[Senate Hearing 110-938]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 110-938
 
                     NOMINATION OF NANCI E. LANGLEY 

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                 ON THE

 NOMINATION OF NANCI E. LANGLEY TO BE COMMISSIONER, POSTAL REGULATORY 
                               COMMISSION

                               __________

                             APRIL 23, 2008

                               __________

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

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        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, Professional Staff Member
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                   Jennifer L. Tarr, Minority Counsel
                  Trina Driessnack Tyrer, Chief Clerk
         Patricia R. Hogan, Publications Clerk and GPO Detailee
                    Laura W. Kilbride, Hearing Clerk





















                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Carper...............................................     1
    Senator Akaka................................................     2

                                WITNESS
                       Wednesday, April 23, 2008

Nanci E. Langley, to be Commissioner, Postal Regulatory 
  Commission:
    Testimony....................................................     4
    Prepared statement...........................................    15
    Biographical and professional information....................    17
    Responses to pre-hearing questions...........................    25
    Letter from U.S. Office of Government Ethics.................    38


                     NOMINATION OF NANCI E. LANGLEY

                              ----------                              


                       WEDNESDAY, APRIL 23, 2008

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:31 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 Committee will come to order, and I am 
pleased to serve as Chairman today alongside my friend and 
colleague, Senator Akaka, as the Committee considers the 
nomination of Nanci Langley to be Commissioner on the Postal 
Regulatory Commission. Welcome.
    Ms. Langley. Thank you.
    Senator Carper. You look familiar. [Laughter.]
    I am not sure why. We are glad you are here with us today.
    Ms. Langley, your nomination comes at a difficult and 
challenging time for the Postal Service, although they have had 
plenty of challenging times before. Recently, in the last 7 
years that I have served in the Senate, the economic slowdown 
that we have found ourselves in today has hurt a number of 
families and businesses, but it has hit the Postal Service 
early and hard. I described in a recent meeting with the 
Postmaster General, the Postal Service is a little bit like the 
canary in the coal mine in terms of feeling of the economic 
slowdown early
    We actually heard some testimony in our Subcommittee about 
the Postal Service potentially being on track, for the first 
time in many years, to suffer significant losses, maybe as high 
as in the billions of dollars. But hopefully that is not going 
to be the case.
    There is always the chance that some of the mail volume 
that the Postal Service has lost as a result of the slowing 
economy could be lost for good, although we hope not. The 
number of communications options available to postal customers 
and available to all of us continues to increase and to grow 
easier to use as well.
    But having said all that, I think this is also a time of 
great opportunity for the Postal Service. The Postal 
Accountability and Enhancement Act, a bill that you have played 
a key role in helping us to get enacted, along with my 
colleague, Senator Akaka, and others, has been the law of our 
land for more than a year now, and we are starting to see, I 
believe, some real benefits that flow from it as a result.
    The Postal Service is set to change prices this spring 
using the streamlined cap-based rate system called for in the 
Act, and it is my hope that the Postal Service can use this new 
rate system in the coming years to offer customers some level 
of predictability and to be more competitive in the advertising 
and the mailing markets.
    We also have a new set of service standards for most postal 
products that I trust will make the Postal Service more 
relevant and more valuable to customers that now have a lot of 
other communications options.
    All this makes it vitally important that we have strong, 
experienced leadership, not just at the Postal Service, but at 
the Postal Regulatory Commission, too.
    The Commission can play a key role in helping the Postal 
Service through the challenges that it faces in the years to 
come. In some ways, they can do this by standing back and 
letting the Postal Service take advantage of the commercial 
opportunities that the Congress has given it.
    The Commission must also ensure that the Postal Service is 
acting in compliance with the law and fulfilling its service 
obligations.
    I look forward to hearing how you, Ms. Langley, can help 
the Commission fulfill the important role it has under the new 
law we worked so hard together to make reality.
    At this point in time, I want to yield to my friend and 
colleague, Senator Akaka, to actually introduce you to a room 
where you need little introduction. But I am anxious to hear 
what he has to say, nonetheless. Senator Akaka, you are on. 
Take it away.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman. It is 
really a great pleasure to be serving with you and to be with 
you on this Committee. I want to say aloha and good afternoon 
to everyone here as well. I am delighted to be at this hearing 
to consider the nomination of Nanci Langley to be a 
Commissioner on the Postal Regulatory Commission.
    It is my distinct pleasure this afternoon to introduce 
Nanci Langley, whom I have had the privilege of knowing for the 
last 18 years. Although I say ``introduce,'' Nanci is by no 
means a stranger to this Committee. She served in my personal 
office for 10 years, handling an array of issues, and until 
recently served on this Committee as the Deputy Staff Director 
of what is now the Oversight of Government Management 
Subcommittee.
    It was in that capacity that Nanci was my senior adviser on 
government management, Federal workers, and, importantly, the 
Postal Service. She was instrumental in working for years to 
ensure that my concerns--financial transparency and workers' 
rights--were addressed in what became the recently enacted 
postal reform legislation.
    As the former Chair of the Postal Subcommittee, I can think 
of no one who is more qualified to be nominated to this 
position and serve as a Commissioner than Nanci Langley. She is 
well known and respected by the entire mailing community, 
having worked closely with the Postal Service, mailers, and 
employees for many years.
    Being from my home State of Hawaii, thousands of miles away 
from the Mainland, let alone Washington, DC., she has a unique 
appreciation for just how important a role the mail system 
plays in everyday life. Her family was well aware of this. For 
48 years, her parents owned a chain of clothing stores which 
relied on the Postal Service to receive timely deliveries of 
merchandise.
    Nanci came to work for me when I came to the Senate after 
the passing of my predecessor and colleague, Senator Spark 
Matsunaga. When I asked her to join my staff, little did she 
know that today she would be well known amongst the postal 
community as one of the foremost experts in the city on postal 
affairs.
    Not only does Nanci understand the needs of the Postal 
Service, more importantly she knows well and cares about the 
tens of thousands of employees that work at the Postal Service 
every day. It is this appreciation, which I share, that guides 
in balancing the needs of consumers, the Postal Service, and 
its employees.
    The Postal Service and the Postal Regulatory Commission 
(PRC), in particular, have recently undergone tremendous 
changes. These changes have created challenges and also 
opportunities. Consumers are now assured more regular, 
predictable rate increases as well as increased transparency in 
postal finances, due in large part to Ms. Langley's hard work 
in crafting the postal reform legislation. As a testament to 
her expertise, after passing the postal reform legislation, 
which expanded the role of the Postal Regulatory Commission, 
she was tapped by PRC, headed by another former staffer of this 
Committee, Chairman Dan Blair, to run the Public and 
Governmental Affairs team.
    Since assuming that role, I can tell you that she has been 
as tenacious and outstanding as ever in balancing the needs of 
the postal community. While I was saddened by her departure 
from my office, I knew it was a tremendous opportunity, and now 
we see it has led to an even bigger role at the PRC.
    I will not belabor her qualifications for this position, 
which I think few have questioned. However, I do want to pass 
on my full faith in her abilities and to you, Ms. Langley, I 
want to extend, as I have for years, my deepest ``aloha'' and 
``mahalo,'' which is thank you, for your years of dedicated 
service not only to me but to the people of Hawaii, the Federal 
workforce, and the mailing community of this country.
    Thank you, Mr. Chairman. I hope the Committee can move this 
nomination quickly.
    Senator Carper. Thank you, Senator Akaka. How do you say 
``thank you''? Is it ``maloha''?
    Senator Akaka. ``Mahalo.''
    Senator Carper. ``Mahalo.'' Thank you for that opening 
statement, for introducing Ms. Langley to us, and for your 
willingness to share her, not just with the folks that you 
serve in Hawaii, but with the whole country.
    I believe Ms. Langley has filed responses to a biographical 
and financial questionnaire, answered pre-hearing questions 
submitted by the Committee, and had her financial statements 
reviewed by the Office of Government Ethics. I won't question 
you about how much fun it was to go through just filling out 
all the paperwork that we deal with. I remember once when I was 
nominated by President Clinton to serve on the Amtrak Board of 
Directors--I was governor at the time--a job I very much wanted 
to have, an extra job plus my regular day job. But after going 
through all this stuff, filling out the questionnaires and the 
financial statements, I said, ``I am not sure this is really 
worth it for a job that does not pay anything.'' But I ended up 
doing it, and it was worth it. Thanks for going through all 
that.
    Without objection, the information that you have compiled 
and submitted to the Office of Government Ethics will be made a 
part of our hearing record. The financial data, however, will 
remain on file and available for public inspection in our 
Committee's offices.
    I believe the Committee rules require that all witnesses at 
nomination hearings give their testimony under oath, and you 
have had an opportunity, as someone who has worked in these 
halls in the past, seeing any number of people stand and take 
an oath. Did you ever think that you would be taking the oath 
yourself and repeating this?
    Ms. Langley. Never.
    Senator Carper. All right. You can probably do it by heart. 
I am going to ask you, if you don't mind, just to stand and 
raise your right hand. Do you swear that the testimony you will 
give before this Committee will be the truth, the whole truth, 
and nothing but the truth, so help you, God?
    Ms. Langley. I do.
    Senator Carper. That is good. OK.
    Senator Akaka, if you would like to lead off with 
questions--I have a whole lot of questions. I really want to 
grill this witness. [Laughter.]
    But I am told by my staff director, John Kilvington, that I 
need to ask three questions first, and then if you would like 
to take over, I will ask a number of additional questions after 
that.
    It is required, I think by Committee rules, to ask these 
three questions, and I will start--Mr. Kilvington says you 
might have an opening statement. Is that possible?
    Ms. Langley. It is possible. It is probable. [Laughter.]
    Senator Carper. Well, then, go ahead. We would love to have 
your opening statement, and then I will ask those questions, 
and then yield to Senator Akaka. Go ahead.
    Ms. Langley. I will try to be brief.
    Senator Carper. No. Take your time. I want to hear this. 
[Laughter.]

 TESTIMONY OF NANCI E. LANGLEY,\1\ TO BE COMMISSIONER, POSTAL 
                     REGULATORY COMMISSION

    Ms. Langley. Thank you, Mr. Chairman. As someone who sat 
behind Senator Akaka for so many years on the dais in front of 
me, I am humbled and I am pleased to be here today. I wish to 
thank the President for nominating me as a Commissioner of the 
Postal Regulatory Commission, and I am grateful to the Senate 
Majority Leader, Harry Reid, for recommending me to the 
President. And I am especially grateful to you, Senator Akaka, 
for your long advocacy on my behalf and your gracious words 
today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Langley appears in the Appendix 
on page 15.
---------------------------------------------------------------------------
    I am honored to be accompanied by Dan Blair, whom Senator 
Akaka mentioned, a former staffer on this Committee, but, more 
importantly, Chairman of the Regulatory Commission. He is here 
with Vice Chairman Mark Acton and Commissioner Tony Hammond. 
Commissioner Ruth Goldway is in California with her family 
observing Passover. And I am equally pleased that two former 
PRC Chairmen, George Omas and Ed Gleiman, are here as well. And 
I would also like to acknowledge the many friends and 
colleagues who are wishing me good luck today.
    And, last, but most importantly, I would like to introduce 
my husband of nearly 30 years, William Selander, who, for more 
than two decades as a Senate spouse, rarely complained about 
missed meals and having to take vacations during Senate recess.
    Senator Carper. Rarely complained?
    Ms. Langley. I said rarely, yes. Rarely. [Laughter.]
    Senator Carper. Where is he?
    Ms. Langley. Right behind me.
    Senator Carper. Welcome. How are you? He has your back.
    Ms. Langley. Yes, he has my back.
    Senator Carper. Just like you had Senator Akaka's for all 
those years.
    Ms. Langley. Absolutely.
    Senator Carper. Good.
    Ms. Langley. But I do continue to be Bill's biggest fan, 
and I thank him for all his support.
    I am fortunate to have worked for two fine Senators from my 
home State of Hawaii, the late Senator Spark Matsunaga and 
Senator Akaka, who has been both my mentor and my role model 
for over 17 years. I thank you, Senator Akaka, for all the 
experience and opportunities you have afforded to me. And 
although I have left your Subcommittee, I know that I am in 
your heart, as all the people of Hawaii are in your heart.
    And having spent so many years helping to draft, negotiate, 
and enact the Postal Accountability and Enhancement Act (PAEA), 
I am pleased that I am now inplementing the Act as part of the 
senior team at the Postal Regulatory Commission. If confirmed, 
it will be my privilege to continue my public service as a 
member of the Commission.
    In closing, as I looked around the room before I sat down, 
I know that bringing to fruition the PAEA was not done in 
isolation. The mailing community, from union and association 
members to business mailers, to individual citizens, moved this 
effort forward because of their collective desire to sustain 
the Postal Service. The American people have Members of 
Congress, especially Senator Carper, Senator Akaka, Senator 
Collins, and Senator Lieberman, to thank for their tireless 
efforts. Ensuring a fair balance between the flexibilities 
granted to the Postal Service by the new law, with the 
accountability and transparency provided by the Commission, 
will be my goal if confirmed as Commissioner. I have the 
greatest respect for the four Commissioners who are now 
carrying out these duties.
    So I thank you, Mr. Chairman, Senator Akaka. I also thank 
your wonderful staff who helped me through this nomination 
process: John Kilvington, Larry Novey, Chris Barkley, Brooke 
Hayes, Evan Cash, Kristine Lam, and Jennifer Tarr. They have 
all been wonderful, as well as Jennifer Tyree, and Rick 
Kessler, my former staff director. Thank you so much. That 
concludes my statement, and I am happy to answer any questions 
you may have.
    Senator Carper. Thank you for that really wonderful 
statement.
    Again, as I was trying to say before you interrupted with 
that opening statement, I was trying to get to some of these 
questions. There are three questions that I think we are 
required by Committee rules to ask, and I will ask those, and 
then depending on how you answer those questions, we will turn 
it over to Senator Akaka.
    First, is there anything that 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. Langley. No.
    Senator Carper. 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. Langley. No, I do not.
    Senator Carper. So far, so good. 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. Langley. I do.
    Senator Carper. And I have a fourth question, but I am 
going to hold off on that, and I am going to ask Senator Akaka 
if he would like to go ahead and open the questioning. Ask as 
many questions for as long as you want, and when you have 
exhausted your list, I will ask a few of my own. Thank you.
    Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman. It is a 
pleasure to ask Ms. Langley this question. She has the 
background for it. This question has to do with the Pacific.
    Ms. Langley, when the Postal Service was crafting new 
service delivery standards, I urged them to ensure that 
standards to non-contiguous States were accurate and that they 
be constantly improved. However, I remain concerned that some 
of these standards, especially to Guam and Hawaii, may not 
fully reflect--and let me underscore this--the actual time, the 
actual time from mailbox to mailbox. And I am concerned about 
the delivery time between Guam and Hawaii and notice the 
standard is that it would take one day by boat from Hawaii to 
Guam.
    Do you plan to work closely with the Postal Service to 
ensure that this issue remains a priority to be addressed?
    Ms. Langley. Yes. If confirmed, I can assure you that 
service standards and performance measurements for non-
contiguous areas, including the State of Hawaii, as well as the 
territories, will be a top priority of mine. The Commission on 
its own, without my prompting, actually pressed the Postal 
Service quite a bit on the delivery standards for Hawaii. 
Particularly Hawaii and Alaska, there was a lack of 
understanding why it would take 4 days from the West Coast to 
Hawaii or to Alaska, when the current service standards were 
already 3 days.
    Your concerns that were expressed to the Postal Service, as 
well as the PRC's concerns, had a great deal of impact because 
it ended up rolling back those service standards to what the 
norm is now, and that is 3 days. As far as 1 day between Guam, 
we know that it is absolutely unfeasible to get a ship between 
Guam and Hawaii in that time frame. So I can assure you again, 
this will be a priority.
    Senator Akaka. Thank you very much.
    Mr. Chairman, I apologize for leaving the Committee now. I 
have to chair another committee in a few minutes. So thank you 
very much, Ms. Langley. I wish you well.
    Ms. Langley. Thank you.
    Senator Akaka. With much aloha and, again, we will try to 
move as quickly as we can on my part, and I am sure the 
Chairman's part as well, to have you confirmed.
    Ms. Langley. Aloha pumehana.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Senator Carper. Senator Akaka, thank you so much.
    Ms. Langley, I served in the U.S. House of Representatives 
with Senator Akaka, then-Congressman Akaka. I never served with 
his predecessor in the Senate. Tell us a little bit about him.
    Ms. Langley. Senator Matsunaga came to the House, I think, 
in the early 1970s and then came to the Senate in the late 
1970s and served--he was Chairman of the Taxation Subcommittee 
on the Finance Committee for a number of years and really 
pushed alternative energy. That was one of his key concerns, 
knowing Hawaii was out in the middle of the Pacific, finding a 
viable business besides agriculture, and it was actually a good 
thing to do because the pineapple and sugar cane industry has 
really closed up in the State. But he was constantly looking 
for ways to use the byproducts of sugar cane and pineapple.
    Senator Carper. He was ahead of his time.
    Ms. Langley. He was ahead of his time. He also passed 
legislation to establish the Institute of Peace in the United 
States.
    Senator Carper. Really.
    Ms. Langley. And to establish the position of Poet Laureate 
at the Library of Congress. So the United States, like many 
other countries, now has a Poet Laureate. He was a very fine 
man.
    Senator Carper. Good. You mentioned in your statement that 
Senator Akaka has been--you said a role model and a mentor to 
you, and he is, I think of all the Senators, maybe the most 
beloved Senator of all. People just love working with him, 
serving with him, and I think he is a role model and mentor for 
many of us.
    In what ways have you learned from him? I am sure he has 
learned from you as well. But give us some examples of how he 
has mentored you and the lessons that you take from that time 
that you worked for him and what you have taken with you to the 
Commission.
    Ms. Langley. Well, he truely believes in finding consensus. 
He has taught me that whenever you are faced with a situation 
with two opposing sides and the two sides cannot come together, 
there must be a way of bringing people together. And I know 
with the PAEA, there were differences of opinion as to what to 
do with the workers' compensation.
    Senator Carper. I remember that.
    Ms. Langley. And with a lot of patience, we were able to 
work out an agreement that, while it may not be totally 
acceptable to everybody, it allowed the bill to move forward 
and allowed Senator Akaka to proudly cosponsor the bill. So I 
think that is a good example.
    Senator Carper. That is a good one. Well, what do you think 
are some of the biggest issues today that are, first of all, 
facing the Postal Service but also facing the Commission? And 
if you are confirmed, are there any particular issues that you 
want to focus your time and attention on?
    Ms. Langley. Well, I think you mentioned the economy, and 
that is certainly a huge challenge to the Postal Service today. 
So there is the double whammy, so to speak, of the economy and 
the diversion of hard-copy mail to digital technology, and this 
is a short- and long-term challenge. And First-Class mail and 
standard mail are very susceptible to the impact of the 
economy. The downturn in the housing and credit markets is 
certainly affecting the Postal Service. And the Postmaster 
General mentioned that the last time that he was before the 
Committee that the economy is of great concern.
    As far as the Commission, I think the challenge has been 
implementing the various requirements of the PAEA in a rather 
compressed time frame. But I believe the Commission has done an 
excellent job and having the new ratemaking system in effect 8 
months early has allowed the Postal Service to move forward and 
use the flexibilities granted under the new law.
    Senator Carper. Good. Thank you.
    Ms. Langley. And do you want me to answer--I forgot to 
answer your question about what I would do.
    Senator Carper. Yes. What would you do?
    Ms. Langley. I think that accurate, timely data is very 
important, and Senator Akaka mentioned the financial 
transparency issue. So compliance with Section 404 of the 
Sarbanes-Oxley requirements as well as SEC-like reporting 
requirements, are going to go a long way to boost financial 
transparency and accountability. So that would be an area that 
I would continue to be interested in, as well as making sure 
that the non-contiguous areas along with rural areas and 
economically disadvantaged areas are served well by any changes 
in service standards.
    Senator Carper. All right. Fair enough.
    The Postal Service has now submitted and received 
Commission approval for the first price increases under the new 
ratemaking system, as you know. New prices both for market-
dominant products and for competitive products will go into 
effect, I believe, in less than a month.
    What is your view on how the process has worked so far? 
And, second, what is your own philosophy on how the Commission 
should approach your pricing changes proposed by the Postal 
Service?
    Ms. Langley. Well, I think the first effort was a good 
first effort. The market-dominant review found that there were 
no increases that exceeded inflation at the class level and 
that workshare discounts in general did not exceed avoided 
costs. There were some areas where the workshare discounts did 
exceed 100 percent of avoided costs, and with all but one 
exception, the Commission approved those. The Postal Service 
provided the appropriate detail that is required by the law, 
but the one that was returned to the Postal Service was 
reviewed again by the Service and returned in a timely manner.
    But the entire process underscores the need for timely and 
reliable data. That has been the mantra from the PRC for many 
years. And there is more visibility now because of the reliance 
on the Postal Regulatory Commission to provide this 
accountability and transparency through the initial review. We 
have a 34-day review of the market-dominant increases, and then 
there is an annual compliance determination, and we completed 
the first annual compliance determination. And that lengthy 
report goes into great detail on the operations of the Postal 
Service as well as how well service standards are working.
    And as far as my approach, I think the premise of the PAEA 
to provide the Postal Service with flexibility to set rates and 
classify products is going to work well. I am very hopeful that 
the system that was set up by the law and actually effectuated 
by the Commission through its ratemaking process will work 
well.
    Senator Carper. Well, I am glad to hear that you feel that 
way.
    Are there some things that you have seen over the last year 
or so since we enacted the legislation with the Postal Service 
and the Commission endeavoring to meet the requirements under 
the law? Do you see any things that are not working so well 
that are a cause for concern that maybe we should be mindful 
of?
    Ms. Langley. I think the only thing that I would be 
concerned with, and I think because of the communication, the 
good ongoing communication that is going back and forth between 
the Postal Service, is making sure that the data is available. 
We are still working with the Postal Service many times on how 
to present the data, and with the compliance determination 
there will be a rulemaking that will set out guidelines as to 
what should be submitted and in what form. But it is a new 
process and the whole system is evolutionary, which I believe 
it needs time just to work out the different kinks that may be 
in the system.
    Senator Carper. All right. Good enough.
    You talked earlier in your testimony about the economic 
slowdown, and I alluded to it as well, and that has hit the 
Postal Service hard. We were talking with the Postmaster 
General, and it is strange that sometimes when companies feel 
that we might be slipping into a recession, rather than 
advertising more or marketing more, they advertise less. It is 
sort of counterintuitive, but it happens time after time. I 
think it has happened this time, too, and as a result, some of 
the reduction in advertising has had an effect, and fewer 
catalogues are going out, thinner catalogues going out as well. 
And this problem I think is compounded by the fact that at 
least some--not all, but at least some of the postal customers 
are leaving the mail or are maybe considering leaving the 
Postal Service in favor of other forms of communication. There 
certainly are others to lure them away.
    How can the Commission itself help the Postal Service to do 
what it needs to do to get past these challenges and past these 
difficulties and maintain the level of service that our public 
depends on?
    Ms. Langley. Well, I think the law is very clear that there 
is now a profit-making system that is available to the Postal 
Service, and the Postal Service needs to be innovative. They 
need to think outside the box, if you will, in what is an 
increasingly difficult economic climate. But there are simple 
things that they are doing which I think demonstrates the 
innovation that is needed to really keep them going.
    Senator Carper. Do you want to mention a couple of those?
    Ms. Langley. Yes. The efforts they are undertaking in the 
area of recycling, it does not bring a lot of revenue----
    Senator Carper. You are addressing the Co-Chairman of the 
Senate Recycling Caucus, so this is music to my ears. 
[Laughter.]
    Ms. Langley. That is wonderful.
    Senator Carper. Take as much time as you need.
    Ms. Langley. OK. [Laughter.]
    The Postal Service obviously moves a lot of paper goods and 
material that is recyclable. So taking the opportunities to get 
involved in recycling I think is beneficial.
    They have also recently moved ahead with having a new 
larger size flat rate box, flat rate priority box, so they are 
beginning to look at different areas in which they can grow 
revenue or volume. And where the PRC comes into account is 
through its regulations to move these requests from the Postal 
Service in an expeditious manner. And the competitive products 
area is an area where there portends a lot of innovation and a 
lot of activity.
    Another opportunity is with competitive negotiated service 
agreements (NSAs), and they have not brought one forward, but 
there are opportunities there as well.
    Senator Carper. All right. Thank you.
    Yesterday was Earth Day, and I reminded my colleagues at 
our caucus luncheon and gave them a little pep talk on 
recycling, encouraged them to--in the words of one of my old 
ministers who liked to say people would rather see a sermon 
than hear one--I was encouraging my colleagues to set a good 
example in recycling. We recycle here in the Senate, I think, 
on any given day roughly 3 tons of recyclables, including paper 
and beverage containers, toner cartridges, batteries, and 
cardboard. About 3 tons a day. This year we will be up over, I 
think, a thousand tons from the Senate. And for every 1 ton of 
aluminum cans that we recycle, we save about 400 gallons of 
oil. For every 1 ton of recycled paper products that we use, we 
avoid chopping down 17 trees; we preserve about 3\1/2\ cubic 
feet of landfill per year, and just do some good things.
    While I have your attention, one of my favorite recycling 
``gee whiz'' statistics is that we throw away enough aluminum 
cans in this country in a year, just in landfills, to rebuild 
the entire domestic U.S. airline fleet every 3 months. And for 
every--gosh, I could go on and on.
    In any event, I am pleased to hear that the Postal Service 
is focusing on recycling, and I am glad you are giving them 
some encouragement.
    You mentioned NSAs with individual customers, and I want to 
come back and just focus on that just a little bit more, if we 
could. As you know, those negotiated service agreements with 
individual customers have been talked about for some time as a 
tool that the Postal Service can use to find efficiencies and 
to bring along some additional businesses. And I know you have 
spoken about this to some extent, but let's just dwell on it a 
little bit more. Are you convinced that the Postal Service has 
taken full advantage of its opportunities in this area?
    Ms. Langley. I think they could take more advantage.
    Senator Carper. If you were giving them friendly advice, 
what kind of friendly advice would you extend to them, the 
Postal Service?
    Ms. Langley. Continue talking to individual customers and, 
again, be innovative, think of new ways that you can work with 
your customers. The law clearly provides for new opportunities, 
and this is especially true, as I mentioned, in the competitive 
product area.
    The Commission's regulations mirror the law which ensures 
that NSA must either have a positive net effect on income or a 
positive effect on operational improvements, so long as no 
other competitor is harmed.
    The one area that continues to be problematic is that NSAs 
are not always providing value to the Postal Service. Our just 
completed compliance determination found that current NSAs have 
provided a net $2.5 million, and that is not a great deal of 
money. And so, more work needs to be done by the Postal Service 
to make sure that NSAs are mutually beneficial to the Postal 
Service as well as the partner.
    Senator Carper. All right. Good. Thanks.
    The postal reform bill includes a mechanism within it 
whereby members of the public can file a complaint, as you 
know, with the Commission if they feel that the Postal Service 
is in some way violating the law. In addition, I think the 
Commission has a number of tools that it can use to compel the 
Postal Service to be in compliance or even, I think, to punish 
the Postal Service for some of the transgressions that it might 
commit.
    How do you think the Commission should handle this process?
    Ms. Langley. Well, on the compliance process, we have an 
existing compliance system, and it will be enhanced through new 
rulemaking activity, probably in a short time. Under the PAEA, 
the PRC is required within 90 days to make a determination on 
any complaint that is filed to decide whether or not it merits 
consideration.
    I believe the complaint system will work well. It has 
worked well in the past. I think it will be more accessible to 
individual citizens and certainly accessible to mailers who may 
have concerns.
    On the issue of subpoena, the Commission for years has been 
seeking subpoena authority. Subpoena authority many times is 
just that: It is authority. It is the threat of having a 
subpoena, the threat of being able to use a subpoena in order 
to get the information or the data that is necessary. It has 
not always been easy to get some information from the Postal 
Service. The Postal Service realizes now that the Commission 
has subpoena authority. The Commission has authority to levy 
fines, and it has authority to require corrective action, if 
necessary.
    My personal view is I would rather talk to the Postal 
Service first to see whether or not issues can be resolved 
rather than just wielding a subpoena when we have not spoken to 
the Service.
    Senator Carper. I think you spoke to this in part, but I am 
going to ask this question anyway just to make sure I know what 
your views are. Under what circumstances do you think that the 
Commissioners should use the tools available to them under the 
law to ensure that the Postal Service is in compliance with the 
law? And if you want to give some examples, feel free.
    Ms. Langley. Well, I think there needs to be judicious use 
of any of these tools. But I do think that if there is 
continued disregard of a Commission directive, for example if 
the Commission asks for information regarding a certain product 
and the information does not come forth, then there may be a 
discussion that the Commissioners would have to hold among 
themselves. But I think that would be an instance where if 
requested and information is not forthcoming what would be the 
next step.
    Senator Carper. All right. The Postal Service has proposed, 
as you know, a set of service standards for its market-dominant 
products. How do you think the Postal Service should be using 
these standards? And what role do you hope to see the 
Commission take in ensuring that they are enforced?
    Ms. Langley. The law is quite clear that the Postal Service 
has to consult with the PRC on the establishment of the initial 
service standards. That was done. The Postal Service issued 
those standards in December of this past year, and service 
standards are a key element in a rate cap regime. There is 
always the concern that a business that is guided by a rate cap 
could reduce the level of service in order to stay under a cap. 
And certainly this is an area that the Commission, in my mind, 
should keep a vigil eye on because you do not want to see 
service reduced in order to just stay under the cap.
    So I believe that the PRC has an important role in 
monitoring service performance. Also, the Postal Service is 
required by the law to consult with the Commission on the 
establishment of performance measures and goals, and that is 
ongoing right now. So there is definitely a critical role for 
the Commission, and the annual compliance determination also 
has a section that is devoted strictly to service standards. 
The current compliance determination does not include a lot of 
data on service standards because at the present time, only a 
little under, I believe, 20 percent of mail is actually 
measured for service. But measuring service is critical, 
particularly when we are talking about regularity and 
predictability of mail.
    Senator Carper. As I recall, the Postal Service is required 
to submit a report, I think it is later this year, in which 
they will lay out their strategy for managing their facilities 
network, and include in that report any plans they may have for 
removing excess capacity.
    What role should the Commission play in developing and also 
in monitoring the implementation of this strategy?
    Ms. Langley. Well, once more, I believe Congress wisely 
ensured that the Postal Service consult with the Commission on 
its June 2008 report that is due to Congress on facilities. And 
as part of this report, we have already made mention to the 
Postal Service in the past two hearings, that the Service needs 
to keep interested Members of Congress, stakeholders, and the 
public, as well as employees, informed about any decisions that 
they will be making. So this is an area where the Commission, I 
believe, is performing good service.
    Another thing is that the Commission in 2006 reviewed 
realignment plans and found that the Postal Service's plans for 
making the public aware of its activities was not as good as it 
should be. This determination was handed down at the end of 
2006. The Commission has also met with the GAO to have the 
benefit of their observations in this area as well.
    One thing that is important to remember is that the service 
standards set in December 2007 are based on current facility 
capability, and so any realignment or reorganization of these 
facilities may or may not meet the service standards that were 
set forth at the end of the year. And that is where the 
performance measurement and performance goals are very 
important.
    Senator Carper. All right. Thanks.
    Among the laws that exist in this land are laws that we 
never passed here in Congress. One of them is Murphy's Law. 
Another is the law of unintended consequences. When you look at 
the law that we worked on and finally enacted a year or so ago 
affecting our Postal Service--I asked you earlier what you 
thought was working well, and then I asked you if there were 
some areas where you had some concerns.
    Are there any unintended consequences that you have seen 
grow out of the legislation that we have passed that we should 
be mindful of?
    Ms. Langley. There is an interesting consequence that the 
law requires the Postal Service within 90 days of the end of 
its fiscal year to file its compliance report with the 
Commission, and then the Commission has 90 days from that to 
issue its annual compliance determination. And because the law 
requires the Postal Service to have predictable schedules of 
rate increases, it turns out that when we are doing the 
compliance determination, we are also looking at the market-
dominant and the competitive products rate cases at the same 
time.
    So it really shows how great the Commission is because we 
are able to do it. But balancing a small staff and limited 
resources has been an interesting project. But I do not believe 
I would classify it as unintended. It just turned out to be 
that way.
    Senator Carper. OK. Thank you.
    Each of the Members of the Committee, aside from Senator 
Akaka, have joined together and asked me to ask on their behalf 
one last question, and that is, if you could not have been from 
Hawaii, grown up in Hawaii, maybe lived in any other State---- 
[Laughter.]
    And been able to work on the staff of a Senator, what other 
State would have been your second choice?
    Ms. Langley. The chairman of the Commission says Missouri.
    Senator Carper. You can answer that one for the record.
    Ms. Langley. No. It is well known that I enjoy going over 
the Delaware bridge and seeing the factories, and John 
Kilvington has promised a tour of the factories.
    Senator Carper. Well, that is good.
    Ms. Langley. So I find Delaware actually a very interesting 
and exciting place.
    Senator Carper. I could not agree more. [Laughter.]
    A wonderful answer, I thought. I will share that with my 
colleagues after the vote.
    Well, we thank you for your service to our country. We 
thank your family, your husband for sharing you with the rest 
of us, and your parents for raising you and instilling these 
values in you as they have. We appreciate your statement today 
and your responses to our questions.
    We are going to leave the record open until noon tomorrow 
for the submission of any additional statements or questions 
that my colleagues might have.
    Do you have anything else you would like to say before we 
close the hearing?
    Ms. Langley. No, other than thank you for making this 
rather nervous experience very nice.
    Senator Carper. You are quite welcome. Thank you for 
allowing us to all be here.
    And with that having been said, I think the hearing is 
adjourned. Thank you all.
    [Whereupon, at 3:21 p.m., the Committee was adjourned.]














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