[Senate Hearing 105-754]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 105-754

 
                ANNUAL REPORT OF THE POSTMASTER GENERAL

=======================================================================

                                HEARING

                               before the

  SUBCOMMITTEE ON INTERNATIONAL SECURITY, PROLIFERATION, AND FEDERAL 
                                SERVICES

                                 of the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION


                               __________

                            OCTOBER 1, 1998

                               __________

      Printed for the use of the Committee on Governmental Affairs


                     U.S. GOVERNMENT PRINTING OFFICE
51-708 CC                    WASHINGTON : 1999

_______________________________________________________________________
For sale by the Superintendent of Documents, Congressional Sales Office
         U.S. Government Printing Office, Washington, DC 20402



                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOHN GLENN, Ohio
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              JOSEPH I. LIEBERMAN, Connecticut
SAM BROWNBACK, Kansas                DANIEL K. AKAKA, Hawaii
PETE V. DOMENICI, New Mexico         RICHARD J. DURBIN, Illinois
THAD COCHRAN, Mississippi            ROBERT G. TORRICELLI,
DON NICKLES, Oklahoma                  New Jersey
ARLEN SPECTER, Pennsylvania          MAX CLELAND, Georgia
             Hannah S. Sistare, Staff Director and Counsel
                 Leonard Weiss, Minority Staff Director
                       Lynn L. Baker, Chief Clerk

                                 ------                                

   SUBCOMMITTEE ON INTERNATIONAL SECURITY, PROLIFERATION AND FEDERAL 
                                SERVICES

                  THAD COCHRAN, Mississippi, Chairman
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
PETE V. DOMENICI, New Mexico         RICHARD J. DURBIN, Illinois
DON NICKLES, Oklahoma                ROBERT G. TORRICELLI, New Jersey
ARLEN SPECTER, Pennsylvania          MAX CLELAND, Georgia
                   Mitchel B. Kugler, Staff Director
               Ann C. Rehfuss, Professional Staff Member
               Linda J. Gustitus, Minority Staff Director
                      Julie A. Sander, Chief Clerk




                            C O N T E N T S

                                 ------                                
                                                                   Page

Opening statements:

    Senator Cochran..............................................     1
    Senator Stevens..............................................     2
    Senator Levin................................................     2
    Senator Collins..............................................    10
Prepared statement:
    Senator Cleland..............................................     3

                               WITNESSES
                       Thursday, October 1, 1998

Hon. William J. Henderson, Postmaster General, U.S. Postal 
  Service........................................................     3
    Prepared statement...........................................     4

                                APPENDIX

Questions submitted by Senator Levin and responses from Mr. 
  Henderson......................................................    19


                ANNUAL REPORT OF THE POSTMASTER GENERAL

                              ----------                              


                       THURSDAY, OCTOBER 1, 1998


                                     U.S. Senate,  
                 Subcommittee on International Security,   
                      Proliferation, and Federal Services, 
                   of the Committee on Governmental Affairs
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:02 p.m. in 
room SD-342, Senate Dirksen Building, Hon. Thad Cochran, 
Chairman of the Subcommittee, presiding.
    Present: Senators Cochran, Stevens, Levin, and Collins.

              OPENING STATEMENT OF SENATOR COCHRAN

    Senator Cochran. The Subcommittee will now come to order.
    Today our Subcommittee meets to receive the annual report 
of the Postmaster General. This hearing offers the Postmaster 
General the opportunity to report publicly on the state of the 
U.S. Postal Service and to answer our questions about the 
operation and management of the Service.
    Congress passed the Postal Reorganization Act of 1970 for 
the purpose of converting the Post Office Department from a 
taxpayer-subsidized, Executive Branch Department to a self-
sustaining, independently managed service. This has not been an 
easy transition, but it has enabled the Postal Service to 
become a more efficient and reliable provider of mail services.
    After having served for several years as the agency's chief 
operating officer, William J. Henderson was appointed in May to 
serve as Postmaster General. With approximately 800,000 
employees and more than $60 billion in annual revenues, today's 
Postal Service far exceeds the size and scope of most U.S. 
companies. Competition from electronic alternatives and private 
sector competitors has presented the U.S. Postal Service and 
its Postmaster General with a big challenge.
    New postal rates have been approved and are scheduled to 
take effect on January 10 of next year. This was the third 
increase in postal rates approved by the board of governors 
during this decade. The new increase is expected to generate 
$1.3 billion in revenue and result in an average increase of 
2.9 percent across all domestic services.
    Among other subjects of interest to me, I would be 
interested to hear what impact on the use of U.S. postal 
services this rate increase will have, and whether you expect, 
Mr. Postmaster General, your competitors will be raising their 
rates, too. Mr. Henderson, we welcome you, and we look forward 
to hearing your report on the state of the U.S. Postal Service.
    Our distinguished colleague, who is the senior Member of 
this Subcommittee, to all of us, the distinguished Senator from 
Alaska, Ted Stevens, is here. And I yield to him for whatever 
comments he might like to make.

              OPENING STATEMENT OF SENATOR STEVENS

    Senator Stevens. Thank you very much, Mr. Chairman.
    I welcome the Postmaster General. We had a delightful trip 
to Alaska this year when we dedicated the Klondike Gold Rush 
stamp. I look forward to having him come back to our State. I 
would urge you to join us on one of those trips, so you can see 
more of the rural parts of Alaska.
    I look forward to seeing your 1999 performance plan and how 
that ties in to the changes in your 5-year plan.
     I would be very pleased to hear the answers to the 
Chairman's questions, too, Mr. Postmaster. But we've got a bill 
on the Floor and I must leave. So I have to beg your pardon on 
that, and tell you that I do look forward to visiting with you.
    One of the issues I think we should visit with you on, the 
Chairman and I and perhaps the Ranking Member, Senator Levin, 
would be the Y2K issue and how that's going to affect the Post 
Office and how far along you are on making the changes that 
will be necessary because of that in your automated programs. I 
assume you've got a task force working.
    Let me just ask one question. Have you been in touch at all 
with Senator Bennett and his committee, the Y2K Committee, 
about postal problems?
    Mr. Henderson. No, I have not. But we do have a huge effort 
on Y2K going on.
    Senator Stevens. I look forward to talking about that. And 
again, please excuse me.
    Senator Cochran. Thank you very much, Senator.
    Senator Levin, do you have any comments or remarks before 
the Postmaster General commences his annual report to us?

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Just to join you and Senator Stevens in 
welcoming our new Postmaster General. I know this is the first 
you've appeared on the annual report, at least, before this 
Subcommittee. You've been before this committee many times 
before in different capacities, I think. But this is the first 
as Postmaster General, as far as these annual oversight 
hearings are concerned.
    You are also the first postal employee to be named 
Postmaster General in the last dozen years or so, and that 
experience is going to be of great importance to the Postal 
Service and of great value to the Nation. So we look forward to 
your comments today.
    But again, as I've indicated to you in hearings and 
privately, we look forward to your service and your tenure as 
Postmaster General.
    Mr. Henderson. Thank you.
    Senator Cochran. Senator Cleland has submitted a prepared 
statement for the record.
    [The prepared statement of Senator Cleland follows:]

                 PREPARED STATEMENT OF SENATOR CLELAND
    Mr. Chairman, it's good to have the opportunity to review the 
progress of the U.S. Postal Service. I would like to express my 
appreciation to Mr. Henderson for testifying today, and for the 
leadership that he has provided to the Postal Service. I have been very 
impressed with the direction that he has set for the Post Office in the 
relatively short time that he has been Postmaster General. The 
initiatives that he has taken to incorporate technology into the Postal 
System, including the information management platform, exemplify the 
vision that is needed as the Postal Service enters the next millennium.
    I want to take this opportunity to again stress my strong support 
for the issuance of a commemorative stamp to honor the contributions 
and achievements of Lieutenant Henry O. Flipper. Lt. Flipper was the 
first African American to graduate from the U.S. Military Academy, West 
Point. This year at the NAACP convention in Atlanta, supporters 
collected 2,546 signatures urging the Citizen's Stamp Advisory 
Committee to issue a stamp. I have a copy of the petitions with me 
today if Mr. Henderson would be so kind as to give them to the 
Subcommittee.
    In the next several years, the Post Office faces many challenges 
brought about by changing technology and the increasingly competitive 
marketplace for information. The Postal Service must find a way to 
remain relevant in an electronic age. I feel confident that Mr. 
Henderson has the ability to deal with these challenges fairly and 
effectively.

    Senator Cochran. Mr. Postmaster General, you may proceed.

  STATEMENT OF HON. WILLIAM J. HENDERSON, POSTMASTER GENERAL, 
                      U.S. POSTAL SERVICE

    Mr. Henderson. Thank you, Mr. Chairman, Senator Levin.
    I will hit the highlights of my prepared statement.
    First of all, from an overall perspective, the Postal 
Service is in good shape. We have enjoyed 15 consecutive 
quarters of improved postal services and occupy a strong 
position in the marketplace. Two and 3-day mail service is up a 
remarkable eight points. That's the biggest leap we've ever 
made in one category in 1 year.
    So things are really on the right track. We're very proud 
of the fact that we'll probably have in this year between $500 
million and $600 million net surplus. And at the same time, we 
postponed a rate increase until January 10, and that 2.9 
percent increase will be the smallest in our history. This 
delayed rate increase has saved the ratepayers of America $800 
million. So we're very pleased.
    We still see challenges in the area of labor relations. 
We're actively involved right now in labor negotiations with 
our unions. It is our hope to improve labor relations 
significantly in the coming years. I think there is a 
commitment from both labor unions and postal management to do 
that.
    So things are very good right now. We do have a major 
initiative that we announced in our customer forum, a major 
technology platform that we'll be putting in place that will do 
essentially three things. It will provide the Postal Service 
with better operating information so that we can make the 
correct decision before it's a mistake that we have to correct. 
It will provide us a better, activity-based accounting system, 
and it will provide an information platform through which our 
customers can monitor their mail. We think that will be a great 
advantage for us in the marketplace.
    So we think the Postal Service is on the right track. We 
appreciate the support of this Subcommittee. I'll be happy to 
answer any questions you might have.
    [The prepared statement of Mr. Henderson follows:]

                  PREPARED STATEMENT OF MR. HENDERSON
    Good morning, Mr. Chairman and Members of the Subcommittee. I 
welcome this opportunity to talk with you today.
    I want to thank you, Chairman Cochran, and all the Members of the 
Subcommittee, for your support and your oversight of the U.S. Postal 
Service. I appreciate the time and energy you invest in helping us 
fulfill our fundamental mission of delivering to everyone, everywhere, 
every day.
    I am pleased to report that the men and women of the Postal Service 
are doing a fine job of succeeding at this mission. We have just ended 
Fiscal Year 1998, and the early results show it was one of our best.
    Service was up. We now have the results from our final quarter, and 
I want to announce them today. Nationally, 93 percent of local First-
Class Mail was delivered overnight. That is one point better than a 
year ago, and marks our 15th straight quarter of improvement. Combined 
2- and 3-day service also improved to 87 percent. That is an 8-point 
increase over last year and our highest mark ever.
    Our customers asked us to expand our measurement system for First-
Class Mail. We have responded. Last month, we began extending our 
coverage from 62 percent to 80 percent of destinating First-Class 
volume. The expansion process will be completed and the results 
publicly reported in the spring of 1999.
    Priority Mail service performance has also improved. Both consumers 
and commercial customers continue to find great value in Priority Mail. 
We are investing significant resources in this product to make it even 
stronger. We are also working very closely with our customers to 
improve service for periodicals and advertising mail.
    We have gone to great lengths to get ready for a banner fall and 
holiday mailing season. We began our preparations early in the year. 
Working with our customers, we developed our most extensive set of 
plans ever. These plans were implemented in July. So far, performance 
has been solid. We will make every effort to keep service high 
throughout the season and into the new year.
    Hurricane Georges has made that task extremely difficult in the 
Caribbean and the Gulf Coast. It effectively cut off the flow of mail 
in a number of locations. By Tuesday, postal operations in Puerto Rico, 
the Virgin Islands, and Florida were mostly back on line. Because of 
heavy flooding and damage, we were forced to close facilities and 
suspend deliveries in New Orleans and several locations in Alabama and 
Mississippi this week. Our employees are going the extra mile to get 
mail delivered despite the elements and working to restore service as 
quickly as possible in the affected areas.
    Financially, we expect to end 1998 with a surplus of $500-$600 
million. We have made a great deal of money over the past 4 years, but 
there are nearly $4 billion in accumulated losses since 1971 still to 
be recovered.
    Originally, we planned to put our 2.9 percent rate change in place 
over the summer. This would have helped us restore our equity more 
quickly. However, the postal governors and management decided that 
delaying new rates past the holidays was the right thing to do. It 
shows America that we are committed to being responsible and 
responsive. We listened to our customers. Stable rates for a fourth 
straight holiday season will help our customers grow their businesses 
during this most critical time of year. Overall, this is an $800 
million dividend for the Nation.
    It also poses a challenge to the Postal Service. Our revised 1999 
budget calls for a $200 million surplus. I have asked our field and 
headquarters managers to increase that amount by several hundred 
million dollars by operating smarter and tapping into our employees' 
good ideas. We need this additional net income to help restore our 
equity, continue building our infrastructure, and keep next year's 
rates in place at least 2 years.
    Overall, I am pleased with our progress. Still, we have some work 
to do to get ready for the dynamic marketplace of the 21st Century.
    Over the last 4 years, the Postal Service has become a performance-
driven and customer-centered organization. This focus will not waver. 
We will continue to deliver improvement and innovation. That means more 
reliable and timely deliveries, better customer service, new product 
features, and higher overall efficiency and value.
    In fact, on Wednesday we provided the President and the Senate and 
House with copies of our 1999 Annual Performance Plan. This plan was 
created within the framework of the Government Performance and Results 
Act and carries forward our updated 5-year Strategic Plan.
    Over the next 5 years, technology will be a key to our success. The 
electronic revolution has and will continue to divert billions of 
dollars in business from the mail stream. However, technology has also 
been a God-send. Over the past 2 decades, it has created a postal 
revolution--automation. Automation has saved the American people 
billions of dollars. It has helped keep postage rates in line with 
inflation and given businesses and non-profit organizations the ability 
to narrowly target their messages and advertisements. The result is 
that mail has continued to grow. In 1999, mail volume is expected to 
reach 200 billion pieces for the first time, more than double what it 
was in 1971.
    Now, we are taking the next step to keep mail strong and vibrant in 
the next century. On August 21, I announced a major technology 
initiative for the Postal Service. I committed to building an 
information management platform in 5 years. This platform will add a 
new level of sophistication and value to hardcopy mail. I named a new 
Chief Technology Officer to begin leading a coordinated effort to link 
together new and old information systems into a vast electronic 
network.
    This platform will have three key benefits. First, it will give the 
Postal Service real-time information--instead of yesterday's reports--
on which to base decisions. This will drive billions of dollars in 
costs out of our system and improve service.
    Second, it will revolutionize pricing through a true activity-based 
accounting system. Knowing our true costs will help us manage them 
better and price more effectively.
    Third, it will give customers access to information about their 
mail. The mail will ``talk'' to customers. It will tell them what kind 
of mail it is, where it is in our system, and when it will be 
delivered. This will enable customers to better manage staffing, 
inventories, cash flows, and other critical business factors.
    We have just started to build our information platform, but it will 
be a key force in improving the value of mail for the American people 
in the years to come.
    I believe the Postal Service is on the right track for 1999. Our 
employees are focused and ready to deliver for the holidays. We are 
committed to embracing technology and process management and using 
these tools to drive our performance to the next level. We are proud to 
serve every American, everywhere, every day, and we look forward to 
working with this Subcommittee to continue that mission in the 21st 
Century.
    Thank you, Mr. Chairman.

    Senator Cochran. Mr. Henderson, I first of all want to 
congratulate you and the employees of the Postal Service for 
improving the on-time deliveries of the mail. I'm curious to 
know whether this is something that can be sustained, this 
performance level, over a long period, or even improved upon in 
the future.
    What is the outlook for continuing to meet these goals?
    Mr. Henderson. It is our goal to not only sustain it, but 
to continue to improve it. It pays for itself in the 
marketplace; our products become more and more competitive 
because of the quality we provide. Our customers respond by 
using the Postal Service more. And that's a great testament to 
postal employees across this country, that they have rallied to 
the cause of service.
    Senator Cochran. There's a question that I worked into my 
opening remarks about the postal rate increase and whether or 
not you expect your competitors to also raise their rates. What 
is the outlook, in your view, of that?
    Mr. Henderson. Our competitors, traditionally, have had 
annual rate increases. Our 2.9 percent increase is the first 
increase in 4 years. It's a third of the inflation rate. We 
think we'll characterize it as a speed bump. We don't see that 
it will affect our volume. We worked with our customers on this 
rate increase. We're very proud of the fact that it's the 
lowest in our history.
    Senator Cochran. When I was home during the August recess, 
in my State of Mississippi, there were some who came to meet 
with me to express concerns about the effect on small town 
newspapers and other mailers of that kind, of the rate increase 
that was going to take effect. What impact will it have on your 
customers of that kind, and what can be done to help ease the 
burden that they have?
    Mr. Henderson. Well, it's about the least amount of impact 
that we could have on periodicals mailers still and have a rate 
increase. They can work with their local post offices to make 
sure they're taking advantage of any and all discounts that 
they might be entitled to. And I would urge them to do that.
    But 2.9 percent is a very small increase.
    Senator Cochran. There was a statement you made recently 
about a plan to link the major information systems. If I 
understood that right, could you tell us what you're talking 
about, and what is the purpose of these changes and the 
benefits that you expect from the changes?
    Mr. Henderson. As I said in the opening statement, we 
intend to put an information platform in place in the Postal 
Service which first of all provides operating managers with 
real-time information about what's going on. Rather than see 
the report hours or in some cases days later, they'll be able 
to get real-time information.
    The platform will also provide more of an activity-based 
accounting system, so that we can attribute our costs more 
accurately. And third, it will provide a window for our 
customers to see what information they would like to know about 
their mail.
    So the system will pay for itself in better operating 
decisions.
    Senator Cochran. In connection with the recent decision by 
the Postal Rate Commission to approve a rate increase, it was 
observed by the Commission that the Service did not spend as 
much on program expenses as was expected in 1997. Why were 
monies not expended as planned, and were the revenue 
requirements accurate that were presented to the Postal Rate 
Commission?
    Mr. Henderson. The aggregate of those slippages was about 
$540 million. They occurred because management made decisions 
that it needed to slow up technology, to fine-tune it. An 
example was the tray management systems, that's probably the 
largest example, that we planned on deploying last fiscal year. 
I slowed it up, personally, because I wasn't satisfied with the 
performance of the prototypes in several post offices.
    So there's a variety of reasons why we slow up the 
deployment of technology. With an organization our size, you 
can't expect to hit a home run every time you're at bat. Some 
of these technologies sound better than they actually work. And 
when we do find that is the case, we stop them at that point.
    Senator Cochran. What about the revenue requirements? Were 
they accurate as presented to the Commission?
    Mr. Henderson. Well, the revenue requirements were adjusted 
by about $700 million, based on the real-time assessment. I 
think the Rate Commission did the right thing in making that 
adjustment. At the time we planned the rate case, we planned on 
that technology, those capital expenditures to work in a 
fashion that probably wasn't realistic, in hindsight.
    So the revenue requirement was adjusted. For example, the 
Postal Service did better in the field operationally by about 
$300 million. That's $300 million on $50 billion in revenue. 
That's a fraction, but the money's there.
    Inflation was less than what we had projected, and that was 
worth about $500 million there. So when you add it all up, and 
then the $800 million that we gave back to the customers 
because of the rate increase delay, it's going to end up 
between a $500 million and $600 million surplus. But there's 
not one single reason for all that. It's multiple.
    Senator Cochran. Thank you. Senator Levin.
    Senator Levin. Thank you, Mr. Chairman.
    A few years back, there were major stresses in terms of the 
relationship between management and employees. We had a number 
of tragic incidents in post offices in my home State, Michigan. 
I know that's something you are very conscious of. And I'm 
wondering if you could tell us the kinds of efforts that you're 
making to work with employees to remove, reduce stress levels, 
and also to have a harmonious relationship between management 
and employees, so it's not the military-style command that's 
given, but rather more of a partnership.\1\
---------------------------------------------------------------------------
    \1\ Questions by Senator Levin and responses from Mr. Henderson 
appear in the Appendix on page 19.
---------------------------------------------------------------------------
    There obviously needs to be a boss and there needs to be an 
employee. There needs to be a supervisor and there needs to be 
someone who will carry out instructions. But there's also a 
tone which can be created in post offices. And because the 
demands are so great on these employees, I'm wondering what 
efforts you're making to see if we can have a harmonious work 
place.
    Mr. Henderson. Your point is well taken. People ask you, is 
there one thing that wakes you up at night and worries you. It 
is the labor climate in the Postal Service and the atmosphere 
that may surround a lot of our clients. There are two 
fundamental ways that we're looking at this. One is a 
leadership model, in which we're going to measure 
characteristics of our managers in terms of promotions and 
model the kind of behavior that we want in a work place, which 
is certainly more participative.
    The other avenue is really a systems approach, a process 
approach. We're trying to redesign some of our antiquated 
processes, like the way we manage city delivery, as an example. 
There's a tension, it's not a violent tension, but there's a 
tension between the carrier and the manager. We have a 
memorandum of understanding to go out and redesign with the 
NALC the way we manage city carriers all across America.
    We're very committed to taking the tension out of the 
system. We think that if you take the tension out of the 
system, you'll get more productivity, because you'll get more 
discretionary effort out of the employees.
    But we have a huge effort that involves outside 
consultants, it involves our employee assistance program, which 
I think is world class. It involves engineers redesigning work. 
It involves new ways of doing labor relations and new ways of 
settling disputes. We have a new dispute resolution process 
that Janet Reno recently recognized in a meeting as being best 
in class.
    So we're really trying to attack it on several different 
fronts. And it really starts here in this chair. This is where 
you model a non-militaristic, more participative style of 
management.
    Senator Levin. What is the status, by the way, of the 
negotiations between the Postal Service and the employee unions 
on new labor contracts?
    Mr. Henderson. We're in the presentation stage of 
negotiations. We just recently finished a summit meeting at 
Federal Mediation. I think the dialogue thus far has been good. 
There is a strong commitment on both sides, it appears, to 
reach a settlement. So we're very hopeful, not being naive, but 
hopeful.
    Senator Levin. We recently had a hearing of the 
Subcommittee on the problem of fraudulent or misleading 
sweepstakes mailings. The House Postal Subcommittee is going to 
be holding similar hearings, I believe, next year. I think 
there was a press conference either today or yesterday on that 
subject, which I believe you and the FTC were involved in.
    I'm wondering if you would first discuss your views on the 
seriousness of the sweepstakes problem and the role of the 
Postal Service in preventing it. Then second, would you comment 
on a bill which I've introduced that now has the co-sponsorship 
of a number of Members of the Subcommittee, including Senators 
Collins and Durbin, I believe, which would eliminate deceptive 
practices by prohibiting misleading statements and would impose 
a much stiffer penalty for each deceptive mailing, as well as 
giving the Postal Inspection Service subpoena authority.
    So on both of those issues, in general, what is your 
position on this, how big a problem is it, what are you doing 
about it, and do you support S. 2460, which I introduced and 
just described?
    Mr. Henderson. First, it is a problem. And it's a problem 
for the Postal Service in a number of ways. It's a problem for 
our consumers, but it's also a problem for our good name. We 
don't want to be associated with fraudulent mailings.
    I know everyone in the mailing industry I've had 
conversations with are really concerned about it, too. It's not 
condoned by any of the mailing associations, and they're trying 
to police it.
    The difficulty that we have with it, from a postal point of 
view, is that we don't want to kill advertising mail. 
Obviously, that's very important to the health and well-being 
of the Postal Service on the one hand. On the other hand, we 
absolutely do not want fraudulent mailings in the mail. So 
we're trying to balance those two, and I think you've had some 
very constructive, as I understand, discussions with the 
mailing industry about ways to police sweepstakes mail, as an 
example, without killing off the legitimate sweepstakes 
mailings.
    My approach is to have a balance between the mailing 
industry and the consumer in this regard, so that the interest 
of the Postal Service in keeping mail in the mail stream is 
pursued. I'm not as familiar as I should be with your bill. 
But, as I understand it, your bill is a compromise and the 
mailing industry does support it.
    Senator Levin. I'm not sure they support all of it. 
[Laughter.]
    I think parts of it they may support.
    Mr. Henderson. We're very concerned about killing off the 
legitimate sweepstakes, or making it so difficult that that 
type of mailing will go away. We're equally concerned, and the 
Postal Inspection Service, as you know, is very diligent on 
that, policing fraud that exists in sweepstakes mailings.
    Senator Levin. I want to again thank Senator Cochran for 
holding hearings in this area. It's a very significant problem 
where I come from. And we want to give the Postal Service the 
tools to go after the violations, the people who are using 
deceptive practices instead of legitimate practices. There are 
just too many of them.
    The tools that you have in current law are not adequate. 
The penalties are just the price of doing business, too often. 
And we cannot rely on the industry to police itself. Although 
it's helpful, we have to have some very good tools in your 
hands and willingness on your part to use them.
    So I would appreciate, if you would, a formal response to 
that bill indicating your comments on it.
    Mr. Henderson. I will do that.
    Senator Levin. Several weeks ago, the Senate voted to adopt 
an amendment to the fiscal year 1999 Treasury Postal 
Appropriations Bill that would establish guidelines that must 
be followed by the Postal Service before you could close or 
open or relocate a post office. You opposed the amendment. I'm 
curious as to why and what alternative proposals you could 
offer to ensure that the opinions of the public will be taken 
into account when a post office is going to either be closed or 
opened or relocated.
    Mr. Henderson. I opposed that, Senator, because it would 
put our facilities program in gridlock. If every dispute in the 
United States over where a facility was located had to be 
settled in Washington, DC, it would just put a huge burden, it 
seems to me, on the process.
    Now, we did redesign the process we use so that there is a 
public hearing and communities involved have a voice. And it is 
our policy to try to go along with communities wherever 
possible. But to have a formal procedure, so that if I want to 
build a post office in location A and one person objects, and 
it therefore comes to Washington, DC to be resolved, it seems 
to me to be an unnecessary regulation of the building process.
    And I have gone around and tried to explain this, what 
happens if we don't hold those capital monies for a delayed 
project resolution; there's an expense associated with holding 
capital funds. So we go on to the next project. And if there 
are no complaints about that project, we'll build that post 
office in that community.
    That will deny some places that need legitimate help with 
that legitimate help. And I just think it's an unnecessary 
regulation of our organization. When you put a post office in a 
community where they don't want it, they never forgive you. 
They bring that up time and time again. It's not worth it.
    And if the community wants the Postal Service, which most 
do, there is a way to resolve these kinds of issues, and that's 
what we intend to do. We want to be a good citizen.
    Senator Levin. My last question has to do with the recent 
issuance of a stamp that focuses on breast cancer awareness, a 
stamp where there's a surcharge in order to raise funds for 
research in breast cancer. I'm wondering if you have any early 
returns, whether it's just too early to know whether or not 
that is producing the hoped-for income. There was some question 
as to whether in fact it would be productive enough to do and 
the precedent that it would set. I was troubled by both those 
aspects of it, as a matter of fact. Are there any early returns 
that you have that you can tell us?
    Mr. Henderson. We have some early returns, I don't remember 
what they are. But I'll be glad to provide those to you.
    In general, though, it has created a great deal of 
awareness of breast cancer issues, and has been remarkably well 
received all across this country. The genuine identification 
with this issue, the real tenacity to whip this issue, it's 
been almost overpowering.
    Senator Levin. There's a tremendous public interest, 
obviously. The question is whether or not that's going to 
translate into purchases and sales of stamps so it really 
produces the money. That's the issue. So if you could give us 
for the record any of the returns.
    Mr. Henderson. I will.
    Senator Levin. And as it goes along, perhaps give us a 6-
month report on it, that would be helpful. Because we're 
looking at that in terms of future issues of the same kind, 
whether we ought to start down that road. We already have 
started down it, whether we ought to continue down that road in 
using postage stamps to produce revenue for very good causes. I 
don't know of a better one than breast cancer awareness and 
research.
    So it is important in terms of whether we want to, whether 
we raise enough money in that process to use this mechanism of 
raising funding for other important issues as well.
    Senator Cochran. The distinguished Senator from Maine, 
Senator Collins, has been a leader in the effort to do 
something about these misleading mailings, deceptive practices, 
fraudulent, overreaching of postal customers. And she was an 
active participant in the hearing we held, and then she chaired 
hearings in the investigation subcommittee.
    We're glad you joined us for the hearing today. You may 
proceed.
    Senator Levin. Can I ask the Senator from Maine to yield so 
I can correct my oversight, thanking her also for holding those 
hearings. They were terrific, indeed.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you very much. Thank you, Mr. 
Chairman, and thank you, Senator Levin, for your kind comments 
as well.
    The Chairman held hearings that all three of us 
participated in, and Senator Levin has alluded to, on the issue 
of deceptive mailings. This is an issue that is of great 
concern to all of us. I'm particularly concerned about what I 
call government look-alike mail. It always comes in the kind of 
envelopes that government checks come in, they're always that 
kind, they frequently say, buy savings bonds, often they have 
an eagle on it.
    They have various notices to the Postmaster General, all of 
which are intended to deceive people into thinking that these 
are mailings from official government agencies, and of course 
they're not. They're inevitably solicitations. I got one myself 
this week at home. Little do they know I'm now saving every one 
I get. [Laughter.]
    Similarly, I had a constituent in Washington County, Maine, 
that received this mailing saying, official business, special 
notification of cash, currently being held by the U.S. 
Government, is ready for you as long, of course, as you send 
$9.97 by return mail. We see cases where, and I'm even more 
concerned about those than I am the sweepstakes mailings, 
although we've seen a lot of deception and fraud in sweepstakes 
mailings as well.
    We also see mailers using look-alike postal cards to try to 
deceive consumers. Your return receipt card is almost 
identical, except in color, to this ``blue return receipt 
card,'' I put that in quotes, that was used for this mailing. 
This one is a sweepstakes mailing. And it seems to me that 
you're mainly dependent on cease and desist orders, of ordering 
people to cease this kind of activity. And that doesn't seem to 
be very effective to me. Oftentimes, if you put someone out of 
business, they crop up elsewhere, for example.
    So I want to follow up on the work the Chairman's done and 
Senator Levin, in inviting you to tell us more about your 
enforcement efforts in this area, but also to ask you to work 
with us in the next Congress to develop legislation to really 
crack down on these deceptive mailings. I know you have a 
balance, because you don't want to curtail legitimate mail. And 
yet, we just see a huge increase in these kinds of fraudulent 
and misleading mailings that are really of great concern to us.
    Mr. Henderson. As we said a couple of days ago, we are 
stepping up our enforcement efforts. But we are very happy to 
work with you and others to try to work out a solution to this 
problem. Obviously, as I said earlier, these kinds of deceptive 
mailings not only hurt the individual, they also hurt our 
organization, devalue the quality of the mail service. So we're 
very concerned.
    Senator Collins. Do you believe that legislative changes 
are needed to give you additional authority, whether it's 
subpoena authority or the ability to impose civil penalties, 
for example, after due process, after hearings, perhaps?
    Mr. Henderson. Our Postal Inspection Service is of the 
belief that they need more authority in dealing with these 
sorts of things. The specifics of that I really can't get into. 
It's more of a law enforcement issue. But they do feel that 
they need more authority and broader powers.
    But we've got to be careful we don't cross the line of 
censorship. We're very concerned about that. Our job is to 
deliver the mail. Where we draw the line in the sand that says, 
this is mail that we ought to do something about, that we ought 
to somehow censor, is concerning to us not only as an 
organization, but to myself as a citizen in a free country. So 
we must strike a balance here. But we certainly don't condone 
those deceptive practices, and we are out trying to chase them 
down.
    Senator Collins. I would ask that you provide the 
Subcommittee with some specific recommendations for statutory 
changes over the next few months, in the hopes that we continue 
to work with the Chairman on legislative remedies. We want to 
make sure that anything we come up with doesn't cross that 
line, and yet really takes care of what I'm convinced is a 
growing problem.
    Mr. Henderson. We'd be more than willing to do that.
    Senator Collins. The second issue I want to raise with you 
is one that's near and dear to my heart, coming from a large 
rural State. And that is the issue of small, rural post 
offices. I understand that the Postal Service has imposed a 
moratorium on the closing of small post offices. And in my 
State, many of these post offices, which are in small towns, 
remote areas, such as Frenchboro, or Cliff's Island, are really 
the source of community pride. They are central to the identify 
of rural communities in Maine.
    One constituent told me, ``It's what puts us on the map.'' 
Another recounted how during the terrific ice storm that we had 
in January, everyone gathered at the community post office to 
find out what was going on, and to exchange information.
    So they're really not only important from a mail service 
point of view, and in keeping with our commitment to universal 
service, but there's a very important role that they play in 
small communities.
    I'd like to know your plans for keeping the moratorium, and 
what you see coming as far as the role of small, rural post 
offices.
    Mr. Henderson. I agree with you 100 percent. I was a big 
driver for putting the moratorium on. They are in some ways the 
soul and fabric of America. Communities only mourn as a 
community two events, in my association with the Postal 
Service. The first is if their newspaper closes, they think 
they've lost their identity. And second, they have lost their 
identity if their post office closes.
    So you're not going to see me lifting or modifying the 
moratorium, period. I think that, while small post offices cost 
money, they provide intangible benefits. Communities are loyal 
to this organization at a grass roots level, because a 
postmaster does the right thing every day to customers in their 
small community.
    And we're glad that people gather at their post offices to 
talk and to even play checkers, which where I grew up, that's 
what they did in the small post office, they played checkers. 
And we're very proud that our post offices are part of the 
fabric of the communities. So you're not going to see any 
reduction of that moratorium while I'm around.
    Senator Collins. I'm very glad to hear that. And I really 
appreciate the commitment that you have. I do think it's so 
important.
    A related problem that we've seen in a lot of small towns 
in Maine is when a postmaster or postmistress retires, and 
sometimes there is difficulty in finding someone to take the 
place, or find new real estate to have a post office. In some 
little villages in Maine, the post office is part of the 
postmaster's house.
    How do you deal with situations like that, because that's a 
concern that I hear from a lot of my constituents? I realize 
that's not a case where you've initiated a closure, but the 
impact can be just the same.
    Mr. Henderson. We generally hold those post offices in 
suspension and try to find a location. We go around and talk to 
grocery stores, if there is one, and every other place, to try 
to find a location for the post office. And we keep trying to 
find a location and somebody who will run the post office.
    In some instances, we're not successful, over long periods 
of time. But generally if we make it known to the community 
that they don't have a post office unless we've got a roof, 
somebody will supply a roof.
    Senator Collins. I'm pleased to hear that you are going to 
pursue that as well. Because the results can be the same, the 
loss of that very important community tie and service.
    The final issue I want to raise with you is the renovation 
of post offices. When I was running for the Senate in 1996, I 
went to Castine, Maine. And I swear that every citizen in 
Castine came up and talked to me about the post office's plans 
to move the post office out of the historic building in which 
it was located, which had been the oldest continuously 
operating post office, I believe, in the United States. And 
there was much to do about taking it out of the downtown, 
taking it out of this historic building.
    This particular saga had a happy ending, and the Postal 
Service agreed to do some necessary renovations, to keep the 
post office located in town. But it created a lot of anxiety 
among the citizens that it was going to be moved out of the 
downtown, that it would no longer be in this historic building, 
and then what would become of this historic building.
    How does the post office consult with communities when it's 
deciding the location of a post office, or when it believes 
that there is a need for significant renovations?
    Mr. Henderson. We just recently issued new guidelines that 
require not only consultation with the community, but a public 
hearing on our plans. As I said earlier, it is the goal of the 
Postal Service to be a great citizen. When you put a post 
office in a place where the community doesn't want you, they 
never forgive you. They never forgive the Postal Service.
    So it really is our goal to have a Postal Service that the 
community rallies around. So it's not our intention to try to 
buck the community. We often find there are disputes between 
landholders, who want that piece of property. But most of the 
time, if everybody involved is well-intentioned, that is, they 
want the Postal Service and they're willing to move, we are 
more than willing to cooperate with the community. And our 
guidelines are pretty strict about being aboveboard in public 
hearings and very open. So we're trying to be a good citizen 
here.
    Senator Collins. Thank you very much, Mr. Chairman.
    And again, I wish you good luck in your new position, Mr. 
Henderson, and I look forward to working with you.
    Mr. Henderson. Thank you.
    Senator Cochran. Thank you, Senator Collins, very much, for 
your participation and for your leadership.
    Mr. Henderson, in the 1997 annual report, revenues were 
shown from international mail to have declined from 1996. What 
do you attribute this decline to, and what do you expect the 
benefits and rate of return will be from the new international 
service centers?
    Mr. Henderson. The decline primarily is due to just pure 
electronic erosion. People have different ways of communicating 
now, and the mom and pop international letters that were the 
bulk of international mail are simply being replaced.
    Our commercial product, Global Package Link, which was a 
subject of a hearing some time back, has also suffered some 
declines because of the economics of the Asian market. We're 
seeing about a 25 percent drop in Global Package Link.
    So overall, internationally, the world is not in the 
booming economy that the United States is. And the impact of 
that is hard to tell at this point in time. We're still, as 
everyone is, hopeful that there will be a huge rebound, and 
that once again, the Asian economy will be bouncing and 
rolling. But we don't see any signs of that right now.
    Senator Cochran. What about the benefits from the 
international service centers? Anything to tell us about?
    Mr. Henderson. That's a pure service issue. It's not a 
financial issue, it's a service issue. We have a goal of being 
the leader in the world in international service scores, and 
we're not there yet. It's our belief that we have to isolate 
that mail in these international hubs, but we're not nearly far 
along enough to see an impact of that today.
    Senator Cochran. Competitors of the Postal Service have 
raised concerns about whether the Postal Service is competing 
fairly. We hear that from time to time in private meetings and 
in public hearings as well. And this is specifically with 
respect to differences in application of certain laws, such as 
Customs treatment or anti-trust immunity.
    How do you respond to these concerns, and how can they be 
addressed as competition continues to increase?
    Mr. Henderson. Well, just to comment on international 
service, we're treated like a postal service, not like a 
commercial shipper. So we have different rules, not necessarily 
better rules. But different rules. And they do not give us a 
real competitive edge in the marketplace. They actually slow 
the process.
    I will tell you that the Postal Service does nothing today 
that it hasn't done for the last 25 years except, and this is 
one very big exception, the quality of the service of the 
Postal Service is very competitive in the marketplace. We don't 
operate fundamentally any different today than we did in 1975, 
except that our package business, our priority business, our 
mail business, is of a much higher quality.
    And that quality service is the reason our competitors are 
worried. They see us as a real competitor, because our products 
are of a much higher quality today. Citizens don't use the 
Postal Service as a deliverer of last resort. They see us as an 
alternative to the private sector competitors. And what that's 
saying is that we represent good government. That's what we are 
all about, is improving the levels of service that we provide 
the American people.
    And we've done it in such a dramatic fashion that those 
private sector competitors, who are in the same marketplace as 
we are, are seeing a loss of volume, simply because of the 
quality of service we provide. That's it in a nutshell. It's 
the quality of service the U.S. Postal Service provides the 
American public today.
    And we would argue with our competitors who say that we 
ought to not provide that quality of service, which is really 
nonsensical. We ought to get better. So we see it as an example 
of pure good government.
    Senator Cochran. Tell us what the role of the universal 
postal union is, and what benefits does our country get from 
participating in the universal postal union?
    Mr. Henderson. The primary role, from my perspective, of 
the UPU, is to determine the exchange of monies for 
international mail. In other words, when Great Britain mails a 
letter to the United States, there are certain monies that 
change hands, tariffs, if you will, that are imposed between 
countries, and the UPU is the vehicle to determine those 
exchanges. That's the primary role from our perspective.
    Senator Cochran. Recently, a foreign postal administration 
announced that it planned to acquire a local mail-forwarding 
company. I believe this was the United Kingdom, I may be wrong. 
What impact will this have on the U.S. Postal Service's revenue 
and volume? And does the Postal Service plan to respond in any 
specific way to this development?
    Mr. Henderson. There are a number of countries that are in 
the United States trying to ship mail as freight to their 
country and then convert it to postage and deliver it to 
wherever around the world. The Dutch are very active here, and 
Royal Mail is in New York and Chicago.
    Senator Cochran. Royal Mail, is that the United Kingdom?
    Mr. Henderson. Yes. And the Swedish are here. They're 
investing in American companies that are related to mail.
    The Royal Mail has a goal of getting about $80 million of 
revenue out of the United States. I think the Dutch are 
probably in that same neighborhood today.
    Our response has been to do a better job, through the 
international service centers, to do a better job with U.S. 
mail. Our customers, U.S. businesses, are really looking at 
service as an issue. That's why we're very focused on 
increasing and improving our international service.
    We are active, also, in foreign markets, looking at the 
opportunities. But quite frankly, it's more of a nationalistic 
issue than it is a real dollar and cents issue. Because in 
effect, $80 million on a $62 billion budget is not much of an 
impact. It's more in your face than it is real impact.
    Senator Cochran. What is the status of the Postal Service's 
efforts to develop electronic communications services? What 
role should the Postal Service play in this area, given the 
fact that private companies are also providing these services?
    Mr. Henderson. We're in the early stages of looking at some 
secure electronic services now, including a desktop post 
office, which provides mailing labels. It can also provide some 
very limited addressing. It's designated for the small office, 
home office market. We have an electronic stamp that's pending 
that we just received a patent on.
    But these efforts are in their infancy. They're not very 
sophisticated and they're not driving any revenue. There is an 
issue about what our role ought to be in the electronic 
services. We are getting inquiries from the private sector 
about being a trusted third party. There is some concern that 
if remittance mail, for example, gets into the hands of a 
private sector company who has an electronic platform, there's 
no effective way to regulate the tariffs that will be charged 
on that platform.
    And private sector interests have asked the Postal Service 
if we would be willing to provide that sort of platform because 
the PRC provides some public oversight and regulation. And 
we're discussing those issues, but we haven't taken any 
initiatives.
    But it is an interesting role that the Postal Service might 
play in the future, because we are a public entity.
    Senator Cochran. Last year, the Postal Service filed a 
request with the Postal Rate Commission to offer ``pack and 
send'' as a new postal service. In April of this year, the PRC 
approved a 2-year test of this service, but it encouraged the 
board of governors to consider the financial consequences of 
entering into competition with existing owner-operated small 
business that provide similar services.
    Has the board looked into this issue, to your knowledge, 
and what is the current status of pack and send?
    Mr. Henderson. It's currently on hold. We're having a 
series of discussions with Jim Amos who is the head of 
Mailboxes, Etc., a partnership experiment with them. Pack and 
send is all a part of that discussion. There again we're trying 
to get a partner here, and not a foe. We think there's an 
opportunity for the Postal Service to generate some revenue and 
for Mailboxes, Etc. to generate some revenue, to work in tandem 
at the local level with the Postal Service. So we're in 
discussions right now, we have 270 test sites that we'll be 
kicking off beginning in November.
    Senator Cochran. Last year, also the Postal Service 
reported plans to build 150 wireless communication towers on 
postal property. We understand because of some public criticism 
the Postal Service has been reviewing the program. What's the 
status of that program and how many antennas, if any, have been 
constructed, and how many do you anticipate building?
    Mr. Henderson. There's 25 that have been constructed, and 
we're in some discussions with the organization, UniSite, as to 
future plans.
    Senator Cochran. The Postal Service has attempted over the 
last several years to introduce a variety of new products, some 
things are sold in the post offices now, people complain that 
they're not really postal-related.
    What is your policy on this issue? How do you determine 
what new products are appropriate to market and which ones 
aren't? What steps do you take to ensure that the Postal 
Service doesn't undertake creating an unfair relationship with 
other businesses in the process?
    Mr. Henderson. We have a retail group that approves and 
specifies what can be sold in post offices. I think we have 
sold some merchandise, such as ties and tee shirts, that I 
would call inappropriate for a post office. We shouldn't be 
marketing stamps on ties and tee shirts at a post office, we 
should be marketing them through a catalog. So we've taken 
those products and separated them, and I think you'll see a lot 
more discipline now in our retail units than you have in the 
past.
    Senator Cochran. Senator Levin asked you a question about 
the labor relationships. You have four unions, I think, that 
you've begun negotiations with. What's the status of these 
negotiations? Do you think you can reach contracts with them 
and avoid the use of arbitration or other devices to settle 
disputes?
    Mr. Henderson. We're currently negotiating with the 
American Postal Workers Union, the National Association of 
Letter Carriers, and the Mail Handlers Union. It is our hope 
that we can reach a settlement, but it takes two parties. Right 
now, I think both sides, from my perspective, appear to be 
committed to reaching a settlement. It depends on, in the final 
hours, what the terms are.
    Senator Cochran. The General Accounting Office reported 
last year the number of employee grievances continues to 
increase. It has been doing that over the last several years.
    Is that something we should be worried about? What's being 
done to deal with this problem?
    Mr. Henderson. It is one of the hot subjects of 
negotiations. It is our belief in management that the grievance 
process is broken, it's too long and too cumbersome, and has 
too many layers. And we're actively engaged with the unions in 
trying to streamline it, to offer a quick route to justice, if 
you will, to the people who are complaining. We're very hopeful 
we'll come out of these negotiations with a much better system.
    Senator Cochran. There's an awful lot of new emphasis in 
the work place on training and making people sensitive to 
harassment issues and diversity issues and the like. What do 
you think the record of the Postal Service is on these things? 
Are you doing what you need to be doing to ensure that these 
issues are dealt with in a fair way and an appropriate way 
across the country?
    Mr. Henderson. Yes. We have a huge, ongoing effort. 
Everything from training programs like Looking Glass, in which 
you learn to appreciate diversity, to seminars and training on 
sexual harassment and those sorts of things.
    It is something that's not fixed. It's forever ongoing. You 
have to continuously train people, and make them very sensitive 
to those kinds of issues.
    Senator Cochran. What's the status of your efforts to 
implement the new process known as redress to expedite 
resolution of EEO complaints?
    Mr. Henderson. We're rolling that out nationwide. Mary 
Eleano, our general counsel, was recognized by Janet Reno as a 
dispute resolution expert in government. This is really Mary's 
child. She's done a heck of a job with the Redress Program, and 
we think that's really going to unclog a process that's been 
horribly clogged for a long time in the Postal Service.
    Senator Cochran. One of the Postal Service's initiatives 
that's recently raised some concerns is the contract for 
processing priority mail. What's the status of the 
implementation of the priority mail processing centers?
    Mr. Henderson. We have five centers on the east coast. 
They've shown dramatic improvement in the quality of priority 
mail. That's an active subject of labor negotiations, as you 
might expect. And we're going to see what comes out of labor 
negotiations before we draw any judgments or make any decisions 
about the future.
    Senator Cochran. Can you tell us if there will be many 
postal employees affected in an adverse way by this new 
program? Does it have high cost associated with it?
    Mr. Henderson. There's virtually no impact on postal 
employees. What it represents is, as your service gets better, 
you get new business, new packages come in, packages that were 
carried by others are now carried by the Postal Service. It's a 
net positive; it's growth for the Postal Service. We don't see 
it as having an impact on postal employees.
    In terms of how much it costs and that sort of thing, it 
will depend primarily on whether we out-source it, or we build 
the facilities ourselves.
    Senator Cochran. Do you have any plans to bring a certain 
number of these priority mail processing centers on-line? Do 
you have specific plans for how many you want?
    Mr. Henderson. Yes. We have a plan that says in order to 
service the entire Nation, we need about 20 more facilities. We 
haven't decided on locations. But it takes about 20 more 
facilities to service beyond the test area that we have now.
    We have not gone to the governors of the Postal Service to 
ask for approval. We implemented the test to establish two 
things: One, the threshold question, could we dramatically 
improve service. And the answer to that question is, yes, we 
have. And the second is once we've dramatically improved 
service, can we in fact grow our revenue with this improved 
service, attract more people in the marketplace. And the answer 
to that is yes, too.
    So we are in the process, and as I say, it's being 
discussed in negotiations. We are preparing to go back to the 
governors to talk about the success we've had in phase one.
    Senator Cochran. You've been on the job now 5 months? Has 
the time gone pretty quickly, or does it seem like you've been 
there 10 years now?
    Mr. Henderson. No, it's actually passed rather rapidly. I 
tell everybody it's more fun than being the chief operating 
officer, because you have somebody to yell at. [Laughter.]
    Senator Cochran. Who is your chief operating officer?
    Mr. Henderson. Clarence Lewis.
    Senator Cochran. Do you yell at him like Mr. Runyon used to 
yell at you?
    Mr. Henderson. No. It's just a stress releaser. It's not 
real. [Laughter.]
    Senator Cochran. I know I may have omitted some questions 
that I should have asked you, and if some occur to us that we 
should submit, I hope you'll be helpful to us and respond in 
writing for the record.
    I know also Senator Stevens had asked you a question about 
the Y2K effects on postal operations. And I'm not sure we got 
an answer. If you could, provide us for the record what you are 
doing, what the status of that effort is and what you think the 
outlook is for dealing with it in the Postal Service.
    Mr. Henderson. I'd be happy to do that. Thank you.
    Senator Cochran. Mr. Henderson, you've done an excellent 
job. We thank you very much.
    Mr. Henderson. Thank you.
    Senator Cochran. The hearing is adjourned.
    [Whereupon, at 2:55 p.m., the Subcommittee was adjourned, 
to reconvene at the call of the Chair.]



                            A P P E N D I X

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