[Senate Hearing 110-320]
[From the U.S. Government Publishing Office]
S. Hrg. 110-320
VIEWS FROM THE POSTAL WORKFORCE ON IMPLEMENTING POSTAL REFORM
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HEARING
before the
FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT
INFORMATION, FEDERAL SERVICES, AND
INTERNATIONAL SECURITY SUBCOMMITTEE
of the
COMMITTEE ON
HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
JULY 25, 2007
__________
Available via http://www.access.gpo.gov/congress/senate
Printed for the use of the Committee on Homeland Security
and Governmental Affairs
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TED STEVENS, Alaska
THOMAS R. CARPER, Delaware GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana TOM COBURN, Oklahoma
BARACK OBAMA, Illinois PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri JOHN WARNER, Virginia
JON TESTER, Montana JOHN E. SUNUNU, New Hampshire
Michael L. Alexander, Staff Director
Brandon L. Milhorn, Minority Staff Director and Chief Counsel
Trina Driessnack Tyrer, Chief Clerk
FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, FEDERAL SERVICES,
AND INTERNATIONAL SECURITY SUBCOMMITTEE
THOMAS R. CARPER, Delaware, Chairman
CARL LEVIN, Michigan TOM COBURN, Oklahoma
DANIEL K. AKAKA, Hawaii TED STEVENS, Alaska
BARACK OBAMA, Illinois GEORGE V. VOINOVICH, Ohio
CLAIRE McCASKILL, Missouri PETE V. DOMENICI, New Mexico
JON TESTER, Montana JOHN E. SUNUNU, New Hampshire
John Kilvington, Staff Director
Katy French, Minority Staff Director
Liz Scranton, Chief Clerk
C O N T E N T S
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Opening statements:
Page
Senator Carper............................................... 1
Senator Collins [ex officio]................................. 3
Senator Akaka................................................ 13
WITNESSES
Wednesday, July 25, 2007
William Burrus, President, American Postal Workers Union......... 4
John Hegarty, President, National Postal Mail Handlers Union..... 7
Donnie Pitts, President, National Rural Letter Carriers
Association.................................................... 9
William H. Young, President, National Association of Letter
Carriers....................................................... 11
Louis Atkins, Executive Vice President, National Association of
Postal Supervisors............................................. 27
Dale Goff, President, National Association of Postmasters of the
United States.................................................. 29
Alphabetical List of Witnesses
Atkins, Louis:
Testimony.................................................... 27
Prepared statement........................................... 57
Burrus, William:
Testimony.................................................... 4
Prepared statement........................................... 35
Goff, Dale:
Testimony.................................................... 29
Prepared statement........................................... 62
Hegarty, John:
Testimony.................................................... 7
Prepared statement........................................... 38
Pitts, Donnie:
Testimony.................................................... 9
Prepared statement........................................... 47
Young, William H.:
Testimony.................................................... 11
Prepared statement........................................... 51
APPENDIX
Prepared statements:
Charles M. Mapa, President of the National League of
Postmasters................................................ 69
John V. ``Skip'' Maraney, Executive Director of The National
Star Route Mail Contractors Association with attachments... 76
VIEWS FROM THE POSTAL WORKFORCE ON IMPLEMENTING POSTAL REFORM
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WEDNESDAY, JULY 25, 2007
U.S. Senate,
Subcommittee on Federal Financial Management,
Government Information, Federal Services,
and International Security,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 3:03 p.m., in
Room 342, Dirksen Senate Office Building, Hon. Thomas R.
Carper, Chairman of the Subcommittee, presiding.
Present: Senators Carper, Akaka, and Collins.
OPENING STATEMENT OF SENATOR CARPER
Senator Carper. I am tempted to say the Subcommittee will
come to order, but the Subcommittee has already come to order.
This is one of the quietest gatherings I have ever seen, at
least for this crowd.
We welcome you all and thank you, on behalf of Senator
Collins and myself, our thanks to our witnesses for taking your
time to be here today, for preparing for this hearing, and for
your willingness to respond to our questions. We want to thank
you for your help, Senator Collins and myself and our
colleagues here in the Senate and the House, as we worked for
years to try to update the Postal Service's business model.
I know that the final Postal reform bill that was signed
into law by the President in December didn't turn out to be
exactly as we had all hoped, at least not in some areas, but I
think your commitment and the commitment of those that you lead
to getting the bill right, or mostly right, helped us start a
new era for the Postal Service. Your efforts and those of a lot
of people who helped us certainly are commendable.
I think what we were able to accomplish together will, if
implemented properly, and I would underline that, if
implemented properly, will be a good thing for the American
people and for the men and women that you are privileged to
represent and that we are privileged to represent.
This is, as you may know, the second of three hearings that
we are going to be holding this year to hear the views from the
Postal Service, the Postal Regulatory Commission, and key
stakeholders in the Postal community on the implementation of
the Postal Accountability and Enhancement Act. This is also a
hearing I have been looking forward to. I have always thought
that Postal employees, that is, the people who interact with
the public and Postal customers every day, can tell us the most
about what is working at the Postal Service and what isn't.
In addition, under the new pricing and regulatory regime
currently being developed by the Postal Regulatory Commission,
the Postal Service will need to work closely with its employees
to find efficiencies and to seek out innovative new ways to
make Postal products more valuable.
Postal employees have a lot to add to the discussion about
what needs to be done going forward to make Postal reform work.
That is why I have been disappointed by some recent
developments that have put a strain on labor-management
relations at the Postal Service. I was troubled to learn that
the American Postal Workers Union has been forced to sue the
Postal Service to gain entry to meetings of the Mailers
Technical Advisory Committee or even to learn anything at all
about what happens at that group's meetings. I know that this
group is now called the Mailers and Unions Technical Advisory
Committee, but I also know that the committee is an important
body that facilitates the sharing of ideas about how the Postal
Service can improve the way it does business. I think the
Postal Service could benefit from giving employee
representatives a voice in these discussions.
I have also been troubled by recent developments in the
area of contracting out. While I have always argued that the
Postal Service must do all it can to cut costs, taking work
that is traditionally performed by Postal employees and giving
it to contractors just because they can do it cheaper is not
always a good idea. An organization like the Postal Service
that depends so much on daily direct contact with its customers
cannot afford, at least in my view, to rely solely on
contractors to make those contacts.
I am pleased, then, that the Postal Service has recently
reached a tentative contract agreement with the National
Association of Letter Carriers that places some restrictions on
the contracting out of mail delivery. That agreement also, as I
understand it, sets up a joint carrier-Postal Service committee
that will seek to find a more permanent resolution to the
debate over contracting out. It is my hope that the other
unions represented here will play a role in that committee's
discussion at some point down the road. Dialogue with the
Postal Service, the letter carriers have proven, is how this
issue will be resolved.
For now, we look forward to your testimony today on
contracting out and on the other issues that the Postal Service
is grappling with as we await the beginning of the new system
that we created together last year. My thanks for your
participation, for your presence, and for your hard work and
all the hard work of the men and women that you are privileged
to represent.
Since Dr. Coburn is not here yet--I think he is coming. But
since he is not here yet, I would like to introduce my
colleague from Maine, who worked at least as hard as I did, and
I know her staff did, as well, on this legislation for the last
God knows how many years. It is a privilege to be here with you
and you are recognized for as much time as you wish to consume.
OPENING STATEMENT OF SENATOR COLLINS
Senator Collins. That is a very dangerous invitation to
ever give a U.S. Senator, to take as much time as she would
like to consume. I thank you, Mr. Chairman, for your
graciousness in allowing me to make an opening statement and I
very much appreciate the opportunity to join you today.
As the Chairman is well aware, when I was Chairman back in
the good old days, the Postal issues were handled at the full
Committee because I felt they were so important and I wanted to
make sure I had a pivotal role in all the Postal issues that
come along. With the reorganization, they are now at the
Subcommittee level, but they are in very good hands with
Senator Carper as the Chairman of this Subcommittee. But he is
allowing me occasionally to come to his Subcommittee hearings
because he knows that my concern and interest in the Postal
Service and support for its employees remains undiminished, so
I do appreciate the opportunity to be here.
When I look out at the crowd and at the witness table
today, it really is old home week, as well, since the long and
difficult process of bringing about the most comprehensive
modernization of the Postal Service in 30 years was successful
only due to the close consultation that we had with the entire
range of experts and stakeholders, the Postal Service
officials, the mailing community, the public, and, of course,
the Postal employee associations and unions which are
represented here today. And although we did not agree on every
issue, and a bill like this always involves compromise, I think
that all of us can be proud to have played a role in getting
Postal reform legislation signed into law. The insights and the
involvement of employee groups were invaluable in this effort.
But the real test of legislation is not in getting it
passed, but in seeing that it works. It is essential that the
steps toward implementation remain true to our original goals,
and I want to just repeat the three original goals that I know
we have had since the beginning.
First was to ensure that affordable universal service
remains. It is so critical. It is such a part of our heritage
and I want it to be part of our future as well, and that
universal service principle was one that has always been very
important to me.
Second, we wanted to strengthen the Postal Service because
it is the linchpin of a $900 billion mailing industry that
employs nine million Americans.
And third, we wanted to secure the futures of the more than
750,000 Postal employees who make this remarkable component of
American society and our economy work, and this was as
important as the other two goals. I will never forget the GAO
coming before our Committee and warning that the Postal Service
was in a death spiral and raising questions about its very
viability into the 21st Century.
We drafted the legislation with those three goals in mind
and your continual involvement is essential. Whether the
employees you represent work in a huge distribution plant, in
the community post office, or alone on a delivery route, in the
city or in rural America, you provide a level of knowledge and
experience that is essential. So I look forward to hearing your
views today.
Thank you, Mr. Chairman.
Senator Carper. You bet. I think Senator Akaka is on his
way. He is going to join us, and when he gets here, I am going
to offer him the opportunity, if he wants, to offer an opening
statement.
But in the meantime, why don't we just go ahead and get
started. We are working, on the Senate floor today, we are
working on one of our appropriations bills, the Homeland
Security appropriations bill which Senator Collins and I have a
whole lot of interest in. We will probably be interrupted
somewhere along the line for votes, but I will just ask you to
bear with us and we will try to do that as quickly as we can.
Let me make short introductions, if I could, for each of
our witnesses, and we will start with William Burrus, also
known as Bill Burrus. He is President of the American Postal
Workers Union. Bill Burrus was elected President in 2001,
becoming the first African American ever to be elected
President of a national union. Mr. Burrus started with the
Postal Service in 1958 at the age of 12, maybe a little bit
older, and he served in a number of leadership positions with
the APWU. He also serves as Vice President of the Executive
Council of the AFL-CIO and is Chairman of the AFL-CIO's
Committee on Civil and Human Rights. Welcome.
John Hegarty became President of the National Postal Mail
Handlers Union in July 2002 and was reelected to that position
at the union's national convention in 2004. For the 10 years
prior to becoming national President, Mr. Hegarty served as the
president of his union local in New England. Was that in
Springfield?
Mr. Hegarty. Springfield. The six south New England States.
Senator Carper. Alright. He was employed as a mail handler
in Springfield, Massachusetts, beginning in 1984. Welcome.
Donnie Pitts is President of the National Rural Letter
Carriers Association. He is currently serving his second 1-year
term in that position, after serving two terms as Vice
President. He served at his union and at the Postal Service for
a total of 37 years.
And finally, William H. Young is President of the National
Association of Letter Carriers. He took office in December 2002
after serving in a number of national leadership positions for
the union since 1990. He began his Postal career in 1965, more
than 40 years ago.
With those introductions completed, I would ask each of our
witnesses to try to keep your oral comments to about 5 minutes.
We won't be too strict on it, but roughly 5 minutes. Your
entire statements will be part of the record.
Mr. Burrus, you are recognized and I would invite you to
proceed. Thank you again for joining us.
TESTIMONY OF WILLIAM BURRUS,\1\ PRESIDENT, AMERICAN POSTAL
WORKERS UNION
Mr. Burrus. Thank you, Mr. Chairman. Mr. Chairman and
Senator Collins, other Members of the Subcommittee as they
arrive, thank you for providing me this opportunity to testify
on behalf of the 300,000 dedicated Postal employees who our
union is privileged to represent.
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\1\ The prepared statement of Mr. Burrus appears in the Appendix on
page 35.
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I commend the Subcommittee through your leadership, Mr.
Chairman, for convening this hearing on the important subject
of subcontracting and other issues in the U.S. Postal Service.
In the interest of brevity, Mr. Chairman, I request the
opportunity to summarize my prepared statement and enter the
full testimony into the record.
Senator Carper. Your full testimony will be entered into
the record, so feel free to proceed.
Mr. Burrus. Thank you. For more than a decade, virtually
all of the legislative focus on the U.S. Postal Service was
based on the belief that absent radical reform, this
institution faced eminent demise. Our union did not share this
belief and viewed it as an attempt to undermine collective
bargaining. However, the Act has become law and we promised to
lend our best effort to making it work.
But now with the ink on the legislation barely dry and with
new regulations spawned by the law yet to be written, we turn
our attention to the unfinished business of reform, the
subcontracting of Postal services. Throughout the torturous
debate over Postal reform, not a single proposal was made to
privatize the Postal Service. Yet Postal management, in concert
with private enterprises, has begun to travel resolutely down
this road without the approval of Congress. The subcontracting
of delivery routes, which has been the subject of much recent
discussion, is just one aspect of a dangerous trend: The
wholesale conversion of a vital public service to one performed
privately for profit.
The U.S. Postal Service adoption of a business strategy
based on outsourcing is especially troubling in view of the
obligation to military veterans and its responsibility to
provide career opportunities for all Postal employees. But
nonetheless, the U.S. Postal Service has adopted a business
model that strives to privatize transportation, mail
processing, maintenance, and delivery.
As the Washington Post reported this month, a prominent
mailing industry spokesman recently opined, ``In the not-too-
distant future, the Postal Service could evolve into something
which could be called the master contractor, where it maintains
its government identity but all the services would be performed
by private contractors.'' This is a private investor's dream, a
tax-exempt public monopoly with revenues of $80 billion per
year. Eager businessmen will seize the opportunity, divide the
pieces of the Postal Service among themselves for substantial
private financial gain.
Perhaps the most insidious example of this march to
privatization is the operation of the Mailers Technical
Advisory Committee, a panel composed of high-ranking Postal
officials and mailing industry executives. At closed-door
meetings, top-level Postal officials entertain policy
recommendations by the Nation's biggest mailers, and despite
the Government in the Sunshine laws the public is excluded from
their deliberations, as are individual consumers, small
businesses, and, of course, labor unions representing the
employees.
The APWU and the Consumer Alliance for Postal Services have
filed a lawsuit challenging this secret policy making, which
has operated for many years in relative obscurity except to
Postal insiders. But Congress has passed a law prohibiting the
very secrecy that is being practiced. Under this law, it should
be fairly easy to find out which Postal policies and programs
originated and were finalized on the advice of the industry
representatives in MTAC. The Act requires that committee
meetings be open to the public and that minutes of meetings be
available.
After the removal of the minutes from the official website
and the request of my union for access, I am informed that such
minutes are now available in an abbreviated form, but to date,
they have not responded favorably to our requests for
membership.
The secrecy of this powerful advisory committee is now
taking on an even more ominous tone. The Postal Accountability
and Enhancement Act maintained that the Postal Service publish
new service standards in consultation with the Postal
Regulatory Commission. It is a matter of grave concern that
representatives of the Commission, rather than awaiting formal
proposals from the Postal Service, have been invited to attend
secret MTAC meetings where these standards are under
discussion. These standards will be the heartbeat of Postal
services in the future, and no single entity should have undue
influence on their creation.
On the issue of privatization of the U.S. Postal Service,
it is imperative that Congress take a stand, insist on its
rights and its responsibilities to set public policy. What is
at stake is whether an independent Federal agency that performs
a vital public service should be converted to private, for-
profit enterprises.
I previously testified before the House Subcommittee and
asked that lawmakers refrain from substituting their judgment
for that of the parties who are directly involved because the
road of intervention is a slippery slope. If you adopt a bill
that addresses subcontracting of a specific Postal service, who
will resolve the ensuing disputes? Will courts and judges be
called upon to replace arbitrators and the parties'
representatives as the interpreters of the provisions that you
imposed?
We believe that the USPS and its unions are best suited to
make the many decisions and compromises that are required in
all matters involving wages, hours, and working conditions for
the employees we represent, and I congratulate the Postal
Service and the National Association of Letter Carriers for
resolving their major dispute within the framework of
collective bargaining.
However, there are issues of such importance that Congress
must intervene and set public policy. If you believe, as we do,
that the Nation's mail service demands a level of trust between
the government and the American people requiring the use of
dedicated, trustworthy career employees who are official agents
of the government, you can achieve your objective without
bargaining in our stead. You can accomplish this goal by
requiring the Postal Service to negotiate over subcontracting.
This simple minor modification would place the issue in the
forum where it belongs. You would not be breaking new ground
because you have previously granted us the authority to
bargain. To address the important issues of contracting, we
need the opportunity, and that will require your assistance.
Thank you for providing our members the opportunity to
express our views on these important subjects and I would be
pleased at the appropriate time to respond to any questions you
may have. Thank you.
Senator Carper. President Burrus, thank you very much.
We have been joined by Senator Akaka and I invite him to
give an opening statement. I think when we finish this first
round of witnesses, when they have concluded, when Mr. Young
concludes his statement, I will call on you for your opening
statement and then we will go into questions.
Senator Akaka. Thank you.
Senator Carper. We are delighted that you are here. Mr.
Hegarty, welcome.
TESTIMONY OF JOHN HEGARTY,\1\ PRESIDENT, NATIONAL POSTAL MAIL
HANDLERS UNION
Mr. Hegarty. Thank you, Chairman Carper, Senator Collins,
andSenator Akaka, we appreciate the opportunity to testify
today. The National Postal Mail Handlers Union serves as the
exclusive bargaining representative for approximately 57,000
mail handlers employed by the U.S. Postal Service. I will not
repeat the details of my April statement to your Subcommittee,
but would ask that it be included in the record of this
hearing, and I also ask that today's written testimony be
included as I will only summarize it.
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\1\ The prepared statement of Mr. Hegarty appears in the Appendix
on page 38.
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Senator Carper. Without objection.
Mr. Hegarty. Thank you. You have asked us to address the
effects of the Postal Accountability and Enhancement Act on
Postal employees. This is a difficult topic at this early stage
after enactment of the legislation, but during the 13 years
that Postal reform was debated, we continued our long history
of labor stability within the collective bargaining process. At
this point in time, from the perspective of any individual mail
handler who works on the floor at any major Postal facility,
the most significant change made by the new legislation is the
mandated cut in the workers' compensation program.
Mr. Chairman, as you know, we often work in dangerous
conditions. I would like to take this opportunity to thank you
for your efforts in initiating the studies of the workplace
injuries in the Postal Service. The Mail Handlers Union is
engaged in several joint efforts at reducing these dangers,
including, first, the Mail Security Task Force, which grew out
of the 2001 anthrax situation and has developed specific
protocols related to such incidents. The Task Force also
addresses a potential pandemic flu and natural disaster that
could disrupt mail processing and delivery.
Second, the Ergonomic Risk Reduction Program, which has
been very successful in reducing repetitive motion injuries,
probably by as much as 35 percent. It has been estimated that
this program saves, on average, 20 injuries per facility per
year, about a five-fold return on the dollar.
Third, the Voluntary Protection Program, which rather than
looking at recurring injuries looks at the specific cause of a
specific often traumatic injury. During the past 5 years, there
have been measurable differences in the injury rates in
facilities that use this program versus those that do not.
I bring up these joint management-labor programs for a
reason. They are one of the value-added benefits of our union.
Our efforts make the Postal Service more efficient and Postal
employees more productive. There are no comparable savings with
a privatized workforce.
Another important aspect of the Postal reform legislation
is the flexibility provided to the Postal Service in pricing
its products and responding to economic crises. The legislation
specifically is intended to recognize the volatile world in
which we live, where gasoline can cost $35 a barrel one month
and $70 a barrel shortly thereafter, or extreme incidents, such
as the deadly anthrax attack. Consequently, the exigency clause
and banking provision were strengthened during Congressional
debate to cover not just extraordinary events, but other
exceptional circumstances not limited to those I have already
noted. The Postal Service needs such flexibility.
Let me also address the public pronouncements of Postal
management and some members of the Board of Governors
suggesting that the Postal Service must privatize to stay
within the price cap set by the Consumer Price Index. We reject
that notion. We contend that these arguments ignore the true
cost of privatized labor. It is not simply our wages and
benefits versus theirs. As we saw at Walter Reed and elsewhere,
there are hidden costs and perilous dangers in privatizing.
Furthermore, as I noted in the safety and health areas, unions
provide an environment that can be a win-win situation for all.
Some will argue that getting the work performed more
cheaply is the same as getting the work performed more
efficiently, more safely, or more securely. The premise of this
argument, however, that the Postal Service will save money by
allowing private contractors to perform the work currently
performed by mail handlers and other career Postal employees is
totally false. Recent experience has shown that subcontracting
of mail handler jobs has not worked. In fact, it has had the
opposite effect.
For example, the largest subcontract for mail handling work
ever signed by the Postal Service had Emery Worldwide Airlines
processing Priority Mail. Nearly 1,000 mail handler jobs were
privatized. Today, the work at those facilities has been
returned to mail handlers, but not before the Postal Service
and its customers suffered severe losses in the hundreds of
millions of dollars. One governor stated publicly that the
Emery subcontract was one of the worst decisions that the Board
of Governors had ever made. The United States Postal Service
Office of Inspector General released an audit report that
concluded that Emery cost more and did not meet overall
processing goals.
Finally, the Postal Service is an important career for
millions of Americans, allowing entry into the middle class. A
Postal career has allowed millions of American families,
including my own and undoubtedly many other families
represented here today, to buy a home, send their kids to
college, and pay their fair share of taxes. We do not believe
that Congress should encourage a Postal Service of poorly-paid
employees for whom health care means a visit to the emergency
room.
Who handles your personal mail and who has access to your
identity is a public policy issue. Sending military mail to
Iraq or Afghanistan via a private subcontractor is also a
policy issue. The piecemeal privatization of this Nation's
communications network is a policy issue. We do not believe
that Postal reform legislation, passed less than 1 year ago,
should be a convenient excuse to dismantle the Nation's Postal
system.
Thank you, Chairman Carper. I will be glad to answer any
questions that the Subcommittee may have.
Senator Carper. President Hegarty, thank you very much for
that statement.
We now turn to President Donnie Pitts. Welcome. Your full
statement will be entered into the record.
TESTIMONY OF DONNIE PITTS,\1\ PRESIDENT, NATIONAL RURAL LETTER
CARRIERS ASSOCIATION
Mr. Pitts. Thank you, sir. Mr. Chairman, Members of the
Subcommittee, my name is Donnie Pitts and I am President of the
111,000-member National Rural Letter Carriers Association. I
want to thank you, Mr. Chairman, for holding the hearing on
contracting out.
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\1\ The prepared statement of Mr. Pitts appears in the Appendix on
page 47.
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As of July 2007, rural carriers are serving on more than
76,000 rural routes. We deliver to 37.6 million new delivery
points and drive more than 3.4 million miles per day. We sell
stamps and Money Orders, accept customer parcels, Express and
Priority Mail, signature and delivery confirmation, registered
and certified mail, and serve rural and suburban America to the
``last mile.''
Mr. Chairman, I am pleased to report that as of July 17,
there are 35 cosponsors of Senator Harkin's bill, S. 1457, a
bill that would prevent the U.S. Postal Service from entering
into any contracts with any motor carrier or other person for
the delivery of mail on any route with one or more families per
mile.
I am saddened, however, that only one Republican, Senator
Cochran of Mississippi, is a cosponsor of S. 1457. I had hoped
this bill would have received more bipartisan support. Is it
because the Postal Service has suggested that contract delivery
is a matter for collective bargaining and not a policy
question? I hope not, because contracting out most certainly
raises significant policy questions, particularly when the
safety and security of the mails is at stake.
Mr. Chairman, I am sure by now that everyone knows that the
NRLCA and the Postal Service could not reach an agreement
during our recent contract negotiations and we are headed
toward interest arbitration. What is less well known is that,
unlike our friends in the city carrier craft, Contract Delivery
Services were never brought forward during the union's talks
with the Postal Service. We don't see what the Postal Service
is doing now as a collective bargaining issue. We see it as a
policy issue.
There are a number of different policies already in place
with the Postal Service to limit what can and cannot be
contracted out. Our national agreement with the Postal Service
contains an article which addresses subcontracting, Article 32.
Article 32 sets the standards and policies under which routes
can be subcontracted. The Postal Service's P5 Handbook, which
``establishes the national policy and procedures for the
operation and administration of Highway Contract Routes,'' that
handbook language states that a route that serves less than one
family per mile may be converted to CDS, or Contract Delivery
Services.
Additionally, we have grievances at the national level that
challenge the improper contracting out of mail delivery. Mr.
Chairman, we as a union have done everything within our power,
utilizing policies and agreements with the Postal Service, to
stop the Postal Service from contracting out delivery of mail.
Despite this, the Postal Service continues to ignore all these
policies and agreements and continues to contract out routes. I
am asking that you support S. 1457 and pass this vital
legislation to stop Contract Delivery Services.
In May, the House of Representatives held a site hearing in
Chicago regarding the slow delivery of mail. Congressmen in New
Mexico are scheduling meetings with officials from the Postal
Service to discuss staffing concerns and persistent service
problems throughout New Mexico. When the Postal Service
announces the consolidation or closing of a facility within the
State, that Senator gets involved. During the passage of Postal
reform, even an issue like work sharing was made into a policy
issue. Every time the Postal Service enters into work sharing
agreement with a mailer, the end result is a Postal employee
not performing the work.
What I am trying to point out using these examples is that
when there is a problem with the mail service, closing of
facilities, security, or other problems, Congress gets involved
to correct that problem. Why isn't Congress getting involved in
stopping contracting out? Do they not see this as an issue just
as important as service problems or consolidation of
facilities? I have no problem telling you this is an issue that
is just as important as the others.
Letter carriers are the face of the Postal Service. We are
the ones the American public sees out in the streets every day
delivering their mail. They get to know us, they become our
friends, and they trust us. This honor for the third year in
the row has earned the Postal Service the distinction of being
named the Most Trusted Government Agency by the Ponemon
Institute.
I reference this survey because the public perception of
the Postal Service is delivery. If the Postal Service fails to
deliver because of here today, gone tomorrow contractors, the
mailers will find another way to get their message to the
public. I care about the future of the Postal Service. I want
the Postal Service to succeed. But hiring non-loyal, non-liable
contractors is not the way to ensure the success of the Postal
Service.
Mr. Chairman, you and Senator Collins spent years passing
Postal reform to make the Postal Service more viable for the
21st Century. I would like to thank both of you and the
Subcommittee for their involvement in passing P.L. 109-435 and
P.L. 108-18 relieving approximately $105 billion in obligations
for the Postal Service.
I thank you for allowing me to testify here today, and if
there are any questions you would like to ask me, I will be
glad to try to answer those.
Senator Carper. Good. President Pitts, thank you very much.
Thanks for working with us, too.
President Bill Young, you are batting clean-up here today,
Mr. Young. Take it away.
TESTIMONY OF WILLIAM H. YOUNG,\1\ PRESIDENT, NATIONAL
ASSOCIATION OF LETTER CARRIERS
Mr. Young. Third baseman. I love it. Good afternoon,
Chairman Carper and Ranking Member and other distinguished
Members of the Subcommittee. Before I begin, I want to
congratulate both Senator Carper and Senator Collins on the
outstanding work that they did in the long debate over Postal
reform. It wasn't an easy thing to form a consensus on Postal
reform, but you were able to do it and my hat is off to both of
you for your efforts and all the other people that worked so
hard achieving that.
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\1\ The prepared statement of Mr. Young appears in the Appendix on
page 51.
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Our goals in Postal reform were straightforward, to enhance
the long-term viability of the most efficient, affordable
Postal Service in the world and to protect a legitimate
interest of America's Postal employees in general and letter
carriers in particular. If properly implemented, I am confident
the law will do exactly that.
I want to again express my strongest opposition to
contracting out the core functions of the Postal Service. As a
letter carrier and a union leader, I make no apologies for
standing up for decent jobs for American workers. The trend
towards outsourcing to contingent low worker, no-benefit
contractors has been broadly used in both private and public
sectors in recent years. The results for working people have
been downright disastrous. At a time of so-called prosperity,
the ranks of the workers without health insurance or pension
protections have surged to the tens of millions. The Federal
Government, the U.S. Postal Service, should not contribute to
this disgraceful trend. Exploiting contractors who deserve the
same kind of pay and Congressionally mandated benefit
protections afforded to career employees is unacceptable.
But contracting out is also misguided as a business
strategy. NALC believes that CDS is penny-wise and pound-
foolish and it would damage the brand of the Postal Service by
undermining America's trust in the service. Mail delivery is
the core function of the Postal Service. Outsourcing these jobs
threatens the long-term viability of the agency.
Now, the Postal Service would have you believe there is a
strong correlation between the two issues, the new pricing
indexing system and contracting out. Outsourcing delivery, it
now maintains, is necessary because the new law contains a
price indexing system requiring the Postal Service to limit
rate increases to less than the CPI. However, the decision to
contract out work was taken long before Postal reform became
law. The Postal Service took the first steps towards
outsourcing in 2003. CDS was coming whether Postal reform
passed or not. The fact is, holding rate hikes in line with the
CPI is nothing new for the Postal Service. Just examine our
last 35-year history. We have done it every single time for the
last 35 years.
Contracting out is not the Postal Service's only choice.
Productivity growth and boosts in revenues are preferable
strategies. Postal labor productivity has increased far more
than compensation costs over the years and it will continue to
do so in the future if the Postal Service embraces a
partnership with its dedicated career workers and their unions.
Indeed, 2 weeks ago, we reached an agreement on a new 5-year
contract that seeks to facilitate the smooth introduction of
flat mail automation technology that will cut labor costs
significantly.
That agreement also commits letter carriers to a program
called Customer Connect that seeks to dramatically increase
Postal Service revenues. I am proud to tell you that, to date,
we have increased Postal Service revenues by $300 million
through this program, and that is with less than one-tenth of
our total workforce involved in the program. Over the coming 5
years, we will get more people involved and we fully expect
that revenue figure will increase substantially.
I believe it is safe to say that expanding outsourcing was
the last thing that Congress had in mind when it enacted Postal
reform. In fact, we believe that outsourcing violates a number
of key public policies that were reaffirmed by Postal reform.
For example, the law still gives preference in hiring to
veterans and mandates with some exceptions collective
bargaining rights for workers employed by the Postal Service.
The widespread expansion of Contract Delivery Services would
make a mockery of these policies. This is why the NALC
applauded Senator Harkin's bill to limit outsourcing to
traditional Highway Contract Routes.
We also want to thank the other 35 Senators who have
cosponsored the legislation. Together, they sent a strong
message to the Postal Service. That message was reinforced by
the overwhelming support that we received from our public
during the dozens of informational pickets that we conducted
around the country during the past several months. Plain and
simple, the American public wants career letter carriers to
deliver their mail. It is just that easy.
As I mentioned earlier, the NALC and the Postal Service
recently reached agreement on a new collective bargaining
agreement. It contains two Memorandums of Understanding related
to subcontracting. The memos may be relevant to your
consideration of S. 1457 or any future legislation on the issue
of Postal outsourcing. First, we signed an MOU that prohibits
for the life of the contract, 5 years, the outsourcing of work
now performed by career letter carriers in 3,000 city carrier
only installations. Second, we signed another memo that
established a Joint Committee on Article 32 to review existing
policies and practices concerning the contracting out of mail
delivery in other installations. We have a 6-month moratorium
there.
I want to address what the two memos mean for the long-term
debate between the Postal Service and many other interested
parties about whether outsourcing is a bargaining issue or a
policy issue. I maintained from the very beginning of this
debate that the NALC has the ability to represent the letter
carriers covered by our collective bargaining agreement. But
who provides service to new deliveries is both a collective
bargaining issue and a public policy issue. By expanding
Contract Delivery Services to potentially serve all new
deliveries, the Postal Service has transformed a contract
delivery into a public policy issue.
We have maintained the kind of workers assigned to handle
new deliveries in the future should not be left alone to Postal
management to decide. In fact, it shouldn't be left to the
Postal unions alone to decide. Congress has mandated collective
bargaining for Postal employees in general and only it can
decide whether to make exceptions to this policy.
I believe we have reached a sensible and constructive
approach to dealing with this difficult issue. Although the
Postal Service seems to be moving in the right direction, it is
not committed to abandon CDS altogether. For that reason, I
welcome this hearing, the Subcommittee's oversight of the
Postal Service, and I sincerely hope that this is an issue that
you will continue to monitor.
Thanks again for all the Members of the Subcommittee for
holding this hearing. I would be happy to answer any questions
you might have.
Senator Carper. President Young, thank you very much. In
fact, thank you all for very fine statements.
Senator Collins, thanks for joining us and again for your
leadership on this front.
And we have been joined by Senator Akaka, and I want to
recognize Senator Akaka for any statement that he would like to
offer, and then we will move on to questions of our panelists.
Thank you. Welcome.
OPENING STATEMENT OF SENATOR AKAKA
Senator Akaka. Thank you very much, Chairman Carper. Thank
you for holding this hearing. I am interested in hearing Postal
workers' perspectives on implementing Postal reform.
First, my thanks to Postal workers represented by all of
our panelists and who are responsible for over 212 billion
pieces of mail delivered to over 144 million homes and
businesses across the country. For many Americans, the Postal
Service is the face of the Federal Government.
Last year, after several years of work, the Congress
finally succeeded in passing meaningful reform to the Postal
Service which should keep the Postal Service strong far into
the future. However, even after passing the important
legislation, there remain concerns.
The United States has always relied on Federal employees to
perform the most important of tasks. The security and sanctity
of our mail has been one of these. However, I know that
increasingly, the Postal Service is relying on contractors to
deliver and in some cases process the mail. I have been
concerned for some time about the increasing government-wide
reliance on contracting out.
As Chairman of the Subcommittee on Oversight of Government
Management and the Federal Workforce and the District of
Columbia, I have directed my Subcommittee staff to examine
closely the problem of contracting out throughout the Federal
Government. While there is a place for some contracting, it is
important that no Postal employee ever lose their job to a
contractor. Further, those who are contractors must be held to
the same high standards of excellence and conduct as are our
outstanding Federal Postal workforce. The Postal Service must
carefully weigh the benefits and costs of contracting, which we
know are not merely monetary.
I am very interested to hear further from you and to hear
your responses to our questions and look forward to continuing
to work with you to help our Postal Service be the best.
Thank you very much, Mr. Chairman.
Senator Carper. You bet. Senator Akaka, thank you so much
for coming today and for your help on Postal reform.
As you know, one of the most contentious provisions in the
Postal reform bill was the so-called exigency provision laying
out when the Postal Service should be able to raise rates above
the CPI rate cap, at least for market-dominant products. Our
staffs, the mailing community, the Postal Service spent months,
maybe years, debating how that language should be crafted. We
were finally able to come to an agreement almost at the 11th
hour, as you will recall. Now we are at the point where the
ball is in the court of the Postal Regulatory Commission and
they are busy trying to figure out how our language should be
implemented.
What guidance would each of you give the Commissioners as
they complete their work? Under what conditions do you think
the Postal Service should be permitted to breach the rate cap?
Mr. Hegarty.
Mr. Hegarty. We don't think right now that the Postal
Regulatory Commission should be defining the exigency
circumstances because there are so many different things that
could happen that we may not foresee. The law says either
exceptional or extraordinary. That language was put in there
for a reason and the Postal Service has asked the Postal
Regulatory Commission to hold off on issuing definitive
regulations so that each case on a case-by-case basis can be
addressed.
Next week there could be a war that breaks out somewhere
across who knows where that could raise the price of oil, like
I said in my testimony, from $35 a barrel to $70 a barrel. I
think that is pretty much a clear-cut example that everyone
would agree the Postal Service may need to raise rates under
the exigency provision.
There are other things we may not be aware of right now
that could happen. The anthrax attack from 2001 was another
example where the Postal Service needed to put in protective
equipment, and thankfully, Congress came to the forefront on
that and approved funding for that detection equipment.
So I think that the Postal Regulatory Commission should not
narrowly define exigency circumstances right now. I think they
need to be decided on a case-by-case basis as they come up.
Senator Carper. Thank you, sir. Other presidents, please.
Mr. Burrus. Yes, Mr. Chairman. I wish they would use a
different word. I have such a difficult time repeating
``exigency.''
Senator Carper. It is refreshing to know I am not the only
one.
[Laughter.]
I have stumbled over that word for months now.
Mr. Burrus. My union also counsels that they should be as
flexible as possible. To set in today's conditions at this
time, to predict the future and try to coin words that reflect
the unusual extraordinary circumstances that may occur is a
most difficult task, and by defining what is covered, we are
also defining what is not covered because though that which is
not included is by nature of sentence structure, it is
excluded. So our counsel would be to be as flexible as possible
to make it possible for the parties to revisit the issue as
circumstances arise and not put themselves in concrete as to
what is covered under the clause.
Senator Carper. Alright. Thank you, sir. President Young.
Mr. Young. Senator Carper, my union played a significant
role in this. We were asked by you and Senator Collins to meet
with a group of mailers and we were the ones that actually
hammered out ``unusual and exceptional'' or whatever it is now,
I forget. I apologize for that, because I don't have the bill
in front of me.
But I totally agree with the remarks that the two
presidents made before. The idea was that things that are not
under control of the Postal Service should not be held against
them when they are not reflected adequately in the Consumer
Price Index. A lot of things are in the Consumer Price Index,
as you well know, but there are other things that are not in
the Consumer Price Index and we think that when things are
exceptional, extraordinary, outside of that norm, that they
should be covered.
So our guidance would be the same as the two previous
speakers, that we believe that at this point, it is premature
for the regulatory body to try to define what was intended by
those words.
Senator Carper. OK. Thank you. President Pitts.
Mr. Pitts. What can I say? It has already been said.
Senator Carper. You could disagree with the other three.
Mr. Pitts. I don't disagree at all.
[Laughter.]
I think we just need to wait until circumstances justify
exceeding the CPI Index, because I echo what John and Bill and
the other Bill have said here. We don't need to try to set
standards right now that may not be applicable when the time
comes.
Senator Carper. OK.
Mr. Pitts. So that would be my comment, Senator.
Senator Carper. Alright. Thank you. All of you know better
than anyone, I think, that the Postal Service has always had
problems with workplace injuries. What has been done in recent
years to address the problem? I think at least one of you
alluded to that in your testimony. I found it very interesting.
Are there still parts of the country or even individual Postal
facilities that have serious injury problems? And finally, is
the Postal Service working with your unions directly to address
these problems? If you have already spoken to this, I would ask
you to come back and revisit it. I think the comments that at
least one of you made are worth repeating.
Mr. Young. Well, I didn't make those comments. I think
President Hegarty did. I will just tell you this, Senator. In
the tentative agreement that we have reached, there is a joint
commitment toward safety and health. We have been monitoring
the number. I hate to tell you this, but it is mostly letter
carriers that comprise it. More letter carriers than any other
craft employees are injured. There has been tremendous
improvement in the last 2 years, I mean, off-the-chart
improvement in the area of injuries and it is a lessening of
the number of injuries, and I believe it is because during the
last 3, 4, 5 years, the parties have been working together to
jointly address these issues. I think if we continue to do it,
we will get there. I don't promise overnight results, but I
think, ultimately, we will get where you want us to be.
Senator Carper. Thank you, sir. President Pitts.
Mr. Pitts. Yes, sir. We have involvement with the Volunteer
Protection Program, VPP Program, that allows the employees to
get involved and to expand safety and health programs to have
involvement for them to have input when safety issues arise.
Also, with the Postal Service and the Rural Letter
Carriers, we have entered into a program that deals with safety
on our delivery routes, looking for left-hand turns, U-turns,
backing situations, high-speed areas where the carriers become
targets out there, trying to eliminate a lot of those items to
make it safer for employees out on the delivery routes. It is
bad enough for one employee to lose their life during a year,
but when you have 9 or 10 or 12 people losing their lives, any
kind of safety program that you can get involved in, and the
one we have been involved in takes a look at these areas and
helps eliminate them. So that is some of the things that we are
doing to try to make safety better.
Senator Carper. Good. President Hegarty, you spoke to this,
but I want you to revisit it again. I found your comments
especially interesting.
Mr. Hegarty. Thank you, Mr. Chairman. Yes. We participate
also in the VPP, which is the Voluntary Protection Program.
That is a partnership with OSHA, with the APWU and the Mail
Handlers because we generally work together in the plants where
that program is rolled out. It has been very successful. You
have to qualify for the program. You have to demonstrate a good
safety record, and then you identify within the facility
potential causes of injuries and eliminate them.
Similarly, the Ergonomic Risk Reduction Program, which we
also partner with the APWU and the Postal Service, and we have
dedicated headquarters personnel to roll this program out
facility-by-facility around the country, identifying causes of
repetitive motion injuries, musculoskeletal injuries, where
people have to have operations for carpal tunnel and rotator
cuff----
Senator Carper. Did you say Carper tunnel?
[Laughter.]
Mr. Hegarty. Close. That is in Delaware, isn't it?
[Laughter.]
Senator Carper. Actually, just a quick aside. We have a
Gridiron Dinner here in Washington every year and they poke fun
at the politicians and folks in the media and so forth. We also
have, I call it a cheap imitation of the Gridiron Dinner in
Delaware and one of the, really one of the funniest skits was
on something called Carper Tunnel, and they were poking fun at
me because I shake hands with everybody who has a hand in
Delaware.
Mr. Hegarty. You are prone to it, then.
Senator Carper. I had a great time with that, so I
apologize for interrupting you.
Mr. Hegarty. No, not at all. But that program, also, the
Ergonomic Risk Reduction Program, works great, and some of the
solutions are as simple as raising the height of a conveyor
belt six inches, or putting fatigue mats down so that people
who are standing all day don't develop joint pain and injury
such as that, and that has been very successful, as well.
We also have safety and health committees at the local
level, the regional level, and the national level. Those have
been successful over the years. In fact, over the last couple
of rounds of collective bargaining, we have improved our safety
and health article in our contract, which is Article 14.
One thing that President Pitts said that I think is very
important to point out is that both of these programs are
employee ownership programs. The employees, the union
representatives, have a big say in what goes on, and in fact,
in some instances, are the chairpersons of the committees. So
the buy-in from the employees on the working floor is much
better.
You asked if parts of the country or certain Postal plants
had problems. I would say you are always going to have problems
in some Postal plants, whether that is due to the age of the
plant. We have some of the older plants, such as the one in
Maine that was just replaced. It was a four-story building that
was probably built in 1920, elevators transporting mail long
distances where it really should not have been done. They now
have a new processing plant in Scarborough. I would say that
that has been alleviated.
But what we do is if we find a particular plant that is
having problems, our union officials will bring it to our
attention, will try to get it some immediate attention and not
just wait for the system to work. As far as statistics, I think
you would have to ask the Postal Service if there were specific
areas of the country or plants that have higher-than-normal
injury rates.
Senator Carper. Thanks very much for those comments.
President Burrus, a last word on this point?
Mr. Burrus. Yes. Despite our disagreements with the Postal
Service on a number of issues, major disagreements, safety and
health is one of our success stories. We have worked together
cooperatively. We have brought injuries down. We have in place
a number of programs, joint programs, where we are addressing
in a serious way injuries to employees. I think the Postal
Service and its unions have a joint philosophy, one injury is
too many, and we are working towards that objective.
Senator Carper. That is a great philosophy to have. I think
you are right, President Burrus. This is a success story. I
don't know how broadly it has been told, but this is one that
you can feel good about and your members can feel good about
and I think the management at the Postal Service ought to feel
proud of, and frankly, we in this body salute you for the great
progress that you have made.
Let me turn, if I can, to another issue. There have been
reports, I guess in just recent months, of some serious service
problems across the country. Some of the communities, I will
mention. They include Chicago. I think L.A. has seen maybe the
worst of it. But my staff and I have heard anecdotal stories
from Delaware about mail going to its destination a lot later
than it really ought to be, for example.
Let me just ask, what do you think is going on out there?
Have we reached a point where the Postal Service's efforts to
cut costs might be having a negative impact?
Mr. Young. I would be happy to go first on that one.
Absolutely, Senator. It is exactly what you just said, and I
think is some acknowledgement starting to come out now from the
Postal Service itself. I was at the hearings at the House when
Mr. Potter was asked about the Chicago problems. He said some
maverick postmaster decided not to hire a bunch of people that
he needed and he was going to put 200, I think is the number he
said, 200 new letter carriers into Chicago right away to
alleviate the problems.
Senator Carper. For what purpose was that decision made by
the local postmaster?
Mr. Young. I am not even sure that is accurate. That is
just what Mr. Potter said. He said that the guy had made it. I
don't know why a postmaster would make that decision. It
doesn't make sense. This next panel is a group that represents
them and they can probably explain the ins and outs of this
process to you.
Senator Carper. OK.
Mr. Young. But make no mistake about it. They have cut
thousands and thousands of jobs in the last 3 or 4 years from
the Postal Service, I think over 100,000 total from all of us,
and it has an effect. If you go too far, you compromise
service. I have watched this happen, Senator, the 42 years I
have been in the Post Office, maybe four or five times. It is
like a cycle. When the finances get bad, the first thing they
do is go after labor because a lot of the cost is labor, and I
don't dispute that. I don't agree with their 80 percent, but we
won't go there. Whatever the cost is, a significant part is our
wages. So the first part they cut is our wages. That works up
to a point, and then at the point, it starts to be
counterproductive and service deteriorates.
I was in a meeting with the Board of Governors and I was
very proud of the four representatives from the management
associations because they sounded like the union in there,
complaining to the Board of Governors that they had went too
far with these cuts and that these significant service problems
were going to occur. In my opinion, they just weren't listened
to and now it has got to be fixed.
Senator Carper. Alright. Thank you. Others, please.
President Pitts.
Mr. Pitts. Yes. I just had an opportunity to visit the
great State of New Mexico and was talking with a district
manager out there who was having problems with getting the mail
processed in the mail processing centers, and I know Mr.
Hegarty probably has a better idea of that, and Mr. Burrus. But
their concern was the staffing. It has been cut back to a bare
minimum. They don't have the workers to get the mail delivered.
We see it even in my craft where they have cut back on local
managers, even using our employees, the rural carriers, in
higher-level assignments, which puts a problematic area on us
for having someone to cover the routes, and even going as far
as to, in the highway contracting, requiring our leave
replacements, the Rural Carrier Associates, to carry contract
delivery routes.
So they are cutting back, and I think a lot of it is
because of the pay-for-performance. There is an incentive there
for the manager to cut all the costs he can, but if you cut it
too far, you get into problems, and that is exactly what has
happened in some of these situations.
Senator Carper. OK. Thank you. President Burrus, would you
comment on this, as well, please?
Mr. Burrus. Yes. The Postal Service is adopting many of the
tactics of the private sector of cutting service. If someone
loses their luggage on an airline, the call to India will take
weeks on end to recover. If you go into a bank today at
lunchtime, you are going to wait an extraordinary amount of
time, or the supermarket. Service in the private sector often
is less than satisfactory, and the Postal Service has adopted a
business model that mirrors what they see in the private
sector. They think they can be more profitable if they reduce
their employee costs, even though we are a service
organization.
And added to the inconvenience it causes to the American
public, when you incentivize the managers to cut, then you are
going to find when their bonus is affected by how much, how
many hours that they cut out of their workload, then it is
going to have a residual effort, sort of residual impact upon
the service we provide to the public. So this has become the
new part of the Postal business model of reducing cost through
cutting of service, and they can't cut it anywhere else. We are
a service organization, so if they are going to cut, they are
going to cut service.
I think the rate cap for rates is going to feed into future
cuts. I think there is going to be a cycle. As the Postal
Service has a need to reduce their costs to save money, the
place where they are going to look to save that money is in
service to the American public. That means fewer employees,
less service to the public.
Senator Carper. Alright. Thank you. President Hegarty, the
last word?
Mr. Hegarty. Yes. We had a meeting with the Postmaster
General probably about 6 weeks ago on a variety of issues and
this topic came up, and I asked Postmaster General Potter, I
said, what do you have in place or do you have something in
place to prevent another Chicago from happening? Rather than be
reactive, can you be proactive with it? And he said that they
did. He said that they were working on that nationwide to make
sure it doesn't happen again. So I guess I will leave that to
your Subcommittee to find out from the Postal Service what they
are doing. We haven't had a follow-up meeting on that yet.
But I can tell you from experience, traveling the country,
visiting the mail processing facilities, that it is a problem
in some facilities, in management in those facilities. I agree
with the other union presidents that it comes down to budget.
It comes down to cost cutting. It comes down to: If I can make
a pay-for-performance bonus by keeping my costs below a certain
dollar amount, then I just won't hire those 10 mail handlers
that I know I really need or those 10 letter carriers that I
know I really need.
Now, in a big facility like where I am from in Springfield,
we have in the neighborhood of a thousand mail handlers, so can
you get the job done with 995 mail handlers? You probably can.
Can you get the job done with 900? I don't think so. So it is a
balancing act. The Postal Service has to look at staffing and
should be staffing to the needs of the service within the
particular facilities.
Senator Carper. Alright. Thank you. Thanks for sharing that
insight, too.
Before we bring on our second panel, I want to spend a few
more minutes and let me just delve into contracting out. Before
I say that, though, I want to just say a word about service. If
you ask most people in this country how they feel about the
quality of the service that they receive, it could be from the
private sector, it could be from the public sector, I think you
will find that among the entities that they feel best about in
terms of service are the Postal Service. You have heard those
numbers, and I have, too. They make me proud and I am sure they
make you and your colleagues proud, as well.
Having said that, almost every day, we get in the mail at
our home an offer for a different credit card, and if we don't
like the kind of service that they provide--most of them are
from Delaware, but if don't like the service that we are
getting from our credit card company, we can try somebody else.
Maybe not every day, but every week or two, we get something in
the mail from the folks that provide cable service or different
companies that provide cellular service. We get something in
the mail at least every month, usually more often, from folks
who build cars, trucks, and vans and they want us to take
advantage of the automotive service that they provide for us.
I think there is a lot of interest in the private sector to
provide good service and there is a fair amount of competition.
For those companies that provide good service, they get
rewarded with more customers. Those that don't, they get
rewarded, too.
The Postal Service, as time goes by, is operating in more
of a competitive environment than was the case before. It is no
longer a public entity as it was for many decades, years,
hundreds of years. Today, it is sort of a quasi-public-private
sector animal and you have competition and your competitive
products that the Postal Service offers have competition with
the likes of UPS and FedEx and others, as well. You have got to
be good in order to retain the market and to be competitive
going forward.
I am just real encouraged by what I have seen. I have been
in the Senate now for about 6\1/2\ years. I have been on this
Subcommittee for 6\1/2\ years and the spirit of cooperation
that you have seen demonstrated here today with respect to
reducing injuries, making the workplace safer. It is good for
the folks you represent. It is, frankly, good for us as mailers
because it brings down our costs and enables them to get better
service.
I am encouraged by the fact that the Letter Carriers are
able to actually hammer something out at the bargaining table,
a new contract, and to address, at least for now, the issue of
contracting out. With that, I just want to sort of shift to the
issue of contracting out and then will thank you for being
here, but I want you to take some time to talk with me about it
a bit more. I know you already have in your statements.
I am going to ask you just to start, if I could, with
President Young. You spoke to this in your testimony, but I
want you to come back and just revisit it for us, the process,
the discussion that you were a part of. My understanding is
that contracting out has been something that your union has
bargained with the Postal Service for a number of years, maybe
even since 1972. We have been asked by you again today to
consider a legislative fix offered by Senator Harkin which
would essentially ban any, as I understand it, any contracting
out, at least for new routes, maybe even for existing ones. But
this is an issue that historically, I think, has been dealt
with at the bargaining table by your union, not by all, but
certainly by yours. Would you just talk with us a little bit
about how did you end up finally being able to reach agreement
at the bargaining table?
I guess I will just close with this. I have said to Senator
Harkin, I thought that his legislation was helpful. I thought
it had a salutary effect----
Mr. Young. Well, it clearly was.
Senator Carper [continued]. Because what it did is it
provided a real impetus to the Postal Service to negotiate. Up
until that point, I don't know that the Postmaster General felt
that he could, was empowered to, and I think it helped to free
him up to do that.
Mr. Young. No question about it. First of all, I do this at
some risk, Senator, but I want to correct something you said.
We haven't bargained----
Senator Carper. My wife does that every day.
Mr. Young. Okay.
Senator Carper. Sometimes every hour. Why shouldn't you?
[Laughter.]
Mr. Young. Alright. Well, I am reluctant because of the
distinguished position that you hold, but we have not bargained
with the Postal Service since 1973 over contracting out. What
occurred in 1972 is a provision--Article 32--was entered into
the agreement, which at the time covers all four unions. That
allows the Postal Service to contract out certain activities,
and that was part of the give-and-take. We do not have the
right to strike, but binding arbitration. They got the
contracting out provision in 1972. Up until the time that
Senator Harkin introduced a bill and the 282 Resolution started
moving over in the House, the position of the Postal Service
was, we are not interested and we don't bargain over Article
32. That is ours. We don't bargain over it.
It was only when the Postal Service believed that there was
a legitimate threat that legislation was going to be passed did
things change, and they changed in a New York second, or let me
put it more distinctly, in a Delaware second----
Senator Carper. That is pretty fast.
Mr. Young [continuing]. Because I think you were the major
mover of this, and I say that not facetiously. I mean, it is
just the truth. I don't think my colleagues got the same chance
to negotiate on contracting out that I did just because I
happened to be in the right place at the right time, and
largely due to your efforts.
Here is the point, Senator, and I just want to take one
more second, if I could, to try to define this for you because
I am not sure we are all on the same page yet. If you are
talking about existing city letter carrier routes or territory
that has been assigned through a boundary agreement between the
Postal Service and our union, I have always had the right to
bargain for that. You should not go there. That is a collective
bargaining issue. I agree with what President Burrus said to
that narrow extent.
But if you are going to talk about a program that involves
workers who don't have a union, first of all, I think that is
against the Postal reform law. Maybe I am reading it wrong, but
in that reform law, it says the Postal employees will have
bargaining rights. Who is bargaining for the private
contractors of America? The answer is no one. They don't have
anybody to try to get them health benefits, retirement
benefits, annual leave, sick leave, or any of the other
benefits that we have. I think the current state of Postal
reform law requires certain health benefits and certain
retirement provisions. These folks don't get any of that. There
is no one there that speaks for them.
Because of you guys' influence, I have got a chance. That
is all I have got. It is not a done deal, I am telling you. I
am going to meet with them. Hopefully, my friends from the
rural carriers will find their way in there. They have been
offered the opportunity. That is their decision. I don't speak
for them. But we are going to try to address it, and here is
what we hope to accomplish, Senator Carper. We hope that we can
come up with some criteria that makes sense.
Now, let me say this. It pains me to say it, but I am going
to be truthful because I am required to be truthful at these
hearings. In a pure sense, I wish there was no contracting out,
but I am a realist. I live in the real world. I supported the
Postal Service's right to contract out the air transport of the
mail through FedEx. I supported that. I thought it would help
the institution. I thought it was the right thing to do. We
have never grieved what we call HCR routes, the Highway
Contract Routes, and here is where I want to be very careful
that I make this distinction again.
People that drive 50, 60, 70, 80 big sacks that would stand
up from the ground this tall that are locked up full of mail
from one Postal installation to another and maybe deliver three
or four individual deliveries in these real isolated areas that
Mr. Pitts is talking about, where there is not a box for every
mile, they don't require the same level of trust, the same
level of professionalism as the members I represent. That, to
me, is not synonymous with somebody picking up 500 letters
addressed to Senator Carper and going through them individually
to make sure that they are yours and that everything is right
with them. That takes a different level of trust.
We never grieved and we are not trying to stop HCRS, and I
told the lobbyist who is here today from the Star Routes, our
union is not trying to eliminate Star Routes.\1\ And here is
the second point I have to disagree with you. I do not believe
Senator Harkin's bill does that. I think he grandfathers in all
of the existing Highway Contract Routes.
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\1\ The prepared statement of from John V. ``Skip'' Maraney,
Executive Director of The National Star route Mail Contractors
Association with attachments appears in the Appendix on page 76.
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But now let me end it by saying this. Here is the public
policy issue that I honest to God believe you have to decide,
and I mean you, the Congress. Are you okay with the Postal
Service giving deliveries, the final delivery of mail to
communities, to private contractors side by side with career
employees? So if your house was built in 1990, you are going to
have a mailbox on your porch and a career letter carrier is
going to come to your porch and deliver the mail. But if your
house wasn't built until 2008, you are going to have a
neighborhood mailbox located two blocks away from your house
and some private contractor that you never see or never know is
going to deliver your mail.
And all I am suggesting to you is this, that when the
public finds this out, they are outraged. They don't want these
private contractors doing the final delivery of their mail. We
built up over a long period of time their trust and they don't
want it. I think it was Congresswoman Norton-Holmes said, you
can't have my mailman. And honest to God, I think she expresses
the heartfelt opinion of most American people. They want the
career letter carrier to deliver their mail.
Again, let me say it. This is not a battle over whether
there are going to be city letter carriers or private
contractors. This is a battle over whether there are going to
be rural carriers or private contractors because the majority
of the new deliveries go to rural carriers because their costs
are less than ours, and I know that. I don't like it, but it is
what it is and that is what happens.
So I know there is nothing in this for me. The only thing
in this for me is this: 42 years, I have worked in this Postal
Service. I have developed all kinds of friends. I know all
kinds of people and their families that rely on a Postal
Service for their future and I am worried if they go too far
with the delivery of private contractors, the American public
will lose trust in the mail, and if they do that, there are a
lot of alternatives, as you know, out there that they can use,
and that is what I think they risk in this effort to reduce the
cost by using the private contractors.
So I think in 6 months, after this Subcommittee does its
work, we will be in a great position to give you all the
evidence, something that we haven't had for you because we are
not the owners of that evidence. It is not in our possession.
This agreement requires the Postal Service to turn over
everything to us. We can have hearings. We can call members of
the public there to tell us what their views are. And we will
give that information to you. In the best of all worlds, I will
end up with an agreement that makes sense for everybody and I
will never have to come back here. But if I don't, I am going
to come back and I am going to say, now we have to have these
1,547 because we can't get where we need to be if you want
career letter carriers delivering the mail. Thank you, sir.
Senator Carper. Thank you, sir.
Mr. Young. I am sorry I took so long.
Senator Carper. No, that is quite Alright. Thank you very
much.
Let me hear from others on this, please. President Pitts, I
will just ask a more specific question. President Young
mentioned that what we have, I don't want to misstate what he
said, but I think President Young said what we have here is a
chance or the opportunity to try to work something out. What
did you say? What were your words, do you recall?
Mr. Young. I say, we have got a 6-month opportunity to try
to work out guidelines that we can all agree to that make sense
for the American public, the workers, and the Postal Service.
If we can do that, that will be----
Senator Carper. And then you said it was up to President
Pitts and the folks he represents to decide whether or not they
wanted to----
Mr. Young. Well, yes, because I don't represent them. There
is one sentence in our agreement that says, if the rural union
decides they want to be part of this task force, we welcome
that.
Senator Carper. Okay. Thank you.
Mr. Young. Yes.
Senator Carper. And I would just ask President Pitts, is
that something you would have an interest in doing?
Mr. Pitts. Yes, sir. I most definitely would have an
interest in doing that, and let me clear up one thing.
Senator Carper. Please.
Mr. Pitts. One reason we didn't bring Article 32 to the
table in the contract negotiations is because I feel we have
got a little stronger language in Article 32 that protects us
better than my counterpart on my left side here, Mr. Young,
because the Postal Service, if they are going to step up
contracting out, they should give us notification of their
intent to increase the contracting out. And also, there is a
provision in our Article 32 that says that they have to let us
know of any policy changes.
None of that happened. None of this came about as a result
of contract negotiations. It wasn't mentioned, because we
didn't feel we had a problem with it. And over the years, we
have seen through testimony from Jack Potter back in April
before the House, he made a statement that Contract Delivery
had averaged about 2 percent per year, which we know, like Mr.
Young said, Contract Delivery Services have been here. It will
be here in the future.
But what concerns us is the fact in that same statement he
said for the purpose of Contract Delivery Services it only came
about as a result of Postal reform being passed, and that isn't
correct. And he also in the same statement said it is 2 percent
over the past few years on Contract Delivery Services. It has
now for the year 2006, increased from 2 percent to 6 percent,
which tells me it is a 4 percent increase. And just last week
in another hearing, now I am hearing from one of the Board of
Governors representatives that 92 percent of all new deliveries
are going on either Bill Young's routes or the NRLCA routes,
which tells me there is 8 percent now unaccounted for.
So the numbers continue to escalate, and basically, we are
trying to protect our craft. We are the growingest craft in the
Postal Service and we do pick up about 1.2 out of 1.8 million
new deliveries each year. And I am here to tell you, in doing
comparisons from this same pay period this year to the same pay
period last year, we have had a decline of about 258,000 boxes.
This time last year, we were over a million new deliveries.
This year, we are at 750-some-odd-thousand deliveries.
So something is going on here. It is not something I am
just thinking about. It is happening out there. So we do have
concerns. We have filed a national level grievance, a step
forward because they, we feel, have violated our contract. But
we also feel it is a policy issue because they are changing
their policy and not trying to negotiate anything through our
contract when we already have language. So that is my big
concern.
Senator Carper. Okay. Thank you. President Hegarty.
Mr. Hegarty. Well, I would just like to say that we have an
Article 32, as well. It is the subcontracting article. I am not
here asking you to rewrite that article or to renegotiate that
article with the Postal Service. But what I would say is just
because they can contract out doesn't mean they should contract
out, and at some point, it becomes a public policy issue. There
is a fine line between collective bargaining and public policy.
We did not come to Congress when they subcontracted the
Emery Priority Mail Centers. We didn't come to Congress when
they subcontracted empty equipment processing. Those are things
that we handled in the collective bargaining process. I think
history proved us correct, certainly on the Emery one and also
audits were conducted that showed that the Postal Service was
not saving the type of money they wanted--they said they were
going to save.
But when you start contracting airport mail, where mail
handlers, entrusted Postal employees, other Postal employees
who have background checks and career jobs are sorting mail for
loading onto airlines for transportation around the country,
when you subcontract military mail that is going to our troops
over in Iraq and Afghanistan and elsewhere in the world, that
is where I think it becomes a public policy issue, especially
in the world we live in today. Since 2001, things have changed.
Since the anthrax attacks, since September 11, 2001, it is a
different world we live in. It is a different Postal Service,
and I think that needs to be recognized.
So I would say that career Postal employees should be
handling the core Postal functions, not driving a truck from
Point A to Point B or flying the airplane that the mail is
being transported in, but certainly the sorting individual
pieces of mail and people having access to the mail, whether it
is problems with identity theft, terrorism, whatever you want
to call it, I think career Postal employees should be handling
that mail.
Senator Carper. Alright, thank you. President Burrus, the
last word, please.
Mr. Burrus. Yes. My union's solution is to give us the
opportunity and the right to bargain. I think these issues can
be resolved at the bargaining table. It takes more than just a
general opportunity and right to engage in collective
bargaining, but a decision by Congress requiring the Postal
Service to bargain on subcontracting, not within the framework
of collective bargaining, but bargaining over subcontracting.
And without that right, you will find in the ensuing years
we will return to Congress repeatedly as each of our bargaining
units is affected by specific pieces of contracting. Each of
the previous speakers spoke regarding the subcontracting that
affected their environment. The Postal Service has a very large
environment. It involves transportation, maintenance, retail
services, delivery, processing, and all of us are affected by
one or more of those. And unless we have the right to
bargaining on each occasion that it occurs, we will inevitably
come back before Congress to bail us out.
We will call it public policy, we will call it collective
bargaining, we will use whatever words are convenient at the
time, but we will be seeking out for assistance, and I say you
can avoid that. Give us the right to bargaining on each and
every occasion and we will take care of it ourselves.
Senator Carper. Alright. That is a good note on which to
conclude.
This has been, for me, just a most helpful, interesting,
and valuable panel and I want to thank each of you for your
preparation for today's hearing, for your presentations and
particularly for your responses to the questions that have been
raised. We appreciate the opportunity to work with you and your
colleagues in recent years as we try to bring the Postal
Service into the 21st Century. We couldn't have done it without
you, and I realize it is not perfect and I always like to say,
if it isn't perfect, make it better. We are still going to try
to make it better. But thank you very much for being with us
today and for the leadership that you provide. Thank you.
Gentlemen, welcome. We are happy that you are here.
Mr. Atkins, there is some disagreement. Do you pronounce
your first name ``Louis'' or ``Louie''?
Mr. Atkins. Both ways, Senator, whatever you feel like
calling me.
Senator Carper. If your middle name was Louis, we could
call you ``Louie, Louie,'' but we won't.
Mr. Atkins. The famous song.
Senator Carper. There you go.
Mr. Atkins. I need royalties off it.
Senator Carper. Let me just take a moment and introduce you
first, and then I will turn to introducing Dale Goff and I will
ask you both to proceed.
Mr. Atkins is the Executive Vice President of the National
Association of Postal Supervisors. He took over that position
in January 2005 after previously serving as Secretary-Treasurer
and a number of other leadership positions in the Gulf Coast
region. His Postal career began in 1970. He has been a member
of the National Association of Postal Supervisors for 30 years,
is that correct?
Mr. Atkins. Yes.
Senator Carper. Alright. Dale Goff is President of the
National Association of Postmasters of the United States. He
has also had a long career at the Postal Service. He has been a
Postmaster for how many years, 27 years?
Mr. Goff. Twenty-seven years.
Senator Carper [continuing]. Twenty-seven years, and has
served in a number of leadership positions with the
Association. He was even named, is it true, Postmaster of the
Year in 1994?
Mr. Goff. Yes, sir.
Senator Carper. Alright. Can you be Postmaster of the Year
more than once, or just once?
Mr. Goff. Just once, I think, is all they said they could
do for me.
Senator Carper. Alright. Well, congratulations.
My notes here indicate that the President of the National
League of Postmasters was planning to be here today, but he was
not able to come. I think what he has done is he has sent his
written testimony, and without any objection, we are going to
place that in the record.\1\
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\1\ The prepared statement of Mr. Mapa appears in the Appendix on
page 69.
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Senator Carper. OK. The bells are going off here. We have
lights going on on our clock. I think we can go ahead. We are
going to proceed at least for now.
Mr. Atkins, your entire statement will be entered into the
record. Feel free to summarize, and if you keep it pretty close
to 5 minutes, we would appreciate it. If you go a little bit
over, that is okay, too. Thank you. You are recognized at this
time. Welcome.
TESTIMONY OF LOUIS ATKINS,\2\ EXECUTIVE VICE PRESIDENT,
NATIONAL ASSOCIATION OF POSTAL SUPERVISORS
Mr. Atkins. Chairman Carper and other arriving Members
maybe later on of the Subcommittee, thank you for holding this
hearing today and for the opportunity to appear on behalf of
35,000 Postal supervisors, managers, and postmasters who belong
to the National Association of Postal Supervisors. Throughout
the 99-year history as a management association, NAPS has
sought to improve the operation of the Postal Service and the
compensation and working conditions of our members. Many of our
members are involved in management and supervising the mail
processing and delivery operations. We also represent the
interests of men and women engaged in every function in the
Postal Service.
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\2\ The prepared statement of Mr. Atkins appears in the Appendix on
page 57.
---------------------------------------------------------------------------
Indeed, the Postal Service stands at the beginning of a new
era. The new law crafted on the basis of principle and
compromise presents opportunity and challenges to the Postal
Service, opportunity in the sense of greater flexibility within
the Postal Service to design and price its products, services,
and challenges because of the heightened competition the Postal
Service faces in an increasing wide world.
The Postal Service stands unique as a time-tested public
institution, while at the same time operating like a business
without the taxpayers' funds. Now the creation of a new pricing
framework under the reform law, a price cap limiting increases
to no more than the rate of inflation will require the Postal
Service to be more creative and focused than ever in growing
new business and expanding revenues. At the same time, the
price cap framework will place new demands upon the Postal
Service to become smarter in how and where it spends its funds
and services for its customers. These demands will extend from
the front-line counter to the back offices, from post office to
plants, from Maine to Alaska.
The Postmaster General, his leadership team, and the Postal
workforce has done an excellent job over the past 6 years in
increasing productivity, reducing costs, and focusing attention
on mail that is the core business of the Postal Service. Two
transformation plans promoted by GAO and mandated by Congress
have paved the way for policies and operational changes that
have permitted the Postal Service since 2001 to serve an
additional 12 million delivery points with a dedicated
workforce that is approximately 10 percent smaller than it was
in 1999.
For a successful Fortune 500 company, the dynamics of
growing and reshaping its business and operation goes with the
terrain. Innovation, agility, and speed are the ingredients of
business success, especially in the service sector. For the
Postal Service, the will to innovate, accelerate, and compete
for success has not come as easy. Historically, America's
indispensible reliance on the mail, the comfort of a quasi-
monopoly, and the size of the USPS bureaucracy have spawned a
culture more resistant to change, to survive, and thrive.
However, especially under the new law, the Postal Service will
need to change faster and smarter, undergoing a greater
transformation of its people and operations than ever before.
What does this mean for the Postal Service managers and
supervisors? Undoubtedly, financial pressures, especially to
remain within the price cap, will place new demands on managers
and supervisors to continue to reduce costs, yet continue to
deliver universal service at the same level of quality. We have
already seen the financial pressures play out within the
current policy debate over contracting out of delivery service.
Unacceptable service levels in Chicago also have demonstrated
what happens when service quality is allowed to deteriorate.
The big structural change within the Postal Service is yet to
come, involving the potential mass alignment and consolidation
of processing plants and post offices, along with Postal
transportation network.
The increasing insistence to do more with less, to maintain
and exceed expectations with fewer resources, to cut costs, all
are placing unprecedented demands upon the managers and
supervisors, demands that are not healthy, either in the long
run for the Postal Service and for our customers, on the
vitality and loyalty of its employees.
When performance goals are arbitrarily set, staffing needs
go unmet, demands increase to make your numbers, all within a
context of pay-for-performance, the conduct of managers and
supervisors is likely to be skewed in perverse ways, getting
some supervisors into trouble through clock falsification and
other unacceptable behavior. This is not a path toward
progress. All of us within the Postal Service, corporate
executives, mid-level managers, and front-line supervisors,
need to be increasingly sensitive to avoid the creation of
expectations and insensitivity that brings about these kinds of
negative outcomes.
The broader solution to success within the Postal Service
will apply upon realistic, jointly arrived at goals, and may I
add again, I will say it again, jointly arrived at goal
setting, better communication at all levels, less paperwork,
training and genuine support of problem solving, and greater
teamwork at all levels. These are the building blocks of an
organization whose business success will rely upon sharp-edged
focus on the bottom line merged with a realistic sense about
what is possible today and what we need to work together to
achieve tomorrow. These things cannot be legislated. They can
come about only through the desire and determination of the
Postal Service employees at all levels to work together in ways
that reflect courtesy, dignity, and respect, joined together
for a common purpose, that is, the timely and affordable
delivery service to all Americans.
In that same sense, as the new law becomes implemented and
as the Postal Service and Postal Regulatory Commission
undertakes their responsibility, Congress may find it necessary
to retool the reform law in remedial ways, recognizing that a
statute as sweeping and comprehensive as the Postal reform law
is never quite perfect. In the meantime, Mr. Chairman, we look
forward to continuing to work with you and the Congress in
making the Postal Service stronger than ever.
I will be happy to answer any questions at the appropriate
time that you or any other Members of the Subcommittee may have
to ask.
Senator Carper. Good. Thank you for that statement and we
look forward to asking some questions. Thanks.
President Goff, you are recognized.
TESTIMONY OF DALE GOFF,\1\ PRESIDENT, NATIONAL ASSOCIATION OF
POSTMASTERS OF THE UNITED STATES
Mr. Goff. Mr. Chairman, Ranking Member Coburn, and
distinguished Subcommittee Members, I am Dale Goff, President
of the 40,500-member National Association of Postmasters of the
United States, commonly known as NAPUS. I have been a
Postmaster for 27 years and in the Postal Service for 37 years.
As Postmaster of Covington, Louisiana, I understand the
challenges and opportunities that the new law presents to the
U.S. Postal Service. I also recognize the benefits that my
customers will reap from the new law as the Postal Service
meets the new challenges and exploits the opportunities
presented to it.
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\1\ The prepared statement of Mr. Goff appears in the Appendix on
page 62.
---------------------------------------------------------------------------
We understand that the Postal Reform Act is still not a
finished product. Congress did not intend it to be so. Congress
charged Postal managers, craft employees, the Postal Regulatory
Commission, Postal stakeholders, and the Postal Service itself
to complete and perfect the legislative project. Implementation
is the key to success. Indeed, the Postal community needs to
put the finishing touches on the legislation. Therefore,
postmasters are working with the Postal community to help
guarantee the lasting triumph of Postal reform.
I have faith that implementing the new law will not be as
daunting as passing it. Presently, postmasters are discussing
with Postal headquarters, the PRC, and others strategies on how
to ensure the new Postal paradigm enhances this Postal system.
We should recall that this is not the first time the Postal
world has been apprehensive about legislation. In the 1970s,
there was anxiety about the creation of the Postal Rate
Commission and the establishment of a self-sufficient Federal
entity that was mandated to break even. We succeeded then and
we will succeed now, because we believe that the new law
affords the Postal Service with new tools to maintain its high
standards.
Presently, NAPUS is working to educate managers in charge
of the approximately 26,000 post offices about the fresh
approach necessary under P.L. 105-435. Postmasters have new
responsibilities under the Act. Obviously, education and
training are necessary.
Therefore, it is important for NAPUS, in conjunction with
the Postal Service--and I will repeat that, in conjunction with
the Postal Service--to develop an appropriate instructional
program and to effectively and clearly communicate the new
processes and expectations to front-line Postal managers.
Postmasters and the Postal Service are accustomed to a long
lead time between filing a rate case and the implementation of
new rates. The new law authorizes periodic, predictable rate
adjustments. It will be incumbent that the Postal Service
anticipates these adjustments. The Postal Service will have to
download new rate data into retail Postal facility pricing
software.
At the same time, Congress and the PRC need to recognize
that there may be a time or times in which the Postal Service
may be forced to file a much reviled exigent rate case.
Postmasters understand that they are no longer working with a
break-even Postal model. However, in order for this new
business model to operate, postmasters must be allowed to make
operational decisions without micromanagement from above, and
with the staff they need.
Indeed, the Postal Reform Act presents postmasters with the
prospect of promoting new Postal products to their customers
and being able to market competitive Postal products. The
future of the Postal Service may very well depend on how well
we are able to expand our product line, both in the market and
in the competitive domain.
Currently, the Postal Service earns 90 percent of its
revenue from market-dominant products. These are the items that
will be indexed to inflation. Postmasters are cognizant of the
challenge imposed in operating under a price index system.
Employee productivity, creative management, and committed
teamwork will afford us the opportunity to use these factors to
operate under the new rate system.
We have witnessed the erosion of First-Class Mail, which
used to represent the preponderance of mail volume. We have
inherited a Postal culture that relies on volume mailings, not
necessarily value mailings. It will be important that the
Postal Service and the Postal Regulatory Commission work
together to create appropriate incentives to encourage mailers
to emphasize value in their mail program rather than simply
generate volume. Certainly, the advent of Intelligent Mail
creates that ``eureka'' opportunity for the Postal Service.
Finally, the Postal Service's success with competitive
products will depend on whether the agency can operate in a
truly competitive fashion. The Postal Service needs sufficient
breathing space to bring new, as well as time-tested
competitive products to the marketplace. The Postal Service
will need to increase the competitive product generated revenue
beyond the current 10 percent. As this growth occurs,
postmasters will need to sharpen their skills and have the
assets to be an aggressive sales force.
Mr. Chairman, for implementation of this new law to be
successful, the Postal Service must be true to its historical
mission, universal, affordable, and accessible service.
Moreover, it is equally true that Postal Service, the Postal
Regulatory Commission, and Postal customers must be willing to
invest in the infrastructure and the personnel that will be
needed to support the new Postal business model.
Thank you, and I will be glad to entertain questions.
Senator Carper. Good. President Goff, thanks so much. Thank
you both for excellent statements.
What I would like to do is start, if I could, President
Goff, with you. Just to follow up, near the end of your
testimony, you were talking about how 90 percent of the
revenues of the Postal Service come from products which we will
call market-dominant products and the need to grow the revenue
stream from those that are competitive products. You mentioned
something called Intelligent Mail. When President Bill Young
was here from the Letter Carriers, he mentioned something
called Customer Connect. Could you just tell us a little bit
more about Intelligent Mail? What is it? What may be helpful
for us to know? And how does that relate, if at all, to
Customer Connect?
Mr. Goff. OK. Intelligent Mail is a process or a system
that the Postal Service is developing right now. From what they
are telling us and from different briefings we have had, it is
going to be a way to track every piece of mail that is sent
through the system. It is going to be an external measurement-
type system of the mail. The mail will be bar-coded, as well as
the pallets, and the mail encased with the shrink-wrap that
comes in. Whatever is bar-coded it is delivered to a processing
place or a post office, it will be scanned. As each piece of
that mail goes through, all the way up until it is finally
delivered, the mailers will be able to know where their mail
pieces are at the time.
I know in some of the tests conducted by the Postal
Service, it has helped a lot of the mailers to correct their
mailing list and know when mail was actually getting delivered.
It addresses those things that you had said earlier about the,
``please get my credit card so we can get the interest rate on
you'' or things like that. Mailers will know exactly when that
piece of mail gets delivered from the day it is dropped at a
post office, until it actually gets to someone's home.
Senator Carper. And Customer Connect, how familiar are you
with Customer Connect and can you shed some light on that?
Mr. Goff. Very familiar with it. One of the first Customer
Connect success stories was out of Covington, Louisiana. We
pulled in a customer that was going to spend almost $1 million
with us sending supplies out for pets and medicines. We
actually did a video with the Postal Service on the carrier
that brought the business in to us. It is a very successful
program. Obviously, the carrier, who else but the carrier, sees
that one of our competitors pulls up to one of their customers
every day. We can send somebody in there, or ask the carrier to
ask that customer, ``Hey, we have this type of service that we
can give to you. How about I will send somebody out to talk to
you?'' It has been very successful and I look for it to be
successful in the future, especially with the unions still
agreeing to do it.
Senator Carper. What is the incentive for the carrier to
help make this connection and to find the new business?
Mr. Goff. I know what we did in our office. I did something
locally for the carrier that brought in the business. When you
bring in a million dollars, you think that there would be some
type of monetary award, which we did do in a small amount. But
the incentive is that they are going to bring more business in
and, again, keep our jobs for the future.
Senator Carper. Okay. I want to give both of you a chance
just to think back over the last hour, hour and a half, where
our first panel of witnesses was testifying and responding to
questions. I don't normally ask this, but I am going to ask
you, do either of you have a comment that you would like to
make on some aspect of the first panel, any of the discussion
we had on our first panel? Does anything come to mind that you
would like to just make a quick comment on, not at any length?
Mr. Atkins. Well, I can make one comment that comes to mind
right away, is the deterioration of service that they referred
to and cutback in staffing. All of that is semi. I think
sometimes it is taken out of context, because overall, 95
percent of our volume of mail, First-Class overnight, is
delivered on time.
My major concern is that some managers are making some
arbitrary decisions about staffing and because of their selfish
need for pay-for-performance are making some good people do
some bad things or developing some bad habits. But in
conjunction with that, the accountability isn't there when they
do that. What happens to make headquarters aware of it? They
have all the numbers that drive the complement in Chicago and
there is a red alert that says that they are not hiring two
carriers. Let me see or talk to the division or the district
manager there and find out what is going on.
That is the driving force, is that most of our district
managers are very cognizant and they are very service-oriented
and they are making the good decisions or we couldn't have a 95
percent delivery count done by an external firm, EXFC. It would
not be capable of getting those type of scores if they weren't
doing the right things throughout the country. But in Chicago
and in New Mexico, there are some other driving forces.
Senator Carper. Alright. [Alarms going off.] You win the
prize.
Mr. Atkins. I am the millionth customer.
[Laughter.]
Senator Carper. President Goff, while we find out for a
moment what is going on here, any quick observation that
relates to the discussion of the first panel?
Mr. Goff. There are many things that the previous panel
talked about that I could discuss, that is for sure. People
find it odd these days that management and unions will be in
agreement on some of these issues. The biggest problem is, as
Mr. Atkins just talked about is the service. Our major issue is
the staffing in the field. I wish postmasters would have that
authority to hire people. When I hear that a postmaster in
Chicago had the authority to hire people and didn't, I have a
hard time believing that. We do not have that authority. It
comes from somebody above us. We don't have that authority.
I know the contracting out issue. One of the statements
that I made in one of my previous testimonies is, ``You get
what you pay for.'' I still stand by that. Any time that you
are going to take the service of a established delivery, I have
a problem. How can we come in and just arbitrarily put some
type of contract route in there.
Senator Carper. Alright. With that, I am going to ask us to
just hold. We are evacuating the building. It has nothing to do
with our hearing. We are not sure what it has to do with. But I
am going to ask us to go ahead and adjourn the hearing at this
time.
We are going to provide questions for the record and we
will ask you to respond as your schedules allow you, promptly.
I apologize for this, but I am not sure when we are going
to be able to come back into the building, so for now, we are
going to adjourn. Thank you so much. The hearing is adjourned.
[Whereupon, at 4:46 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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