[Senate Hearing 110-276]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-276

                    NOMINATION OF ELLEN C. WILLIAMS

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                                 ON THE

 NOMINATION OF ELLEN C. WILLIAMS TO BE A GOVERNOR, U.S. POSTAL SERVICE

                               __________

                            OCTOBER 18, 2007

                               __________

       Available via http://www.gpoaccess.gov/congress/index.html

                       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
                  Kristine V. Lam, Research Assistant
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
              Jennifer L. Tarr, Minority Associate Counsel
                  Trina Driessnack Tyrer, Chief Clerk





























                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Carper...............................................     1
    Senator Akaka................................................     4

                               WITNESSES
                       Thursday, October 18, 2007

Hon. Mitch McConnell, A U.S. Senator from the State of Kentucky..     1
Ellen C. Williams, to be a Governor, U.S. Postal Service.........     3

                     Alphabetical List of Witnesses

McConnell, Hon. Mitch:
    Testimony....................................................     1
    Prepared statement...........................................    15
Williams, Ellen C.:
    Testimony....................................................     3
    Biographical and professional information....................    19
    Letter from U.S. Office of Government Ethics.................    29
    Responses to pre-hearing questions...........................    31

















































 
                    NOMINATION OF ELLEN C. WILLIAMS

                              ----------                              


                       THURSDAY, OCTOBER 18, 2007

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 3:48 p.m., in 
Room SD-342, Dirksen Senate Office Building, Hon. Thomas R. 
Carper, presiding.
    Present: Senators Carper and Akaka.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. The hearing will come to order. We welcome 
Ms. Williams. Thank you for joining us. And we welcome our 
Republican Leader, Senator McConnell.
    My opening statement called for me to defer to you after I 
had made my statement, but I just want to ask you to lead off, 
Senator McConnell, because I know you have a lot going on.

 TESTIMONY OF HON. MITCH McCONNELL,\1\ A U.S. SENATOR FROM THE 
                       STATE OF KENTUCKY

    Senator McConnell. Well, thank you, Mr. Chairman. I really 
appreciate that. I have a prepared statement here which I would 
like to ask consent be made part of the record.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator McConnell appears in the 
Appendix on page 15.
---------------------------------------------------------------------------
    Senator Carper. Without objection.
    Senator McConnell. And I would rather speak 
extemporaneously on behalf of my old and dear friend Ellen 
Williams who is superbly qualified to continue as a Governor of 
the U.S. Postal Service.
    I have known Ellen for 20 years. I have watched her in a 
variety of different positions of extraordinary responsibility. 
She has extraordinary intelligence. She is very personable. She 
knows how to handle people. In short, she is the complete 
package, and I cannot think of anybody the President could have 
nominated any better qualified. Add onto that the fact that she 
has already been serving as one of the governors of the Postal 
Service, so she is familiar with the subject matter and can hit 
the ground running. And I guess the best way to sum it up is I 
give her my very highest recommendation without any 
qualification whatsoever and would urge the Committee to speed 
her through the process and get her confirmed at the earliest 
possible opportunity.
    Senator Carper. Well, Mr. Leader, we will do our best to 
see that it happens.
    Senator McConnell. Thank you, Mr. Chairman.
    Senator Carper. It means a lot to us and I am sure to Ms. 
Williams that you are here. Thank you.
    I am pleased to serve today as Chairman of our Committee as 
we consider the nomination of Ellen Williams to be a member of 
the Board of Governors of the U.S. Postal Service. As just 
about everyone here today probably knows, our Postal Service 
finds itself in the midst of a new age of sorts.
    Until very recently, the Postal Service was operating under 
a business model that was created to serve our economy in the 
1970s. But since the 1970s, we all know our country has grown. 
The complexity of our economy has grown. The number of postal 
customers has also grown, but so has competition from the 
private sector from companies like FedEx and UPS and from 
technologies that we did not have in the 1970s, like cell 
phones, fax machines, e-mail, and electronic bill paying.
    With this in mind, Senator Collins and I and a number of 
our colleagues in both the House and in the Senate worked for 
years to enact the first major reforms to the Postal Service 
since 1970 when Ted Stevens was a freshman Senator from Alaska.
    Our bill will not convince people to give up e-mail--that 
is not our idea, that is not our intent--and return them to 
written correspondence as their primary means of communication. 
What it will do, though, is shore up the Postal Service's 
finances in the long run and give postal managers the tools 
that they need to price and market their products like any 
business would. So we think it is important perhaps now more 
than ever that the Postal Service has good leadership.
    Ms. Williams, you have provided some of that leadership in 
your current capacity, and for that we are grateful. I am 
pleased that you have shown an interest in continuing to serve 
in this position, and I look forward to hearing from you today 
about what your priorities would be as governor and how you 
would work with your colleagues to implement the reform 
legislation that the President has signed and to add value to 
the products and services that postal employees provide every 
day.
    Senator McConnell has been good enough to come and to 
introduce you. We rode over on the subway together, and I 
caught him on the Senate floor and asked if he was going to 
come over and introduce you. And he said, ``Well, I want to,'' 
but he had heard that the hearing had been canceled. And I 
said, ``Oh, no. I am chairing it. So believe me, it is not.'' 
[Laughter.]
    We rode over on the subway together along with Senator 
Bunning, who asked that we extend his regards to you. And I 
mentioned to both Senator McConnell and Senator Bunning that 
Ellen Williams was among my very earliest supporters when I ran 
for State Treasurer. And knowing of your affiliation and 
leadership in the other party in the State of Kentucky, they 
both blanched when they heard that. But I hastened to add that 
it was another Ellen Williams, and one who is a good deal older 
than you.
    I have not done this before, and I have really been looking 
forward to it, but I have the opportunity to swear this witness 
in. I believe, Ms. Williams, that you have filed responses to a 
biographical and financial questionnaire. I believe you have 
answered some pre-hearing questions that were submitted by our 
Committee. And you have had your financial statements reviewed 
by the Office of Government Ethics.\1\ I would just ask, 
without objection, that this information be made part of the 
hearing record, with the exception of the financial data, which 
are on file and available for public inspection in our 
Committee offices. And since I am the only one here, I hear no 
objection to that request, so we will proceed.
---------------------------------------------------------------------------
    \1\ The biographical information and pre-hearing questions of Ms. 
Williams appear in the Appendix on page 19.
---------------------------------------------------------------------------
    The Committee Rules require that all witnesses at 
nomination hearings give their testimony under oath, and I am 
going to ask, Ms. Williams, that you stand and raise your right 
hand, and then I will ask you a couple of questions.
    Do you swear that the testimony you are about to give to 
our Committee will be the truth, the whole truth, and nothing 
but the truth, so help you, God?
    Ms. Williams. I do.
    Senator Carper. All right. Please be seated. That was the 
answer we were looking for.
    Ms. Williams. Thank you.
    Senator Carper. And I understand there is at least one 
member of your family here today, and I do not know if you 
would want to introduce him or anyone else that is sitting out 
in the audience. But if you do, you are welcome to do that. And 
we will make your whole statement part of the record. If you 
would like to summarize that, you can. You have the next 2 
hours to proceed.
    Ms. Williams. It will be very brief.
    Senator Carper. Well, maybe we will make that 10 minutes.

 TESTIMONY OF ELLEN C. WILLIAMS, GOVERNOR, U.S. POSTAL SERVICE

    Ms. Williams. I would like to thank Senator McConnell for 
taking time out of his schedule to come and introduce me today, 
and I would like to thank you very much, Senator Carper, for 
convening this hearing and allowing me to appear before you so 
I can talk about why I would like to have the opportunity to 
serve for a second term on the Postal Board of Governors. But I 
do have guests today. I have two of my dear friends: Vicki 
Dixon, with the Department of Interior--she was at my hearing 
about 15 months ago.
    Senator Carper. Would Vicki raise her hand? Ms. Dixon, how 
are you? Welcome.
    Ms. Williams. And Mark Acton--a fellow Kentuckian--on the 
Postal Regulatory Commission (PRC), one of the Commissioners.
    Senator Carper. Nice to see you. Welcome.
    Ms. Williams. He is here. And my very special guest is my 
father, retired Lieutenant General John Conaway. My dad is 
former Chief of the National Guard Bureau from 1990 to 1994. He 
likes to say he went into the Pentagon in the 1970s as the 
youngest general. He came out in 1994 as the oldest general, 
and by far and away the wisest general. And he was Chief during 
Desert Shield and Desert Storm, and his 37-year military career 
gave rise to the modern-day Guard, which we are so proud of, 
and its importance to the total component of our military. So 
he is our example in my family of public service and a hero to 
us all. So I am really honored that he is here today--General 
Conaway.
    Senator Carper. At ease, General. Welcome. Has your father 
ever been to Delaware?
    Ms. Williams. Well, he is a constituent of yours. Did you 
know that, sir? [Laughter.]
    We see you in the parade every year.
    Senator Akaka, how are you, sir?
    Senator Akaka. Fine. Thank you.
    Ms. Williams. I appear before you today after serving 15 
months as a Governor of the U.S. Postal Service, and I appear 
before you to seek nomination to a full term. I would like to 
thank the President for his confidence in me, and I truly 
appreciate the opportunity to be considered for a full term, 
and under the new law that full term will be 7 years.
    Last week, I met with your staff, and we discussed many of 
the key issues facing the Postal Service, and most 
specifically, we discussed implementation of the new postal 
legislation which was enacted.
    The enactment of this new legislation is the main reason I 
would like to have the opportunity to continue my service. I 
thought long and hard about it, and prior to the legislation, I 
mean, I was interested in the Board; but upon passage of the 
legislation, I was energized and intrigued by the opportunities 
that the Board of Governors will be afforded to help guide the 
Postal Service into its next era, if you will. I think that you 
all did an excellent job in defining the roles of the Board of 
Governors and the roles of the Postal Regulatory Commission. 
PRC is what Kim Weaver of the Postal Service said I need to 
stick to because I always get confused.
    Senator Carper. You are not the only one.
    Ms. Williams. Well, thanks, but it is exciting, and we 
stand at an exciting time, and I look forward, should I be 
confirmed to the full term, to working closely with my fellow 
governors, management, the PRC, and all stakeholders as we move 
this valuable institution forward.
    I will take any questions that you all may have, and I 
thank you for allowing me to be here.
    Senator Carper. Thank you.
    We have been joined by Senator Akaka. I am going to ask 
Senator Akaka to say whatever is on his mind and maybe ask the 
first question or two. Senator Akaka, thanks for joining us.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman. I am glad 
to be here with you, and I want to commend you for your 
oversight work over the Postal Service.
    Senator Carper. My pleasure. Thank you. Thanks for your 
help.
    Senator Akaka. I want to add my welcome to Governor 
Williams.
    Senator Carper. It has a nice ring to it, doesn't it? 
``Governor Williams.''
    Senator Akaka. I also want to thank you for your service. I 
think you mentioned that it has been 15 months?
    Ms. Williams. Fifteen months, yes.
    Senator Akaka. The Postal Service is in the midst of many 
changes resulting from the passage of the Postal Accountability 
and Enhancement Act at the end of last year by this Committee 
with the leadership of Senator Carper. As you said, this 
legislation has re-energized your passion in your work with the 
Postal Service. Yours is the first nomination to the Board of 
Governors since the law passed, so while your responsibilities 
have changed and while being a governor may be a part-time job, 
it still requires a full-time commitment to every American 
citizen that is connected with the Postal Service. I am pleased 
that we have before the Committee a nominee that is from a 
rural area, who understands the unique challenges and needs of 
those communities. I hope to ask your views about some of these 
important rural issues.
    Even with the new law enacted, it is up to the Postal 
Service, in large part through the Board of Governors, to 
ensure that the Postal Service is never privatized and that 
there continues to be a commitment to universal service for 
every American.
    Finally, I want to urge you, if confirmed for this 
appointment, to keep your door open to the Congress and to make 
it a point to share your thoughts and update Members of this 
Committee regularly.
    So, again, I want to thank you for being here and appearing 
before us.
    Ms. Williams. Thank you, Senator.
    Senator Akaka. Thank you, Mr. Chairman.
    Senator Carper. Senator Akaka, thank you, my friend. It is 
always great to be with you.
    I want to start off, Governor Williams--you do not mind if 
we call you ``Governor Williams,'' do you?
    Ms. Williams. No. You can call me ``Ellen,'' if you would 
like, but ``Governor Williams'' works. [Laughter.]
    Senator Carper. Let me start our questioning. We ask some 
fairly standard questions that we ask of all the nominees, and 
let me just ask those, and then we will move on from there.
    First, is there anything you are aware of in your 
background that might present a conflict of interest with the 
duties of the office to which you have been nominated?
    Ms. Williams. No, sir.
    Senator Carper. All right. And, second, do you know of 
anything, personal or otherwise, that would in any way prevent 
you from fully and honorably discharging the responsibilities 
of the office to which you have been nominated?
    Ms. Williams. No.
    Senator Carper. OK. And do you agree without reservation to 
respond to any reasonable summons to appear and testify before 
any duly constituted committee of Congress if you are 
confirmed?
    Ms. Williams. I absolutely do.
    Senator Carper. Well, why don't we go on to the other 
questions then.
    Ms. Williams. OK.
    Senator Carper. You passed that first test.
    You have now served on the Board of Governors for almost a 
year and a half--I think you alluded to this in your opening 
statement, but just talk a little bit more about why you would 
like to continue to serve.
    Ms. Williams. Well, I think that I have been given a good 
framework in the first 15 months of the term that I just 
completed, understanding a bit about how it was but not being 
so entrenched in how it was that I do not have the ability to 
look at the new law and begin to move forward. And as I said in 
my opening remarks, I have enjoyed the Postal Board of 
Governors, but I am energized about being on the Board in light 
of the new legislation that you all enacted. I think it gives 
us great opportunity to move the Postal Service into the 
future. It gives us a lot of opportunity in the competitive 
market area, with caution. I like the way you have defined the 
way the PRC and the Board of Governors will work together. I 
appreciate their regulatory role and the way it has been 
defined.
    And so I just think there is a lot of unique opportunities 
and it is an exciting time.
    Senator Carper. Good.
    Ms. Williams. And I would like to continue service.
    Senator Carper. Talk to us a little bit about some of the 
challenges that you think the Board and postal management are 
going to be facing in the coming years under the new law, and 
in addition to telling us what you think are some of the 
challenges, maybe what you believe are some of the 
opportunities.
    Ms. Williams. Well, the challenges, I mean, first and 
foremost--and you mentioned it in your opening statement--is 
the decline of First-Class mail. And we are not under the 
illusion that we can increase for the long term First-Class 
mail due to electronic diversion. But I think there are things 
that we can do to make the Postal Board more cost-efficient, 
and we are looking at ways right now with the service standards 
that are mandated in the new legislation, and we just posted 
the regulations today for comment, so there is a 30-day comment 
period, and we are working with all the stakeholders to try to 
make sure that service standards are doable, not too low, not 
too high, and that once we have something that everyone agrees 
to and comments are accepted, we then can work on a facilities 
plan, which is due, according to the new law, by June 2008.
    And so I think then we will put some measurements in place, 
too, on these service standards so that we can determine if we 
are achieving them and if we need to modify them as we go 
forward. We work closely with the PRC on that. The PRC has 
issued draft regulations on the way we file a new rate case, 
and they are pushing us, and we appreciate that. I think Dan 
Blair and Mark Acton, the two specifically that I know of, and 
the rest of them are doing a good job in communicating with us. 
But the Board of Governors and management almost without 
exception like the draft regulations on the new ratemaking, and 
it would be our intention that we file our rate case under the 
new law. And I think as a Board of Governors that is part of 
our role, to show leadership in the implementation of this law, 
to try to help set the tone, to try to work through some of the 
challenges that management is going to be facing as we move 
forward.
    Senator Carper. When you think about some of the new pieces 
of business that might be out there for the Postal Service in 
this decade and down the road, what are some that come to mind? 
This is not a trick question, but I think we have a couple of 
States now where folks actually do their voting by mail. I 
believe that maybe Oregon is one of those States. There may be 
others, but I am aware of at least Oregon. I suspect some 
others are thinking of it.
    I have not thought about that until right now as a possible 
area of growth, a growing area of your business. But it could.
    Ms. Williams. It could be. There could be a lot of things. 
What we are focused on right now is to try to make sure that we 
have parameters for competitiveness, and the PRC has submitted 
some guidelines. We at the Board of Governors level are redoing 
our bylaws to be consistent with what the law states we need to 
do. So we have a lot of oversight in the competitive products 
area. So we want to make sure that these bylaws and the 
standards that the PRC submitted allow for a competitive 
environment to make us move forward.
    So as far as actual products, we brainstorm on some, but 
none that I am really comfortable talking about.
    Senator Carper. How does it work within the Board of 
Governors? At the Board of Governors, I think, just in terms of 
brainstorming, given the kind of intellectual fire power you 
have on the Board, you have the ability to come up with some 
ideas there. I presume the folks who run the Postal Service are 
coming up with ideas. Do you hire consultants and others to 
help you figure out how to develop new business opportunities?
    Ms. Williams. I think that remains to be seen, but it is 
certainly something that is on the table as we look to expand 
products and enhance our role, if you will. Jack Potter, the 
Postmaster General, and Pat Donahoe have put together a 
tremendous staff, and they are very innovative. They are 
aggressive. They have a wonderful marketing team and overseas 
division. We hope that there will be a lot of opportunities, 
and, frankly, we would like to come back and talk to you all 
maybe in the spring or summer and expound on some of the 
competitive opportunities that we are exploring.
    Senator Carper. All right. I have stated in the past, those 
of us who put together the postal reform bill chose not to 
pursue the idea of privatization. We also chose to preserve 
postal employees' collective bargaining rights, as you know.
    A number of my colleagues and I have been concerned about 
the trend in recent months in the Postal Service of contracting 
out work in what appears to be a greater degree than has 
happened in the past. I acknowledge that work has been 
contracted out for years by the Postal Service, but it just 
appears to be something that is being done more often than was 
the case a year or even 2 years ago. And that contracting out 
of mail deliveries has received a fair amount of attention, and 
I am sure it has been brought to the Board's attention.
    Personally, I believe that contracting out has its place, 
but that it should be the exception rather than the rule with 
respect to the Postal Service.
    Let me just ask what your views are on this subject. When 
is it appropriate and when is it not appropriate for the Postal 
Service to be contracting out work that is currently performed 
by bargaining unit employees?
    Ms. Williams. Thanks for that question. That is one that I 
think we all struggle with. I agree with you; I do not believe 
the Postal Service should be privatized, first of all.
    Second of all, contracting out does have its place, but it 
is a balancing act, and we have restraints and parameters based 
on our contracts that we have with our workforce. And Jack 
Potter and our management team, I think, are very judicious in 
trying to make the determination when it is OK to contract out 
and when we should not. And it is a balance of cost. Is it 
cost-saving? Can you still get the same efficient work? But 
there is no hard and fast rule on when it is OK to contract out 
and when it is not.
    I can tell you that our management team has just 
successfully negotiated three of our four contracts with our 
workforce.
    Senator Carper. Which ones have you negotiated?
    Ms. Williams. All but the rurals. I always forget the one 
that we have not done.
    Senator Carper. All right.
    Ms. Williams. But there is language that says--there is 
nothing in these contracts that prohibit contracting out, and 
that was something that both parties agreed on. It is not 
anything that we want to do wholesale. We believe that is an 
opportunity to save costs. We also believe there are a lot of 
efficiencies that can be identified in automation and other 
things that can help save money, too, and keep us in a more 
profitable or straight line on not losing money.
    Senator Carper. With the significant increase in 
contracting out that has taken place within the last year or 
so, at least one of my colleagues, with support from a number 
of other Senate colleagues, introduced legislation that sought 
to preclude the contracting out in a number of instances. I 
think there is an interest in maybe adding it as an amendment 
to one of our appropriations bills that was moving through. We 
encouraged that not to happen. We felt that the authorizing 
committee should really have jurisdiction over that. And what 
we heard from some of the labor unions was that this is a 
matter that should be resolved at the bargaining table between 
management and labor, and others are actually supportive of the 
legislation. Your thoughts in that regard?
    Ms. Williams. My thought would be to not do anything 
legislatively at this juncture, and I would hate to see our 
hands really tied from the standpoint if we need to do 
contracting out, which the Postal Service has been doing since 
the 1700s, to prohibit it through legislation I am not sure is 
the right approach. I think the new law has yet to be 
determined how it is going to impact the Postal Service, and so 
I would like in a year or two maybe we come back, and I know we 
provide yearly reports to you all, and we are redoing our 
strategic transformation plan to coincide with the new law and 
some of its requirements. So I would not encourage any 
legislative action on contracting out at this time. I agree 
with letting us take care of it at the table, frankly.
    Senator Carper. Thank you.
    Senator Akaka, I have some more questions, but let me yield 
to you, if I may.
    Senator Akaka. Thank you very much, Mr. Chairman, for this 
opportunity.
    As I mentioned, I was glad that you have lots of experience 
with the rural areas. In my home State of Hawaii, over the 
years we have sometimes experienced problems with services in 
the most rural areas. For example, a few years ago, there was a 
shortage of post office boxes in a community that did not offer 
delivery to the home. And coming from a rural area yourself, do 
you think the Postal Service is doing everything it can to 
ensure universal quality mail service?
    Ms. Williams. I do, and I think that the Postal Service is 
continually addressing how to provide universal service, and we 
are reviewing our standards right now--and they are out for 
comment--to try to figure out how we can provide universal 
service regardless of where a person lives in this country, 
which is the backbone of the creation of the Postal Service.
    So your staff had indicated they may have some thoughts, 
and we are going to work with the Postal Service on our service 
standards that are out for comment right now. So I appreciate 
very much mail being delivered in a timely fashion no matter if 
you are in New York City or Elliott County in Kentucky that in 
some instances in the winter we use a mule to deliver the mail.
    Senator Akaka. Speaking of timely delivery, as you know, 
yesterday the Postal Service released their draft modern 
service standards regulations for comment. One issue of concern 
I have is the disparity between Alaska and Hawaii standards and 
the Mainland standards. For example, a periodical sent on the 
Mainland to another State would take 1 to 9 days; whereas, a 
periodical from Hawaii to the Mainland would take from 11 to 17 
days, even though both periodicals cost the same to send.
    Can you give me your reaction to such disparities? Should 
the Postal Service do more to close this gap?
    Ms. Williams. I cannot speak specifically on how to close 
the gap. I know Pat Donahoe, our Chief Operating Officer, is 
working closely with stakeholders to try to figure out how to 
close the gap on the disparity. I believe that we need to do as 
much as we can. We may not be able to get it to exactly the 
same time frame as the Mainland, but I think if we could shave 
off some of the days, that seems to be a pretty big gap. And I 
know that they are working diligently on it, but I cannot state 
specifically what will be done to do that. But I know they are 
conscious of it, and it is a problem.
    Senator Akaka. Governor Williams, in your pre-hearing 
questions, you stated that as you see it, the Board of 
Governors should act much like a private sector board----
    Ms. Williams. Right.
    Senator Akaka [continuing]. Providing high-level oversight 
and guidance to management. In the brief time that you have 
spent already with the Board, can you give me any examples of 
what kind of oversight or what kind of guidance you or the 
Board as a whole has provided to management?
    Ms. Williams. We have pushed management pretty hard on 
trying to measure the standards and trying to put some system 
in place so that we can understand that if you make this more 
efficient, what is the dollar savings. And so we are really 
trying to put some more accountability into the standards that 
we develop.
    Also, I am on the Management and Compensation Committee, 
and in 2008, we are going to have a huge number of retirees in 
management. And so we have pushed hard on that committee and 
have brought in a consultant to help us help them develop some 
succession planning that has parameters and is not based on 
maybe who you may be comfortable with or who you may know, but 
who has the talents and the experience and the capabilities to 
move into the pipeline to start filling some of the management 
gaps that will begin existing.
    We are reaching out to the colleges to try to bring some 
new college graduates in on a career path for the Postal 
Service, which is a wonderful career. I had no idea until I 
joined the Board. And so there are some of those kinds of 
things. I am on the Governance and Strategic Planning 
Committee, and we have spent a lot of time discussing the new 
legislation and really pushing on how we start thinking in a 
different way, how we start thinking more like a business in 
the competitive products standpoint. And those are the two 
committees I can specifically speak on the way that the Board 
has tried to give them some backing and point some things out 
that maybe they--because they are not bogged down, but because 
they are dealing with a lot of the day-to-day issues may not 
have time to step back and think about.
    Senator Akaka. The postal reform bill that we passed last 
year shifted more responsibility to the Postal Regulatory 
Commission. Can you tell me what are some of the changes you 
have experienced from the Board's perspective?
    Ms. Williams. I like the changes very much. The Board of 
Governors are a part-time board, and the PRC is a full-time 
board. And so I think that in and of itself makes sense that 
there would be a shift to some more responsibility, if you 
will, to the PRC with more of a board of directors oversight 
capacity that the Board of Governors now has. A lot of us have 
functioned that way, but I think the legislation has clearly 
spelled it out and articulated just exactly how the two bodies 
work together. And on a lot of the draft regulations that the 
PRC is sending over, they are helping to provide a framework on 
how we as a Postal Service will go forward on competitive 
products, on the new rate case. As I said earlier, we like what 
they are doing. We like the direction and the driving force 
that Chairman Blair is showing.
    And so that has been a really good thing, and it has 
clarified and prevented--it has just allowed good cooperation, 
good communication, which we had before, but I am excited about 
the opportunities that it is going to afford the Postal 
Service.
    Senator Akaka. Well, I am glad to hear that about the 
relationships. Do you think that the relationship between the 
Board and the Commission has been constructive?
    Ms. Williams. Yes, I do. I think it has been very 
constructive. I think that both entities are working hard to 
provide the leadership on this new legislation and to do what 
is right for the Postal Service. The one thing for certain 
about the Postal Service right now is nothing is for certain. 
There is a lot of change.
    Senator Akaka. Yes. Well, I am glad to have you before us. 
I want to wish you well.
    Ms. Williams. Thank you very much.
    Senator Akaka. And I want to thank the Chairman for his 
part in crafting the bill that was passed and for his 
leadership in bringing it to fruition to improve the service of 
the Postal Service.
    Ms. Williams. Thank you.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Senator Carper. Thank you very much, Senator Akaka. I would 
be happy to extend your time another 10 minutes if you want to 
go on.
    Senator Akaka. No, thank you.
    Senator Carper. All right. Thank you. And thank you for 
being a big part of the legislation that Senator Collins and I 
and others worked on.
    Governor Williams, a number of us here in the Senate have 
been concerned for a while, really for a number of years, over 
the way that processing plant consolidations are handled. On 
the one hand, it appears that at times the Postal Service does 
not have what I would call a robust plan for right-sizing its 
facilities in our network and taking advantage of some of the 
technology in mail processing innovations that have made some 
plants, particularly older ones, obsolete.
    On the other hand, when a plant is being considered for 
closure or for consolidation, we always hear concerns from 
employees, as you might understand, that they were not 
consulted and they have no idea what is going on and how they 
are going to be affected.
    How do you think that these issues ought to be addressed?
    Ms. Williams. Well, we do not make any of the decisions on 
closures or changes lightly, and we have encouraged on the 
Board all stakeholders' views to be heard. The new law will 
also require that by 2008 we have a facilities plan, if you 
will, which will be, I am sure, presented to Congress in our 
report. But it is not a decision that we would ever make 
lightly, and I can tell you that we have something called 
``total factor productivity'' and----
    Senator Carper. What does that mean?
    Ms. Williams. It means that we look at automation, we look 
at our staffing, and through attrition, we have 100,000 less 
employees at the Postal Service today. But our productivity 
from the standpoint of cost efficiencies and moving the mail 
out the door and service standards have improved. And so we are 
really trying to make decisions that are good for the Postal 
Service, good for the communities, and not do anything that has 
not been totally thought out and part of the overall plan, 
which I think management and the folks out in the field have 
done a good job putting together.
    Senator Carper. All right. How many people serve on the 
Postal Board of Governors today?
    Ms. Williams. Nine. We have a full Board.
    Senator Carper. A full Board. Not all of us are born or 
raised with the same skills or gifts or talents, but when you 
look at the folks who serve on the Board and the range of the 
talents that are represented by the membership of the Board, 
what do you find are some of the most important gifts or skills 
or talents that one needs to serve in this brave new postal 
world?
    Ms. Williams. The Board is a really unique mixture of 
strengths, and we have a woman that has experience with a large 
corporation. We have a former Congressman and someone who has 
served on a lot of task forces, the base closing task force 
being one of them, so he understands large challenges and the 
enactment of legislation. We have a small businessman. We have 
someone from a small rural State in myself. We have a former 
staffer who is pretty intimately knowledgeable about issues and 
the legislation.
    So I think that the diversity of the Board and all of our 
backgrounds are what make the give and take and the 
opportunities for discussion good. I know that in the 
legislation there was some encouragement of 50,000-person 
organizations, and I think it is good to have people like that 
on there. But I do not know that you would want a whole board 
made up of people who only come from the large corporate 
mentality--particularly in the small States and the small 
communities, you would look at a Postal Service and say, well, 
this one is not profitable, we need to close it. Well, 
sometimes you cannot put a price tag on the benefits to a small 
community, and I think that is where the balance in the 
membership of the Board is really important, and I believe that 
we have that in this Board.
    Senator Carper. OK. When you think of the other eight 
members who serve on the Board of Governors and you think about 
their expertise, their abilities, and what they bring to the 
table--I am not going to ask you to go through and name for 
each person what they are, but could you think of for everybody 
some of their foremost talents or skills or expertise?
    Ms. Williams. Absolutely.
    Senator Carper. And when you think of yourself and what you 
bring to the table, the value-added that you bring, what are 
some of the things that you think are most valuable that you 
bring as a governor?
    Ms. Williams. I think that my experience--I have managed 
large organizations, never any with a union component, but I 
have managed large organizations. I have been in State 
government. I have been in the Federal Government in many 
capacities. I think that coming from a rural State and living 
in a small town and being involved in the political process, 
frankly, gives me a unique perspective as we put all the 
different stakeholders together and try to come to some 
compromise and solutions on big issues. And there has to be 
give and take in all these solutions that we deal with, and I 
think one of my strengths is absolutely trying to draw the best 
out of a situation and the best out of each side to meld 
together, I think, the optimum solutions.
    Senator Carper. I have served on boards, and you probably 
have served on other boards, I am sure, where we think, it 
would be great if we had a person who was good at this or maybe 
good at that, but there was not a vacancy and as a result you 
could not.
    When you look at the Board today, and you think it would be 
nice if we had somebody who is especially good at something 
else, what might that be? Or let me ask that question in 
another way. If you were advising a President, a future 
President, on what to look for in appointing or nominating a 
person to serve on the Board of Governors, what advice would 
you provide?
    Ms. Williams. I think it would be important--I would not--
all of us, obviously, if you asked that question on the Board 
of Governors, would come up with a different answer.
    Senator Carper. This is just for you.
    Ms. Williams. My specific answer would be--look at the 
make-up of the Board and then let's figure out where the hole 
is. If we do not have anybody from the accounting field--which 
we do--or if we do not have anybody that is versed in business 
start-ups, I think it would be important to have somebody that 
has been involved with union negotiations and labor unions. We 
have a good management team that has been very helpful on that, 
and Jack Potter serves in that role--our Postmaster General.
    So I do not know that we have any gaps, frankly, right now, 
but there will come a time that, depending on who leaves, I 
think that it will be evident to you all as you go through the 
next confirmation process where the hole would be.
    Senator Carper. All right. The main feature of our new rate 
system is the rate cap, as you know. In most cases, the cap 
will prevent the Postal Service from raising rates above the 
CPI. Having said that, our reform bill does include a provision 
that would allow rate increases above the cap under certain 
circumstances. There has been some debate over the years about 
what those circumstances might be. In fact, there was a fair 
amount of debate during the time that we were negotiating the 
legislation about that.
    When do you think it would be appropriate for the Postal 
Service to break the cap?
    Ms. Williams. I think it would have to be a truly 
extraordinary circumstance.
    Senator Carper. Well, can you give us some example?
    Ms. Williams. Well, God forbid, but a September 11, 2001, 
or a large national or international incident. I do not think 
that we want to use the ability to raise rates--or this caveat 
in the law as something if maybe we did not do as well last 
year as we thought we would, well, then, this is a special 
circumstance and we want to raise rates. It is my opinion that 
was not the intent of the legislation but the intent was for an 
anthrax or a September 11, 2001--a truly extraordinary 
situation that I hope we are never faced with, but at that 
point we would sit down and immediately begin work on what we 
needed to do.
    Senator Carper. OK. Maybe a couple more questions and then 
we will call it a day. I have been an advocate for some time of 
the Postal Service using alternative retail options, such as 
vending machines or windows in places like grocery stores and 
pharmacies in order to reach its customers. This kind of retail 
can be used, at least in my view, to augment what is already 
offered or to serve as a cheaper alternative in some cases to a 
full-scale post office where that does not make good economic 
sense.
    Now, the reform bill that we passed included language that 
requires the Postal Service to come up with a plan for rolling 
out alternate retail options. And let me just ask what, in your 
view, should the Postal Service be doing in this regard.
    Ms. Williams. I like the alternate retail options. I think 
with the decline of the First-Class mail service, anything that 
we can do to expand our reach and make the post office more 
user friendly to folks is a good thing. We are working on ways 
to roll that out right now, so I do not have specific instances 
for you, but I think there are--like I said, probably by next 
summer you will see some things that we would be prepared to 
come talk to Congress about that I hope will be worthy of good 
things and expansion and good news for the Postal Service.
    Senator Carper. OK. The last question I have is probably 
the most important question I will ask of all as we look at 
your nomination going forward, and it is a fairly 
straightforward question, but what does PRC stand for? 
[Laughter.]
    Ms. Williams. The Postal Regulatory Commission.
    Senator Carper. Just the answer we were looking for.
    Ms. Williams. I almost choked. Thank you, sir. [Laughter.]
    Senator Carper. I think that is all the questions we have 
for you today.
    Ms. Williams. Thank you.
    Senator Carper. Senator Coburn had indicated that he was 
going to try to come by, but unless he comes in the next few 
seconds, I am afraid he is going to miss this opportunity.
    So let me thank you for your willingness to serve and for 
your willingness to take a longer view at this opportunity for 
service and maybe give us a few more years.
    There may be some other questions from Members who were not 
able to join us today, and if those questions find their way to 
you, I would just ask that you respond promptly so that we can 
have a full record of the hearing.
    Ms. Williams. I will do so. Thank you.
    Senator Carper. With that having been said, we thank you 
and your guests again for joining us today, and with that this 
hearing is concluded.
    Ms. Williams. Thank you, sir.
    Senator Carper. Thank you.
    [Whereupon, at 4:32 p.m., the Committee was adjourned.]


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