked shocked. one of the reasons for that expense of finding in 2002 by the dod ig is each person that you can return, a long-term savings are between a $300,000 and $500,000. >> who is grandfathered? >> we would grandfather totally people who are currently on the

rolls who are totally disabled and have a permanent total disability. so there would be no change. >> what percentage of people currently on the rolls gets that the grandfather? >> about one-quarter of the people on the roll. i also want you to know that president obama's proposal, much of which we have incorporated, the omb estimate is that it saves $500 million over 10 years. >> was the billion dollars each year, so that would be about $50 million a year roughly a, maybe 5% reduction in cost, does that sound right? rather $500 million over 10

years. >> that is the obama administration estimates for across-the-board savings. >> we believe this proposal will save more than that. although it has not been financial estimated yet. we are giving something to the super committee in that regard as it works to strike a balance. >> keep in mind and the postal employees are disproportionately represented in that pool. that is why there would be more savings to accrue to the postal service. >> further debate? senator corpora, would you like to respond? -- senator carper? >> 38 states do not have any

reduction at retirement age. but there are complex issues related to the program and benefit levels that should be analyzed before we act. while there was discussion of workers compensation during the debate and post or form in 2006, since that time this committee has not considered a single bill on workers' compensation reform, nor have there been any hearings on workers' compensation reform that was heldearing in july where i was the only member that participated. there are three different goa reports spending that would help inform changes to fica, including two that senator collins has requested from

congress. another one requested by a bipartisan group of congressman from the house educational workforce committee, which has jurisdiction over fica in the house, is looking at the precise questions regarding benefit levels that this bill would address. so i am eager. ands time to work with you on with the committee on workers' compensation reform, but we cannot hold the survival of the postal service hostage on compensation changes. if we have to set a benefit levels too low, that could harm disabled people. high, we set them too

that could harm people. we do not want to harm employees that where injured in service to the country. the reason why that i offer this amendment to strike the entire fica title of the bill. >> thank you, senator akaka. >> three quick points. the inspector general of the department of labour has reviewed this program every single year since 2002 and has said that these reforms -- that reforming the system is needed. second, the reason that states don't have a retirement problems for what to do when a person reaches retirement age is the vast majority of states limit

the number of weeks you can receive workers' compensation. so it is very rare for someone to reach retirement age. there is a weekly limits, which we do not have in the federal system and are not proposing. finally, the treatment for people call over retirement age for new people coming onto the system when they reach retirement age in this bill is identical to the proposal of president obama. so this is not just a republican idea. it is the president's proposal. >> mr. obama is getting a lot of bipartisan support here this morning. it is very heartening. >> let me add to that the department of labour has admitted that the changes to benefit amounts in their proposal is somewhat arbitrary.

round numbers based on rough calculations, hardly the basis to determine what elderly disabled people will have to live on for the rest of their lives. i. gao -- i have mentioned gao reviewing the retirement age benefits to determine trends benefit amounts. this request was made in response to the administration proposal, because it is not clear that their proposal contains responsible changes to benefits. so we simply don't have the information we need to decide on their benefit levels. that's why i think what we are doing is premature and i offer this amendment. >> would you like a roll call vote on this? >> yes, please.

>> the clerk will call the roll on amendment no. 1. levin?ator 1 >> aye. >> senator mccaskill? [not audible] senator brown? [not audible] >> center moran? >> no. senator lieberman? >> no.

on the vote of those present, the nays are 8. on the vote by proxy, the nays are 3. on this boat the yeas are 5, the nays are 11. the amendment is not agreed to. >> thanks, clerk. of those in attendance, next we will go to senator johnson and then senator mccaskill, and then senator paul, then senator tester, and then senator moran, all of ron knipling amendments pending. >> thank you, mr. chair chairman. i would like to offer johnson #one and only. like my colleague from kansas, i am new to this process. as i studied the issue, pretty eye-popping chart, gao issued a study in 2010 laying out the annual deficits for the postal

service. through the year 2020 if it ends up being $250 billion. it is a somewhat private governmental agency. we experienced those type of deficits, the taxpayers will be on the look for that. that governs my votes in this process. my amendment recognizes my concern about the $6.9 billion overpayment. i think the overpayment is primarily with the results of our recalculation based on actual yields assumptions, which can change. -- actuatial assumptions. when you look tax a growing concern like the u.s. postal suspicious that does not exactly look like a growing concern. you want to make sure retirement systems are properly funded and have a little bit of a surplus. i hate to see?

fact we are trying to spend that surplus. what my amendment does would remove section 102, which allows the postal service stopped offering of up to a year credit of service for individuals in the civil service retirement system and up to two years for individuals employees retirement system, as an incentive to encourage retirement. i understand their rationale try to get -- to use retirement as a way to reduce the workforce, but what we are spending, retirements or +, which would be a good buffer. we went to the office of personnel management to see what type of payouts could this potentially result in. the range is somewhat eye- popping. according to this sheet, it could be as low as a $6,000 benefit or as high as a $280,000 benefit to an individual. i don't think in a time when we have a 1.3 trillion dollars per

year deficits and the postal service is looking at a 10 year annual deficit of $250 billion, that we should be offering something unprecedented. the office of personnel management, this is an unprecedented payout to individuals and it could certainly unfortunately act as an incentive in the future areas where we are trying to reduce the government workforce to handle the exact same way. it would be a bad precedents. that's why i offer my amendment and urged people to support it. >> thank you, senator johnson. i appreciate the amendment. obviously, one of the major responsibilities of the postal service is that it is a necessity now is to reduce the level of employment. as we have said before, 28% of the costs are personnel. that is much higher than fedex

or ups, but we also have to and knowledge, as we did in the discussion earlier, this is a different kind of institution and has a requirement of universal service, if so it does need more personnel. in fact, the network that it has to deliver to the so-called last mile is one of its great assets, so great that ups and fedex basically purchase the services of the u.s. postal service for delivery of that last mile. considering even all that, we still think -and the post postmaster general appeal strongly about fiscal -- there should be more. there's been a suggestion that we should override existing contracts and collecting -- of collective bargaining agreements to allow involuntary departures from the postal service, but

we've got it was not a fair thing to do. so we are working with the postmaster general and created this system of incentives, a bonus to retire of not more than $25,000. of thet's the request postmaster to add the /or of lity of either'o 100,000 employees who will retire as a result of this package and the savings will be enormous. they do come out from the pension fund, not from ratepayers. the estimates are that this program to cut the workforce of the postal service by an additional 100,000 employees it will probably consume about one-

third or maybe less of the refund from the pension system. so there will still be two thirds of that will be there as a cushion. i hear you. in this case i guess we decided the better part of wisdom, cost- effective over the long run was to accept the proposal of the postmaster to give alternative credits to have people retire and the savings would be much greater than what they cost. i appreciate your thoughts. i will oppose the amendment. >> and mr. . senator collins? >> this was an issue of concern to me when it was first brought to us by the postal service. it was a far more generous

proposal that was originally proposed to us. that is why we cappped it at one year service credit for the program and two years for the other program. capped the buyout amount at $25,000. keep in mind that the postmaster general is going to determine what is offered within the confines of a set amount of money. the postmaster general past told us that he believes that it will be approximately $1.7 billion that would be used for the buyout program to reduce the total workforce by almost 20%. 100,000 employees to 110,000 employees.

ipod giving him this limited flexibility makes sense, because we have essentially a cap on the program as a whole. -- i thought. crs ran the numbers and had a different result. i know yours takes a worst-case scenario, but one that could happen. i hope before we go to before that we can try to reconcile hwy crs comes up with a different number than opm does. >> thank you know, senator collins. >> one other point. the postmaster general said his goal is to have the service credit in most cases not exceed the value that you would gallup's from giving the monetary payout -- that you get from giving the monetary payout.

>> can we work towards the $25,000 total compensation? i did you are referring to the cash payout to versus the service credit payout, which can be quite higher, correct? >> i'm sorry. are you saying but the bonus payments that might be offered and the credited service, neither of those should be in excess worth more than $25,000? you can only get one of them? employees have to decide whether they will take the cash payment or the credited service? i think the legislation is pretty clear that you cannot take both of them. >> that's not the information i have. i would feel better if it were capped at $25,000 regardless of which way that you chose.

i will research that. >> a i think we should continue to work on this as we go to the floor. because we did limits, but you are correct, we limited the service credit to one year of credit if you are in pay pass crs retirement system and two years if you are under the other system. the question of a monetary limits is important. we will continue to work on it, because there was a general understanding but this was an either/or and that the net financial effect would be the same, that it would be limited within the $25,000. if not, we should be open about that and make a judgment it is worth it or it is not worth it. i will leave it to you whether you want to go forth with a vote. you've raised a good point.

>> if you're willing to work quickly before this comes up to the floor, that's fine. we will work

if an arbitrator want to look at compensation, who are they comparing to? the issue for me, and i tell me speak as a former mayor that negotiates contracts and then i also wrote labor laws for the city of anchorage, so i've been on both sides. here's what can happen with a large organization like this, give administrators take studies that are developed on a mass scale, which have a sizable amount of small businesses would then they try to compare to employers of this magnitude, which is very problematic, or they take industries that are

different and compare them. tell me understand " the thought process was behind it? i have seen this on the management and and to we make sure that we compare similar things as best we could come as a limited area, obviously. we did not include small businesses because they're not the same kind of compensation packages that you can compare when you are going through arbitration. i don't know who wants to answer that. does my question make sense? ? no, next question. [laughter] >> let me answer that. with respect to comparability of pay, you may have an arbitrator and folks there from labor and management. the folks from labor might say

we think the patient be comparable to pay for fire, police, first responders, maybe folks in the construction district. focus on the management side can agree and say maybe it should be more like on the retail side -- the folks on the management side. they can decide whether or not their work is comparable to the people that worked for fedex or ups. at the end of the day the arbitrator decides, after having input from both sides. kind ofe bathere some case law history in the courts and there may be some cases treated that builds up over time with respect to accountability. that is the way i'm told it works. -- with respect to comparabl

ility. >> i could probably dispensable of these potentially. >> go ahead. >> i want to make sure that we are clear that the process you laid out, how it will develop over time. we have to be careful when we are in the process of that management does not pick -- and i was an assembly member who dealt with a mayor that decided this is what the private sector pays, which is totally irresponsible when trying to build pay packages. that is not what i see in this, so i wanted to put that into the record. the amendment number one, if the struggle is is very broad in the way it is written in the current bill. let me read something and maybe then a response. in the municipal law that we

drafted, because you can do prescriptive and list all the things the fact finder should look at, or you leave it kind of broad and hope that they recognized these other things. id itl read you how we depart and texas. the fact finder shall not be limited to workload, economic feasibility, cost of living, bargaining history, relative market comparisons in the mprivate-sector and public- sector and impact on workplace morale. do you see that as a piece of how you see how the arbitrator reduce the package of benefits? >> what are you reading from? >>

this is what we did in municipal code in our labor laws. the big debate is always what is included and what is not included. what we want to do is become somewhat prescriptive but not so hamstrung the only have to look into these issues. the way the bill is written is is kind abroad so the arbitrator can select. but what i'm asking for is the drafters of the legislation, are these the kinds of things that you envisioned, not limited to, but the arbitrator would use in the determination of wages and benefits. if that is the sort process behind a language, then i want to make sure that is on record. if not, then it's a problem. because these are the kinds of things -- i have negotiated during my time nine different union contracts when i was on the assembly and over 10 years

we dealt with probably 20 different union contracts. the guiding force of how to arbitrate, probably half of them went to arbitration. when i was on the assembly we did not have such a compromising mayor, not me, another 1. his debt question -- and want to know the genesis behind a language. >> if we go back to 41 years ago when your predecessor was involved in the creation of the postal service, one of the reasons the postal service was created was the wage benefits treatment of the post office, it was not a good situation. the wages were lousy, of benefits were lousy. most of the time people would call in sick and would not work. it was not a good situation. so we decided to move from the old system to a postal service

which was designed to professionalize and pay people a decent wage and benefit. we are not going to go back to the way it was prior to 1970. if you look at the language in the bill today on arbitration, it says we expects the arbitrators, they had a $15 billion line of credit used by the postal service and the looking at more debt if we don't straighten things out. the arbitrator need to consider the financial position of the post office. >> not limited. >> that's one thing. they also have to consider comparability. are they looking at what ups and fedex pays their employees. or are they comparing this to what first responders and earn?

the arbitrator decides on a case by case basis. the third thing, title 39 is pretty broad and lays out how the postal service will operate, all kinds of ways. it says that not only the financial condition of the postal service is part of this decision making process and arbitration, but the wage and benefit comparisons is on the table. title 39 is open as well. that is a lot. >> if i can just briefly respond to a good question, the language in our proposal, we went over fairmount. -- a fair amount.

it broadens the authority of the arbitrator to consider a wide array of factors that are relevant to the arbitration and then we have cited three of them as examples. gun into a condition of the postal service, pay comparisons, and everything the in title 39 of the u.s. code which relates to the postal service. it is different from your amendment. though i understand what you're getting at. your amendment says "nothing in this title may be construed to limit the factors the arbitration board may take into account in rendering a decision." they can actually go beyond relevant factors. so the wording of our proposal here is "in rendering a decision, the arbitration board shall consider such relevant s" and then it

mentions the three. the distance between the language in the substitute before the committee and your amendment is the word "relevant ." ahead. >> let me give you a scenario to make sure. let's assume they are at a point where they are in a financially tough position. like they are today. a contract is going through arbitration and the arbitrator says that they deserve a pay. and the post office may not have the full resources. does your language say that takes precedence over the other

component which is the compensation? in other words, what can happen is like today if an arbitrator looks at it and says that is the predominant decision on the financial condition versus the compensation of the employee. now you have a significant conflict. if it is driven by this, i can tell you what can happen. i've seen it. people will drive this number however they want in order to win. out want to make sure there's some equity in recognizing the importance of management and not just put it on the back of employees. you follow where i am going? >> i do. my understanding is that those three items, those relevant factors, are not exclusive. >> they are not living. >> right.

second, when does not agree on the other. in other words, we mentioned financial condition of the postal service as one of them because we want to make sure that is something the arbitration board should consider that. the postmaster has said to us in his understanding of the arbitrators are already considering fiscal condition of the postal service in their arbitrations, but it is a good thing to state. i certainly do not intend that to be more important than the other two examples given. gatt is a personal expression of my intentions. senator collins. >> senator, the original bill that i had introduced only had financial status of the postal service. so, to address concerns that you and some of the postal employees unions raised, we made

clear that comparability was also a standard. that is important because there were a arbitrators' decisions on both sides of that issue. now that it is law, it is clear. and then senator wanted to make it even broader by saying that any issues in the entire title 39 that are relevant could also be considered. compared to where i started out, this is far broader and represents a considerable compromise. and because it clarifies conflicting findings in previous arbitrations, i think it does accomplish some of the goals you have outlined. >> mr. chairman, i think i see

what senator is driving at. i think it can be clarified by putting into this language what you, mr. chairman, just said, which is is not limited to these relevant factors. any relevant factor could be considered and that could be easily inserted by saying if we have this language "the arbitration's should consider a any relevant factor including these three." i'd think that is what you said and i think that would address the senator's point. from what senator colin said, i'm not quite as sure in the terms of making the statement as i am about saying what i am proposing would reflect what the chairman said. >> read it again. >> i apologize. >> this is technical stuff. in rendering a decision, this is

the way the current wording of the bill is. the arbitration board shall consider such relevant factors as -- i think what senator begich is driving at is any relevant factor including those three. >> we are back on the debate of including. >> are there any other relevant factors. >> we put the word "relevant" in

-- a normal arbitrator would not go as far afield -- >> the other cure would be if senator begich would be willing to put the word "relevant" before the word "factors." nothing in this title would be used to construe the relative factors that the arbitration board may consider. >> you are not striking our language but you are adding yours. >> i think we are getting -- i just want more clarification. if i am postmaster general, this is what i will say in arbitration. the house said this is the only relevant issue. >> he has the word "relevant"

ray there. >> i would be happy to give time to the folks that drafted it. >> could ask you, senator begich, a question? would that be adequate for you if the word "relevant" -- >> i agree with what you said. 39 covers a lot of area which does not bother me. i want to keep this show moving. >> i think senator collins might -- >> pardon? you want more time. >> could we do that? >> coming back this afternoon, we might be able to work it out. we will see where we are. i think we did clarified intention. we now go -- i have to go to the

senator. ok. i am not sorry to go to you, senator. [laughter] >> i will try to move it along. this is a man in number one and this would provide flexibility for mailbox usage, granting the individual who owns the house and a mailbox -- and the mailbox. i would recommend we support this amendment. >> it is amendment number 1 and it would allow you to use your mail box as you see fit. if you bought it and paid for it, you can do with it what you wish. >> say more about what your intention is here.

[laughter] >> i think it was article 57 of the magna card deck guarantee that free men would not be deprived of their property without just and to process. that is what i am asking for here. this just reasserts the ownership of the mailbox to the individual and says the individual should be able to decide how they want to use their mailbox. >> one result of the passage of this amendment would be that alternative delivery of these services could use the mailbox? >> back in the old days, back in the 1970's, people thought that would destroy the post office because you would get first

class mail. i kind of doubt fedex or ups would deliver it for 47 cents to tell you the truth so i do not think it changes anything. it would solidify and codify the idea that private property is private property, and the individual has the right to exercise the decisions on how you use private property. >> here is a part of the problem that i see with this. you are viewing it from the point of view of private property, but i think the effect of the passage of this amendment would be to further hurt maybe, cripple, and the finances of the post office because one result would be that private operations which are trying to supplant the postal service

could basically carry pecked the carry-- basically cherry pick the most lucrative routes and services and deprive the postal service which is bound by this constitutional, legal, statutory requirement of universal delivery no matter where you live and make it harder for the postal service to survive financially and probably lead to an increase in rates paid by citizens to mail through the postal service. >> but i think there would be a loss and place on first-class mail. i do not think this changes of the lost. you are opposing article 57 of the magna kordecarta. [laughter]

distributing the mail was part of the constitution but it did not say anything in the constitution that your mailbox belong to you. so it does go against the grain and a history of the development and usage of private property. that is why i brought it forward. to have some discussion and let people divide the house and decide where you stand. >> is there further discussion? >> mr. chairman, i agree with your concerns. i think what would happen particularly in urban areas is the alternative carriers would do all the less expensive routes, and the rural areas would be left to the postal service which would inevitably cause an increase in rates.

so i do not think this is a good idea. i hope will week -- i hope we will oppose the amendment. >> that was probably true in the 1970's and the 1980's. when people thought they could make money with this. i do not think people can make money on it anymore. i get fedex delivered to my door, just thrown on the doorstep whether i am therefore not. it is an envelope. it is not the same size as a first-class envelope and it costs more. i think they might compete at 3- or 4-delivery. this is more about the philosophy of private property then i think is of changing anything because i do not think anyone wants to get into first class mail. i do not think it is profitable. >> would you like a roll call?

>> the clerk will call the roll. i was going to say that the question on this vote is whether you want to stand by our own constitution or some foreign document, the magna carta. [laughter] >> which by the way discriminates against women. [laughter] >> some might argue that the constitution derived from the magna carta. >> the amendment raises the risks, the financial risks, of the post office. i thank you. >> senator levin. senator akaka. >> no. senator carper. [inaudible]

>> senator mccaskill. >> i am going to say no instruction. i do not want to cast a vote without them being here. we are going to pass again. ok. a no vote. .> senator begich > >> no. >> senator collins. >> no. >> senator brown. >> no. >> senator mccain. >> no by proxy. >> senator paul.

>> aye. >> senator moran. >> aye. >> senator lieberman. >> no. can i go back -- >> senator mccaskill. >> senator mccaskill is no by proxy. >> senator brown has just appeared. >> underground. ok. -- senator brown. ok. mr. chairman, the yays are two, the nays are seven. on this vote, the yays are six, the nays are 10, and the amendment is not agreed to.

>> thank you. >> thank you, mr. chairman. i think the senator wanted to be noted that she based her vote on the napoleonic code. [laughter] listen, this amendment -- i do not think we have passed the amendment yet so maybe this will be the first 1. we passed one? there we go. maybe mine will be non- controversial. i would like to ask senator mccaskill to be added as a co- sponsor. my amendment is very straightforward. >> number one? >> eminem number two. -- amendment numbered two. whenever the post to regulatory commission makes recommendations through their advisory process, that the

postal service would have to respond in writing and say how they are implementing the recommendations or if they are not why they are not implementing those recommendations. i think this has been an issue over the years that the prc will make recommendations but oftentimes the postal service and ignores them. this is more transparency and more accountability. i do not think we need a roll- call vote. >> did you call this a straightforward amendment? >> i did. >> further discussion? >> it would also be appropriate for the prc to be giving some answers to the postal service at times as well. i do not have time to go through the history of that. what is true for the postal service which is i think accurately set forth needs to be true for the postal rate

commission in terms of responding things they do not implement when the postal service makes decisions. i will make that as a comment and support your amendment. >> further discussion? all in favor? those opposed? the amendment is adopted. senator moran. >> mr. chairman, thank you very much. i have just one on and, and it deals with world post office's. -- i have just one amendment, and it deals with world post office's. some have outlived their viability, but others have not. i have yet to see the criteria by which the postal service reaches a conclusion as to which which ones remain viable and which ones do not.

the postal service announced the potential closing of 3700 post offices, 134 of them for example in the state of kansas. we have attended -- staff of mine have attended 90 of those closing meetings. i cannot think of an instance in which any member of the community goes to the community meeting and comes away believing that the postal service has a plan in place for why their post office was chosen or that there is anything that a member of the community can do about it. it seems to me we have the postal service going through the motions of conducting these meetings, explaining that their post office is on the list for whatever reasons that the individual representing the postal service explains, and when folks suggest what we do to

see that our post office is now closed, almost without exception there is no answer other than to call your congressman and senator. the amendment that i would propose and i would indicate that it is co-sponsored by m several, it creates a set of criteria by which the postal service must used in conjunction with the postal rate commission, and it sets out the criteria that the postal service should consider for the basic services. perhaps a goes to the question that i was raising earlier. is there not some standard that we would expect the post office to provide service to americans across the country? in this case, communities, rural versus urban, suburban.

this requires the postal service to develop those national retail service standards and to take into account really four things -- geography, the proximity of the postal service to customers and what maximum amount of time a customer should be expected to travel. population factors. requirements to serve rural areas such as alaska or hawaii that may have unique needs in regards to transportation. and to make certain that the postal service looks at available retail services in the area that were served by the post office. again, the nature of the community. many people, many constituents of mine will attend these meetings and will come away wondering why my town was

chosen and not one down the road. this sets criteria for which we have some level of ability to determine why us and not somebody else, but more importantly it creates the opportunity for the community to appeal that decision based upon the criteria to the postal rate commission. in addition to that, this economic requires the postal service to look at other options such as shortening the length of hours for the local post office. for example, having a post master there for fewer hours during the workday. the opportunity for the concept of co locating with a local school or restaurant or groceries store in order to save cost. and finally, this amendment -- that is the nature of the amendment. i would indicate the effective date of this amendment is upon

enactment, and the language of the legislation if adopted would say that it applies to the post offices currently under consideration. they would become subject to the criteria that we have now created. so, in my view, it is a pretty straightforward, creating a transparent process to determine which levels of service are to be expected, the criteria for determining whether a post office in the community meet those standards, give the community a chance that they disagree with the conclusion, and have the postal rate commission, and more independent agency, determine whether or not the postal service has followed that procedure. >> thank you, senator, for all of your work on this amendment. senator brown. >> in response to the self- programmed new guy, thank you

for your thoughtful amendment -- in response to the self- proclaimed new guy, thank you for your thoughtful amendment. i think this has affected every single congressman in their states. i think you have more than most. it is certainly something that i agree with. i would ask that it be taken up. do you need a roll call? >> i would ask for 1. >> i want to thank you for the work on this. i think it is a good amendment and i am going to support it. the postal service has a lot of post offices. more probably then it can afford now. one of the numbers i have seen which startles me is that it has more retail outlets than

starbucks, wal-mart, and macdonald combined. so, we have to close some post offices. i have been through this a few times in connecticut. again, this is when this is not a typical business. there was one case in a small town years and years ago when the postal service tried to close the post office and on sheer numbers, they were right. but that little post office was not only important to small businesses and the people in town, but there was also a sense that it had become a community center. we cannot afford that really now. is very difficult to close post offices but it is necessary to do that now. senator mccain said something earlier which is that this bill will stop the closing of post

offices by the postal service. id will not, and it does not do that. including with your amendment, it creates what i would call some thoughtful and reasonable due process before the postal service can close post offices, including everything you have listed. i think it is not bad. requiring the postal service to consider instead of closing a post office reducing the number of operating hours or procuring a contract for retail services and community served by the post office or by providing services to rural carriers. i think this is a very balanced amendment. it does not stop the postmaster from doing what he thinks is necessary to keep the post office going but a creates some reasonable due process before post offices are closed. i support the amendment.

thank you for your work on a. further debate? senator levin. >> i want to commend the senator for his work on this amendment. i just have one question. that is a reference to the appeal to the postal rate commission. where is that? i do not want you to miss the commendation because i think it is an important piece of work. i think you are right on track. two questions. where is the question to the appeal to the prc? what page of line is that on? >> answer forthcoming. >> i believe it has to do with

the service standard. >> any time a service standard is violated, there is an appeal to the postal rate commission. >> it already exists in law? >> correct. >> secondly, in the post office that is proposed for closing after these standards are adopted could make an appeal to the prc on the basis that the standards which have been adopted required by this amendment were violated. >> that is true. effective upon its passage, upon enactment, but also the language includes those post offices that are currently being considered by the postal service today. >> it is not limited to them. >> it is not. >> the other question is the

words "market-dominant product" on page 3 -- i am not sure what that means. are the eight market-competitive products? with that not be -- are as a market-competitive products? >> that is a term within the arcane post the world. -- postal world. the products are defined in different categories. products that the postal service are the only provider of, like first-class mail, is one category. packages with a competing with fedex or ups is another category. those are terms that actually mean something. >> this maintains then the universality of the service.

>> right. >> is that what the term is intended to be? what about service standards for other things like a market- dominant? >> i wonder if this one if we want to pull in an expert witness. it is a fair question. may be the deputy postmaster or somebody from his team. do you want to come forward? would you like senator levin to repeat the question? >> this just a hoax back to that requirement. -- this just goes back to that requirement. market-dominant products are products where there is no other competitor.

>> like first class mail. >> on the competitive side, competing with people mostly on the packages side. >> further discussion? >> i want to commend the senator. thank you for the leadership he has taken. this is an important issue. we know that the postal service has to stem the bleeding. we know they have more post offices then they need. we also know there are ways they can provide good service to the folks in these communities. we can have somebody there to sell stamps several times a day. if you have a letter carrier, be there when they come to your house and buy their stance. that is not convenient for

everybody. -- buy their stamps. maybe the convenience or the drug store down the road. i visited a drug store in the chicago area. walgreen's has a post office there. this is a new generation pharmacy. i think there are a lot of alternatives. the goal is how do we continue to provide good postal service to people across the country and doing it in a cost-effective way? i think we have struck a good balance. >> mr. chairman, thank you. you and my colleagues have been very cooperative with me. i have had wonderful conversations with both senator collins and senator carper as well as my colleagues who have been co-sponsors of this amendment.

could i ask someone to confirm my understanding that they are not going to rush out and closed post office is why this legislation is. ? that they will allow the legislation to take effect? >> you are not here under subpoena bank [laughter] do you want to answer? >> [inaudible] >> senator, we did particularly raise that issue with the postmaster general when we were negotiating the language that you brought forward. >> thank you. finally, just to conclude and shorten the day, i will withdraw my request for roll-call. i did want to point out one more

fact. as we try to find savings within the postal service, according to the postal rate commission, you could close 10,000 of the smallest post offices in our country and effectuate savings equal to 0.7% of the revenue of the post office. there really is a much bigger picture here that we need to make sure that we do not lose sight of. again, as a member of the senate that represents a pretty rural state, we want to make certain that rural america is not the target for savings exclusively. we want to share our burden and responsibilities with others. 0.7% closing 10,000 post offices. this amendment, in my view, is a reasonable opportunity for us to demonstrate the need across

america. i thank senator levin for raising the technical issues in his questions. >> an amendment this up in -- and the men in this important -- i think it is important that there be a message for a strong role call to the postal service that we do not want them to be closing post offices during this thing. >> do you want to look at my list first? [laughter] >> mr. chairman, i will not ask for a roll-call vote. >> i think it is bipartisan. >> i will not ask for 1. preference as a junior member -- >> i would ask for a roll call. >> senator levin. >> aye.

>> senator akaka. >> aye. [laughter] >> senator mccaskill. >> aye by proxy. >> senator begich. >> aye. >> senator coburn. >> aye by proxy. >> i tried to warn everybody. [laughter] >> senator paul. >> no instruction. >> senator lieberman. >> aye. >> mr. chairman, the yays are 9,

the nays are 0. on this vote, the yays are 12, the nays are 4, and the amendment is agreed to. >> lunch break was mentioned earlier. do we want to try to move an amendment or two? do you have any other amendments? >> i have no other amendments. >> i just am thinking about who is here. senator levin i believe has been passed. we will go to senator akaka for another amendment at this time. which were number would you like to call up? >> i would like to offer akaka number five. it is an amendment on medicare. i would like to come back to

workers' compensation another time but not now. so i would like to turn to health care. my amendment strikes the provisions requiring postal retirees to enroll in medicare parts a and b if they are eligible and replacing their current health benefit plan with not a not-yet-negotiate plan. the postal service estimates it will save $15 billion from these provisions, but as far as i know, they have not provided anything as so far as a particular claim. not believe it will save the postal service money.

rather, opm believes it will impose costs on the health benefits plan, resulting in higher premiums for every one including the postal service. additionally, this appears to shift costs from the medicare program which is serious financial challenges already. for this reason, finance committee staff have informed my staff of this amendment. the provisions in this bill could create jurisdictional problems because these changes are financially jurisdictional. i think it will impose costs on retirees. we are requiring retirees to pay more than $1,100 a year in medicare part b premiums with

no guarantee how much of that will be offset by savings from a new plan. therefore, mr. chairman, i encourage my colleagues to support this amendment to strike the provisions requiring postal retirees and to enroll in medicare parts a and b. if they are eligible. thank you. >> thank you, senator akaka. respectfully, i am going to oppose this amendment. this is one of those cases where the legislation does give the postmaster the authority to take steps regarding the health care costs of the postal service. not only most private employers, but most public entities that i know of including state governments for instance have taken to reduce the increase in the cost of health care for

their employees. the sections that senator akaka would strike direct the postal service to require medicare- eligible retirees to enroll in medicare parts a and b and direct the postmaster to work with opm to develop plans that offer comparable benefits within the federal program for postal retirees and their dependents. this is an amendment about how we can argue how much it will save. it will save a significant amount for the postal service which is critically needed now. it will alter the health care benefit package of the postal employees and retirees.

but we think it still maintains a level of coverage for health care that compares quite favorably to people in the public and in the private sector. we also have a provision in here that says if the expected savings are not realized, the new program would end. we discussed that with the postmaster, and he is confident that they would achieve the savings. he is willing to be put under that requirement. so for those reasons, this is an important part of the legislation. what the legislation saves would be dramatically undercut if this amendment was adopted. >> i just want to emphasize your last point. of the postal service estimates that this provision -- the postal service estimates this provision would reduce its cost

by $15 billion. as senator akaka pointed out, opm is uncertain whether or not that is the case. that is why we included language in the amendment that would allow opm and the postal service to scrap the program if they agreed that it would not save the postal service money. so there is a safeguard, if you will, that has been built into the language. >> senator begich. >> mr. chairman, has there been a response from folks on medicare about what this would do to their costs? >> my assumption is if one saves, the other pays. >> one point i would make on that is a postal employees are paying into medicare now. in some ways, they are paying

twice. they are paying into medicare when they are active employees, and then if they do not enroll in medicare part b or d, they are not getting the best benefit of all of those payroll deductions over the years made both by employees and the postal service, and they are instead of getting the federal employees health benefit plan. in a way, they are paying twice. >> but i guess my question is if you require them to take the benefit, they are not taking it now. is actually a bonus for medicare. it is like free cash flow for medicare. >> but that is not fair. >> have medicare folks responded

in any way about any impact it would have? >> i do not believe the committee has had any response he cms.teh it would raise costs for medicare. we are saying that this large entity, this clause i-public business, the postal service, ought to have the right to take the same kinds of actions that every private business and most of the states as far as i know and other municipal levies are doing for their employees. in this case, i think our priority has to rescue the postal service even though it may add some cost to medicare. >> thank you. >> senator akaka. >> let me add that the office of

personnel management has stated that its health care actuaries do not believe the postal service will receive money on this. opm runs one of the largest health plans in the country. 8 million participants at about $40 billion in total annual cost it. i have not seen the postal service's analysis for how they believe this program will save money for them, but i trust opm's cost estimate more than i do the postal service. >> ok. further discussion? senator akaka, would you like a roll call? >> yes. >> the clerk will call the roll. >> senator levin. >> aye by proxy. >> senator akaka.

>> aye. >> senator carper. >> [inaudible] >> senator mccaskill >> aye by proxy. >> senator begich. >> yes. >> senator collins. >> no. >> senator coburn. >> aye by proxy. [laughter] >> senator brown. >> senator mccain. aye by proxy. >> senator paul. >> aye by proxy. >> senator moran. >> no.

>> senator lieberman. >> no. is it possible that there is a little mischief going on? >> mr. chairman, on the vote of those present, the yays are 4, the nays are 5. on this vote, the amendment is agreed to. >> ok. thank you, senator akaka. congratulations. let's see. no one else here on the republican side has an additional amendment. you are retiring undefeated. if it is ok, after the senator, we will break for lunch.

>> thank you, mr. chairman. i want to thank the committee for passing the amendment. senator mccain talked about the fact that when he has public meetings people talk about the post office. if you are in a small town and you have a public meeting, i guarantee you it will be the first issue that comes up. with the 10-mile issues that the senator brought up, it is an issue that people have talked to me about. post office closures are really going to close a lot of communities. i want to express my appreciation to senator moran for offering the amendment. the amendment i want to take up now has to do with executive compensation. i want to thank the senators for joining me in offering this amendment. it restricts the pay of the

postmaster general has the same for a member of congress. $104,000 a year. the 2006 reform bill allow the postal board of governors to set salary as the same rate as the vice-president and allowed the postmaster as many as a dozen senior executives to receive bonuses up to 20% of their base pay. the postmaster general could earn $276,840 per year. this will take it back to 174,000. to let you know, that could save about $200,000, you could keep open post offices in various towns -- five could be saved for this. it is a common-sense amendment.

as we look to everybody to make sacrifices, i think it is entirely appropriate that the administrators of the postal service also make the sacrifices. i would urge my colleagues to support 8. >> thank you. is there further debate? >> earlier in our debate, we were talking about making sure that we allowed the postal service to do what it needs to do, to really get out of the way. one of the underlying things that was said is we should let them proceed with closing mail processing centers or post offices or go from six to five- day a week services. this amendment runs in contravention to the. -- to that.

the postal service is the second largest business and america. the second-largest business and america. they have over a half-million employees, 33,000 retail outlets, over 500 mail processing centers. day service every home, every business in america six days a week. there is a reason why ups and fedex pay their ceo's of $1 million or more per year. the reason why they do it is they want to be able to attract the best talent they confined to run this big operations. the postal service makes those big operations look small in comparison. we need excellent people. we need some of the best talent leading the organization to be

able to be successful in the 21st century. to say to people that are working hard to turn the postal service around, for your efforts, we are going to lower your pay by $100,000 or $50,000, i don't know how that retains the best talent to lead the postal service and one of the most challenging times in its history. i do not see it. my grandmother used to say to me, "penny wise and pound foolish." we are talking about replacing or losing executives that can help the postal service save billions of dollars by providing the leadership that is needed. i would urge us to defeat this amendment. i just think we should defeat

this amendment. >> could respond, mr. chairman? >> if the goal here is to make the usps and the ups or fedex, we need to take the u.s. off of the front of the postal service, get done with it, change the constitution to be sure we do not have any obligation. if any of us sitting here around the table because of the money we make, what they are not sitting here for the right reason. to say that we cannot find people -- good people to run the post service because of salary, maybe that is the reason we need to pass this amendment. if we cannot find anyone to get the postal service out of the woods, how the hell are we going to get the deficit under control? this is the most money i have

ever made in my life. it does not compared to $800,000. $174,000 is a lot of dough. if you cannot hire anyone for $174,000, -- if our employees have to sacrifice, and there is no reason on god's green earth that administrators should not have to suffer too. i encourage your acceptance of this amendment. >> mr. chairman, could i suggest since your plan is to come back at 2:30 that maybe we could try to work on this amendment? i am sympathetic to the arguments that both of you are making in that this is a huge enterprise, but on the other hand, i am troubled that bonuses are being given at a time when the postal service is losing

billions of dollars a year. i also wonder if maybe we could cut down the number of people to be paid at the level of the vice president. this is one of the largest enterprises in the united states. so i find i have sympathy with both of your points, and i wonder if we could try to work since we are going to break to see if we could come to a meeting of the mine's. >> i would like to see us all line to the extent that we are paying money above the cabinet secretary level money above that there should be tied to results. it should be tied to better performance, a better financial performance. i am not averse to doing that. what it boils my blood is when i

see big companies who pay a boatload of money, millions of dollars, to ceo's who run their companies down the drain. i am not interested in doing that. the idea of tying executive compensation to results -- i think maybe we can work something out and that thing we should do that over lunch. >> that would be my same point. i want to see fair compensation. the part that bothers me is the bonus component. a lot of us signed a letter on the fan the mae, freddie mac bonuses -- on the fannie mae, freddie mac bonuses. the net results was they gort

millions in bonuses. we want to attract a right people for public service. the bonus component bothered me. that is where you were going on what does this all mean. i would recommend the same thing. >> are you willing to hold over -- >> the problem is going to be that my schedule this afternoon is packed. might right hand person will work with your staffs to make this happen. >> fine. if you vote by proxy, you will have to sign off on any agreement that we make. >> i understand what the senator is getting. i feel that the postmaster general -- i do not want to -- taking the bonus offer is one thing, but it seems to me that he is running a very big operation and is trying hard to bring it back into the fiscal

balance. i think it is the wrong message to give when cutting salaries. i think we should come back and talk about that. i think we have had a very productive morning. i think we are going to be able to finish this this afternoon. senator akaka's amendment on the worker's compensation was put forward. if it passed with some surprising votes. it puzzles me -- it passed with some surprising votes. the medicare amendment. it passed with some surprising vote. it also opposes something that the four of us have recommended by the obama administration recommended, so the bipartisan support was short-lived. it diminishes the savings here by a very substantial amount.

i hope we can come back and reconsider its debt some point, if not here then on the floor. we did a lot of good work. i wish you a good lunch. we will reconvene at 2:30. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> air lunch break in this markup session with the committee looking at proposals to halt the postal service avoid bankruptcy. we will continue our live coverage online at c-span.org when they resume at 2:30 eastern. here is a look at today's live coverage on c-span networks. we will be alive at 2:30 as a foreign relations committee looks at politics toward syria. officials will testify, live