[Senate Hearing 110-970]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-970

                   NOMINATION OF HON. RUTH Y. GOLDWAY

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                 ON THE

  NOMINATION OF HON. RUTH Y. GOLDWAY TO BE A COMMISSIONER OF THE U.S. 
                      POSTAL REGULATORY COMMISSION

                               __________

                           SEPTEMBER 9, 2008

                               __________

       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, 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

                               WITNESSES
                       Tuesday, September 9, 2008

Hon. Hillary Rodham Clinton, a U.S. Senator from the State of New 
  York...........................................................     1
Hon. Ruth Y. Goldway to be a Commissioner of the U.S. Postal 
  Regulatory Commission
    Testimony....................................................     4
    Prepared statement...........................................    19
    Biographical and professional information....................    24
    Responses to pre-hearing questions...........................    38
    Letter from U.S. Office of Government Ethics.................    69

 
                   NOMINATION OF HON. RUTH Y. GOLDWAY

                              ----------                              


                       TUESDAY, SEPTEMBER 9, 2008

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 3:20 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Thomas R. 
Carper, Chairman of the Committee, presiding.
    Present: Senator Carper.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Welcome, one and all. Today, we are going 
to be considering the nomination of Ruth Goldway to remain a 
member of the Postal Regulatory Commission.
    Commissioner Goldway is no stranger to this Committee, but 
Senator Clinton is here to introduce her, and I would like to 
begin by recognizing Senator Clinton at this time for her 
statement.
    Welcome Senator Clinton.
    Senator Clinton. Thank you very much, Chairman Carper.
    Senator Carper. I have seen a lot of you this morning and 
this afternoon. That is good.

 STATEMENT OF HON. HILLARY RODHAM CLINTON, A U.S. SENATOR FROM 
                     THE STATE OF NEW YORK

    Senator Clinton. That is right. We have been busy today.
    It is a real privilege to be here, to introduce and testify 
on behalf of someone I have known for a long time as a friend, 
and someone whom I greatly admire as a public servant.
    Commissioner Ruth Goldway is seeking her third confirmation 
as a Commissioner of the Postal Regulatory Commission, and she 
has really given of herself to this job.
    You know, a lot of the jobs that come before us for 
confirmation, we do not really know what happens after we 
confirm somebody: what their role is, what their participation 
and contribution might have been. But in this case, we have a 
very impressive record of the work that Commissioner Goldway 
has done behind the scenes that has been important not only to 
the Postal Service, but to the people of America and the 
indispensable service that is provided to us.
    She has demonstrated a record of leadership and advocacy. 
As Commissioner, she is focused on the concerns of citizens and 
consumers to help make the Postal Service a more modern, 
responsive organization.
    She has advocated for producing the Forever Stamp, 
expanding vote by mail, improving postal insurance, eliminating 
gender bias in Postal Service promotional campaigns, and 
improving tracking and reporting of retail service performance.
    She has been active and unflinching in offering her 
distinct point of view, and she regularly submits her own 
independent concurring and dissenting opinions in important 
cases brought before the Commission.
    She has testified, as you know, before committees in 
Congress to help forward a positive agenda for the Postal 
Service. She is not afraid to stand her ground, even 
criticizing the Postal Service when she believes that is 
appropriate, but the criticism is constructive because she is a 
strong defender and protector of the service--because she 
really does recognize the vital importance of what this means 
to us.
    So, I am very honored to be here in support of Ms. Goldway. 
She is the kind of person that we want to attract and retain in 
public service, and I am delighted that she is up for 
confirmation so that we can see her continue her active and 
innovative leadership on the Commission for years to come.
    And Mr. Chairman, I also want to commend you for the 
extraordinary service you have performed and the innovative 
thinking you have brought to the Postal Service. Again, you 
recognize the vital importance of this service, but you know 
that it has to change or die. If it does not keep moving 
forward, it is going to just stay in place and not really 
provide what we need as a Nation.
    So, thank you for what you have done, and I lend my 
wholehearted support to Ruth Goldway's confirmation.
    Senator Carper. Senator Clinton, thank you so much. Thank 
you very much for coming. I know that Commissioner Goldway 
appreciates it as well, and I also know you have a lot to do, 
and if you need to slip out, we will certainly understand, but 
thank you so much for joining us today.
    Ms. Goldway. Well, thank you, Senator Carper----
    Senator Carper. I am going to ask you to hold for just a 
moment on your statement. In a minute, I get to administer an 
oath to you and will swear you in as we do all of our witnesses 
at hearings like this. But I think, before we do that, I have 
just a few things I want to get off my chest, and then we will 
yield to you.
    Today, as I said earlier, we are pleased to hold the 
confirmation hearing for your third term on the Commission.
    Ms. Goldway. Yes.
    Chairman Carper. Yes. And I am pleased to do that. As you 
know, Commissioner Goldway, your nomination comes at a 
challenging time for the U.S. Postal Service.
    The economic slowdown we find ourselves in has hurt any 
number of families and businesses, but it has hit the Postal 
Service early, and it has hit them hard. Mail volume is poor, 
and the service is on track, I understand, to suffer 
significant losses for this year.
    Even more troubling than that is the possibility that some 
of the mail volume that the Postal Service has lost as a result 
of the slowing economy may be lost forever. The number of 
communication options available to postal customers continues 
to increase and grow easier to use, as well.
    But this could also be a time of real opportunity for the 
Postal Service. I like to quote Albert Einstein; I will 
paraphrase him here. He said, ``In adversity lies 
opportunity,'' and I think that may be the case here, as well.
    The Postal Accountability and Enhancement Act has been the 
law of our land for over a year, and we are starting to see, I 
think, some benefits as a result of the legislation. The Postal 
Service is able, for example, to respond to the market and 
charge prices using a streamlined ratemaking process. It is my 
hope this new rate system can be used in the coming years to 
offer customers some level of predictability, and to be more 
competitive in the advertising and mailing markets, as well.
    We also have a new set of service standards for most postal 
products that I hope will make the Postal Service more relevant 
and more valuable to its 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, where you serve, as well. The 
Commission can play a key role in helping the Postal Service 
through the challenges that it faces. In some ways, they can do 
this simply by standing back and letting the Postal Service 
take advantage of the commercial opportunities that Congress 
and the Administration have given it. The Commission must also 
ensure that the Postal Service is acting in compliance with the 
new law, and fulfilling its service obligations.
    Commissioner Goldway, you have now served two terms on the 
Commission. You have worked under the old law and now, for a 
year or more, under the new law. I appreciate your willingness 
to continue your service, and, I think I speak for my 
colleagues, we appreciate your willingness to continue to serve 
and to use your experience to help your colleagues and the 
Postal Service to navigate through the challenging years that 
lie ahead.
    Commissioner Goldway, I believe you filed a number of 
responses to biographical and financial questionnaires. You 
also answered pre-hearing questions submitted by the Committee. 
In addition, your financial statements have been reviewed by 
the Office of Government Ethics. Without objection, this 
information will be part of the hearing record.
    The financial data, however, will remain on file and be 
available for public inspection in the Committee's offices.
    As I said earlier, the Committee rules require all 
witnesses at nomination hearings to give their testimony under 
oath, and you have done this before, I believe.
    Commissioner Goldway, please stand and raise your right 
hand.
    Do you swear the testimony you are about to give to the 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Ms. Goldway. I do.
    Senator Carper. Thank you. Please be seated.
    And I would invite you now, Commissioner Goldway, to please 
proceed with any opening statement that you may have, and I 
think that you may have one.

 TESTIMONY OF HON. RUTH Y. GOLDWAY \1\ TO BE A COMMISSIONER OF 
             THE U.S. POSTAL REGULATORY COMMISSION

    Ms. Goldway. Thank you, Chairman Carper. I am certainly not 
shy about taking opportunities to speak when I am given an 
opportunity.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Goldway appears in the Appendix 
on page 19.
---------------------------------------------------------------------------
    So, I wanted to begin by thanking you and the honorable 
Members of the Committee for letting me appear today. I am very 
honored and proud to be here. Each time that I have been lucky 
enough to be nominated by the President for the position of 
Commissioner and have undergone the thorough process of advice 
and consent before the Senate, I gain increased respect for our 
Nation's unique system of shared power among government 
branches that assures accountability to all citizens. I 
sincerely hope you will once again find me worthy of your 
support.
    I greatly appreciate the thoughtful and considered 
attention that you, the Members of this Committee, and your 
excellent staff have given and continue to give to postal 
matters. For the careful review of each of the candidates for 
this position who has come before you over the years, for your 
robust oversight of postal operations, and especially for the 
foresight and imagination you provided in crafting the 
fundamental reforms embodied in the 2006 Postal Accountability 
and Enhancement Act (PAEA), I thank you.
    And I thank Senator Clinton for introducing me today. 
Little did I realize when, in the early winter of 1998, she 
encouraged me to seek a Commission appointment--she pointed out 
that the Postal Service is the only government agency to touch 
every single household in America 6 days a week--that 10 years 
later I would still be engaged in this exciting work, 
representing the interests of ordinary consumers and average 
citizens.
    I thank her for her leadership in regulatory issues, for 
her instrumental efforts on behalf of the semi-postal stamps--
which have raised money for breast cancer research and for the 
heroes of September 11, 2001--and for her hard work and model 
participation in government that inspires us all, and 
especially the members of a new professional group that I 
helped to form, Women In Logistics and Delivery Services 
(WILDS). Some of the members are here today.
    Senator Carper. What is the acronym, again?
    Ms. Goldway. WILDS.
    Senator Carper. And it is all women?
    Ms. Goldway. Yes.
    Senator Carper. All right.
    Ms. Goldway. We are open to men, on occasion, but they have 
to live up to our standards.
    Senator Carper, In addition to the members from WILDS, I 
would like to introduce some of the people who are in the 
audience who have joined me here today.
    First, my invaluable staff assistant, Michael Ravnitsky. 
And then, three of my fellow Commissioners are here: 
Commissioner Tony Hammond, Commissioner Mark Acton, and our 
newest Commissioner and fellow redhead, Nanci Langley. They, 
along with Chairman Blair----
    Senator Carper. Is it true that you have to have red hair 
to serve on this? [Laughter.]
    Ms. Goldway. Seems to be. Ask Ann Fisher. [Laughter.]
    Senator Carper. All right.
    Ms. Goldway. Yes.
    Senator Carper. We will check it out.
    Ms. Goldway. They, along with Chairman Blair, who was not 
able to come today, are exceptional public servants, and we 
have been seeing a great deal of each other since the enactment 
of the PAEA and the resulting responsibilities of the new law.
    The Chairman has set us on a furious pace so that we meet 
or beat every deadline imposed by the new law. And in the 
process and in spite of our partisan differences, we have 
developed a deep respect for each other, and made 
accommodations for our various and unique points of view that 
serve to enhance the final outcome of our decisions. I hope you 
don't mind me taking the opportunity to thank them.
    And I want to also thank former Chairman George Omas who is 
here as well. He was instrumental in creating the enormous 
respect for our agency that can be seen so clearly in the final 
outlines of the PAEA.
    There are many good people who are in the audience today, 
and they make up what I call our ``postal community.'' As I 
have been a member of that community now for 10 years, many of 
them have become good friends as well as colleagues: 
Publishers, mailers, printers, citizen advocates, unions 
representing clerks and letter carriers, supervisors and 
postmasters, shippers, and, of course, their legal counselors. 
All of us are engaged in a communication industry that adds up 
to nearly $1 trillion and an economic force essential to the 
day-to-day commerce of our Nation.
    And, more importantly, we all recognize that we participate 
in a system that has vital social and cultural significance. It 
binds our Nation together, and plays a key role in our 
democracy. I thank them all for their contributions, and I am 
really looking forward to working with them for the next 6 
years.
    During my tenure on the Commission, I believe I have 
demonstrated my commitment to maintaining and improving postal 
services. I have used my position forcefully to advocate on 
those issues that are of special importance to me: Residential 
consumers, single piece mail user, and small businesses.
    I have filed separate concurring and dissenting opinions 
that clearly state my points of view, especially on fairness. 
For example, I have discussed the degree to which negotiated 
service agreements are fair and effective products for 
generating new mail volume while maintaining postal revenue, 
and how Post Office window service should be provided to the 
users of insurance or to the users of bound printed mail, and, 
through op-ed pieces published in national newspapers and in 
public appearances, I have suggested new services, such as the 
Forever Stamp and expanded vote by mail.
    Most recently, during the frequent consultations between 
the Commission and the top executives of the Postal Service, a 
key requirement of the PAEA, I have been urging that the Postal 
Service's measurement standards include a component for retail 
access. After all, the neighborhood Post Office is a vital 
social link in most communities. I also believe that 
maintaining a vibrant, inviting, and ubiquitous network of 
convenient access points will be of utmost strategic advantage 
to the service as it moves into the more competitive role 
envisioned by the PAEA.
    In 1999, I was the first Commissioner to attend the 
Universal Postal Union (UPU) Congress in Beijing as a member of 
the U.S. delegation, and from that time, I have participated in 
every UPU Congress, gaining expertise regarding the rapid 
structural reforms that other national posts have undertaken to 
adjust to a changing world.
    The next 6 years will most certainly see major 
transformations within the Postal Service.
    First of all, the Commission as the regulator and the 
Postal Service as the operator will be finalizing and 
implementing all the new rules and responsibilities defined in 
the PAEA. The decisions that we are making now in the first few 
years of the PAEA will set the course for a decade to come. 
Transparency and accountability must be the keystones of the 
system.
    But just as we are making these decisions that ask all the 
players to live by the new rules, we will likely face a steady 
and marked decline in mail volume that will challenge the 
Postal Service in new and perhaps unanticipated ways. We must 
be sure that the Postal Service is flexible enough to respond 
with new products that will surely come to replace old-
fashioned letters, and we must be sure that cost-saving 
measures are not so draconian that the Postal Service 
deteriorates before it can take advantage of the opportunities 
created by changes in communications technology.
    If you honor me again with another term in office, I pledge 
to work more diligently than ever with the Senate, especially 
the Members of this Committee, your staff, members of the House 
of Representatives, the Postal Service and the mailing 
community, Chairman Blair, and my fellow Commissioners, to 
assure that the health, vitality, and future of the Postal 
Service is maintained. I will be grateful for the opportunity 
to continue as a public servant. The challenges I face, I am 
sure, will be more exciting, more important, and more 
personally rewarding than ever. Thank you again for your 
consideration. I am happy to take any questions.
    Senator Carper. Thank you. Thank you for that statement, 
and thank you for your service as well.
    We will start the questioning with three standard questions 
that we ask of all nominees.
    And the first is, 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. Goldway. No, there is nothing.
    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. Goldway. No.
    Senator Carper. 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. Goldway. Yes.
    Senator Carper. Who is the mother of the Forever Stamp?
    Ms. Goldway. Well, I am the former mayor of Santa Monica--
--
    Senator Carper. I know.
    Ms. Goldway [continuing]. And when I go around the city, I 
point to projects, and I say, ``This is the Ruth Goldway 
Memorial `This' or `That'.'' Of course, it does not have my 
name on it. So, I like to claim credit for the Forever Stamp, 
but of course it was an idea that was shared--and a concept and 
effort that was shared by many people in the mailing community: 
The Office of Consumer Advocate on our staff at the Postal Rate 
Commission, the then-Chairman of the Board of Governors, Jim 
Miller, and many people who were willing to take a risk and 
provide a new product for people.
    Senator Carper. Well, I think it is a great idea, and I 
know a lot of consumers believe that as well.
    Several people have approached me over the last year or so, 
who like the American Flag Stamp and who like the idea of the 
Forever Stamp. And they have asked me, and I will just ask you, 
is there a possibility that the Forever Stamp would also be the 
American Flag Stamp someday?
    Ms. Goldway. I certainly think it is a good idea. I am 
always asked about what is on stamps. That seems to be the 
issue of great interest in the public, and I think it would be 
great fun to be able to decide what was on a stamp, but that is 
a separate committee, and I think they did a really excellent 
job in choosing a symbol that represents forever. But perhaps 
we could encourage them to think of----
    Senator Carper. All right.
    Ms. Goldway [continuing]. New Forever Stamps in the future. 
I would agree with you.
    Senator Carper. Thank you. Today is primary day in the 
State of Delaware and there are people that are out there 
braving the elements. I was out at 7 o'clock this morning and 
voted before I caught the train to come down here.
    But my wife and I have two boys that are in college, and we 
have sought to get them registered to vote and get absentee 
ballots in their hands so that they might participate in this 
primary, and it has been a challenge.
    I do not know that we make it easy for people to vote in 
this country, and you have been a champion for longer than I 
have of the opportunities for voters for greater participation, 
and the opportunities for the Postal Service for additional 
business if people actually vote by mail.
    I think one State, Oregon, does this rather broadly and 
successfully. Let me just ask, given that this is something 
that you have taken a real interest in, provided leadership 
for, what is the latest? Give us the status. I know there is 
some legislation that has been introduced, at least in the 
House.
    Ms. Goldway. Congresswoman Davis introduced legislation 
which would require all States to have what is called ``no-
excuse'' absentee ballots for Federal elections. I guess we 
cannot determine what the nature of State and local elections 
are. And that was marked up and--has it passed the full House? 
It has just gone through Committee, I think. So, I guess we 
cannot expect it to get through this year, but we will work on 
it again next year.
    And Senator Wyden has a bill which would provide some grant 
money for States to experiment with vote by mail for the whole 
election, not just absentee ballots, and that also has not 
moved yet through full committees.
    I would hope that next year we will have more interest in 
that and they will move forward. I am a voter in California, 
and California has no-excuse absentee ballots, and as much as 
50 percent of the voters voted absentee in the last election, 
and the trend is toward more and more absentee voting. I think 
people feel in many ways more secure with the paper ballot they 
get in the mail and putting it back in the mail to be counted 
than they do with whatever the machines are that are now in our 
voting booths.
    And the convenience of it----
    Senator Carper. Well, what might be some other virtues of 
vote by mail?
    Ms. Goldway. Well, in those States like California where 
you have a large ballot with, let's say, initiatives on it, and 
a number of judges and various things, it is a daunting task to 
just go through that and mark it quickly when you have got 10 
people waiting in line behind you to vote.
    But if you can sit quietly in your own home, look at the 
document, refer back to some of the descriptions that have been 
given of it, you can really vote in a much more thoughtful, 
responsible way than you might otherwise. I have been known to 
mark the ballot and when I am not sure about a judge, then I 
call this group that I belong to and ask them if they have done 
research on it, and then I can go back and finish my ballot. 
So, I think people who really care about taking their voting 
responsibility seriously do it.
    For the Postal Service, I think it is very important 
because what I believe the future of the mail is mail that is 
important to people, mail that has significance. And certainly, 
there is no more important act in our country than 
participating in democracy and voting.
    And to the extent to which people count on the Postal 
Service to deliver their ballots and then to present the 
ballots to be counted fairly at the Secretary of State's 
Office, the value of mail has increased, and it also increases 
in volume. So, I think there are many reasons why we should 
enhance voting by mail throughout the country.
    Senator Carper. So, there are a couple of good examples. We 
had a hearing this morning on legislation that Senator Clinton 
has introduced dealing with encouraging people to use transit 
as opposed to just riding everywhere in our cars, trucks, and 
vans.
    But the notion that voting by mail does the things that you 
have mentioned--I would also vote for that, it may take a few 
people off the roads.
    Ms. Goldway. Absolutely.
    Senator Carper. We may use a little bit of less gasoline 
and oil. We may emit less carbon dioxide and other harmful 
emissions into our air.
    And as you suggest, we might be more thoughtful voters. And 
the participation rate might well go up and more people feel 
that they have a sense of ownership in our country, in State 
and local governments, and in what they do.
    So, I see a lot of virtues here. I would like to say that 
the States are really the laboratories of democracies. In this 
case, maybe Oregon is going to be that laboratory for us in 
that way.
    I am very encouraged and I hope that we will end up going 
down that trail.
    Ms. Goldway. Good. I look forward to working on it.
    Senator Carper. What do you think are some of the biggest 
issues facing the Postal Service and at the same time the 
Commission?
    Ms. Goldway. Well, I think your statement outlined the 
issues facing us in a comprehensive and eloquent way.
    The Postal Service is facing a transformation in the 
methods of communication in our society. There is no question 
about that, but I think there will always be an important place 
for hard copy mail, and the question is how to figure out what 
that place is and to provide an adequate system without huge 
subsidies.
    I think the Postal Service is responding remarkably well to 
the dramatic downturn in mail, showing great flexibility in 
being able to reduce costs and to find ways to deliver mail 
more efficiently. I think the management is really on top of 
that, and I had, in my early years, worried that the Postal 
Service would not be able to do that, but it is really doing a 
fine job.
    The Postal Service is investing a great deal of money in 
what is called the ``Intelligent Mail'' barcode, and in an 
automation system for flats, and it is hoping that this 
combination of computer readability, trackability of the mail, 
and automating this other size of letters that had not been 
automated before will make the mail as efficient or as 
competitive a product in the 21st Century as electronic mail 
is, or other kinds of communications.
    We all think it is a good bet, but it is going to take a 
few years for the Postal Service to get from here to there, and 
I think we want to encourage them. So, the Postal Regulatory 
Commission has been supportive of that effort. And rather than 
imposing an external measurement system on the Postal Service, 
it is working with the Postal Service to try to make sure that 
the Intelligent Mail barcode does what it is required to do, 
which is to measure the service standards of the mail and have 
the transparency that is required under the law. So, we have a 
partnership in this, and we are all hoping that the transition 
to this new effective electronic technology will make a big 
difference in the future.
    One issue that you may not have covered that I think we are 
going to have to struggle with is the definition of, ``what is 
a postal product?'' The law is quite clear on that, and when 
you were talking about the unanticipated changes that the 
Postal Service may face in the next decade, we may need to look 
at that definition again to give it that flexibility.
    Senator Carper. All right.
    You touched on this on your response so far and some of 
what you said earlier, but if we confirm you for a third term, 
what are some of the other areas that you might want to focus 
your time and attention on?
    Ms. Goldway. Well, I certainly do want to continue to focus 
my attention on the average citizen, the person who does not 
get to participate on any of the procedures in front of us, and 
whose day-to-day interest is not well motivated because the 
average person only spends about $6 a month on postage.
    So, sometimes I tell people that the Postal Service is kind 
of like the sewers. You know, you expect them to function but 
you do not think about them very much, but when they are not 
working, it is a real problem. So, I feel an obligation to make 
sure it is working for those people, and I will be continuing 
to do that, and making sure that there is accountability in our 
oversight for the average citizen as well as for the big 
mailers.
    I think that I would like to work more, as we talked about, 
on vote by mail. I think it is a really important part of the 
future of our country, and I am going to continue my interest 
in the international arena because, while we do not want to 
follow the specific models that are being tried by other 
countries, we can learn a lot from them about what we might do.
    Senator Carper. The Postal Service recently submitted and 
received Commission approval for the price increases under the 
new ratemaking system. From my perspective, from where I sit, 
it seemed to go pretty well. I would be interested in your view 
on how the new system is working.
    And what is your philosophy on how the Commission ought to 
approach pricing changes proposed by the Postal Service?
    Ms. Goldway. Well, we have a limited role now when it comes 
to rate setting. We have a formula that establishes what the 
cap can be, and then we have to make sure that the products 
cover their costs. So, we need to get very clear and 
transparent information from the Postal Service on costing. And 
we need to create a kind of formula to make sure that the 
products, as a class, meet the cap.
    We can only make adjustments if we find that there are 
rates that do not meet cost or rates that are not responsive to 
the worksharing clause in the PAEA, which says that we cannot 
have excessive discounts for worksharing. So, it is really the 
Postal Service's own discretion now.
    And I think the rate increase that they worked with last 
time was a very small one. It is likely that the next rate 
increase in May--they will have a much larger inflation cap 
with which to work, and the mailers will get to see how the 
Postal Service decides to allocate those increases. So, I think 
this next rate increase is going to be a much better 
measurement of the effectiveness of the PAEA than last year's 
measurement because the discretion is now in the Postal 
Service's hands.
    Senator Carper. All right. Did you get feedback, positive 
or negative, with respect to the first round of increases?
    Ms. Goldway. Oh, I think everyone felt very comfortable 
with those. They were done in a very clear, straightforward 
manner. It was what was expected, it followed the cap, and it 
was done very quickly. So, I think, under Chairman Blair's 
leadership, we were really quick to adopt the new system for 
rate setting. So, I think the whole process went very smoothly, 
and I think the process will go again smoothly this time, that 
the PAEA has really done that.
    But how the Postal Service chooses to allocate that--what 
may be as much as a 5 percent increase within its categories--
could result in some mailers getting much higher rates and 
others getting lower rates, and you may see some complaints at 
that point.
    I think that the Postal Service, giving the external 
realities of the poor economy and the competition from the 
Internet, will use its discretion wisely, and my bet is that it 
will follow very much the same pattern it did last year.
    Senator Carper. As we all know, the economic slowdown has 
hit a wide variety of businesses hard. We have seen a lot of 
layoffs, a lot of hardships, and the unemployment rate, I 
think, is now over 6 percent. In some places it is worse than 
others. But the Postal Service has been hit with a special 
vengeance. It is always been interesting to me that at a time 
when business is down and companies are struggling to sell 
their products or services, one of the first places they cut 
back is in advertising.
    Ms. Goldway. Yes.
    Senator Carper. And it seems almost counterintuitive, but 
apparently that is the case and I think we are seeing fewer 
catalogs, for example, going out, instead of more.
    The problems for the Postal Service are compounded by the 
fact that at least some potential customers are likely leaving 
the mail, or at least considering leaving the mail in favor of 
other forms of communication, be it the Internet or others.
    How can the Commission help the Postal Service do what it 
needs to do in order to get past this difficult time, and yet 
maintain the level of service that the public is depending on?
    Ms. Goldway. I actually think that the philosophy, which I 
articulated in some of my questions to you, is ``what gets 
measured is what gets fixed.''
    I think the requirement under the PAEA to have the Postal 
Service set clear standards and measure those standards and be 
accountable has----
    Senator Carper. When you say ``measure those standards''--
measure performance against those standards?
    Ms. Goldway. Measure performance against those standards--
has led the Postal Service to reevaluate its whole operation 
system, and it has undertaken processes that I think will make 
it far more effective and efficient than it has been. And that 
is why, to some degree, why they have been able to reduce costs 
in this climate.
    And the fact that the Postal Regulatory Commission is there 
to make sure that information is transparent and available to 
the public also forces the Postal Service to have a discipline 
to make sure that they meet their standards, and that they have 
a product that is really valuable to the community.
    I think, in business, when your demand is declining, you 
have to find a product that is more valuable to the people you 
want to sell it to, and you cannot just count on raising 
prices; that is counterproductive. You have to increase the 
worth of the product you are giving to these people, and I 
think that is what the Postal Service is trying to do with the 
increased information that is in the Intelligent Mail barcode, 
and we are trying to encourage that procedure.
    I also think the Postal Service is trying to develop a set 
of competitive products, which are going to be attractive to 
people.
    You were mentioning the fact that vote by mail will help 
people not to use their automobiles. Well, buying by mail, 
using the catalogs to order by mail--the Postal Service is 
going to come to your house anyway. Let them bring you the 
packages so you can save some money--that is a value added that 
I think the Postal Service can build on, and it is working 
towards doing that in its package delivery services, and trying 
to raise revenue and profits that way. And we have been very 
supportive of the whole competitive products category and 
allowing them to establish all of that.
    So, I think we actually provide the Postal Service with a 
reality check. They are a huge organization and they have been 
a monopoly for a very long time. So, for them to make this 
transition into a new world where they really have to be 
responsive, to have a regulatory agency that is consultative 
and cooperative, and yet disciplined in terms of performance, 
really will help in the future, I believe.
    Senator Carper. All right. Thank you.
    Let's talk a little bit about negotiated service agreements 
(NSAs). I think you have mentioned that earlier in your 
testimony. But as you know, the negotiated service agreements 
with individual customers have been talked about for quite a 
while as a tool for the Postal Service to use to find 
efficiencies and to try to bring in additional business and 
additional revenue.
    Do you think the Postal Service has taken full advantage of 
the opportunities in this area? And if confirmed, how would you 
work with your fellow Commissioners and with the Postal Service 
to encourage the use of negotiated service agreements?
    Ms. Goldway. Well, under the old law, I was concerned about 
the negotiated service agreements. In principal, I supported 
them, and advocated for them with Postal management. But when 
we would get the actual agreements to look at, I was frustrated 
that the Postal Service had not come to the table with the 
right information to strike an effective business deal with 
whoever was the partner.
    But I think that all of that is improving, and certainly 
the negotiated service agreements that we have seen recently 
under the new Act, except for one that deal with international 
products seem to be quite successful and we are moving those 
through very quickly so that the Postal Service can take 
advantage of agreements it makes.
    And I believe that for the most part, the negotiated 
service agreements that are in the process now, that we have 
received under the new Act, will answer some of my concerns in 
terms of how they are effective as business agreements, not 
just giving things away in exchange for some sort of promise 
from the mailer.
    The Postal Service has to learn how to be a competitive 
business player, and negotiated service agreements are part of 
that learning curve, and I feel that they are certainly moving 
towards a situation where it will not be difficult for the 
Commissioners to approve the NSAs that are in front of us in 
the future and to do it quite rapidly.
    I do want to make sure that they are fair, that you do not 
provide opportunities for one mailer that you would not provide 
to a similarly situated mailer. So, that is an area in which 
the Postal Regulatory Commission will still be concerned.
    Senator Carper. OK. Thanks.
    The postal reform bill includes a mechanism whereby members 
of the public, ordinary folks, can file a complaint with the 
Commission if they feel that the Postal Service is doing 
something that is not consistent with the law.
    In addition, the Commission has a number of tools that it 
can use in order to compel the Postal Service to comply with 
the law, or even, I think, to punish it for any transgressions 
that it may commit.
    How do you think the Commission should handle this process, 
and under what circumstances do you think the Commission should 
use the tools that are available to it to ensure that the 
Postal Service is in compliance with the law?
    Ms. Goldway. Well, I think the complaint process and the 
opportunity to hear from citizens about their experiences with 
the Postal Service will be a wonderful window for us to see the 
effectiveness of the Postal Service and its improved 
operations, and to ferret out any potential problems that might 
be occurring. So, I would certainly work to encourage more 
citizen participation in the complaint process.
    That being said, I think that the punishment, to the extent 
we have a punishment, the corrective measures that we require 
of the Postal Service have to be crafted very carefully because 
we do not want to hurt the Postal Service. You may wind up 
hurting all the users of mail in order to help one particular 
problem.
    The financial penalty does not go anywhere but back to the 
Postal Service, so it is a difficult formula, and I think we 
are going to have to experiment with this a bit. It is, I 
think, one of those areas where, when I was talking about what 
we do in our first 2 or 3 years will set a precedent is 
important. If we are too lax and we do not impose any 
penalties, then we will have set a precedent that the Postal 
Service does not really need to take our complaint authority 
seriously.
    But if we are too stringent, we may punish the wrong 
parties and not really get the improvements that we are seeking 
for the overall benefit of the Postal Service. So, establishing 
the parameters of the imposition of fines or remedial action is 
going to be quite challenging and very important in the next 
couple of years. We are just now getting our complaint 
procedures established under the new law, and we will begin to 
hear complaints and figure out what those parameters are.
    I think I carry this institutional memory with me of the 
Postal Rate Commission, and I think our record of being a fair 
arbiter and a cautious regulator will continue in the future.
    Senator Carper. All right.
    The Postal Service has proposed a set of service standards 
for its market-dominant products, as you know. 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 
those standards are enforced?
    Ms. Goldway. Well, we were part of a long consultative 
process with the Postal Service in going over what their 
service standards should be. They had service standards for 
first class single piece mail, and the new law requires that 
they have service standards for all classes of mail.
    And the question was not just to pick a standard out of the 
air, but to pick a standard that the Postal Service could meet 
that would also be satisfactory to the mailers that use it. And 
we had many discussions with them, and we encouraged them to 
raise the bar on occasion so that the standards that they might 
have preferred to use were more lax than the ones we suggested 
the industry really requires. And I think we came up with a 
certain base which seems to satisfy most people in the 
industry.
    Now, the question is how to measure those standards, how to 
make sure that the Postal Service, in fact, meets those 
standards, and to see if they do it, can we then raise the 
standards so that, if they are meeting a particular standard 98 
percent of the time, why don't they set the bar a little higher 
to try something a little better.
    Or, if they are not meeting the standard, they are only 
meeting it 80 percent of the time, we need to find out what the 
problem is and to engage the industry in a discussion to see 
how the actual performance can be improved. I think measuring 
service standards is an essential part of the PAEA, and the 
Regulatory Commission, each year, will make a report to 
Congress and file a compliance determination to show that the 
Postal Service is in fact meeting those standards. That is a 
very important part of our responsibilities.
    Senator Carper. As you know, the Postal Service recently 
submitted a report in which they share their strategy for 
managing their facilities network across the country.
    What role should the Commission play in developing and 
monitoring the implementation of this strategy?
    Ms. Goldway. Well, the law does not really give us any 
approval of this a priori, but through the complaint mechanism 
procedure and through the standards reporting procedures, we 
will be able to see whether these network changes that they are 
proposing actually improve service, or at least maintain 
service. And should there be problems, we will be able to 
identify them, I think, and encourage the Postal Service to fix 
them.
    As I said in my statement, I am concerned that the Postal 
Service, in its zeal to reduce cost and be as efficient as 
possible, will not just reduce service, which is one of the 
reasons we are here so that--under the rate cap regime, they do 
not just reduce service; we are here to make sure the service 
is maintained--but that they do not get themselves in a 
situation that their network is so stretched that, should there 
be a sudden demand for more use of their product, that they are 
not able to handle it.
    We have been having correspondences about Post Office boxes 
on the corner, and they have been taking them away because 
people are not using them. People are leaving them for their 
mailmen. They are using click-and-ship so letter carriers can 
come to the door and pick up mail. It is a reasonable thing to 
do to reduce the number of mailboxes on the street.
    But what happens if you have too few? And then people 
forget that mail is an option, so they go to something else. 
You do not want to be invisible. You still want to have your 
presence there.
    And what if, as happens in a lot of big cities, there is 
new residential development in an area where you took a Post 
Office box away, and you have got a whole new group of people 
who cannot use the system, or it is not made available for 
them. So, I think you have to be very careful as you prune this 
system to make sure that there is enough of it that is viable 
to maintain current demand and be available for future demand.
    And I hope that the oversight that we provide will give the 
Postal Service the balance it needs when it is developing these 
network realignment plans.
    Senator Carper. OK. Last week I visited the beautiful new 
Post Office in downtown Wilmington, right across the street 
from the central YMCA where I like to work out, and you can 
walk right out the front door of the YMCA after a great workout 
and go over to the Post Office and buy those Forever Stamps or 
whatever else you might need.
    I was going over there to mail a package to a friend of 
mine--one of my best friends from the time I was in the Navy, 
and he lives down in South Carolina now. Sometimes people see a 
line and they say, ``Oh, gosh. I wish there wasn't this line.'' 
When I see a line like I saw this morning when I went to vote, 
I work the line. [Laughter.]
    And it is not exactly like working a room, but I learned a 
long time ago, find a line and work it, and I still do that.
    And I worked the line last week in the Post Office and 
found my way at the end of the line and finally got to the lady 
who was the clerk, and told her I wanted to mail this package. 
I said, ``I want to send it first class. There is not a great 
rush to send it.''
    And she, to her credit, asked me if I wanted to insure the 
package, and she asked if I wanted to receive some kind of 
confirmation that the package had been delivered, and in both 
cases I declined, but I was pleased that she asked, because she 
was selling up.
    Ms. Goldway. Right.
    Senator Carper. And that is something that the employees in 
almost any business need to be interested in doing. And given 
the challenges that the Postal Service faces today, it is 
especially heartening that she was in the business of selling 
up to try to shore up some of the revenue.
    So, you mentioned earlier how pleased you were with the way 
that management has responded to the challenges that we face. 
Do you want to conclude with any comments on some of the rank-
and-file folks who work in the Postal Service, and the 
importance of their role as the Postal Service responds to the 
economic challenges that it faces?
    Ms. Goldway. I think that, as I mentioned in my testimony, 
the notion that the Postal Service is the sole Federal 
Government agency that touches every single American household 
6 days a week is a very important part of our democracy.
    And those letter carriers that are out there going to 
everybody's home 6 days a week are an essential part of our 
democracy, and they are really beloved, for the most part, all 
around the Nation.
    And they do a lot more than just drop a letter in your mail 
box. They will watch out if you are sick. They will help in 
neighborhood emergencies. They will take your mail from you. 
They will give you advice about mail. Rural letter carriers are 
like mini Post Offices, going around the country.
    And all of them treat the mail, whether they are clerks or 
mail handlers, with great respect. And it is probably the most 
secure form of communication. So, we certainly have to respect 
the people who work in the system. And they have seen real 
changes in the last 10 years. There has been a decrease in 
employment as a result of automation in the clerks' categories. 
And now, there will probably be a decrease in the letter 
carriers, as well, as the Postal Service figures out more 
efficient routes and as volume declines. But their importance 
does not diminish.
    So, we need to continue to give them respect and, I think, 
to include them in decisions that are made about how the Postal 
Service changes. I think the Postal Regulatory Commission is 
one of those venues in which the representatives of the workers 
in the Postal Service get to have a voice because they can 
participate as well. They ask for information. They file 
documents. They could, you know, participate in various cases 
in front of us. So, their interests are also met through our 
operations, and I encourage them to do that because I think 
that is a really important part of what we do as a Commission, 
which is to hear a balanced view from all the interested 
parties.
    I cannot imagine the United States without the U.S. Postal 
Service. I think they are going to be around for a long time, 
and I am going to be here for at least another 6 years with 
them, I hope.
    Senator Carper. Well, with a little luck, they will be here 
forever, and you and I will not be in our current roles 
forever, but we may be here for a while.
    And I wanted to just ask in closing if there is anything 
else that you would like to add or take away from your 
statement here today.
    Ms. Goldway. I just want to reiterate how very proud and 
humbled I am to have had the opportunity to serve the public in 
this role and to be considered again, and to emphasize how much 
personal reward I get from working with the Senate and the 
House and people who really care about our society and 
contribute to it.
    I think the discussions we have had around postal issues 
are one of those areas where there is very little partisan 
bickering and we really do come together to focus on making 
this a better system for all of us.
    So, it has been a wonderful 10 years, and I am very 
grateful that you are going to give me an opportunity to do it 
again for another 6 years. Thank you.
    Senator Carper. You are quite welcome. Thanks to you for 
your willingness to serve.
    I spend a fair amount of time in schools. When I was 
governor, I spent a whole lot more time visiting schools in our 
State. I think I visited just about every school in my State 
and a lot that were not public schools.
    People ask me what I like about my job, now and then. I 
always told them I like helping people. I also enjoy trying to 
get people to work together across party lines. And some issues 
are partisan, but a lot are not--most are not.
    And later today, a bunch of us have been trying to cobble 
together a comprehensive energy policy that enables us to 
reduce our dependence on foreign oil, move to renewable fuels, 
follow some of the guidance of T. Boone Pickens, and just find 
a lot of ways to conserve.
    But there is a pretty good compromise out there if we 
figure out how to reach across the aisle and work together and 
use some common sense, and my sense is that is what the 
Commission does, and I applaud you for that.
    When I talk to kids in school, I tell them that the 
greatest source of joy is to help people and that I come to my 
job with the spirit of a servant. My job is to serve. My job is 
to help people.
    And my sense is, in the way that you responded today, that 
you bring the spirit of the servant as well to your 
responsibilities on the Commission, and I think your colleagues 
do, as well.
    And the folks who work in the Postal Service, at least the 
ones that I have come in contact with, I think they see 
themselves as servants, as well, and I applaud that.
    But, thanks for joining us today. Thanks for your service 
for the last decade or so. We are going to leave the hearing 
record open until noon tomorrow. We will not leave it open 
forever, but we are going to leave it open until noon tomorrow 
for the submission of additional statements and questions. And 
if you get any, I would just urge you to reply to those 
promptly.
    And with that having been said, this hearing is adjourned.
    [Whereupon, at 4:19 p.m., the hearing was adjourned.]


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