[Senate Hearing 115-450]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 115-450

   NOMINATIONS OF HON. DAVID C. WILLIAMS, HON. ROBERT M. DUNCAN, AND
                   CALVIN R. TUCKER TO BE GOVERNORS,
                          U.S. POSTAL SERVICE

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS


                             SECOND SESSION

                               __________

            NOMINATIONS OF THE HONORABLE DAVID C. WILLIAMS,
 THE HONORABLE ROBERT M. DUNCAN, AND CALVIN R. TUCKER TO BE GOVERNORS, 
                          U.S. POSTAL SERVICE

                               __________

                             APRIL 18, 2018

       Available via the World Wide Web: http://www.Govinfo.gov/

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky                  HEIDI HEITKAMP, North Dakota
JAMES LANKFORD, Oklahoma             GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming             MAGGIE HASSAN, New Hampshire
JOHN HOEVEN, North Dakota            KAMALA D. HARRIS, California
STEVE DAINES, Montana                DOUG JONES, Alabama

                  Christopher R. Hixon, Staff Director
                Gabrielle D'Adamo Singer, Chief Counsel
              Jennifer L. Selde, Professional Staff Member
               Margaret E. Daum, Minority Staff Director
               Donald K. Sherman, Minority Senior Advisor
                     Laura W. Kilbride, Chief Clerk
                   Bonni E. Dinerstein, Hearing Clerk

                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Johnson..............................................     1
    Senator McCaskill............................................     2
    Senator Portman..............................................    16
    Senator Heitkamp.............................................    19
    Senator Peters...............................................    22
    Senator Carper...............................................    25
Prepared statements:
    Senator Johnson..............................................    31
    Senator McCaskill............................................    32

                               WITNESSES
                       Wednesday, April 18, 2018

Hon. Mitch McConnell, a U.S. Senator from the State of Kentucky       4
Hon. Rand Paul, a U.S. Senator from the State of Kentucky             5
Hon. David C. William to be Governor, U.S. Postal Service
    Testimony....................................................     6
    Prepared statement...........................................    37
    Biographical and financial information.......................    40
    Letter from the Office of Government Ethics..................    60
    Responses to pre-hearing questions...........................    64
    Responses to post-hearing questions..........................    97
Hon. Robert M. Duncan to be Governor, U.S. Postal Service
    Testimony....................................................     8
    Prepared statement...........................................   111
    Biographical and financial information.......................   113
    Letter from the Office of Government Ethics..................   133
    Responses to pre-hearing questions...........................   137
    Responses to post-hearing questions..........................   162
Calvin R. Tucker to be Governor, U.S. Postal Service
    Testimony....................................................    10
    Prepared statement...........................................   171
    Biographical and financial information.......................   175
    Letter from the Office of Government Ethics..................   191
    Responses to pre-hearing questions...........................   195
    Responses to post-hearing questions..........................   217

                                APPENDIX

Income statement submitted by Senator Johnson....................   228

 
                    NOMINATIONS OF THE HONORABLE 
                   DAVID C. WILLIAMS, THE HONORABLE 
                  ROBERT M. DUNCAN, AND CALVIN R. TUCKER 
                   TO BE GOVERNORS, U.S. POSTAL SERVICE

                              ----------                              


                       WEDNESDAY, APRIL 18, 2018

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:04 a.m., in 
room 342, Dirksen Senate Office Building, Hon. Ron Johnson, 
Chairman of the Committee, presiding.
    Present: Senators Johnson, Portman, Paul, Lankford, 
McCaskill, Carper, Heitkamp, Peters, Hassan, Harris, and Jones.

             OPENING STATEMENT OF CHAIRMAN JOHNSON

    Chairman Johnson. Good morning. This hearing is called to 
order. We are meeting to have a hearing on the nominations of 
three individuals to serve on the Postal Board of Governors 
(BOG), a position that I think is sorely needed.
    The history is interesting, in terms of how we came to 
this, what I consider a pretty sorry state of affairs where we 
have no Board members on the Board of Governors. The Board of 
Governors, their task is to, first of all, they are responsible 
for the hiring and firing of the Postmaster General and the 
Deputy Postmaster General. The Board of Governors approves the 
U.S. Postal Service's (USPS) business plan and strategy, 
including major changes to the USPS network, collective 
bargaining agreements, and rate increases.
    Now I think anybody who has taken a look at the numbers, 
and I will be the first to admit that the numbers are kind of 
hard to analyze. We are actually passing out an income 
statement that was kind of a late-night project of mine last 
night, trying to make a little bit more sense, to take a look 
at it from an accountant's standpoint versus kind of government 
accounting, just kind of laying out exactly what has happened 
with the Postal Service.
    It is pretty easy to diagnose. I mean, you have a fall-off 
in volume from 2001, where Postal Service delivered, about 
103.7 billion pieces of mail to now, last year it was 58.7. It 
is only 56.6 percent of that total volume.
    Now they tried to make it up with parcel post. I think part 
of the problem--and I do not have as accurate information as I 
would like before I release some information, but you take a 
look at the price increases over the last 11 years, since the 
last time Congress passed postal reform, which, by the way, did 
not fix the problem long term, the price increases of United 
Parcel Service (UPS) and Federal Express (FedEx) far exceed 
what the postal system has been able to run through. And I have 
had enough meetings with people who use the Postal Service that 
like it that way, but it certainly has not produced a long-
term, viable Postal Service.
    In 2006s postal reform, they came up with this concept of 
pre-funding, which, listen, as a fiscal conservative I 
appreciate the fact that they actually wanted to fully fund 
your pension plans. The problem is the Postal Service has not 
had the funds. So over the last 11 years, in total, the Postal 
Service was supposed to pre-fund about $62.5 billion. In fact, 
they have actually made payments equal to about $20.8 billion, 
which means they have defaulted on that 2006 postal reform to 
the tune of about $41.7 billion.
    And if you look at their income statement that I did pass 
out,\1\ you can see that the total United States Postal Service 
report income was a loss of $63.9 billion, and 62.5 percent, 
virtually all of it, has to do with that pre-funding.
---------------------------------------------------------------------------
    \1\ The income statement referenced by Senator Johnson appears in 
the Appendix on page 228.
---------------------------------------------------------------------------
    So, again, if you take a look at it in terms of what I 
passed out here, I think this kind of lays out exactly what has 
happened over the last 11 years. We obviously need to take a 
look at the balance sheet. We need to understand what it is 
going to take to make the postal system a long-term, 
economically viable organization, which it is not today.
    Now we do not have any Governors. The purpose of this 
hearing is to have one. Right now the Postal Service is 
basically having to deal with the 535-member Board of Directors 
and we are not very effective at doing the job.
    So again, I appreciate the nominees' willingness to serve. 
I want to welcome you. I want to welcome your families. I am 
looking forward to your testimony. And with that I will turn it 
over to Senator McCaskill.

             OPENING STATEMENT OF SENATOR MCCASKILL

    Senator McCaskill. Thank you, Mr. Chairman. I appreciate 
you holding this hearing and I certainly underscore and 
emphasize the comments that you made about how important it is 
that we confirm some members to the Board of Governors.
    The Postal Service is the only delivery service reaching 
every address in America, and is growing by 1.1 million 
addressees per year. The Postal Service employs more than 
500,000 people, including over 100,000 veterans, to deliver 150 
billion pieces of mail and packages each year. It has 
operations in all 50 States, the District of Columbia, and all 
U.S. territories.
    Even as technological advances make the world feel smaller, 
mail delivery remains a critical part of the infrastructure 
that connects people and businesses across the country and 
world.
    The Board of Governors is comparable to a Board of 
Directors of a publicly held corporation and consists of nine 
Governors, appointed by the President and confirmed by the 
Senate. Can you imagine a publicly held corporation that would 
neglect to have a Board of Directors for 4 years, in terms of 
there even being a quorum?
    We have no Senate confirmed members of this Board, and I am 
not just pointing the blame at this Administration. I am 
pointing the blame at the past Administration also, that this 
was not made a priority in terms of filling this very important 
Board, especially at this critical juncture, in terms of the 
Postal Service and the financial constraints it is operating 
under. It is currently operating under the Temporary Emergency 
Committee, which includes the Postmaster General and the Deputy 
Postmaster General. This is untenable. We are in dire need of 
qualified Governors to help make critical decisions especially 
to address the financial challenges facing the agency.
    As the Chairman has indicated, the Postal Service has 
experienced 11 consecutive years of net losses, totaling $65 
billion. In 2012, it reached a statutory borrowing limit of $15 
billion, so it cannot borrow more money from the Treasury, and 
current law prevents the Postal Service from accessing private 
financial markets.
    These financial problems result from a combination of 
factors, including the decline of First-Class Mail and 
requirement to pre-fund 100 percent of its liability. Due to 
its universal service obligation (USO), the Postal Service is 
required to deliver to more addresses every year. Closing post 
offices and processing facilities can save the Postal Service 
money, but can adversely impact these communities, especially 
the rural communities, where the local post office is more than 
brick and mortar. It is very important to the survival of these 
communities that they continue to have first class postal 
service.
    The bipartisan Postal Reform Act of 2018, which Senator 
Carper introduced with Senator Heitkamp, Senator Moran, and 
myself, seeks to balance the Postal Service's competing 
interests while providing the Postal Service with short-term 
flexibility to make some necessary capital investments.
    I hope that we can move forward with nominees for the 
Board. We have a long history of pairing nominees from both 
parties. I am concerned that we are not doing so today. I hope 
the President will quickly nominate a fourth person to the 
Board so that we will have a quorum to take action, and short 
of that, Mr. Chairman, I hope you will work with me to quickly 
confirm a fifth member to the Postal Regulatory Commission 
(PRC). I understand there is a nominee under consideration for 
that position already. We should continue the long bipartisan 
tradition established by this Committee and ensure that balance 
is on the Board of Governors at this critical time.
    While I remain committed to working with the Board of 
Governors and Postal Service management to address management 
and financial hurdles, that will not work if the Postal Service 
refuses to cooperate with congressional requests. For example, 
I continue to be concerned that the Postal Service is not 
maximizing its best but most expensive asset, the last-mile 
delivery, in its negotiated service agreements with FedEx and 
UPS. Without the Postal Service, FedEx and UPS would be forced 
to find more expensive alternatives to deliver packages to the 
last mile.
    I have railed in this Committee for years, we should not be 
giving a deal to our competitors for the last mile of delivery. 
They should be paying a premium, not be getting a discount. In 
no other realm would we be giving a deal to our competitor. And 
package delivery is the future of the Postal Service. But 
despite my repeated requests for data and information about 
these contracts, I have been stymied time and time again. My 
request for Postal Service negotiated service agreements with 
UPS and FedEx has gone unfulfilled for years.
    I will not be able to support anyone's nomination unless 
they can commit that this important oversight committee gets a 
look, and we can negotiate as to how much of that would become 
public. But it is ridiculous that we have reached such a 
roadblock in getting this incredibly important information as 
we try to put the postal service on a more sound fiscal 
footing.
    I see that our leader is here. I apologize for going on 
once he entered the room, thank you, Mr. Chairman. I will put 
my entire statement in the record\1\ and I look forward to the 
testimony of the witnesses.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator McCaskill appears in the 
Appendix on page 32.
---------------------------------------------------------------------------
    Chairman Johnson. Thank you, Senator McCaskill, and in 
addition to welcoming our nominees we do have the distinct 
honor of welcoming the Majority Leader of the Senate, Senator 
McConnell, who would like to introduce Mr. Duncan.
    So, Majority Leader.

  STATEMENT OF THE HONORABLE MITCH MCCONNELL, A UNITED STATES 
               SENATOR FROM THE STATE OF KENTUCKY

    Senator McConnell. Thank you, Mr. Chairman, Senator 
McCaskill. I appreciate the opportunity to be here this morning 
to present my friend and fellow Kentuckian, Mike Duncan, to 
serve on the Board of Governors of the United States Postal 
Service.
    I have known Mike for a very long time. I am glad that 
President Trump has nominated such an intelligent, able, and 
experienced individual to once again serve our country. As a 
businessman, a public servant, and a dedicated mentor to young 
people, Mike is an outstanding choice to help oversee the 
world's largest postal organization. He has a wealth of 
business experience. He brings important skills to the Board to 
help manage the Postal Service with efficiency and 
effectiveness.
    After graduating from Cumberland College, which is in my 
State, and the University of Kentucky College of Law, Mike and 
his wife, Joanne, moved to Inez to lead the Inez Deposit Bank. 
This is a small community up near the West Virginia line. In a 
small coal community like Inez, community banks are a critical 
resource, and Mike's local focus has helped the area for a very 
long time.
    With proven leadership and dedication, Mike has gained a 
keen understanding of the needs of rural Americans. In addition 
to his financial work in Eastern Kentucky, Mike has served as 
President of the Kentucky Bankers Association and a Director of 
the Cincinnati branch of the Cleveland Federal Reserve Bank. As 
a result, he is adept in corporate governance and business 
management. He has shown responsibility, creativity, and 
integrity, and these qualities will continue to serve him and 
all who rely on the Postal Service well on the Board of 
Governors.
    When Mike and Joanne moved to Inez they committed to 
spending at least one day a week doing something to benefit 
their community. Borne from that commitment is Mike's lifetime 
civic service on a local, State, national, and even 
international scale. From directing the Christian Appalachian 
Project to representing our Nation by teaching the principles 
of democracy to former Communist leaders, Mike has clearly gone 
above and beyond his initial commitment of one day a week. In 
fact, in 2006, he took on the herculean task of serving on the 
Board of the Tennessee Valley Authority (TVA) at a time when 
the TVA was billions of dollars in debt and failing to 
adequately serve Kentuckians. The Senate confirmed Mike on a 
voice vote, and his public service helped to improve the TVA.
    Most recently, President Trump asked Mike to chair his 
commission on White House Fellowships. This position proves 
both the trust which the President has in him and exhibits 
Mike's lifetime commitment to mentorship, which all began back 
in Inez many years ago.
    As a dedicated mentor to dozens of young people in 
Appalachia, Mike helps them understand that they have the 
ability to flourish in their communities. He emphasizes the 
importance of hard work and community service and his program 
pushes these young people to reach their potential. Encouraged 
by Mike, they are succeeding in their own lives and bringing 
long-term benefits to their communities.
    So, Mr. Chairman, I am confident that Mike will bring all 
of these qualities--fierce intelligence, business acumen, and a 
commitment to public service to the U.S. Postal Service. During 
the course of this hearing, this Committee will come to 
understand how much the USPS and our Nation will benefit from 
his leadership and public service.
    So I appreciate very much the opportunity to come by and 
take a few minutes and talk about my good friend, Mike Duncan. 
Thank you, Mr. Chairman.
    Chairman Johnson. Thank you, Leader McConnell. I believe 
Senator Paul would also like to make a few words.

 STATEMENT OF THE HONORABLE RAND PAUL, A UNITED STATES SENATOR 
                   FROM THE STATE OF KENTUCKY

    Senator Paul. Thanks, Chairman Johnson, and thanks, Senator 
McConnell, for taking the time to appear on behalf of our 
mutual friend, Mike Duncan.
    I believe Mike is a great pick to serve on the Postal 
Service Board of Governors. Mike and I have known each other 
not for as long as Senator McConnell and Mike have known each 
other but for several years, and I think he will be a great 
pick. He has worked with several hospitals, several colleges, 
and other nonprofits, Senator McConnell mentioned, in his 
resume. But in all the dealings I can tell you, with Mike, that 
I have found him to be honest, forthright, and fair, which I 
think are very important qualities for someone serving in 
government.
    Mike has provided successful and steady leadership for an 
impressive array of organizations, from large national 
nonprofits to regional quasi-government enterprises to small 
community enterprises, and throughout his distinguished career 
across a number of sectors he has always proven that he 
understands how to cultivate and manage personal relationships 
in order to effectively balance the needs of stockholders, 
industry, customers, rate payers, and, really, in the service 
of the public interest.
    The true hallmark of Mike's career, though, as Senator 
McConnell mentioned, has been his willingness to give 
generously of his time, including to students in and around his 
native Martin County and Eastern Kentucky. Though he has been 
to the big city, I do not think he has forgotten he is from the 
small city, and those Eastern Kentucky roots of loyalty to his 
home and loyalty to his State I think have guided him well in 
his career.
    In summary, I think Mike Duncan is a fine man and a 
dedicated public servant. I believe the U.S. Postal Service 
Board will benefit tremendously from his broad experience and 
skilled leadership, as well as, most especially, his good old 
fashioned Kentucky common sense, and I highly recommend him and 
hope the Committee will vote him through. Thank you.
    Chairman Johnson. Thank you, Senator Paul. I would ask 
consent that my written statement be entered into the 
record.\1\
---------------------------------------------------------------------------
    \1\ The prepared statement of Chairman Johnson appears in the 
Appendix on page 31.
---------------------------------------------------------------------------
    It is the tradition of this Committee to swear in 
witnesses, so if you will all stand and raise your right hand.
    Do you swear the testimony you will give before this 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Mr. Williams. I do.
    Mr. Duncan. I do.
    Mr. Tucker. I do.
    Chairman Johnson. Please be seated.
    Our first nominee is the Honorable David Williams. Mr. 
Williams is currently the Director for the Center for 
Performance and Integrity at George Mason University. Mr. 
Williams is the former Inspector General (IG) for the United 
States Postal Service, having retired in 2016. He has also 
served as the watchdog for the Department of Housing and Urban 
Development (HUD) and Internal Revenue Service (IRS), among 
other agencies.
    Mr. Williams.

    TESTIMONY OF THE HONORABLE DAVID C. WILLIAMS\2\ TO BE A 
                 GOVERNOR, U.S. POSTAL SERVICE

    Mr. Williams. Thank you, Mr. Chairman, and Senator 
McCaskill, and Members of the Committee. Thank you for 
considering my nomination. By way of background, my government 
experience began with military service in the Americal Infantry 
Division in Vietnam. I then joined the Secret Service. I served 
with the Department of Justice Organized Crime Strike Force in 
the Labor Department's Office of Inspector General and was part 
of President Reagan's Commission on Organized Crime.
---------------------------------------------------------------------------
    \2\ The prepared statement of Mr. Williams appears in the Appendix 
on page 37.
---------------------------------------------------------------------------
    I went on to head the Government Accountability Office 
(GAO's) of Special Investigations. I was then confirmed by the 
Senate to be the Inspector General at the Nuclear Regulatory 
Commission, the Social Security Administration (SSA), and the 
Treasury. I was also the first IRS Inspector General, and for a 
time was simultaneously acting as the Inspector General for 
HUD. Most recently, I served as the Inspector General for the 
Postal Service for 13 years, until 2016.
    As the Postal Service Inspector General, I conducted audits 
of program efficiency and effectiveness and worked closely with 
the outside auditor to review Postal Service financial 
statements. The office also conducted investigations to ensure 
the integrity of the organization's actions and its business 
dealings. I am currently a Distinguished Professor at George 
Mason University.
    I believe the Postal Service has long served an important 
role in America. As an economic engine for commerce and in 
supporting the daily, the communications, and logistic needs of 
Americans. I believe that the contribution of the Postal 
Service continues in this fast-moving and disruptive era. We 
are certainly fortunate to live in these times but they are 
continuously challenging and disorienting for citizens and 
commercial enterprises. The Postal Service and other American 
infrastructures are stabilizing constants, enabling opportunity 
while supporting citizens and businesses in this complex 
ecosphere.
    Each year the Postal Service continues to protect the 
privacy and security of its 150 billion mail and parcel pieces, 
vigorously investigating thefts and abuses. The business model 
since 1970 relies entirely on revenues from its product sales. 
The Postal Service provides the Nation with an unconflicted 
infrastructure serving the public good.
    The Postal Service recently navigated an immense storm that 
included digital messaging diversion, an historic economic 
downturn, and while serving as the sole participating in a 
major experiment to pre-funds its $400 billion benefit 
programs. And, as a result, there is rightfully a concern for 
the finances of the Postal Service, which are currently 
difficult for stakeholders to interpret and understand, and 
stakeholders, as a result, often accuse one another of 
understating or exaggerating the financial results.
    I believe it is essential for the financial condition to be 
more clearly presented, so that decisionmakers can make 
important judgments and chart the future. A first step is to 
decompose postal liabilities into component parts and to more 
clearly define the universal service obligation.
    I also believe that Congress could use the Postal Service 
to further support American citizens and to position business 
enterprises for opportunities and challenges of the digital 
global era. Today I suspect the Postal Service leaves much of 
its value to the Nation on the table.
    The country is also facing the promise and the specter of 
coming megacities, featuring smart systems and the Internet of 
Things (IOT). New systems must integrate our neighborhoods with 
our cities and surrounding regions and to the world. Binding 
our coming nation may actually be more challenging in the near 
future than in our past.
    The Postal Service's facilities and truck fleet could help 
collect and provide needed data for the Internet of Things and 
perhaps serve as platforms to increase internet broadband 
access.
    The digital age is still unfolding and the period ahead is 
likely to be challenging. The Postal Service's trusted presence 
in every American neighborhood could make it a candidate for 
new national mandates should Congress direct. The neighborhood 
operations of the Postal Service often provide the most visible 
presence in the daily lives of American citizens. This is 
particularly true in rural areas, where the Postal Service may 
be vital to enabling citizens of small towns and rural areas to 
enjoy the lives that we have intended for all Americans.
    If confirmed, I look forward to the challenges of this 
complex era and working with you to respond to the needs of our 
Nation. Thank you.
    Chairman Johnson. Thank you, Mr. Williams. Our next nominee 
is Robert Duncan. Mr. Duncan is currently the Chairman and 
Chief Executive Officer (CEO) of the Inez Deposit Bank and is 
the former Chairman of the Tennessee Valley Authority. He has 
over 40 years of experience in community banking and the 
financial services industry in rural Kentucky.
    Mr. Duncan.

    TESTIMONY OF THE HONORABLE ROBERT M. DUNCAN\1\ TO BE A 
                 GOVERNOR, U.S. POSTAL SERVICE

    Mr. Duncan. Mr. Chairman, Ranking Member McCaskill, and 
Members of the Committee, thank you for holding this hearing to 
consider nominations to the U.S. Postal Service Board of 
Governors. I am, as you know, Robert M. Duncan of Kentucky, and 
I am pleased to be joined today by my colleagues, David 
Williams of Illinois and Calvin Tucker of Pennsylvania. I thank 
the President for having the confidence and trust to nominate 
me for this important job. I greatly appreciate the 
encouragement of my Kentucky Senators. Senator Paul, thank you 
for being here today and the words that you spoke, and Leader 
McConnell, I thank you very much for being here and speaking on 
my behalf.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Duncan appears in the Appendix on 
page 111.
---------------------------------------------------------------------------
    As you know from the material submitted, I have been 
involved in government, business, and politics at all levels 
over my career. I believe that my experiences in the public, 
private, and nonprofit sectors make me uniquely qualified to 
serve as a Governor of the U.S. Postal Service Board. I have 
studied management and leadership in different sectors and have 
an appreciation of the differences, similarities, and best 
practices in each.
    The Postal Service is an interesting blend of a public, 
private, and nonprofit organization. My service on the 
Tennessee Valley Authority Board helps me understand this 
unusual but important structure. I was selected a member of the 
President's Commission on Executive Exchange in 1989 and 1990, 
and I worked at the White House in the Office of Public Liaison 
while studying public and private organizations. I have served 
in many other governmental positions at the local and State 
levels and currently serve as Chairman of the President's 
Commission on White House Fellowships.
    My work with nonprofit organizations includes the Christian 
Appalachian Project, chairing a State University board, and 
serving for many years as Chairman of Alice Lloyd College. In 
addition I was Treasurer, General Counsel, and, finally, 
Chairman of the Republican National Committee.
    As a community banker in Appalachia, I have worked with 
many small businesses and have an appreciation for the 
challenges and potential of rural America. My work with the 
American Coalition for Clean Coal Electricity gave me 
experience of working with CEOs of the largest railroads, 
utilities, and energy companies in the country.
    In addition to my undergraduate and law degrees, I have 
attended numerous Executive Education programs including 
programs at the Kennedy School of Government at Harvard and the 
Harvard Business School. I believe I have both the practical 
and theoretical knowledge to be an effective member of the 
Postal Board of Governors.
    On a personal note, my grandfather, Walter Duncan, carried 
mail on horseback in eastern Tennessee and one year was on a 
train from Cincinnati to Chattanooga as a mail sorter. I have 
been interested in the post office all my life.
    I consider the Postal Service a public trust as every 
American citizen enjoys universal service. Referenced in the 
Constitution, the organization has served to bind America 
together for over 200 years. The Postal Service is in daily 
contact with virtually every business and citizen. The local 
postal employees are the primary contact of most Americans with 
their Federal Government.
    My approach to leadership and governance is simple. It is 
my goal to include all stakeholders through aggressive outreach 
and communications. The working relationship with the Postal 
Service, Congress, and the Postal Regulatory Commission is 
critical. More transparency in governing helps stakeholders 
plan for the future. An adequate staff is necessary for this 
Board to carry out its planning and oversight responsibilities. 
But I believe the reconstituted Board will be strong and 
independent.
    As a new Board member, I do not begin with an agenda of 
specific recommendations. I support a thorough and transparent 
planning process. The basic business model must be examined 
carefully. I will learn as much as possible, as soon as 
possible, to understand the financial conditions of the 
organization, Mr. Chairman.
    The work of the Board will be particularly challenging as 
we begin our tenure. There are many unresolved issues and 
pending legislation that will require flexibility in our 
approach.
    Issues that I expect to confront us are: (1) Governance 
structure. What are the relationships with Congress and the 
PRC? (2) Universal service. What is the intent of Congress? (3) 
Delivery frequency. What is the optimum number of days of 
service each week? (4) Delivery standards. What is reasonable 
and affordable? (5) Changes in rates. What are the constraints? 
(6) Rural service. What is fair to all Americans? And then (7), 
Mr. Chairman, opioids. What can be done to protect the mail, 
customers, and employees?
    If confirmed, I look forward to working with Congress, my 
colleagues, the leadership of the Postal Service, the Postal 
Regulatory Commission, and the stakeholders. The Board's role 
is to establish policy, monitor results, and evaluate 
management. As a board I believe that we can accomplish this 
mission.
    Thank you for considering my nomination, and I look forward 
to your questions, Mr. Chairman.
    Chairman Johnson. Thank you, Mr. Duncan.
    Our third nominee is Calvin Tucker. Mr. Tucker currently 
owns and is the Managing Partner for Eagles Capital Advisors 
LLC, a financial consulting business. His work is focused on 
turning around struggling businesses and starting small 
businesses in Philadelphia. Mr. Tucker has over 30 years of 
experience in the financial services industry.
    Mr. Tucker.

TESTIMONY OF CALVIN R. TUCKER\1\ TO BE A GOVERNOR, U.S. POSTAL 
                            SERVICE

    Mr. Tucker. Thank you and good morning Chairman Johnson, 
Ranking Member McCaskill, and Members of the Committee. It is 
my pleasure to be here today. I want to thank the President for 
his decision to nominate me to become a member of the Postal 
Service's Board of Governors. I am honored and humbled by the 
confidence that President Trump has placed in me.
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    \1\ The prepared statement of Mr. Tucker appears in the Appendix on 
page 171.
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    I also want to thank my wife, Sharon, who is with us today, 
and my family, represented by my two sons, Aaron and Bradley. 
Those who could not join us include my daughter, Sheneen, and 
my granddaughter, Amaya, and my mother, Emma. I want to thank 
them all for their support in everything we have accomplished 
as a family.
    Over my 43 years, I have worked at many diverse 
organizations, and I have had the privilege to serve on 
numerous community and nonprofit boards. From this experience, 
I believe I can truly appreciate these communities. If 
confirmed, I will bring that perspective to help the Postal 
Service better focus on the needs of the small business and 
community groups.
    For example, in my consulting practice, many clients are 
single operators who struggle with their day-to-day 
responsibilities. They will ask questions like, who can help 
marketing, sales, or simply get product to the customers? So 
can the Postal Service simplify shipping options so there is 
one less thing for them to worry about? Are we doing enough to 
support nonprofits and their good work?
    If I am confirmed, these are the kinds of questions I will 
ask. I want to work with the small business community, postal 
management, and all stakeholders to ensure that everyone is 
well represented at the Postal Service. Today, it is essential 
that the Postal Service consider this small business 
perspective. Large companies can leave mail in favor of 
digital, but mom-and-pop businesses still need innovative 
solutions. For example, a neighborhood accountant may struggle 
with a digital advertising campaign, so a mail-based, local 
solution may be necessary. Are we doing everything we can to 
make it the easy and cost-efficient choice? A rural farmer may 
not have broadband, but she should always be able to count on 
mail delivery. How can we service these rural customers better? 
While my experience is in the small business community, I also 
appreciate that the Postal Service is a huge part of our 
Nation's economy. From the smallest to biggest business, from 
the cities to the countryside, from the richest to the poorest, 
the Postal Service is public service without playing favorites. 
Every day it delivers mail to more than 154 billion homes and 
businesses, made possible by more than 640,000 hardworking 
employees. If I am confirmed, I will work to ensure that the 
Postal Service continues to be a significant economic engine 
for all Americans. I am mindful, however, that the Postal 
Service faces significant challenges. These include large 
financial losses, growing debt, and a decline of its most 
profitable product, First-Class Mail. If I am confirmed, I will 
use all of my energy to help find solutions. These solutions, I 
believe, will be found in the Postal Service's strengths. Its 
31,000 post offices connect America. Its workforce is dedicated 
and knowledgeable. And it was, in fact, the very first social 
media network. If we leverage these strengths, I believe the 
Postal Service can flourish. While I do not have all the 
answers, if confirmed, I pledge to bring my perspective and 
experience, listen closely to all stakeholders, including 
Congress, and always remember the tremendous responsibility I 
have been given. Thank you, Chairman Johnson, Ranking Member 
McCaskill, and Members of the Committee. I look forward to any 
questions that you may have.
    Chairman Johnson. Thank you, Mr. Tucker. There are three 
questions the Committee asks of every nominee, for the record. 
I will ask the question then just, in order, starting with Mr. 
Williams, just answer yes or no.
    First of all, 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?
    Mr. Williams.
    Mr. Williams. No, Sir.
    Chairman Johnson. Mr. Duncan.
    Mr. Duncan. No.
    Chairman Johnson. Mr. Tucker.
    Mr. Tucker. No.
    Chairman Johnson. 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?
    Mr. Williams.
    Mr. Williams. No, sir, I do not.
    Chairman Johnson. Mr. Duncan.
    Mr. Duncan. No, Senator.
    Chairman Johnson. Mr. Tucker.
    Mr. Tucker. No, sir.
    Chairman Johnson. Finally, do you agree, without 
reservation, to comply with any request or summons to appear 
and testify before any duly constituted committee of Congress 
if you are confirmed?
    Mr. Williams.
    Mr. Williams. I do.
    Chairman Johnson. Mr. Duncan.
    Mr. Duncan. I do, Mr. Chairman.
    Chairman Johnson. Mr. Tucker.
    Mr. Tucker. I do.
    Chairman Johnson. Well, my intention was to actually defer 
to our Ranking Member, so I can respect the other Committee 
Members' time. Are you ready to go for questions?
    Senator McCaskill. Sure.
    Chairman Johnson. OK. Senator McCaskill.
    Senator McCaskill. Let me first ask a brief yes-or-no 
question for all three of you. Do you agree to provide 
information and documents when requested by Members of 
Congress, regardless of party? Mr. Williams.
    Mr. Williams. I do, Senator.
    Senator McCaskill. Mr. Duncan.
    Mr. Duncan. Yes, Senator.
    Senator McCaskill. Mr. Tucker.
    Mr. Tucker. Yes.
    Senator McCaskill. Do you believe that the USPS management 
should comply with the requests for documents and information 
from Members of Congress, regardless of party? Not you, 
specifically, but the management. As the Board of Directors, 
would you require the management to respond to requests from 
Members of Congress, regardless of party? Mr. Williams.
    Mr. Williams. I would, Senator.
    Senator McCaskill. Mr. Duncan.
    Mr. Duncan. Yes, Senator.
    Senator McCaskill. And Mr. Tucker.
    Mr. Tucker. Yes, Senator.
    Senator McCaskill. Thank you.
    Mr. Duncan, before I get into some of the postal issues, I 
want to just ask you briefly, I know that you have run a bank 
and banks are typically closed on Federal holidays. Were there 
any Federal holidays where you required your employees to work?
    Mr. Duncan. There are no mandatory Federal holidays that 
our employees are required to work.
    Senator McCaskill. Let me put it this way. Are there 
Federal holidays where the bank is closed and you required your 
employees to work?
    Mr. Duncan. We have dates where we do training and the bank 
is closed on those days.
    Senator McCaskill. And what holidays would those be?
    Mr. Duncan. In the past it has been President's Day, 
occasionally it is Martin Luther King (MLK) Day.
    Senator McCaskill. So every year you require your employees 
to work on both MLK Day and President's Day?
    Mr. Duncan. Senator, I am not sure. I have been absent from 
the bank for a period of time. I would like to be able to 
respond to you----
    Senator McCaskill. Well, that would be important, because 
if MLK Day is the only day that you require your employees to 
work when the bank is closed, that would be something I think 
this Committee would want to know about.
    Mr. Duncan. I can tell you that they are required to work 
on President's Day. I am sure of that.
    Senator McCaskill. OK. Well, if you would get us the 
details of that, I think that is important.
    Mr. Duncan. Thank you.
    Senator McCaskill. Thank you.
    Let us talk about last-mile delivery and negotiated service 
agreements. I want you to know that when I began talking about 
this several years ago, I kept getting reassured that I would 
get this information. It was clear to me that there had not 
even been a thorough cost-benefit analysis done as to what they 
should be charging UPS and FedEx for last-mile delivery. So I 
kept drilling down and trying to get information, and 
eventually I came to the conclusion that I was not going to get 
anything from management other than ``trust us.''
    Now I need to let you know that, on top of that, I have 
been approached by people who lobby for both FedEx and UPS, 
saying, ``You are right.'' I had one of the companies go so far 
as to tell me that the Postal Service has no idea whether it is 
maximizing its profits on these agreements.
    You can imagine, in light of--I mean, it feels like, to me, 
that their--I am so concerned that their desire for volume has 
overwhelmed good business decisions, their desire to cut costs 
has overwhelmed good business decisions, particularly when you 
talk about the competitive edge we represent, in terms of the 
number of days we deliver and our access to the last-mile 
architecture.
    If confirmed, would you work with me to ensure that I get a 
copy of these contracts, Mr. Williams?
    Mr. Williams. Yes, Senator. I want to know more about what 
is going on. I was present a number of times when you made that 
representation.
    Senator McCaskill. You were in the room when I have been 
hollering about this as IG, right?
    Mr. Williams. I was, and I remember, I think the first time 
and the other times as well. So I know that it has been going 
on for a long time, and I know that you have a good concern, 
and it is a very interesting question. So we do need to get 
into it. We do need to work with your staff, who I have 
considered friends for many years, and get to the bottom of it, 
and I am sorry that that has not occurred as yet.
    Senator McCaskill. Yes. I understand that they do not want 
information out in the public domain, in terms of a competitive 
business situation. That is perfectly understandable. But keep 
in mind, we go into classified briefings and learn things all 
the time, that hopefully most of us never share. I am not 
anxious here to trot out private business information. I am 
anxious to figure out whether or not we are maximizing profits 
on the part of the system that is most expensive to us. To me, 
that seems like a simple oversight request, and I am frustrated 
that this has been so hard.
    Mr. Williams. And I know that----
    Senator McCaskill. Did you ever have a chance to look into 
this when you were IG, as to whether or not they were 
maximizing profits for these co-optition agreements? What do 
they call them? Not competition but----
    Mr. Williams. Co-optition.
    Senator McCaskill. Yes.
    Mr. Williams. We did look at the National Security Agency 
(NSA) process and I am not sure we looked at these particular 
agreements other than to assure that they met the floor. So 
they have a legal deal. Do they have the best deal----
    Senator McCaskill. Right. I want to know if they have the 
best deal.
    Mr. Williams [continuing]. Is another better question.
    Senator McCaskill. Mr. Duncan, would you work with me to 
ensure I get a copy of these contracts, in some form?
    Mr. Duncan. Absolutely, and I would work with the Board to 
make sure the Board has copies of the contracts and analysis of 
these contracts.
    Senator McCaskill. Yes. I think it would be really 
important that analysis be done, especially in light of the 
explosive growth of packages. I just think that is the future. 
I do not think we are going back, in terms of volume of 
packages in this country, and I am very concerned that we have 
enabled our competition to be more successful while we have 
hamstrung the Postal Service.
    Mr. Tucker, would you agree?
    Mr. Tucker. Yes, I will agree to work with you and the 
Committee to ensure that we all understand these service 
agreements.
    Senator McCaskill. Are all of you comfortable standing up 
to the President if you determine that the deals that have been 
cut with Amazon for delivery of packages are a good deal for 
the United States Postal Service? Mr. Williams?
    Mr. Williams. I would be entirely, and I am anxious to look 
into it. I would like to look at how NSAs are approved by the 
Postal Service. It appears as though a review has already 
occurred with regard to whether they have met that legal floor, 
but I think that space between the legal floor and the moment 
we drive Amazon away is the space we need to operate in and get 
an understanding of.
    Senator McCaskill. Yes. I am just concerned. Presidential 
task forces sometimes tell Presidents what they want to hear, 
and the people who go on the task force are people who want to 
get in and tell the President what they want to hear.
    Mr. Duncan, are both you and Mr. Tucker comfortable with a 
confrontation with the President over the agreements with 
Amazon if you determine they are in the best interest of the 
Postal Service?
    Mr. Duncan. Senator, we have to follow the facts and the 
facts will lead us toward the truth, and that will be what we 
advocate for.
    Senator McCaskill. Mr. Tucker?
    Mr. Tucker. Absolutely. I would not necessarily 
characterize it as confrontation but I certainly would be 
willing to challenge the assumptions if I determined that----
    Senator McCaskill. Well, there is no question he is on a 
mission here.
    Mr. Tucker. Yes.
    Senator McCaskill. He has a thing about the man who owns 
Amazon, and we all kind of follow the tweets and follow his 
personality as it relates to when he decides to pick on 
somebody. Those who confront him typically are shown the door 
in not too long a period of time. And I just want to make sure 
that you are not so afraid of being shown the door that you are 
not willing to do the right thing for the Postal Service.
    Mr. Tucker. Oh, absolutely, I am willing to do the right 
thing and I will challenge any assumptions.
    Senator McCaskill. Thank you.
    Chairman Johnson. Thank you, Senator McCaskill. I will say 
that I think one of your biggest tasks is going to be 
extracting the information you need to make good management 
decisions. I share Senator McCaskill's frustration. I have been 
at this for a number of years and we are starting to drill 
down. I am actually looking forward to the task force being 
able to extract that information as well. So best of luck to 
you.
    Chairman Johnson. Senator Paul.
    Senator Paul. The interesting thing is I think, Senator 
McCaskill and the President, you are on the same side, really, 
on this issue. He is concerned about how much Amazon is charged 
in that last-mile, and that is what we have been talking about, 
whether or not they are charged adequately or not.
    Senator McCaskill. Well, there is a difference, Senator 
Paul, in that Amazon is hiring someone to deliver their 
packages. UPS and FedEx are the competition to the Postal 
Service.
    Senator Paul. Right. But there still is----
    Senator McCaskill. Two different animals.
    Senator Paul [continuing]. There is the question, in that 
last mile, which is very expensive, are we charging Amazon 
adequately or are we charging anybody adequately. And, really, 
the biggest question we face with the post office is, is the 
post office losing a lot of money? I mean, billions and 
billions of dollars--how are we going to keep the post office--
I mean, these are enormous questions.
    And so we have to look at rates. For First-Class Mail it is 
dwindling, so it is not like we can lower the rates and get 
more money through volume. We are just losing the volume in 
first class. What is an appropriate rate? We have to figure 
that out, and I think we have to have the openness to figure 
that out.
    And I guess it is not so much seeing the contracts is how 
you get to the contract, how you get to that price. when we 
deliver that last mile, which is very expensive, to go down 
that last mile to Inez or some small city, it is very 
expensive, and are we subsidizing companies by doing that? And 
we have to look at that, and it is easy to define the problem. 
It is hard to figure out what is the adequate rate?
    Right now Amazon does not have a post office to deliver the 
last mile, so it is not like they could do it on their own. 
There is probably some price at which they would do it on their 
own, actually. But I do not know if we have adequately found 
that price, and maybe there is room for improvement. And so we 
do have to explore all of that.
    One thing that has amazed me, when we have looked at this 
before and we have had a bunch of reforms come forward, none of 
them, I think, have adequately really examined the problem, and 
this is a problem but not maybe easy for people to actually get 
to the solution. Eighty percent of the post office's cost is 
labor. With UPS it is about 50 percent. With FedEx it is about 
38 percent. I am convinced the post office, because of lack of 
market forces and because their labor costs so much, I do not 
think they are ever going to be profitable unless something 
happened with the labor costs. But involves, sort of union 
contracts, and how we get to more affordable labor, I do not 
know.
    But I think, really, is that I hope you are all open-minded 
and that you will be open-minded into looking for answers. I do 
not have a specific question here, but I think what I would 
like to see is that maybe after you are approved that 6 months 
later we come back and say, ``What have you discovered and what 
are we going to do to try to fix the post office?''
    I think there are things that could be done even short of 
legislative changes. One, are we charging the adequate rates? 
Are we negotiating the best deal? And that is the only thing 
that I would advise, is that maybe we come back and look at 
this again. And I do not think it has to be--Amazon is a big 
supplier in our State. I like Amazon. I like all the employees 
that work in Northern Kentucky for Amazon.
    So I am not against Amazon, but I am for seeing what the 
price is. Are we charging an adequate price for the last mile? 
It is not easy. It is not like there is a philosophic answer to 
this so we can say, ``This is the price that is the appropriate 
price.'' Markets determine prices, and so it has to be based on 
supply and demand. But when you have only one supplier, That is 
why it is difficult to let the marketplace work. We have to 
figure out, is there a way we can try to figure out what the 
market price is for the last mile.
    And I do not say that because I dislike Amazon. I just 
dislike losing a billion dollars a quarter at the post office, 
and we have to figure out for all companies that use the last-
mile, Amazon just happens to be a big player, but there are 
thousands of smaller players that use the post office in the 
same way, for the last mile. We have to figure out how we are 
getting the adequate price.
    But I commend you all, really, for wanting to do this 
service to the country, and I hope you will really think long 
and hard about being open to all solutions.
    Thanks, Mr. Chairman.
    Chairman Johnson. Senator Portman.

              OPENING STATEMENT OF SENATOR PORTMAN

    Senator Portman. Thank you, Mr. Chairman, and, yes, I want 
to echo Senator Paul. Thanks to you guys for stepping up. This 
is not an easy job. There are lots of challenges, and I think 
Senator Paul is correct about the last mile, and, Mr. Tucker, 
you talked about the importance of that too. So it is not only 
costly but, qualitatively, it is, in some respects, the most 
important thing the post office does, because no one else is 
going to do it. And that is a challenge, but there is a bigger 
challenge, really, in the financials, if you look at them, and 
that is this pre-funding of retiree health and how we deal with 
that, and pre-funding of pensions. And I know that that is 
something that some of you have some expertise on.
    Mr. Williams, in particular, has spent a lot of time 
looking at that, so you bring really important insider 
information that probably no one else on the Board of Governors 
ever has had, about what is actually going on. You know where 
the bodies are buried and you have probably buried some of them 
in your role as IG. And Mr. Duncan has the business experience, 
and he understands how government works too, which is helpful. 
And I appreciate you being willing to step up once again and 
serve your country. Mr. Tucker, you talked a lot about your 
small business background, and you have been a successful 
entrepreneur, and that is sort of the bread and butter, 
ultimately, of the Postal Service. And again, those are people 
who might get left behind if it is not done right.
    So appreciate it, and it is not going to be easy. I know 
this Committee is looking at the House legislation that came 
out of their committee, and I know Tom Carper has been at this 
a long time.
    And, by the way, one issue that I feel very strongly about, 
that some of you are knowledgeable about, I know, is this issue 
of security of the mail system, and particularly the 
unbelievable threat that we have right now with fentanyl. I 
would just tell you, the communities that I represent in Ohio 
are just getting killed by fentanyl. Columbus, Ohio, that 
county, Franklin County, just did their analysis of last year, 
2017. A 47 percent increase in overdose deaths. Two-thirds of 
those were from fentanyl.
    And guess how it is coming to that community? Through the 
mail system. I mean, it is coming through the U.S. mail system. 
And I can say that with some degree of certainty because we 
spent a year studying it, Senator Carper and I, on the 
Permanent Subcommittee on Investigation. I think, Senator 
McCaskill, you were there when we started that investigation.
    But it is clear where it is coming from. It is primarily 
coming from China, primarily coming through the Postal Service. 
When we went online undercover with some Federal investigators 
from Homeland Security, the websites that were selling this 
poison all said the same thing--use the Postal Service. They do 
not want to use UPS, FedEx, DHL, or anybody else because the 
Postal Service does not require them to provide the information 
that could help law enforcement to be able to interdict these 
packages.
    And so I have been on an tirade on this, and we have good 
legislation that most Members of this Committee, I believe, 
have already co-sponsored, called the Synthetics Trafficking 
and Overdose Prevention Act (STOP Act). We have had hearings in 
this Committee. Unfortunately, it is not in this Committee's 
jurisdiction, because I know the Chairman cares a lot about it 
and the Ranking Member. I think we would probably have 
something done by now, out of Committee, but it comes out of 
the Finance Committee, which we are working on, because it has 
to do with our Customs agreements.
    But, one, are you all aware of our study on this, and, by 
the way, it says that the post office is doing a little better. 
They are now providing advanced electronic data that law 
enforcement can use to identify these packages on about 36 
percent of the packages, as opposed to 100 percent with the 
private carriers. But even with that 36 percent we found that 
20 percent of the time the Postal Service was not presenting 
the package to law enforcement, and we also found out that some 
of the data was not legible, not usable by law enforcement.
    So, fewer a third of these hundreds of millions of packages 
are getting reviewed by law enforcement, and meanwhile, the 
poison keeps coming in and killing more and more Americans.
    So I would just ask you, are you familiar with the report, 
and I would ask all three of you that. And then, second, do you 
think the post office should be providing this advanced 
electronic data to U.S. Customs and Border Protection (CBP) and 
let the law enforcement, which they say is critical to their 
ability to try to interdict some of these drugs? Mr. Williams.
    Mr. Williams. I am familiar and deeply appreciate what you 
did with regard to this. This is a nearly unbelievable problem.
    There are some complications. I know that the packages 
received in China are received by China Post, not the United 
States Postal Service. There are some hopeful signs, as you 
said. There is a growing number of packages, any packets coming 
in from China, that do have the data on it, and that is 
increasing.
    I would like to know more, too, about what we are doing 
with the data that we receive, both with regard to Customs and 
the postal authorities. What kinds of data analytics are we 
engaged in? You have to really move fast when that data arrives 
or it really is not worth anything.
    I would like to know, is there any daylight between the 
efforts of the enforcement agencies? The role of the Customs 
broker, for the private express carriers, I would like to know 
more about. Is there a value-added there, and where are we 
exploiting that, as well as the advanced entry data.
    Senator Portman. Let me just say, briefly, the big data 
capability is impressive, and when law enforcement is provided 
with this data it is extraordinary what they can do with it, 
the analytics that they have in place. You are probably aware 
of that from some of your other experience. But they are much 
more sophisticated than they used to be, and so it works well 
in the context of these private carriers.
    And I have been to the sites and I have seen what happens, 
how they pull packages off and how they can get that data 
immediately. As you say, it has to be real-time. But the post 
office has to have that level of sophistication too, to be able 
to present the packages that they identify as suspicious, and 
that is not happening, and obviously they are not even 
requiring it from a lot of countries. So there is much more to 
be done.
    Mr. Williams. There have been some problems at the 
international centers that are related to that, and I think it 
would be a great area for us to focus on, for a number of 
reasons. But certainly opioids is the one that care most about.
    Senator Portman. So if you were confirmed for this job, you 
would want to focus on that and support providing that advanced 
electronic data to law enforcement?
    Mr. Williams. It would be something I would want to do the 
very first day.
    Senator Portman. Thank you. Mr. Duncan.
    Mr. Duncan. Thank you, Senator. Yes, I am familiar with 
your report. I am also familiar with the ravages that are going 
on in the part of the world where I live, in Appalachia, 
Huntington, West Virginia; Ashland, Kentucky; Pineville, 
Kentucky. That whole area is very personal.
    I do not know all the facts. I do not know as much about it 
as my colleague, Mr. Williams. But I am optimistic about 
technology. I have some data background, as you know, and I 
believe this can be a problem that can be solved. I cannot tell 
you when. I do not know what the finances are. I have a lot of 
questions about it. But it is a commitment. It is one of the 
seven issues that I mentioned today.
    Senator Portman. Yes. Thank you, Mr. Duncan. Yes, I think 
your background in terms of using data is very important. Mr. 
Tucker.
    Mr. Tucker. Yes, Senator. I am generally familiar with it. 
If confirmed, I will certainly look at it. And as I said in my 
questionnaire, anything we can do to provide to law enforcement 
to protect our workers and the American citizens I am in favor 
of as well.
    Senator Portman. Thank you to all three of you. Thank you, 
Mr. Chairman.
    Chairman Johnson. Senator Heitkamp.

             OPENING STATEMENT OF SENATOR HEITKAMP

    Senator Heitkamp. Thank you, Mr. Chairman. This is 
definitely a very important hearing for us. The post office has 
been rudderless. We, as a major Board of Directors here on this 
Committee, but certainly the Board of Directors for the post 
office has not been functioning for a long period of time, and 
you see the result of that in the numbers that somebody has put 
together for us here. And I know, Mr. Williams, as the former--
--
    Senator McCaskill. The Chairman put this together late last 
night.
    Senator Heitkamp. Thank you.
    Chairman Johnson. The accountant.
    Senator Heitkamp. Yes. The accountant. Well, I appreciate 
this because I think it is the best we can do right now to 
really illustrate the enormous challenges that are ahead of us.
    Now it is no mistake. I have been very aggressive on this 
issue. And to give you a sense of how important this is in 
North Dakota, I opened up a portal on my Web page--now, North 
Dakota is a very small State, population-wise--and it was 
called Fix My Mail. And in a month we had over 500 discrete 
contacts from people who have seen deterioration in service. 
And just yesterday I was with someone from rural North Dakota 
who thanked me for the work on the post office.
    So understand this. Where frequently the problems that we 
talk about here may not have reached America in the same way, 
America knows that the post office is not delivering the way 
they used to deliver. And I think that has been a 
responsibility not of the men and women who walk and deliver 
mail. I think it is the responsibility of management. Whether 
it is us and you guys as the future Board of Directors or 
whether it is the upper management of the post office, we have 
to fix these problems.
    And so I am going to ask just some quick yes-or-no 
questions for all of you. If confirmed as a Governor for the 
United States Postal Service, will you make sure that the Board 
focuses on strong service performance so mail delivery in rural 
America is protected and then improved?
    Mr. Williams. Yes, Senator.
    Mr. Duncan. Yes. It is one of the issues I outlined today.
    Mr. Tucker. Yes, Senator.
    Senator Heitkamp. On the record. How would getting postal 
reform legislation help you in accomplishing your job? And I 
would add to that, have you read Senator Carper, Moran, 
Heitkamp--I think Claire is on this bill too--McCaskill's 
postal reform bill, the latest iteration here that we 
introduced a couple of weeks ago. Mr. Williams?
    Mr. Williams. In my mind, you are the reason there is a 
Postal Service. We have, in this room, some of the express 
companies. They are the best in the world. You need us not in 
those big cities but we are needed where you are.
    The reform bill that is coming through, and has been 
presented, is aimed at reestablishing the financial stability 
of the organization, and that is really the only thing in my 
mind that ought to be a challenge at all. Our dedication to you 
is absolute. You are the reason we have.
    Senator Heitkamp. We are going to hold you to that, Mr. 
Williams, because frequently what we find out is that when push 
comes to shove and we end up financial, we start hearing about 
reducing service, we start hearing about reducing delivery. And 
the other problem that we have--and I will just take a moment--
is getting appropriate data. Never mind financial data. Getting 
service-related data that we can rely on. We come into the post 
office and say, ``Look, it took 10 days to get a letter.'' They 
go, ``No, that does not happen.'' Well, yes, it does happen. I 
mean, do not call the people who are talking to me fibbers. 
This happens.
    And so, Mr. Duncan, can you illuminate us at all on what 
your expectations would be of this Congress, in this giving you 
the tools you need to reestablish stability, financial 
stability, at the Postal Service?
    Mr. Duncan. Thank you, Senator. I have not read the report, 
the new legislation, but I have read press reports of it, and I 
think it goes to the heart of what we are about. We have to 
develop a business model that requires the cooperation, first, 
of Congress. It has to be of our regulator, the Postal 
Regulatory Commission. It has to be of this Board and our 
stakeholders. And I believe bringing that group together is how 
you do it.
    I am very aware of the level of service difference today as 
compared to 20 years ago, as someone who uses the mail both 
professionally and in my business.
    Senator Heitkamp. And, Mr. Tucker, we will give you a 
chance too. My baseline question is, can you actually do what 
you hope to accomplish for the Postal Service without a postal 
reform bill?
    Mr. Duncan. No.
    Mr. Tucker. No.
    Senator Heitkamp. So we are sending you on a mission that 
is doomed for failure unless we do our job here. Mr. Tucker, is 
that a fair statement?
    Mr. Tucker. I would say that 90 percent of what we need to 
do is directed to Congress. I think we need a reform bill. I 
think we need to move a 20th Century business model to the 21st 
Century, and I think the reform bill, as I understand it, goes 
a long way to move us in that direction.
    Senator Heitkamp. So our choices are pretty limited. Your 
choices are going to be pretty limited if we do not do postal 
reform. You are going to sit in a room and you are going to 
move money from this pile to that pile, and hope you can make 
it happen. But there is not any certainty of success in 
stabilizing the financial outcome or the financial situation 
for the post office. There is no likelihood of success if we do 
not do postal reform. Would you agree, Mr. Williams?
    Mr. Williams. Both limited and extremely controversial. The 
decisions ahead of this, without postal reform get very bad, 
very fast.
    Senator Heitkamp. Mr. Duncan?
    Mr. Duncan. The business model must be changed. I am an 
optimistic person and I think there are things that can be done 
at the margin, but this comes down to the basic model.
    Senator Heitkamp. Mr. Tucker.
    Mr. Tucker. Yes, I agree. As I indicated in my opening 
remarks, we can do some business development and bring new 
clients to the marketplace, particularly small business and 
community groups and nonprofit organizations. But at the end of 
the day, we need reform.
    Senator Heitkamp. Yes. I mean, I would just say this. It is 
like a business that has not modernized, a business that has 
not taken the appropriate steps for a long period of time, in 
part because they have been squeezed by requirements of 
Congress, requirements of this Board of Directors, at this 
table. And so now, to suggest that we can do this without some 
kind of opportunity to stabilize in the short term, your job is 
going to be extraordinarily difficult.
    And so I am committed, as I have been since I got here, 
that we ought to do our job, and that you cannot do your job 
unless we do our job, and get you the right set of 
circumstances.
    So I want to thank every one of you, and your families, for 
you guys taking on this job. I think it is one of the hardest 
jobs right now in America. And I appreciate the extent of the 
service and the diversity of the opinion here, and I look 
forward to working with you after you are approved, and get the 
Board of Directors up and running so that we have a partner 
that we can work with as we move postal reform.
    Thank you, Mr. Chairman.
    Chairman Johnson. Thank you, Senator Heitkamp, and I 
appreciate you noticing my little income statement. Let me take 
just a minute here to talk about the numbers, because it is 
actually pretty stark and pretty easy.
    Setting the income statement sheet aside, if you just look 
at the balance sheet, as of September 30, 2017, when you 
combine the current retired health care benefit liability with 
the Civil Service Retirement System (CSRS) liability, the 
Federal Employees Retirement System (FERS) liability, and the 
long-term retiree health care benefits, that totals $440 
billion. The fund has a balance of $336 billion. That is 
leaving an unfunded balance of $104 billion. That is the 
problem.
    On the income statement you can see, over the last 11 
years, of the $63.9 billion loss that the Postal Service 
reported, $62.5 billion of that is the pre-funding of that 
liability.
    So if you are not really willing to take a look at how do 
you fund that obligation to retirees--I mean, you can talk 
about postal reform but you have to really understand exactly 
what we are talking about. And we can also throw in pretty 
words like ``Medicare integration,'' but it has been pulling 
teeth trying to figure out what does that actually cost, what 
has been contributed, what has been used by postal--I cannot 
get it. I have been trying to get it for years.
    This little income statement here is the result of 
extracting information kind of bit by bit from the Postal 
Service to try and lay out exactly what has happened over the 
11 years so we can understand what is happening moving forward. 
But again, I mean, the basics are in terms of pre-funding, the 
pre-funding to the tune of about $20 billion, and they have 
defaulted on about $41.7 billion. And that just tells you it is 
kind of hard to follow verbally, but is all in the long-term 
pension and health benefit liability. That is the problem. 
Senator Peters.

              OPENING STATEMENT OF SENATOR PETERS

    Senator Peters. Thank you, Mr. Chairman. And I will just 
echo the comments made by my colleagues here, and Senator 
Heitkamp, in particular. You have a very tough job ahead of 
you, if confirmed. We appreciate your willingness to take on 
this challenge. But it is a challenge that has to be met, 
particularly in our rural areas. Michigan is an urban State but 
it is also an incredible rural State, particularly in Northern 
Michigan and Michigan's Upper Peninsula, which is a very rural 
area.
    And whether it is a retiree waiting for a Social Security 
check or life-saving prescriptions, this is a very real and a 
very big deal for folks, which is why I concur with the 
sentiments that I have heard about the need for postal reform. 
It is up to us to push this forward, and I certainly appreciate 
Senators Carper, Moran, Heitkamp, and McCaskill--thank you for 
your leadership on this issue. Senator Johnson, I know this is 
something you want us to focus on as well. We need to make this 
a priority and move something going forward, and I hope we do 
that very well.
    But Senator Heitkamp alluded to something, the kind of 
complaints that I have been hearing fairly regularly too, which 
is how do you balance the very challenging fiscal situation 
that the Postal Service is in with service? As you cut service 
to meet the demands of the fiscal needs, then people become 
disenchanted with the Postal Service and try to look for other 
options. And then you get, basically, on a slippery slope. You 
cut more services, you lose more business, and your revenue 
goes down so you have to do more cuts.
    And so I want to focus on a couple of areas that I have 
been hearing a great deal about, and one of those areas is the 
consolidation of mail processing centers. As a result of 
unrealistic budget requirements, we are concerned that two more 
centers in Michigan will be placed on the chopping block--
basically, one in the Upper Peninsula near Iron Mountain and 
another in Lansing that service a great deal of Northern 
Michigan. We had a facility near Kalamazoo in West Michigan 
close recently. The pattern of shutting down these processing 
centers, it seems clear, means that it takes a lot longer for 
mail to get to places because it is not being processed as 
quickly with a number of facilities.
    So I would like to have each of you tell me, will you weigh 
in on decisions related to consolidation of mail processing 
centers, and how are you going to weigh cost savings with 
customer service, given the current situation that you are in?
    We will start with you, Mr. Williams, and if we could go 
down and kind of get a sense. How do you grapple with this 
challenge? Give us a sense of your decisionmaking process.
    Mr. Williams. The Postal Accountability and Enhancement Act 
(PAEA) legislation did a lot of good, particularly in the early 
years, but it did go on a long time. And as those budget cuts 
became more extreme in order to meet our obligations, the 
downsizing became less measured, the targets of opportunity 
were all wiped out, and there were a number of targets of 
opportunity. And we are now down to what needs to be a very 
scientific process. And I think we can only do it through 
modeling. We need to understand the universal service and we 
need to create a modeled network that will deliver that.
    I know, from my work as the Inspector General before, some 
of the early analyses efforts for the impact of closure were 
wrong and mistakes were made. And some of the mistakes became 
more frequent as the financial crisis became more serious.
    So I am a huge believer in modeling. I do not believe we 
can close things through professional judgment any longer. 
Those are all gone. And we need to show you how we are going to 
do it, and give everyone a chance to arrive at the same 
conclusion that we did, that we now have the model for a 
network that will deliver on our promises.
    Senator Peters. Thank you. Mr. Duncan?
    Mr. Duncan. I agree with what my colleague is saying today. 
I guess I am an optimistic person and I start on the revenue 
side first. I think that is where I look before I start doing 
the cuts, because, as a business person I know that there is a 
tipping point, that if you cut into the muscle then you lose 
many other things in an organization. So my predilection would 
be to start looking on the revenue side to make sure that we 
are properly charging for our services.
    I think defining what universal service means, what 
Congress means by that, will help us along the way. I have felt 
the cutbacks, personally, in the processing centers. I have 
seen the change in the standard. We need to know what the 
American people want, what Congress wants, what our 
stakeholders want.
    Senator Peters. Thank you. Mr. Tucker.
    Mr. Tucker. Yes. I agree that modeling is an area that we 
need to look at. We need to define that universal service 
obligation, what it means today, and how do we maintain our 
service standards in communities across this country. I would 
look at both revenue and expenses in making decisions. But I 
think we need to see all of the analytics around how it is 
going to affect those communities before decisions are made 
with respect to consolidation or doing some other things.
    Senator Peters. The strength of any organization is 
dependent on the people within that organization. So morale, as 
all three of you know, is incredibly important to having an 
efficient, well functioning organization. People have to come 
to work motivated to do a good job and take pride in their 
work. And what I have heard, on a regular basis, is that morale 
is a challenge at the Postal Service. Workers feel that they 
have too much mandatory overtime, their opinions are not 
listened to, and they are not communicated to in terms of some 
of the decisions that have to be made, sometimes difficult 
decisions.
    So in the remaining time, if you briefly could give us a 
sense of your vision of how are we going to strengthen the 
postal workforce and the morale in that workforce, which will 
be critical to making sure that this organization runs 
properly?
    We will start with you, Mr. Tucker, and then work the other 
way.
    Mr. Tucker. No, morale is key to a strong and committed 
workforce. I think some of the internal tools that the Postal 
Service should use, it is internal communications, to 
communicate some of the issues that we face, some of the 
opportunities, and bring people in on an incentive basis to 
help them create the opportunities they want, the income that 
they are trying to achieve. And I think just information is 
important to driving morale in any organization.
    Senator Peters. So where does that rank in your priorities, 
in this new position?
    Mr. Tucker. That ranks pretty high because we do not--as I 
noted in my opening remarks, we have 640,000 people and that is 
the No. 1 asset of the Postal Service is our workforce. And to 
keep an interested and committed workforce is the No. 1, I 
think, priority that we should strive to do. Because without 
the workforce, we can do all of these reforms and other issues 
and still not achieve what we need because it is the people 
that is going to make things happen.
    Senator Peters. Right. Mr. Duncan?
    Mr. Duncan. Well, I think the postal employees have a lot 
to be proud of. Consistently, they have delivered the mail, day 
in, day out. They are consistently ranked as the best 
government agency, and I think they have a lot to be proud of.
    On the other hand, they have to have constant 
communication, and that communication is in the form of 
education. They have to understand it is up to us. The tone is 
set at the top by the management of the postal board. That is 
how they work with the union representatives but also the rank 
and file everyday member of the organization. And it is 
communication. It is constant and consistent communication.
    Senator Peters. So that will be one of your priorities?
    Mr. Duncan. It has to be one of the priorities of the 
organization.
    Senator Peters. All right. Thank you. Mr. Williams?
    Mr. Williams. The last couple of years have been really 
rough on the Postal Service employees. In response to that, 
they have risen to the occasion. They were the first ones back 
after September 11, 2001, after Hurricane Katrina. And their 
morale has taken a beating but it is extremely high. It is a 
very dedicated group. And as Senator McCaskill said, there are 
113,000 veterans there, and they bring with it the discipline 
that they learned to this new job.
    We downsized very fast. It reached a reckless pace. The 
wheels were coming off the wagon. And also we focused so much 
on our problems that we only focused on our problems, and there 
were some extraordinary accomplishments that we forgot to thank 
people for. They are our assets. They are 80 percent of our 
operation, and we need to take care of them and thank them for 
what they have done. We need to focus on the successes as well 
as the problems ahead, and the successes have been enormous.
    We also kind of inherited a legacy before any of us were on 
the scene in this. There were labor management problems that 
went back to the 1950s and the 1960s, that still sort of cast a 
pall over things. I am glad that you mentioned this. It is a 
big deal and we never talk about it, and its time has come. We 
need to address this and make sure that morale remains high and 
we do not just, intuitively, rely on it.
    Senator Peters. Well, I appreciate that. I appreciate all 
three of your comments. It is a strong workforce. They care 
deeply about their job. But it is important to celebrate them 
and it is important to make sure that they are a part of the 
decisionmaking process, because they do bring a great deal of 
expertise to the job each and every day. So thank you for your 
comments.
    Chairman Johnson. Thanks, Senator Peters. Mr. Williams, 
real quick while we are on the subject of employee morale, 
having been the Inspector General, do you happen to, off the 
top of your head, know the top pay scale, on a per-hour basis, 
for postal workers?
    Mr. Williams. I think I understand. There is a pay scale 
for all of the various professional series.
    Chairman Johnson. Just for a letter carrier. Do you know 
what the top pay scale is?
    Mr. Williams. I have it in my head that it is around 
$50,000.
    Chairman Johnson. Do you know how soon they can retire on 
full benefits, how many years?
    Mr. Williams. I think it is a combination of experience and 
age, and I think it is about 30 years of experience.
    Chairman Johnson. OK. Again, we will explore all of this as 
we work together with the task force.
    Mr. Williams. And if I am wrong, I will send a confirmed 
note.
    Chairman Johnson. No. Again, unfair question at this point 
in time, but because of your past experience I thought you 
might be able to answer it.
    Mr. Williams. I think that is right.
    Chairman Johnson. OK. Senator Carper.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. A couple of guys on--probably some gals as 
well, on our committee, are baseball fans. Senator Peters and I 
both turned out to be Detroit Tigers fans, for reasons I will 
explain later. Ben Cardin is our big Orioles fan. And I watched 
the end of the Tigers-Orioles game last night, where the Tigers 
actually won a game, 4-2. And one of the things that you are 
always worried about as a pitcher, is that you are not 
telegraphing your pitches. You want to telegraph your pitches 
to the hitters.
    I am going to telegraph my pitch, and my first pitch deals 
with revenues, which I think, Mr. Duncan, you mentioned. And I 
think I have met you before. I am happy to meet you today and 
to welcome you, and thank you for your willingness to serve. We 
have known David Williams for a long time and just thank him 
for all of his service.
    Mr. Williams. Thanks, Senator.
    Senator Carper. We need Governors. I am an old Governor. We 
need Governors, desperately. To have the idea we have maybe the 
second-largest business in the country and we do not have a 
Board of Directors, we do not have a Board of Governors? I 
mean, that is awful. And hopefully we can do something about 
that real soon, and we can also move a kind of bipartisan 
legislation, Senator Moran and I, and others, have worked on 
with folks in the House. But I am delighted that we are here 
today. This is an important step.
    All right. Before we talked about--and the pitch I am going 
to telegraph is to ask you what the Postal Service should be 
doing to innovate, to bring in revenues, the kinds of revenues 
it needs to be able to invest in capital, whether it is capital 
in processing plants, post offices, technology, technology on 
new vehicles that actually do not break down, that are not 30 
years old, and they are actually a better size for the kind of 
work the Postal Service is doing these days with packages and 
parcels. So To start thinking about that.
    And I will just say, as a backdrop, the Postal Service has 
gone through a lot of cutting, as I am sure Mr. Williams knows. 
They have half as many processing centers as they used to have, 
one-half. They have about a third as many full-time employees 
as they had before. And about a third of all the post offices 
across the country no longer are open 6 days a week, say from 8 
or something in the morning to 5 in the afternoon. We are 
basically on a much tighter--slower schedule--smaller schedule. 
And there is a menu of options that smaller communities and 
towns can take in terms of how do they want to provide service 
to Postal Service, to their residents and their customers.
    But one of the things that I focused on as Governor for 8 
years is balancing budgets, and we were fortunate to be able to 
balance budgets 8 years in a row. We actually reduced taxes 7 
out of 8 years. A lot of jobs were created. I am told more jobs 
in those 8 years than any 8-year period in history in the State 
of Delaware.
    The reason why I mention that is we paid off debt. We got 
AAA credit ratings for the first time in State history, and I 
was so proud of that. So proud of little Delaware getting AAA 
credit ratings, across the board. And I remember after we got 
the AAA credit ratings, meeting with the rating agencies the 
next year, and they said, you have done--and not just me, but 
previous Governors and legislators--Pete du Pont, Mike Castle 
and others--did really yeoman's service in terms of their 
fiscal responsibilities and leadership.
    But each of the rating agencies said to us, me and my 
cabinet, they said, ``You have done, over the years, really 
responsible stuff, good stuff in managing your State's 
finances. You still have one obligation, one liability, you now 
have to address.'' We literally were amortizing 10 years the 
unfunded liability for pensions. We had no money in the pension 
fund, 10 years later. We were amortizing over 40 years, and 
within 10 years we got there. And we just had a lot of extra 
money and we just threw it in the pension fund and did it in 10 
years.
    But fast forward. We have AAA credit ratings in Delaware in 
1999, and the agency said, ``You still have a major liability 
that you have not addressed.'' And we said, ``What is that?'' 
And they said, ``You have all these pensioners, fully funded 
pension fund, but they have a health care liability that you 
have not put aside any money to address, and you need to do 
that.'' And so we started doing that.
    As it turns out, we were not the only one. I did not know. 
Almost no State had even acknowledged that was a liability, 
health care liability through the pensions. And they said, 
``You need to get to work on that.''
    Well, as it turns out, that was like 19 years ago, and if 
you look across the country, you look at most States, most 
States still have not really acknowledged that that is a 
liability, and they are not setting aside money. But they 
certainly have not funded it to 100 percent of the liability, 
on 90 or even 80 percent, or 70 percent, or 60 or 50 percent.
    And if you look at big businesses, I had my States look at 
Fortune 100 companies, Fortune 500 companies, Fortune 1000 
companies and see what they are doing to fund their health care 
liability for the pensioners. Almost nobody that I know of has 
actually funded to 100 percent of the liability, and very few 
are even close to 50 percent.
    And part of the Postal Service's problem, as you know, is 
that they have been required to meet a liability--how do you 
meet this liability, a real liability, and how do you do it 
over a reasonable period of time? How do you do it over 10 
years? Well you cannot, and that is what we said. You have to 
not only realize and recognize this liability but you have to 
pay it off in 10 years.
    And sort of, I think, the genius behind what Senator Moran 
and I and others are trying to do is to say, this is a 
liability. We want you to address it. We want you to fund it, 
but over a reasonable period of time. And that is 40 years. 
That is part of what we are trying to do. And so I just want to 
mention that up front.
    All right. Let us talk about--what would you all need--and 
let us start with David, if we could--some ways that you might 
suggest that we would allow the Postal Service to innovate and 
to be more creative and bring the revenues it needs to invest, 
realizing that all that growth in packages and parcels is 
coming out of technology, it is out of the internet. And there 
is just a lot of running room there, to make money. But go 
ahead, please. I talked too long.
    Mr. Williams. Thanks, Senator. There are a lot of levers 
that can be pulled that will result in revenue for the Postal 
Service that we have not fully exploited in the past, and we 
need to look at the implications of exploiting those. There are 
down sides too. But in my mind I think of things like returns 
management. A huge issue for e-commerce is the number of 
packages being returned. Those can best be managed at the point 
that they are returned, and the Postal Service could easily 
manage that. It is a perfectly situated adjacent space to the 
services we have.
    A lot of foreign shoppers would love to buy here but they 
cannot, because they do not have an address. We could provide 
virtual post office boxes for them and it would help commerce 
and it would help the Postal Service. There are a lot of 
services we could do in connection with last-mile. We could 
provide presence services for the elderly and deliver nutrition 
to the elderly. There is a growing army of freelance workers 
that now have no office. They work at home. And that is only 
going to grow in the future. Better supporting them in this 
last-mile effort. Smart cities are going to bring with them 
smart systems, and the collection of data from the Internet of 
Things. There is something that these 227,000 vehicles and the 
30,000 post offices could do to collect and do initial analysis 
for.
    We could do 3-D shippings, where we are not shipping 
anything. We are just shipping the software, and we actually 
produce it at the point that it is delivered. So there are an 
ocean of things that could be done, and this exactly how world 
posts have gone from losing money to profitability.
    Senator Carper. Thank you so much. Those are great. Mr. 
Duncan?
    Mr. Duncan. I think it starts with technology. I am very 
optimistic about technology. I like the technology that we are 
using at the Postal Service today to allow you to see what your 
mail is going to be. I think that there are things that will 
build off of that platform. My colleague has mentioned some 
other things, the returns. I think this goes to partnerships, 
and it goes to the ability of us being able to flexibly act on 
an agile basis. One of the things that you can help us with is 
to make sure that we have the ability to act on these 
opportunities that come forward.
    Also look at our physical plant. I have been in many of the 
post office buildings, for example, the Farley Building in New 
York. I have been in one in Indianapolis. And I look at how 
little of the space is being used in some of those buildings. 
We have partnership opportunities there.
    Senator Carper. All right. Thank you. Mr. Tucker?
    Mr. Tucker. Yes. I know my colleague talked about informed 
delivery, the innovation side of what the Postal Service has 
been doing. When I first learned about informed delivery I 
mentioned it to my son, who is a millennial, and he was 
excited. He thought it was great that you could see 12 pieces 
of mail that is being delivered to your home, regardless of 
where you are. So I think if we could tell that story, get that 
out to the marketplace, that is going to be a driver of some 
revenues.
    But in my opening statement I talked about three things: 
small business, community organizations, Consumer Directed 
Community Support (CDCs), as well as nonprofits. Those are 
areas that I think we need to cultivate and farm, and possibly 
raise some significant revenue from those communities, and 
heretofore I am not sure if the Postal Service has been working 
with those revenue generators.
    Senator Carper. All right. Thanks. Grateful that you are 
here. Mr. Chairman, thank you so much for holding this hearing 
for these nominees, and we look forward to working with you, to 
move forward. Thank you.
    Chairman Johnson. Thank you, Senator Carper.
    As is usually the case, my colleagues have done a good job 
answering the questions that you are really in a position to 
answer. My questions really have to deal with the detailed 
financial information that you are going to have to gain access 
to, so we can actually go through a problem-solving process, 
develop the information, gather it, do a root cause analysis, 
define achievable goals. I mean, do that first. Then we will 
start working on exactly what the solution is. I think past 
attempts have just really not had adequate information.
    So, again, I appreciate your willingness to serve, and, 
again, I want to say thank you to your families for working 
with you on this.
    I do have a couple of magic words to read. The nominees 
have made financial disclosures and provided responses to 
biographical and pre-hearing questions submitted by the 
Committee. Without objection, this information will be made 
part of the hearing record,\1\ with the exception of financial 
data,\2\ which are on file and available for public inspection 
in the Committee offices.\3\
---------------------------------------------------------------------------
    \1\ The information submitted by Mr. Williams appears in the 
Appendix on page 40.
    \2\ The information submitted by Mr. Duncan appears in the Appendix 
on page 113.
    \3\ The information submitted by Mr. Tucker appears in the Appendix 
on page 175.
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    The hearing record will remain open until noon tomorrow, 
April 19, for the submission of statements and questions for 
the record.
    This hearing is adjourned.
    [Whereupon, at 11:29 a.m., the Committee was adjourned.]

                            A P P E N D I X

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