[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                         LEGISLATIVE PROPOSALS
                      TO PUT THE POSTAL SERVICE ON
                     SUSTAINABLE FINANCIAL FOOTING

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                          OVERSIGHT AND REFORM
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 24, 2021

                               __________

                            Serial No. 117-4

                               __________

      Printed for the use of the Committee on Oversight and Reform
      
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]      


                       Available on: govinfo.gov,
                         oversight.house.gov or
                             docs.house.gov
                             
                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
43-780 PDF                  WASHINGTON : 2021                     
          
--------------------------------------------------------------------------------------                           
                             
                   COMMITTEE ON OVERSIGHT AND REFORM

                CAROLYN B. MALONEY, New York, Chairwoman

Eleanor Holmes Norton, District of   James Comer, Kentucky, Ranking 
    Columbia                             Minority Member
Stephen F. Lynch, Massachusetts      Jim Jordan, Ohio
Jim Cooper, Tennessee                Paul A. Gosar, Arizona
Gerald E. Connolly, Virginia         Virginia Foxx, North Carolina
Raja Krishnamoorthi, Illinois        Jody B. Hice, Georgia
Jamie Raskin, Maryland               Glenn Grothman, Wisconsin
Ro Khanna, California                Michael Cloud, Texas
Kweisi Mfume, Maryland               Bob Gibbs, Ohio
Alexandria Ocasio-Cortez, New York   Clay Higgins, Louisiana
Rashida Tlaib, Michigan              Ralph Norman, South Carolina
Katie Porter, California             Pete Sessions, Texas
Cori Bush, Missouri                  Fred Keller, Pennsylvania
Danny K. Davis, Illinois             Andy Biggs, Arizona
Debbie Wasserman Schultz, Florida    Andrew Clyde, Georgia
Peter Welch, Vermont                 Nancy Mace, South Carolina
Henry C. ``Hank'' Johnson, Jr.,      Scott Franklin, Florida
    Georgia                          Jake LaTurner, Kansas
John P. Sarbanes, Maryland           Pat Fallon, Texas
Jackie Speier, California            Yvette Herrell, New Mexico
Robin L. Kelly, Illinois             Byron Donalds, Florida
Brenda L. Lawrence, Michigan
Mark DeSaulnier, California
Jimmy Gomez, California
Ayanna Pressley, Massachusetts
Vacancy

                     David Rapallo, Staff Director
                Mark Stephenson, Director of Legislation
                   Ethan VanNess, Professional Staff
                       Elisa LaNier, Chief Clerk

                      Contact Number: 202-225-5051

                  Mark Marin, Minority Staff Director
                        
                        C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page
Hearing held on February 24, 2021................................

                               Witnesses

The Honorable Ron Bloom, Chairman, United States Postal Service 
  Board of Governors
    Oral Statement...............................................    10

Mr. Louis DeJoy, Postmaster General, United States Postal Service
    Oral Statement...............................................    11

Ms. Tammy Whitcomb, Inspector General, United States Postal 
  Service
    Oral Statement...............................................    13

Mr. Mark Dimondstein, President, American Postal Workers Union, 
  AFL-CIO
    Oral Statement...............................................    15

Mr. Joel Quadracci, Chairman, President, and Chief Executive 
  Officer, Quad/Graphics
    Oral Statement...............................................    16

Mr. Kevin Kosar, Resident Scholar, American Enterprise Institute
    Oral Statement...............................................    18

Written opening statements and the written statements of the 
  witnesses are available on the U.S. House of Representatives 
  Document Repository at: docs.house.gov.
                           INDEX OF DOCUMENTS

                              ----------                              
  * Rep. Connolly's Statement for the Record.
  * Rep. Lynch's Statement for the Record.
  * Rep. Lawrence's Statement for the Record.
  * Letter, Peters and Portman Letter of Support; submitted by 
  Chairwoman Maloney.
  * ``How to Fix the US Postal Service,'' article, Roll Call; 
  submitted by Chairwoman Maloney.
  * Letter, National Association of Postal Supervisors; submitted 
  by Chairwoman Maloney.
  * Letter, Alliance of Nonprofit Mailers; submitted by 
  Chairwoman Maloney.
  * Letter, Federal Law Enforcement Officers Association; 
  submitted by Chairwoman Maloney.
  * Letter, Postal Regulatory Commission; submitted by Chairwoman 
  Maloney.
  * Letter, United Postmasters and Managers of America; submitted 
  by Chairwoman Maloney.
  * Letter, MPA-The Association of Magazine Media; submitted by 
  Chairwoman Maloney.
  * Letter, National Active and Retired Federal Employees 
  Association; submitted by Chairwoman Maloney.
  * Letter, The Association for Postal Commerce; submitted by 
  Chairwoman Maloney.
  * ``Protestors Gather Outside of Postmaster General DeJoy's 
  Home,'' article, WUSA 9; submitted by Rep. Biggs.
  * ``Burned Post Offices Destroyed in Minneapolis Unrest Leave a 
  Void,'' article, StarTribune; submitted by Rep. Biggs.
  * Statement, National Association of Letter Carriers; submitted 
  by Rep. Biggs.
  * ``USPS Shuts Down Mail Delivery at 7 Post Offices in Twin 
  Cities for Friday,'' article, Fox 9; submitted by Rep. Biggs.
  * ``Reward Offered for Details in Post Office Looting,'' 
  article, Chicago Sun Times; submitted by Rep. Biggs.
  * ``Rep. Ayanna Pressley Calls for `Unrest in the Streets' Over 
  the Failures of the Trump Administration,'' article, Black 
  Enterprise; submitted by Rep. Biggs.
  * ``Antifa Lay Siege to Lancaster Police Precinct Following 
  Latest Officer-Involved Shooting,'' article, RT.com.usa; 
  submitted by Rep. Biggs.
  * ``Kenosha's Main Post Office Closes Indefinitely Due to 
  Violent Riots,'' article, Breitbart; submitted by Rep. Biggs.
  * ``US Postal Service Vans Stolen and Torched by Rioting 
  Minneapolis Protestors,'' article, The Gateway Pundit; 
  submitted by Rep. Biggs.
  * Testimony, American Catalog Mailers Association (ACMA); 
  submitted by Rep. Comer.
  * USPS IG Report, Mail Delivery and Customer Service Issues - 
  Select Chicago Stations, Chicago, IL; submitted by Rep. Davis.
  * Letter, Chicago Delegation USPS Inquiry; submitted by Rep. 
  Davis.
  * National Association of Letter Carriers PAC Profile; 
  submitted by Rep. Foxx.
  * American Postal Workers Union PAC Profile; submitted by Rep. 
  Foxx.
  * National Postal Mail Handlers Union Profile; submitted by 
  Rep. Foxx.
  * Letter, Postal Operations Response Letter; submitted by Rep. 
  Gibbs.
  * Questions for the Record: to Mr. Bloom; submitted by 
  Chairwoman Maloney.
  * Questions for the Record: to Mr. Quadracci; submitted by 
  Chairwoman Maloney.
  * Questions for the Record: to Mr. DeJoy; submitted by 
  Chairwoman Maloney.

The documents listed above are available at: docs.house.gov.

 
                         LEGISLATIVE PROPOSALS.
                      TO PUT THE POSTAL SERVICE ON
                     SUSTAINABLE FINANCIAL FOOTING

                              ----------                              


                      Wednesday, February 24, 2021

                  House of Representatives,
                 Committee on Oversight and Reform,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 10:13 a.m., 2154 
Rayburn House Office Building, Hon. Carolyn Maloney [chairwoman 
of the committee] presiding.
    Present: Representatives Maloney, Norton, Lynch, Cooper, 
Connolly, Krishnamoorthi, Raskin, Mfume, Porter, Tlaib, Bush, 
Davis, Wasserman Schultz, Welch, Sarbanes, Speier, Kelly, 
Lawrence, DeSaulnier, Gomez, Pressley, Comer, Jordan, Foxx, 
Hice, Grothman, Cloud, Gibbs, Higgins, Keller, Sessions, Biggs, 
Donalds, Herrell, LaTurner, Fallon, and Clyde.
    Chairwoman Maloney. The committee will come to order. 
Without objection, the chair is authorized to declare a recess 
of the committee at any time. I now recognize myself for an 
opening statement.
    Good morning, and I want to welcome all of our witnesses 
and thank everyone for participating in this important hearing 
on the future of the Postal Service.
    The Postal Service is one of our Nation's most vital and 
respected institutions. It provides service across the country 
to every single address and it adds over a million new delivery 
points every year. It binds our Nation together in the way that 
no other agency or organization does.
    Unfortunately, the Postal Service is facing a dire 
financial situation that requires us to act. On Friday, we 
circulated draft legislation with proposals to address some of 
the most important factors driving up costs for the Postal 
Service.
    I will address one of those proposals, Medicare 
integration, and some of my colleagues will address the other 
provisions.
    First, while all postal employees pay into Medicare through 
their careers, not all retirees enroll when they reach age 65. 
Approximately 73 percent of retirees are enrolled, but the 
other 27 percent are not.
    The Postal Service has paid about $35 billion dollars into 
Medicare since 1983. The draft bill would require current 
employees to enroll in Medicare when they reach 65. Retirees 
who are already over 65 would be given a three-month period to 
enroll with no penalty.
    While employees and retirees would keep Federal health 
benefits through a new health plan, Medicare would be the 
primary payer.
    Keep in mind that these employees have already paid into 
the system. This reform, known as Medicare integration, would 
cut long-term costs by reducing copays and other medical costs 
for retirees.
    It would also save the Postal Service about $10 billion 
over 10 years. These are critical savings that will help the 
Postal Service become more financially sustainable.
    In addition to Medicare integration, my colleagues will 
discuss how the bill would eliminate the unfair requirement 
that the Postal Service prefund retiree health benefits for 75 
years into the future.
    Eliminating this unfair provision would take approximately 
$35 billion off of the Postal Service's books. They will also 
discuss how the bill would increase transparency to ensure that 
service standards are met.
    On that note, we all know the Postal Service implemented a 
number of changes last year that resulted in widespread service 
deterioration across the country. Part of that was caused by 
the coronavirus pandemic, and postal employees who are on the 
front lines have been hit especially hard.
    But the other part of the problem was, really, Postmaster 
General DeJoy's actions. As the Inspector General concluded, he 
did not adequately assess the impacts of his changes on service 
and he did not adequately consult with Congress and others 
before doing so.
    Many people across the country and on this panel have grave 
concerns, and recent events have aggravated them. For example, 
we have been trying to get information about the new strategic 
plan, which has yet to be made public.
    Of course, my own views of Mr. DeJoy are a matter of public 
record, and all members of our committee are entitled to 
express their own views.
    However, even as our committee continues conducting 
vigorous oversight of current postal operations, we will not be 
delayed or deterred from our North Star. We need to pass 
meaningful reforms and, hopefully, bipartisan reforms to put 
the Postal Service on more sustainable financial footing for 
years to come.
    With that, I now recognize the distinguished chairman of 
the Government Operations Subcommittee, Mr. Connolly, for his 
opening statement.
    Mr. Connolly. Thank you, Madam Chairwoman, and thank you 
for your leadership in focusing on the long-term success of the 
Postal Service at one of the first hearings of this committee 
during the 117th Congress.
    I am committed to working with you and our colleagues to 
pass a bill through this Congress that finally fixes the long-
standing financial problems of the Postal Service.
    Postal Service has been a critical lynchpin of the American 
fabric since 1775. It employs 650,000 people and is the 
foundation for a more than $1.7 trillion mailing industry that 
employs more than 7= million people.
    Today's hearing serves to inform Congress of the reforms 
necessary to return the Postal Service to viability, financial 
health, and to ensure that Postal Services survive well into 
the future.
    These efforts are not new, certainly, not new to me. I was 
elected to Congress shortly after the lame duck session of 2006 
in which the Postal Accountability and Enhancement Act was 
passed into law under the guise of being a reform bill.
    I believe, however, that that bill is the root cause of 
much of the Postal Service's financial difficulty and decline. 
For nearly 15 years, the Postal Service has struggled to comply 
with that law, especially the prepayment requirement, a unique 
obligation no other entity in the world is required to meet.
    Congress has an obligation, having created this problem in 
its own legislation, to fix it, and that is what the USPS 
Fairness Act provision does. The prefunding requirement 
requires the Postal Service to pay between $5.4 billion and 
$5.8 billion each year for 10 years into the health benefits 
fund.
    But a decrease in revenue starting around 2006, 
coincidentally, forced the Postal Service to forgo the required 
prepayment since 2010.
    Postal Service currently has, roughly, $35 billion in 
unfunded retiree health care benefits because of Congress' 
last-minute decision in 2006 to require an onerous prefunding.
    The money sits in the Treasury account waiting to fund the 
health benefits of those not yet born even when it could be 
used to fortify a struggling Postal Service to replace 
vehicles, for example, that are now on average 25 years or 
older, that literally explode and endanger the work force in 
the second largest vehicular fleet in the country.
    The language of the USPS Fairness Act would remove a 
manufactured yet real liability from the books, wiping the $35 
billion of debt from the Postal Service's ledger books.
    The provision is not a panacea but it is a critical pillar 
of the bipartisan comprehensive reform plan that we are focused 
on today. This provision removes the distraction of a 
multibillion dollar debt of Congress' own creation and gives 
the Postal Service time to build a practical business model 
that will--can be adjusted to the changes in technology in the 
marketplace.
    We have a moral obligation to fix the problem Congress 
created. Most importantly, the provision will allow the Postal 
Service to focus on serving the American people and delivering 
their mail and packages every single day, especially during a 
pandemic.
    I have been working for 12 years since I entered Congress 
to build broad coalitions of multifarious stakeholders who rely 
on the Postal Service for their businesses and nonprofits, and 
for veterans who get their prescription medications through the 
mail, rural Americans who rely on package delivery to make it 
through the pandemic and individuals who pay their bills and 
businesses who use the mail for their commercial transactions.
    I am prepared to meet this moment and join with you, Madam 
Chairwoman, and my colleagues on the committee to enact 
meaningful reforms to deliver for this Nation. Congress cannot 
afford to miss this moment.
    Thank you again for your leadership, and I yield back.
    Chairwoman Maloney. Thank you.
    Mr. Lynch--I now recognize the distinguished 
representative, Mr. Lynch, for your opening statement.
    Mr. Lynch. Thank you, Madam Chair.
    First of all, I would like to commend you and Ranking 
Member Comer for your continued leadership in addressing the 
urgent challenges facing the United States Postal Service.
    I would also like to thank Chairman Gerry Connolly, Ranking 
Member Jody Hice, and Representative Brenda Lawrence for their 
work on this important issue.
    Beginning with the draft text of the Postal Service Reform 
Act of 2021, we now have an opportunity to take a viable path 
toward enhancing the financial viability of our most trusted 
government institution.
    This legislation is strictly reflective of a fundamental 
reform need that are the subject of bipartisan and stakeholder 
consensus. It is also--its sole purpose is to ensure that the 
Postal Service and its dedicated work force are equipped to 
carry out the vital public service mission in the long term.
    And as Chairman Connolly pointed out, the strength of the 
U.S. Postal Service really rests with the more than 650,000 
letter carriers, clerks, mail handlers, supervisors, and 
postmasters who work to process and deliver the mail to every 
home and business in America, six and even sometimes seven days 
a week, and any meaningful effort that we undertake to enact 
postal reform must reflect the commitment and the sacrifice of 
the American postal workers.
    As Chairwoman Maloney stated earlier, the integration of 
postal retiree benefits--health benefit plans with Medicare is 
one of the core reforms included in this draft.
    This proposal comes down to a basic question of fairness. 
To date, our postal workers have been required to pay nearly 
$35 billion into Medicare since 1983, and it remains the second 
largest Federal work force Medicare contributor after the 
Defense Department.
    Meanwhile, one quarter of postal employees never receive 
any Medicare benefits. Yet, all postal employees bear the cost 
of resulting higher retiree premiums.
    So with that, I strongly support our committee's efforts to 
enact common sense and bipartisan reform legislation. This is 
extremely important to a lot of rural communities that rely 
heavily on the Postal Service.
    And with that, I urge my colleagues on both sides of the 
aisle to get behind a good reform bill and I yield back the 
balance of my time. Thank you.
    Chairwoman Maloney. Thank you, Mr. Lynch.
    And I now recognize the distinguished Representative 
Lawrence, who was a postal worker for 30 years and has been a 
great partner in our work to save the Postal Service.
    Mrs. Lawrence, you are now recognized for your opening 
statement.
    Mrs. Lawrence. I want to begin by thanking our Chairwoman 
Maloney and Chairs Connolly and Lynch for your partnership as 
we work to craft this postal reform legislation.
    For years, the financial situation facing the Postal 
Service has grown more and more dire, due in part to factors 
outside of their own control.
    I am thrilled that this committee is prioritizing postal 
reform as one of its major initiatives during the 117th 
Congress. Our reform provisions would provide the Postal 
Service with desperately needed financial assistance.
    I want to focus on another important aspect of this 
package, which are service standards and accountability.
    During my near 30-year career with the Postal Service, I 
and other postal workers took great pride in our efforts to 
meet our service standards and performance targets. It is what 
drove our work ethic.
    The agency's unofficial motto best sums up the work force 
commitment to achieving those goals: neither snow nor rain nor 
heat nor gloom of night stays these couriers from the swift 
completion of their appointed rounds.
    For a large period of the last year, the Postal Service was 
in the news for the wrong reasons, consistently delayed mail 
delivery, while more than 600,000 employees of the Postal 
Service has heroically continued to uphold their mission to 
deliver mail in the midst of a global pandemic.
    Questionable operational changes implemented by Postmaster 
DeJoy has hindered their work and caused the Postal Service to 
miss that mark. Congress must include language to emphasize the 
need for service performance targets.
    While we have only heard reports of this at this time, I am 
critically concerned about any proposal to alter the Postal 
Service first class mail system. Anything that will reduce the 
agency's ability to meet its standards--its service standards.
    After months of persistently low delivery times and those 
concerning reports mandating targets for service performance, 
it is absolutely necessary to hold the agency accountable.
    Last year, 91 percent of Americans had a favorable opinion 
on Postal Service, even though we were struggling with the 
pandemic in our service. That number is based on the agency's 
more than two centuries of robust service standards, something 
that the American people have come to expect.
    If we do not make every effort to affirm that commitment to 
the service standards and accountability, it will chip away at 
the foundation of what makes this agency so great.
    While this legislation provides the agency with financial 
reforms it needs, we cannot allow flawed operational changes to 
be a drop in our commitment to its timely service to compromise 
our mission.
    We must pair these reforms with strong language to repair 
and to require robust service standards.
    At this time, Madam Chair, during a pandemic is not the 
time to weaken our service standards. Thank you so much, and I 
yield back.
    Chairwoman Maloney. Thank you. And I will now turn to 
Ranking Member Comer. But before I do, I would like to extend 
my sincere thanks for his graciousness and for his willingness 
to consider working with us in a bipartisan way.
    And with that, I now recognize Ranking Member Comer.
    Mr. Comer. Well, thank you, Madam Chair, for holding this 
hearing. Thank you for allowing this hearing to be hybrid and 
thank you for what I think is your sincere desire for 
bipartisan postal reform.
    After all the talk about the Postal Service over the past 
year, I am very happy we are finally doing something that has 
the potential to address the real issues facing the Postal 
Service and improve service and delivery for the American 
people.
    But I must add that last year in this committee, Democrats 
spun wild conspiracy theories about Postmaster DeJoy's plan to 
steal the election by removing unnecessary blue postal boxes 
and underused mail sorting machines.
    History has already shown that baseless conspiracy theory 
to be untrue, and it will go down in history with other 
baseless conspiracy theories like the ones Adam Schiff spun in 
the Intelligence Committee.
    Postmaster General DeJoy was attacked for trying to tackle 
two glaring problems with postal operations that must be 
addressed: having the trucks leave on time and reducing the 
massive amounts of overtime postal workers accumulate.
    Again, Republicans debunked the Democrats' mailbox myths 
and said repeatedly we should devote our energies toward fixing 
the Postal Service's broken business model.
    With election year politics behind us, I am thankful, 
again, Chairman Maloney has agreed to take on the important but 
difficult task of postal reform.
    Preserving and shaping the U.S. Postal Service is one of 
the most fundamental and important jobs of this committee. The 
core issues that plague the Postal Service is relatively 
straightforward.
    Demand for first class mail has plunged and costs have 
stayed the same. No business could be expected to survive in 
such a scenario without making tough decisions.
    A second core issue is emerging. Demand for packages has 
exploded and the Postal Service isn't equipped to deal with 
this massive demand increase.
    There are other issues, foremost of which should be the 
needs of the American public, which together create a very 
complex challenge to address. One issue likely to be front and 
center today, how to pay for the benefits the Postal Service 
promises to its employees, which now make up well over $100 
billion, $100 billion, in unfunded liabilities.
    As of now, there is no plan for how to pay for these 
promises. Funding by some estimates will be depleted by the 
year 2030.
    The Postal Service cannot be left to default on its 
retirees. It will require creative solutions and sacrifices 
from all interested parties, and there are many to make, this 
work.
    We cannot ignore this problem. There are realities we must 
confront and address. Hard decisions must be made. This 
challenge calls for bipartisanship, and I am thankful 
Chairwoman Maloney has made the offer to work together on this 
effort.
    Like all Americans, I am deeply concerned about the 
performance of the Postal Service over the past year. The 
delays in mail delivery across the country hurt small 
businesses, prevented the timely delivery of medication, 
hindered bills from being delivered on time, and presented 
numerous other problems for the American people.
    I have spoken to Postmaster DeJoy about these delays and I 
am eager to learn more today about how this issue is being 
addressed and what needs to be done to prevent it from 
happening again.
    But I will say this. Mr. DeJoy is finalizing a business 
reform plan. The last Postmaster General, if you will remember, 
promised us to deliver a plan back in 2019. But it never 
arrived.
    Most of you will remember that hearing when Elijah Cummings 
and Mark Meadows grilled the former Postmaster General, ``Why 
haven't you brought a plan?'' That plan never arrived.
    The status quo at the Postal Service is not sustainable. 
Postmaster General DeJoy should be commended for doing the hard 
work to confront the realities facing the Postal Service.
    I am eager to work with both my Republican and Democratic 
colleagues to reform the Postal Service, ensure its fiscal 
sustainability, and improve service to the American people. We 
must tackle and address the real issues facing the Postal 
Service.
    I look forward to hearing from today's witnesses on their 
ideas to improve the Postal Service.
    Now I would like to yield to the ranking member of the 
Government Operation Subcommittee, Ranking Member Hice from 
Georgia.
    Mr. Hice. I thank the ranking member and, Chairwoman 
Maloney, thank you for calling this hearing today, and we all 
agree that the Postal Service is critical for our country and 
it calls for serious debate.
    But I would agree with the ranking member that for this 
past year, Democrats spread false information and really blamed 
Republicans and the previous administration and the Post Office 
for an attempt to co-opt the 2020 elections. And we are dealing 
with that.
    And just by way of remembrance, I have got some quotes that 
were made right here in this very room.
    Quote, ``An attack on our Postal Service and an attempt to 
dismantle our Postal Service out of a selfish desire to 
sabotage our democracy and maintain grip on power is an attack 
on all of us.''
    So somehow, last year, we were all in here, us being 
accused and Mr. DeJoy in the Postal Service of sabotaging our 
democracy.
    The speaker said, ``The president, his cronies, and the 
Republicans in Congress continue to wage their all out assault 
on the Postal Service and its role in ensuring the integrity of 
the 2020 election.''
    So, somehow we were all involved in an attempt to destroy 
the election.
    Then there was another member of this committee. Mr. DeJoy, 
you will probably remember this. You sat here in this room and 
had to hear this straight up.
    He said to you, quote, ``How dare you disenfranchise so 
many voters? You know that it is a felony for a Postal Service 
officer or employee to delay delivery of mail. Somehow you can 
delay all the mail and get away with it. They can be 
prosecuted. You can't, even if your actions are a million times 
worse.'' And then he said, ``Mr. DeJoy, is your backup plan to 
be pardoned, like Roger Stone?''
    How unfair to make those kinds of unbelievable accusations 
and allegations. That same representative went on and suggested 
that we may need to arrest you in order to have you show up 
here for a hearing, which, of course, was unnecessary. You did 
it voluntarily.
    Then there was a picture that went online, like this one 
here, of a member chained to a mailbox. This did nothing but 
create fear in the American people. This did nothing but put 
distrust in the American people with the Postal Service.
    And I bring all this up because we endured all this last 
year, all year long. But let us remember what Mr. DeJoy 
actually did with the Postal Service.
    First, he removed the blue mailbox drop boxes. But in so 
doing, was that an attempt to sabotage the election? Absolutely 
not. It is a routine process.
    In fact, over the last couple of decades, 35,000 of those 
drop boxes had been removed, some 12,000 under President 
Obama's watch. We didn't hear anything about it then. It was 
only when Mr. DeJoy continues the process of scaling down.
    One of the other things he did was take out mail sorting 
machines. Perhaps that had something to do with the fact that 
mail volume has drastically declined and these machines take up 
a lot of room, space needed for packaging processing.
    He also reduced overtime. Well, let us just by remembrance 
bring to mind that the Postal Inspector General is the one who 
documented rampant overtime use and abuse, the cost of which 
was over $1.1 billion in 2018 alone.
    If that much overtime is the norm in the operating 
procedures of the Postal Service then, yes, there is a serious 
problem with overtime.
    Now, perhaps all of this that I am saying is water under 
the bridge at this point. I certainly hope so. Maybe now we can 
get back to the real issue at hand, which is authentic reform 
of the Postal Service.
    And maybe the efforts of Postmaster DeJoy will be put 
behind us and at this point that the election is over perhaps 
things will calm down as it relates to the rhetoric that has 
been so consistent this past year from the Democrats. Or maybe 
it won't. I don't know. We will see.
    But as we roll into this debate, as Chairwoman Maloney has 
said, she hopes this to be a bipartisan movement. But, again, I 
would say just yesterday another member of this committee made 
the following quote: ``Louis DeJoy is a political hack, a crony 
of Donald Trump and a massive Republican donor. He is taking a 
wrecking ball to the U.S. Postal Service.''
    So, I don't know that we are going to get over some of the 
rhetoric or not and, quite frankly, I would venture to raise 
the question with that kind of statement made just yesterday, 
are we now to assume that the Biden administration is not going 
to have anyone in any position appointed who has not giving 
money to Democrats?
    Are we to assume from that kind of statement that now 
Republicans have the green light to day in and day out 
relentlessly go after any member of the Biden administration 
who has donated in the past to Democrats?
    Well, today's hearing is about the Postal Service. It is 
not supposed to be about Louis DeJoy. But I doubt if that is 
going to be the case. And why does all this matter?
    Well, at the end of the day, I, like the ranking member, 
have many concerns about the poor performance of the Postal 
Service in recent months. Our office has been covered up with 
complaints. And Mr. DeJoy is the captain of the ship. The buck 
stops with him.
    But the important thing at the end of the day is that the 
Postal Service have strong leadership and that they have a plan 
to improve rather than sit back and wait for more taxpayer 
bailouts and assistance.
    But if we are going to demand reform, which we should, why 
should we believe that there is not going to be more of the 
insane damaging rhetoric in the past? And I hope I am wrong 
with that.
    Why should we believe that any steps other than those in 
the draft bill here, which really erases tens of billions of 
dollars in misplaced payments and unfunded liabilities, which, 
frankly, I support those basic concepts in this draft bill. But 
those things are not enough.
    But why should we believe that the rabid resistance is not 
going to continue? If moving blue boxes and mail sorters and 
trying to bring sanity to overtime usage is somehow viewed as 
criminal activity by the postmaster, then what in the world is 
going to happen to the business plan that he comes up with and 
what is any postmaster general, be it Mr. DeJoy or someone 
else, going to do to try to right the ship of the Postal 
Service?
    I will be very much interested in hearing some of these 
questions answered today. We have got to get input and deal 
seriously with reform issues and get beyond nonsensical, 
insane, rabid rhetoric that has been coming for the past year.
    And I hope we will be able to do that Madam Chairwoman. I 
yield back.
    Chairwoman Maloney. OK. Now I will introduce our witnesses.
    Our first witness today is Postal Service Board of 
Governors Chairman, Ron Bloom. Then we will hear from 
Postmaster General Louis DeJoy.
    Next we will hear from Postal Service Inspector General 
Tammy Whitcomb. Next we will hear from the president of the 
American Postal Workers Union, Mark Dimondstein.
    Next we will hear from Joel Quadracci, president and 
chairman and CEO of Quad, and finally we will hear from Dr. 
Kevin Kosar, a resident scholar at the American Enterprise 
Institute.
    The witnesses will be unmuted so we can swear them in. 
Please raise your right hand.
    Do you swear or affirm that the testimony you are about to 
give is the truth, the whole truth, and nothing but the truth, 
so help you God?
    [Witnesses are sworn.]
    Chairwoman Maloney. Let the record show that the witnesses 
answered in the affirmative. Thank you.
    And without objection, your written statements will be made 
part of the record. And with that, Chairman Bloom, you are now 
recognized for your testimony.

STATEMENT OF RON BLOOM, CHAIRMAN, UNITED STATES POSTAL SERVICE 
                       BOARD OF GOVERNORS

    Mr. Bloom. Chairwoman Maloney, Ranking Member Comer, and 
members of the committee, thank you for inviting me to appear 
before you today.
    My name is Ron Bloom and I am honored to chair the Board of 
Governors of the United States Postal Service. This is not my 
first involvement in public service.
    I served in the Obama Administration, first, as a member of 
the Auto Task Force helping to lead the restructuring of GM and 
Chrysler, and later on the White House staff.
    In my 40-plus-year career, I have held leadership roles in 
both labor unions and financial institutions, specializing in 
restructuring and revitalizing large complex organizations.
    In addition to the Postmaster General, I am joined on the 
board by five other Governors, each of whom brings significant 
relevant experience to our task.
    My involvement with the Postal Service began a decade ago 
as an advisor to its largest union, the National Association of 
Letter Carriers. That experience, along with my work on the 
board, has only deepened my appreciation for the extraordinary 
dedication of the more than 645,000 women and men of the United 
States Postal Service.
    Throughout this pandemic, Postal Service employees 
performed with distinction. This was most evident during last 
November's election, as they delivered 4.6 billion pieces of 
election and political mail and ensured that 99.89 percent of 
mail ballots were sent back to election officials within our 
guidance to voters.
    Our peak season began immediately thereafter, and while the 
Postal Service delivered 1.1 billion packages over the 
holidays, we fell far short of our service targets. With COVID 
sidelining thousands of our employees, many Americans, 
including your constituents, experienced significant delays in 
the delivery of mail and packages.
    This level of service is acceptable to no one at the Postal 
Service, and we are working to urgently address this challenge. 
But as we improve service, and we are and we will, we must face 
some hard truths.
    As presently constituted, the Postal Service's ability to 
serve its twin mandate, to bind the Nation together and remain 
financially self-sufficient, is profoundly threatened.
    For too long the Postal Service has been burdened with 
unsustainable liabilities and its own failure to adapt to the 
changing needs of its customers. As we look ahead, if we 
continue on our current path we are projected to lose $160 
billion over the next 10 years.
    But for the Postal Service to succeed in the long term, we 
can't just throw money at the problem. We must address the 
systemic issues plaguing its outdated model.
    For these reasons, the Postmaster General and postal 
management have been working with the Board of Governors on a 
comprehensive plan to invest in and revitalize the Postal 
Service.
    This plan is still being finalized, so I am not in a 
position to reveal any specifics today. But I can tell you that 
its focus is on ensuring that the Postal Service is able to 
perform its essential public service mission and meet our 
universal service obligation in a reliable and affordable 
manner to 160 million American--161 million American households 
six and seven days each week.
    This plan will require tough choices. As I mentioned 
earlier, I have significant experience in revitalizing and 
restructuring large complex enterprises, including the 
integrated steel industry, GM and Chrysler, and dozens in 
between.
    Now, and if I have learned one thing it is that the single 
largest impediment to achieving a successful outcome is that 
stakeholders will support the abstract need for change, but 
will seek to avoid any change that impacts their particular 
interest.
    Successful restructuring simply cannot work that way. We 
must be ready--we must all be ready to do our part. Congress 
has a vital role to play.
    Our plan will ask you to give the Postal Service relief 
from its current requirement to prefund its retiree health 
benefits, and that we be allowed to fully integrate our retiree 
health plans with Medicare.
    These changes will save us more than $40 billion, or 25 
percent of the hole we are trying to fill. We will also be 
asking the Biden administration to calculate our obligation to 
the CSRS pension plan using modern actuarial principles, which 
will save an additional $12 billion.
    Today, the Postal Service stands at a crossroad facing 
enormous challenges and significant opportunities. What happens 
next is up to us.
    We can continue to ignore these challenges and demand that 
nothing changes while this great organization slowly dies, or 
we can come together and do something really important for the 
United States Postal Service and the people we serve. Thank 
you.
    Chairwoman Maloney. Thank you.
    Postmaster General DeJoy, you are now recognized for your 
testimony.

  STATEMENT OF LOUIS DEJOY, POSTMASTER GENERAL, UNITED STATES 
                         POSTAL SERVICE

    Mr. DeJoy. Good morning, Chairwoman Maloney, Ranking Member 
Comber, and members of the committee.
    I want to applaud the subject of the hearing, legislative 
proposals to place the Postal Service on a more sustainable 
path while addressing performance. You have put your finger on 
the precise combination of success factors that the Postal 
Service leadership and I have been focused on for the past 
eight months--building a financially sustainable organization 
that fulfills our responsibility to the American people and to 
our employees, and that enables excellent reliable service that 
meets the expectations of our customers.
    There is difficult work that is ahead of us to fix the 
systemic problems that have plagued the Postal Service. But I 
am confident that together these problems can be solved and I 
see a bright future ahead for the Postal Service and the public 
we serve if we have the collective courage to act.
    A tangible reflection of our optimism for the long term 
viability of the Postal Service is our award yesterday of a 
production contract for the next-generation delivery vehicles.
    Let me say at the outset that we must acknowledge that 
during this peak season we fell far short of meeting our 
service targets. Too many Americans were left waiting for weeks 
for important deliveries of mail and packages. This is 
unacceptable and I apologize to those customers who felt the 
impact of our delays.
    All of us at the Postal Service from our board, to our 
leadership team, to our union association leadership, to every 
employee strive to do better in our service to the American 
people, and we will do better.
    That said, the fundamental challenges that the Postal 
Service confronted in 2020 made the urgent change that we need 
to pursue even more evident.
    The years of financial stress, under investment, 
unachievable service standards, and lack of operational 
precision have resulted in a system that does not have adequate 
resiliency to adjust and adapt to changing circumstances.
    I am proud of the dedication of our employees who work 
tirelessly to meet our public service mission during the most 
trying of circumstances.
    While our performance during the election was tremendous, 
the service performance issues that we otherwise experienced 
during much of the year demonstrate why we must make 
fundamental changes to provide our customers with the service 
they expect and deserve.
    We need to frankly confront the problems we face, be candid 
and realistic about the magnitude of the solutions we require, 
and embrace the few crucial elements of legislative help we 
need from Congress.
    Above all, my message is that the status quo is acceptable 
to no one because the solutions are within reach if we can 
agree to work together. Our dire financial trajectory, 
operational and network misalignment to mail trends, outdated 
pricing, infrastructure underinvestment, inadequate people 
engagement, and an insufficient growth strategy all demand 
immediate action.
    We have a detailed plan for such action, which we will 
finalize soon, and with your help we can restore a Postal 
Service to the American people that they truly deserve.
    To confront these urgent issues, our team has been working 
on a 10-year strategy that will reinforce the Postal Service's 
obvious strengths and address our obvious weaknesses.
    The key commitments of this plan will include, one, a 
commitment to six and seven day week delivery service to every 
address in the Nation, not just because it is the law but 
because it is the key ingredient to our future success; two, a 
commitment to stabilizing and strengthening our work force, 
especially for our associates who are not yet in a career 
position.
    We want every postal employee to have tools, training, and 
supportive environment necessary to enjoy a long-term career 
with us. And three, a commitment to investing in our network 
infrastructure, including vehicles, technology, and package 
sortation equipment.
    We demonstrated this commitment with our award yesterday 
and look forward to working with Congress to determine if our 
electric vehicle goals can be accelerated.
    In the weeks ahead, I look forward to sharing more 
information and engaging in discussions about this strategy 
with public policymakers, our unions, and management 
associations, our employees, our stakeholders, and with the 
American people.
    To be self-sufficient, we also need targeted legislation. I 
thank you for your leadership and renewed interest in 
addressing our unfair and unaffordable employee retirement 
health benefit costs. That will give us a fighting chance when 
combined with other elements of our plan for financial 
sustainability.
    Importantly, these funding changes can be made while 
sustaining and improving these value benefits to our employees. 
Our board and I, our management team, our union associations, 
and association leadership look forward to working with you and 
the administration to revitalize the Postal Service.
    Thank you.
    Chairwoman Maloney. Thank you.
    Inspector General Whitcomb, you are now recognized for your 
testimony.

 STATEMENT OF TAMMY WHITCOMB, INSPECTOR GENERAL, UNITED STATES 
                         POSTAL SERVICE

    Ms. Whitcomb. Thank you.
    Good morning, Chairwoman Maloney, Ranking Member Comer, and 
members of the committee. Thank you for inviting me here today 
to discuss the Postal Service's recent service issues as they 
relate to potential reform efforts.
    The mission of the OIG is to ensure the efficiency, 
accountability, and integrity of our Nation's Postal Service 
through independent oversight under the authority of the 
Inspector General Act of 1978.
    We take our mission very seriously. The ability of the 
Postal Service to meet its service standards is always 
important, especially during the current pandemic when 
Americans are relying so heavily on it to deliver critical 
items like checks, medicines, packages, and ballots.
    Even before the pandemic, the processing network was not 
operating at optimal efficiency. The Postal Service's drive to 
push mail through its network to meet its service goals 
actually led to costly inefficiencies due to lack of 
coordination and integration between the mail processing, 
transportation, and delivery operations.
    Additionally, it routinely used the transportation networks 
and high levels of overtime to mitigate delays, causing late 
and extra trips and further increasing costs. When the pandemic 
hit, it brought a perfect storm of postal challenges, declines 
in mail volume and revenue, a surge in parcel volume which 
offset the revenue loss from mail but required costly 
operational shifts, and reduced employee availability due to 
illness and quarantine.
    In the beginning of the pandemic, the Postal Service was 
able to modify operations to generally mitigate the impact and 
meet its obligation of universal service.
    However, starting in early summer, the Postal Service 
introduced various operational and organizational changes. When 
deployed on top of employee absences due to COVID-19, these 
changes negatively impacted quality and timeliness of mail 
delivery. Some areas were hit harder than others.
    The pandemic impacted the Postal Service in other ways. The 
2020 primaries and general election saw record numbers of 
people voting by mail. In addition to our planned election mail 
readiness work, we devoted significant resources to monitoring 
how mail-in ballots were processed.
    In the weeks leading up to November 3, we sent 500 OIG 
employees to over 2,000 postal facilities nationwide. Our 
fieldwork is now complete and, generally, the Postal Service 
effectively prioritized and delivered ballots during the 
election season.
    We will soon release our work on service performance during 
the general election and the subsequent runoffs.
    After the election and throughout the peak holiday mailing 
season, service performance was severely challenged. While 
there are signs of improvement, concerns about service 
performance remain. We are currently focused on broad service 
issues as well as specific areas where concerns have been 
raised.
    In response to a request from members of this committee and 
others, we are looking at service performance in a number of 
low-performing districts including Atlanta, Georgia, 
Charleston, South Carolina, and Detroit, Michigan.
    In addition, we are evaluating recent embargoes where the 
Postal Service stopped accepting mail at certain overwhelmed 
facilities. We are currently finalizing a project specifically 
focused on the Cleveland, Ohio, plant, where commercial drivers 
experienced excessive wait times.
    Finally, we are studying the development of service 
performance targets and measurements and looking broadly at 
reasons why they are challenging for the Postal Service to 
meet.
    Any discussion about service must be put in the context of 
the Postal Service's difficult financial condition. The 
combination of declining first class mail volume and revenue, 
an ever growing number of delivery points, and large 
retirement-related payments has resulted in the Postal Service 
reporting a net loss annually for almost 15 years.
    While there are no easy answers, there are potential 
reforms that can help move toward financial solvency. Our work 
supports various measures that could reduce the unfunded 
retirement liabilities including Medicare integration, 
alternative assessment strategies, and addressing the 
prefunding requirement.
    We also identified a more equitable way to distribute the 
responsibility for CSRS-covered postal employees whose career 
spanned both the Post Office department and the Postal Service.
    Another way to address the financial problems is exploring 
opportunities for new revenue. The Postal Service has 
historically played an important role in supporting and 
expanding the country's infrastructure, from building roads to 
developing the zip code system to providing nonpostal 
government services.
    We believe there are opportunities to provide additional 
services that align with this historical role. For example, it 
could partner with internet providers to improve broadband 
connectivity, utilize its vast network to improve access to 
government services, or provide nonbank financial services.
    By leveraging its extensive reach, the Postal Service can 
both increase revenue and provide valuable services to the 
American public.
    Thank you for the opportunity to discuss our work. I am 
happy to answer any questions.
    Chairwoman Maloney. Thank you.
    And, Mr. Dimondstein, you are now recognized for your 
testimony.

   STATEMENT OF MARK DIMONDSTEIN, PRESIDENT, AMERICAN POSTAL 
                     WORKERS UNION, AFL-CIO

    Mr. Dimondstein. Thank you, Madam Chairwoman Maloney, 
Ranking Member Comer, and committee members. I welcome this 
opportunity to testify.
    I am the president of the American Postal Workers Union, 
representing 200,000 of the 630,000 postal workers who proudly 
accept, process, sort, transport, and deliver mail to 161 
million addresses a day.
    Over the years, we have worked closely with the other three 
postal unions, all equally dedicated to the postal mission of 
providing universal service at affordable rates, and working 
with Congress to build consensus on legislation.
    The pandemic has underscored the vital role of the Postal 
Service enshrined in the Constitution and overwhelmingly 
supported by the public. Our mission to bind the Nation 
together is carried out by moving critical information, 
necessary goods, lifesaving medicine, and on a nonpartisan 
basis, providing voters access to the ballot box.
    Like other front line workers, postal workers have been 
nothing short of courageous in these dangerous and stressful 
times. The last year has brought a new appreciation for the 
Postal Service and also exposed the need to address its long-
term stability.
    The system is suffering under the strains of the pandemic, 
decades of understaffing and under investment, and, at times, 
misguided policies. Service has fallen to unprecedented and 
unacceptable lows.
    This committee, we believe, can help right the ship, and we 
propose the following legislative pillars.
    First, repeal the unprecedented and draconian 2006 mandate 
to prefund retiree health benefits decades in advance. This 
mandate accounts for over 84 percent of reported postal losses 
since the passage of the Postal Accountability Enhancement Act.
    We were encouraged by the strong bipartisan support for 
prefunding repeal in the last Congress and look forward to its 
swift passage.
    Second, the $45 billion currently in the postal Retiree 
Health Benefit Fund is invested solely in low yield Treasury 
bonds and is being far outpaced by rising medical costs.
    The Postal Service is forced to make up the difference of 
billions in lost growth and revenue. We suggest a minimum of 50 
percent invested in well proven TSP life funds with strong 
oversight.
    Third, and only as a companion to the first two pillars, 
integrate on a prospective basis future postal retirees into 
the Medicare system, thereby reducing the Postal Service's cost 
and, in many cases, the employees' cost.
    It will have to be carefully designed as a postal plan 
under the Federal employee health benefit umbrella to ensure 
that the health benefits retirees have earned through their 
dedicated service are not sacrificed, and appropriate 
exceptions need to be crafted.
    These proposals have all earned to one degree or another 
bipartisan support in the past and should form the foundation 
of new legislation. There is also no question that your 
oversight and legislative efforts are needed to address the 
current chaos of mail delays.
    The goal should be to improve the service, not reduce the 
standards. In fact, we support a restoration of the July 2012 
service standards. And this is certainly no time to shutter or 
further consolidate mail processing facilities and undermine 
the network.
    The law requires the people deserve and postal workers are 
committed to providing the, quote, ``prompt, reliable, and 
efficient services under the Postal Reorganization Act.''
    Furthermore, our experience of the last year calls for 
bolder action as well, in our view. The bipartisan Board of 
Governors called for $25 billion In emergency COVID relief last 
spring. This body twice passed such a provision.
    The December relief package included $10 billion as a down 
payment. Emerging COVID legislation should include the 
additional $15 billion to help stabilize the Postal Service 
during this crisis.
    We also urge Congress to pass an additional $25 billion of 
what is called a modernization grant, also requested on a 
bipartisan and unanimous basis by the Postal Board of 
Governors.
    This proposal was passed by the House in the last Congress 
as part of H.R. 2. This order would allow the Postal Service to 
upgrade its fleet and facilities, and expand and enhance Postal 
Services.
    Postal Service is a national treasure and trusted 
cornerstone of our country. The American Postal Workers Union 
looks forward to working with this committee on a nonpartisan 
and bipartisan basis to ensure the long-term sustainability of 
the people's Postal Service.
    And I welcome any questions. Thank you, Madam Chairperson.
    Chairwoman Maloney. Thank you.
    Mr. Quadracci, you are now recognized for your testimony.

  STATEMENT OF JOEL QUADRACCI, CHAIRMAN, PRESIDENT, AND CHIEF 
                EXECUTIVE OFFICER, QUAD/GRAPHICS

    Mr. Quadracci. Good morning, Madam Chairwoman, Ranking 
Member Comer, and distinguished members of the committee. Thank 
you for your leadership in pursuing bipartisan postal reform 
legislation and for holding this hearing.
    If ever the country needed a reminder of just how important 
USPS is to our way of life, we got it in 2020. We all relied on 
the Postal Service to deliver groceries, medications, online 
purchases, and other basic goods, which have sustained the 
economy throughout the pandemic.
    We are grateful to the postal workers bravely serving on 
the front lines, and now is the time to support those workers 
by enacting meaningful postal reform legislation, and we are so 
pleased to support the chairwoman's discussion draft.
    I have the good fortune to lead an outstanding company in a 
critical industry. At Quad each year, over 8 billion pieces of 
mail originates from one of our plants. This accounts for just 
over 12 percent of the overall marketing mail in the country. 
It means that our industry and the USPS are intrinsically 
linked.
    I am also here on behalf of the Coalition for a 21st 
Century Postal Service. With mailers and shippers of every kind 
in members of our supply chain, C-21 represents a broad cross-
section of an industry that in 2019, in partnership with the 
USPS, generated $1.6 trillion in sales and employed 7.3 million 
workers.
    Given the accommodation of service and pricing 
circumstances over the past year, our coalition and the 
industry as a whole are alarmed and question the continued 
ability of the Postal Service to provide affordable universal 
service.
    We firmly believe that raising prices and/or reducing 
service will only exacerbate the problem of retaining volume. 
The Postal Service stands on the precipice of another step down 
in its volumes and revenues.
    The combination of crushing mail rate increases authorized 
by the PRC and the recent chaos in delivery has shaken the 
confidence of the industry in the postal system.
    Postage is now more than 60 percent of the cost of mailing 
a piece, and with the PRC proposed rate increases that number 
will jump to nearly 70 percent or more, disproportionately 
impacting mail decisions every day.
    Quad turns 50 this year, and while many aspects of being a 
printer have changed, one remains the same. Serving our 
customers is paramount. The same holds true for the USPS.
    Mailing in the digital world requires that all aspects of 
the effort work together, as now more than ever we live in a 
real-time world and service delays hurt. USPS is a vital 
partner serving the American public, and missing delivery and 
in-home dates reduces or even eliminates the value of the 
catalog from our favorite store, the greeting card from 
Grandma, your hometown newspaper, the magazine you have been 
waiting for, and we all know how frustrated we get when our e-
commerce deliveries are delayed.
    Missed deadlines erode the confidence in the mail and the 
volume declines. The chairwoman's discussion draft is an 
important step forward that our coalition supports 
wholeheartedly.
    But we believe more is necessary. First, the unsustainable 
rate increases authorized by the PRC, which will equal three or 
four times inflation, must be avoided. We recommend that the 
committee direct the PRC to conduct a second time-limited 
review in order to recalculate rates based on the events of 
2020, the impact of the bill and other postal developments, 
none of which are considered in this initial review.
    Second, if at least some of the USPS retirement assets were 
invested in instruments outside of government, the expected 
high-yield returns would net the USPS billions of dollars. The 
thrift savings plan in which most Federal retirements funds are 
safely invested is one of those options.
    Third, the time has come to codify the mandate for delivery 
six days per week and combine it with a directive that the 
postal network remain an integrated whole. We also want to 
bring your attention to overcharges imposed on the Postal 
Service for the Civil Service Retirement System, which total 
anywhere from $50 billion to $111 billion. They should be 
returned to the USPS.
    The Postal Service is at a tipping point. The impacts of 
COVID are exacerbating its financial situation. Maintaining its 
self-funded status is critical to the American public.
    If business mailers, which generate 90 percent of USPS 
revenue, are priced over the mail, taxpayers will be forced to 
pay the costs. The USPS can have its deficit closed, remain 
self-funded, and a valuable partner by enacting the common 
sense reforms proposed in the chairwoman's bill, along with the 
additional reforms I have laid out for you.
    But we must act now. Thank you.
    Chairwoman Maloney. Thank you, and, Mr. Quadracci, you are 
breaking up a little bit. We are going to have the staff 
contact you and try to correct it for the questioning period.
    Mr. Quadracci. Thank you. My apologies.
    Chairwoman Maloney. OK. Thank you.
    And, Dr. Kosar, you are now recognized for your testimony. 
Dr. Kosar?

STATEMENT OF KEVIN KOSAR, RESIDENT SCHOLAR, AMERICAN ENTERPRISE 
                           INSTITUTE

    Mr. Kosar. Thank you, Chairperson Maloney. Am I coming 
through clearly?
    Chairwoman Maloney. You are breaking up a little bit, too.
    Mr. Kosar. Oh. All right. I will do my best.
    Chairperson Maloney, Ranking Member Comer, thank you for 
inviting me to testify, and thank you for devoting your 
valuable time and energy to this critical issue.
    As many of you know, I have been studying the Postal 
Service a long time. I was a nonpartisan analyst at the 
congressional Research Service from 2003 to 2014, and I worked 
with this committee a lot over that period.
    In subsequent years, I have continued to work on Postal 
Service challenges. I thank you for having me back to the 
committee. This is very, very important stuff.
    With time limited and so much for the committee to discuss, 
I am going to limit my comments to the issue of the Postal 
Service's troubled business model.
    As last year demonstrated, the USPS is an essential public 
service. Americans trapped at home relied on it to deliver both 
parcels and absentee ballots, and this is to say nothing of the 
billions and billions of other pieces of mail the Postal 
Service delivered, everything from catalogs to jury summons to 
prescription drugs.
    Americans think quite highly of the agency. In the middle 
of 2020, Gallup found the Postal Service was the Nation's most 
popular Federal agency, and this is not surprising.
    A big reason the public likes the Postal Service is the 
model. It is a self-funding government agency. This model means 
that the public pays no taxes to support the Postal Service, 
and everyone in America receives mail free of charge.
    Now, the Postal Service's self-funding model worked pretty 
well from 1970 to around 2007 because mail volume grew every 
year. But in 2007, then Postmaster General John Potter came to 
Congress and said, ``Our business model is broken.''
    He noted that the Postal Service's revenues were not going 
to increase enough to cover the agency's growing operating 
costs. What PMG Potter could not have known was that the very 
next year mail volume would plunge with the onset of the Great 
Recession, and since 2008, mail volume declined almost 40 
percent.
    Last year in 2020, the Postal Service's revenues were $73 
billion, which is actually a little less than the agency's 
revenues were in 2008. But last year, it is operating for $5 
billion higher than they were in 2008.
    And I should note those figures exclude the cost related to 
the Retiree Health Benefits Fund prefunding. If we threw those 
RHBF costs in the losses would be worse.
    In 2020, the Postal Service lost $4.4 billion dollars. If 
you put in the retiree health benefits costs, it would be more 
than $9 billion.
    So, a critical question I hope Congress grapples with is 
what reforms are needed so that the agency's costs and revenues 
can be made to better align? Or put more bluntly, how can we 
make the Postal Service's self-funding model work in the 21st 
century?
    Speaking to the revenue side, the Postal Service was set up 
in Congress to do paper mail. This main line of business is 
atrophying and there is little reason to believe that paper 
mail volumes are going to start growing again.
    So, you might ask, what about parcels? There, the picture 
is unclear. Postal Service's parcel revenues have tripled since 
2010. It is far from clear if parcel revenues will continue to 
increase. Once COVID-19 passes, presumably some Americans will 
shift some of their purchases from online to going back in 
person to stores.
    I should also mention the Postal Service regularly warns in 
its financial statements that most of the parcels it delivers 
come from a few big companies and those companies are building 
out their own delivery networks, which creates the alarming 
possibility of parcel volume and revenue decreasing for the 
Postal Service.
    This is a really tough situation and I think Congress needs 
from the Postal Service an estimate of what revenues likely are 
going to be over the next five years.
    And then Congress should probably have the Postal 
Regulatory Commission, the Inspector General, and mailing and 
shipping companies all get together and look these figures over 
and provide feedback to Congress.
    Then there is the cost side. Last year, the Postal 
Service's costs actually went up to an all-time high and only 
about $700 million of that has been attributed to COVID-19. As 
my testimony notes, the Postal Service had some success in cost 
control over the last 10 years. But it is an uphill battle.
    As former PMG Potter alluded to, there are natural upward 
pressures on the Postal Service's costs. The delivery network 
is ever expanding. More Americans make for more delivery 
points. And collective bargaining also produces upward 
pressures on costs. Healthcare costs for postal workers at all 
Americans tend to trend upward, et cetera.
    So, I think Congress should consider a variety of means to 
empower and encourage the Postal Service to better control its 
costs so they can be better aligned with revenues.
    With that I will conclude my remarks, and I would be happy 
to respond to any of your questions. Thank you.
    Chairwoman Maloney. Thank you. I understand we are having 
some connection problems. So, we are going to take a very brief 
break for five minutes to see if we can get them corrected.
    Some of our witnesses are breaking up and the delivery 
really from members in this room is breaking up, too. So, we 
will be very brief. Five minutes of brief recess to try to 
correct this.
    [Recess.]
    Chairwoman Maloney. Thank you. I think we have improved it 
so we can communicate better. Thank you, and the chair now 
recognizes herself for five minutes for questions.
    I would like to ask about one of the critical provisions in 
our draft bill, the integration of postal retirees into 
Medicare and get our witnesses' view.
    Postmaster General, why don't we start with you? Right now, 
postal employees pay into the Medicare program. Is that 
correct?
    Mr. DeJoy. Yes, ma'am.
    Chairwoman Maloney. My understanding is that they have 
already paid in about $35 billion since 1983. Is that correct?
    Mr. DeJoy. That is correct.
    Chairwoman Maloney. But not all retirees are enrolled. 
Based on our information, about 73 percent of retirees are 
enrolled but the other 27 percent are not. Is that correct?
    Mr. DeJoy. That is correct.
    Chairwoman Maloney. The provision in our draft bill would 
require current employees to enroll in Medicare when they reach 
65 and retirees who are already over 65 would be able--would be 
given a three-month period to enroll with no penalty.
    Postmaster DeJoy, do you support Medicare integration?
    Mr. DeJoy. Yes, Madam Chair. We support that Medicare 
integration as you described it.
    Chairwoman Maloney. Thank you. Not only will Medicare 
integration reduce copays and other medical costs for retirees, 
but the Congressional Budget Office reports that it will save 
the Postal Service nearly $10 billion over 10 years.
    Is that correct, Mr. DeJoy?
    Mr. DeJoy. I believe it is a little more than that, ma'am. 
The Medicare integration projections that we have are at least 
$30 billion over 10 years.
    Chairwoman Maloney. Thirty billion?
    Mr. DeJoy. Mm-hmm.
    Chairwoman Maloney. Well, we need to get the right number. 
So, we will work with you on that. Thank you.
    Let me go down the list of the witnesses. Mr. Bloom, you 
are the chair of the Postal Service Board of Governors. Do you 
support Medicare integration?
    Mr. Bloom. Yes, Madam Chair. We do.
    Chairwoman Maloney. Mr. Dimondstein, as the representative 
of postal workers, APWU also supports Medicare integration. Is 
that correct?
    Mr. Dimondstein. Madam Chair, we certainly do as part of a 
comprehensive package. So yes, we do. We think it would be good 
for workers, good for the Postal Service, and good for the 
future.
    But it has to be crafted carefully and we are happy to work 
with you and the committee on that. But yes, we are in support 
as part of comprehensive postal reform and the pillars I 
testified about.
    Chairwoman Maloney. Thank you.
    Mr. Quadracci, as an industry stakeholder, do you support 
Medicare integration?
    Mr. Quadracci. We absolutely do. It is common sense and it 
should be done.
    Chairwoman Maloney. And, Ms. Whitcomb, as inspector 
general, I know you don't typically take positions on policy 
proposals. But would you agree that this would significantly 
help the Postal Service's financial picture long term?
    Ms. Whitcomb. Yes. Our work supports the fact that this 
would be very beneficial to the Postal Service's financial 
situation.
    Chairwoman Maloney. Dr. Kosar, would you agree that 
Medicare integration would help the Postal Service's financial 
picture?
    Mr. Kosar. It is not something I have looked at closely, 
but I get the impression it will. One thing where I could use 
some more clarity is whether in the course of doing it, it 
creates any sort of negative spillovers upon the financial 
health of Medicare itself or on the Federal Employees Health 
Benefits Program.
    Chairwoman Maloney. Thank you.
    This is important because the Government Accountability 
Office reports that without reforms like Medicare integration, 
the Postal Service Retiree Health Benefit Fund could become 
insolvent by 2030, and it appears that we have widespread 
support for this provision among the Postal Service, the 
workers, the industry, and stakeholders.
    I believe we should go forward with this provision when we 
introduce this bill and mark it up at our business meeting, and 
I hope there is significant bipartisan support for it.
    I now yield to the distinguished gentleman from Kentucky, 
Mr. Comer, is recognized for his questioning.
    Mr. Comer. Thank you, Madam Chair.
    Postmaster DeJoy, you have seen the provisions in the draft 
bill, mainly, the Medicare integration and prefunding ones. If 
we pass just that, just that part, does that put the Postal 
Service back in good financial state over the long term?
    Mr. DeJoy. No, it does not, sir. We look at this bill, the 
components of this bill for Medicare integration and 
elimination of the prefunding benefit about totaling somewhere 
between $40 billion and $50 billion, and we are projecting $160 
billion loss over the same period the next 10 years.
    So, in our plan, it is a part of our solution and it is 
necessary, and we have experienced, you know, unfair treatment 
in this. But it doesn't solve the problem.
    Mr. Comer. Do all the provisions in the bill do anything to 
address your changing business environment, namely, the 
decrease in mail and increase in packages?
    Mr. DeJoy. No. No. Those are--but these--there are self-
help plans that we have, you know, moving forward, that will 
help address that, and in fact, our strategy, when released, 
will--combined with this legislation should bring us to nearly 
break even. It is a break even plan over the next 10 years.
    Mr. Comer. So, you believe that your plan will be enough to 
provide the structural reform necessary to fix the Postal 
Service?
    Mr. DeJoy. I think absent this legislation that the chair 
proposes there is no path to totally eliminating our loss. But 
in combination with this and other action--other good 
strategies for the American people and for the Postal Service, 
we see a path forward to sustainability and good service.
    Mr. Comer. What happened the last time you tried to 
implement some reforms?
    Mr. DeJoy. Well, you know, I think the word ``reforms'' is 
exaggerated and what I am--what I am accredited with doing is 
also, you know, not accurate.
    But a simple thing that I did engage in was setting--you 
know, we had an organization with a COO and seven, eight area 
vice presidents and an OIG report that said our trucks weren't 
running on time and we were running extra trips, and it was 
substantially costly and deteriorating service.
    And I asked them to go--to make--you know, put a plan 
together to do what I felt was a pretty simple task in most 
other places. After about three weeks, they came back with a 
plan that guided to run--you know, run transportation on time 
and it really had, you know, a negative impact on service for 
about two or three weeks when we began to recover.
    It should have been something that we were--would be able 
to resolve within a couple of days. But it took us longer but, 
in fact, recover prior to--you know, prior to within about a 
month we had gotten back.
    All the other things on closing boxes--collection boxes, 
reducing overtime never happened, from my standpoint. Those 
were internal--it may have been through a meeting where they 
briefed me on something, but I was there for three weeks. It 
was an--it was an operations team that did it.
    In fact, overtime since I have been there is through the 
roof, much more than it has ever been, you know, in the Postal 
Service.
    Mr. Comer. Right. Well, I appreciate the reform efforts and 
look forward to looking more into your reform and working with 
you.
    Mr. DeJoy. If I can just add, the plan that we are talking 
about now has been eight months of work with an extensive part 
of management team, with dedicated long-term postal employees, 
with very, very sensitive--great sensitivity to their service, 
their historical service to the American people.
    This is a balanced plan when it comes forward. Together 
with the chair's legislation, we should be able to, you know, 
have a sustainable Postal Service.
    Mr. Comer. Right. Look forward to that.
    My next question is for Chairman Bloom. Do you support 
Postmaster DeJoy's plan?
    Mr. Bloom. The plan hasn't been finalized. But the Board of 
Governors has been involved with the Postmaster General as the 
plan has been developed. Yes.
    Mr. Comer. Well, Madam Chair, I will conclude with that. It 
is important to note that Chairman Bloom is working closely 
with Postmaster DeJoy. Chairman Bloom is a Democrat, former 
Obama Administration person, and I think that that is what it 
is going to take to reform the Postal Service.
    Real reforms, tough decisions. And it is going to have to 
be done in a bipartisan way, and I look forward, Madam Chair, 
to working with you to see that that happens.
    So, I yield back the balance of my time.
    Chairwoman Maloney. Thank you.
    The gentlewoman from the District of Columbia, Ms. Norton, 
is recognized for five minutes.
    Ms. Norton. Thank you very much, Madam Chair.
    And I really appreciate this hearing because we have been 
talking about the prefunding mandate ever since I have been a 
Member of Congress, and perhaps we can do something about it 
now, Mr. DeJoy.
    Only this agency requires full prefunding of health care 
for future retirees. Only the Postal Service, and this 
prefunding has to be in advance for 75 years. That is a lot of 
money, particularly for an agency which is succumbing to new 
technology. Employees even many years away from retirement, we 
are required to prefund it--to prefund.
    Now, the idea was, of course, responsible to ensure the 
availability of future health benefits for retirees.
    Postal--Postmaster DeJoy, how much money is currently saved 
in the Retiree Health Benefits Fund?
    Mr. DeJoy. I think the original combination of the postal 
contributions and the transition is somewhere around $40 
billion to $45 billion.
    Ms. Norton. Consider that amount of numbers. If other 
Federal agencies were required to prefund the cost of retirees' 
health care coverage.
    Or let me ask you, do you know of any other agency required 
to prefund in this way or is the Postal Service alone?
    Mr. DeJoy. I am not an expert on any other agency. But from 
the standpoint of the comparisons that I received, no, I don't 
think I know of any that does.
    Ms. Norton. Well, let me ask Mr. Quadracci about private 
sector firms. Are they required to prefund the cost of retiree 
health coverage--health care coverage?
    Mr. Quadracci. I don't know anybody who does and I think, 
in fact, if we had to, I am not sure my business would be here 
today.
    Ms. Norton. I understand that.
    And finally, the Federal Government understood it couldn't 
keep refunding and so in 2006 the Postal Service or since that 
time has simply refused to prefund $35 billion, I think, 
outstanding.
    And I think it is fair to say that there is no expectation 
that this money will be repaid. In fact, the Congressional 
Budget Office, when I cite an authoritative reference, does not 
even score any longer the elimination of the prefunding mandate 
because it does not believe that these unpaid funds will ever 
be repaid.
    Chairman Bloom, does the board support eliminating the 
prefunding mandate?
    Mr. Bloom. We do, Congresswoman.
    Ms. Norton. President Dimondstein, your statement 
supporting Chairman DeFazio's bipartisan legislation to 
eliminate prefunding mandate that was included in this 
discussion draft, as you stated, this legislation is a 
necessary step to solving the disastrous prefunding mandate 
that is dragging down the Postal Service.
    Do you stand by that statement here today?
    Mr. Dimondstein. Absolutely. It is unfair. It is draconian. 
It is unprecedented, and it really has choked the Postal 
Service from needed investment and moneys over the years. So, 
we absolutely stand by a repeal of the unfair prefunding 
mandate.
    Ms. Norton. Finally, how would eliminating the prefunding 
mandate help your members?
    Mr. Dimondstein. The eliminating of the prefunding mandate 
would--No. 1, it would take a lot of financial pressure off of 
the Postal Service, and anytime there is undue and unnecessary 
financial pressure we cannot carry out our mission as 
effectively as postal workers believe in and are dedicated to.
    And so it would, certainly, enable the workers to provide 
better benefits and it would certainly enable the workers, 
going forward, to be more secure in their jobs, to be more 
secure in their mission.
    And I don't know any postal worker that doesn't think that 
it is the right thing to do away with this prefunding mandate. 
It will make our jobs easier and it would improve the service 
to the people of this country, and that is what we are about.
    Ms. Norton. Madam Chair, I think it is unanimous from all 
parties that prefunding should be eliminated. I certainly hope 
we do so in this Congress.
    Thank you very much, and I yield back.
    Chairwoman Maloney. The gentleman from Georgia, Mr. Hice, 
is now recognized for five minutes.
    Mr. Hice. Thank you, Madam Chairwoman.
    Chairman Bloom, let me begin with you, and I don't want you 
to take offense at this first question. It is just a matter of 
fact that the ranking member brought it up.
    But which political party do you affiliate with?
    Mr. Bloom. I am a registered Democrat.
    Mr. Hice. OK. So, from that perspective, let me just ask 
you, last year did you believe that Postmaster DeJoy was trying 
to sway the election against your party's nominee?
    Mr. Bloom. No.
    Mr. Hice. So, do you believe that or did you believe that 
he was somehow removing the blue boxes for the purpose of 
preventing people from mailing in ballots?
    Mr. Bloom. No.
    Mr. Hice. Did you believe that he was trying to remove the 
mail sorting machines for the purpose of slowing down election 
mail?
    Mr. Bloom. No.
    Mr. Hice. OK, thank you.
    Let me go--Inspector General, let me ask you along the 
similar line of thought. Did your office, the Inspector 
General's Office, find any sign whatsoever, any evidence of a 
plan by Postmaster General DeJoy to hinder vote by mail?
    Ms. Whitcomb. No, we did not.
    Mr. Hice. All right. Did the Postal Service perform--well, 
let me ask you this. Did you look into how well they performed 
when it came to delivering election mail?
    Ms. Whitcomb. Yes. We have wrapped up that work. Our work 
has not--a report has not yet been released, but generally 
found that that the Postal Service prioritized ballots 
effectively during the election.
    Mr. Hice. OK. Well, then let me go to the Postmaster 
General himself. How was the performance in delivering election 
mail?
    Mr. DeJoy. Very proud of the performance of the 640,000 men 
and women of the Postal Service, and they--we did the usual 
thing that we do every election, performed extraordinary 
measures.
    We delivered 99.7 percent--we have a report out that is on 
our website--99.7 percent of ballots within two days. Some 
very, very, extremely high numbers. I have it written down 
someplace here.
    But everything was in the 99 percent. Ballots to election--
from voters to election boards were 1.7 days, the average time 
across 135 million ballots.
    Mr. Hice. Well, and I know that is specific to election 
mail. We have issues with first class and other types of mail. 
But you can't improve a great deal on those kind of statistics 
when it comes to election mail.
    So, let me come back to you again, Chairman Bloom. Just 
again, in your opinion, where the attacks last year against 
Postmaster General DeJoy warranted?
    Mr. Bloom. Congressman, I would say that they weren't. I 
will say, in my humble opinion, that the politicization of the 
Postal Service was a bipartisan affair. But on your question, I 
think those particular attacks were not fair.
    Mr. Hice. OK. Well, thank you for your honest answers. And 
quite frankly, it is with that spirit that I believe the 
potential of bipartisan solutions is within reach.
    We have got to get away from the attacks and allegations 
that are unfounded, and I am pleased to hear that you, as a 
admitted Democrat, understand that the allegations against Mr. 
DeJoy were unwarranted, and I appreciate that.
    And so it is my hopes, Madam Chairwoman, that we will be 
able to proceed in getting some genuine solutions as we move 
forward here, and the allegations that came forth from many in 
this committee, that he was attempting to alter, co-op, the 
elections. If those were true allegations, he miserably failed.
    There was a record-setting 135 million mail-in ballots with 
almost perfect delivery with those. And so I am hopeful that 
with this information cleared, we will be able to move forward 
in a bipartisan manner.
    I thank the Madam Chair, and I yield back.
    Chairwoman Maloney. Thank you for your bipartisan comments.
    And now to the gentleman from Massachusetts, Mr. Lynch, is 
recognized for five minutes.
    Mr. Lynch. Thank you very much, Madam Chair.
    Let me followup on the gentleman from Georgia's questions 
then. To the two previous witnesses, would you say with the 
near--excuse me, let me quote the gentleman from Georgia--the 
almost perfect delivery of ballots in the previous election, 
given that fact, would you say that it was unconscionable that 
someone would dispute and vote to undo the results of that 
almost perfect delivery of ballots in the previous election?
    To either of the two previous witnesses. Let me--let me 
just recount the facts. The gentleman from Georgia voted to 
undo the elections in two separate states, and so he has just 
spent about five minutes reminding us, in his own words, that 
the delivery of ballots was almost perfect by the United States 
Postal Service in that election that he voted to undo.
    So, I am asking you whether you--the evidence that you have 
supports that.
    Anytime now. OK. Reclaiming my time. I didn't think so.
    Postmaster General, I am indeed very happy to see you here 
today and I am very pleased that in your testimony you have 
agreed that the onerous burden on the Post Office to prefund 
their retiree benefits by 75 years in advance should be 
corrected, should be eliminated, and also that you support the 
integration of Medicare, which, depending on whose estimate, 
yours or Chairwoman Maloney's, it is going to save about $10 
billion for the Post Office over the next 10 years. I am glad 
we are in agreement on that.
    Let me ask you, there was a story in the Washington Post 
that--and I need to be careful about this--it talked about your 
yet to be released strategic plan and the change in the 
delivery frequency of first class mail and that it may be 
reduced from the existing one to two days or 1.7 days, I think 
you quoted, to three to five days.
    Is that something that you are anticipating or that might 
be part of your strategic plan?
    Mr. DeJoy. As Chairman Bloom said, we are not finalized. We 
are getting very close to finalized, and we have taken eight 
months to do a diagnostic on just about every aspect of our 
operation to identify what the significant ails in our 
performance and cost are.
    And we have put together a comprehensive balanced solution 
that moves forward in service--of service standards, which have 
not been met for the last eight or nine years, and which, as 
the OIG has stated, drive significant cost and lack of process 
to do Herculean efforts to meet some of the--some of the 
considerations we have.
    Now, I have----
    Mr. Lynch. Let me just--let me reclaim my time, and I 
appreciate your answer. I do.
    Let me just say we, on this committee, have confronted this 
issue before about reducing delivery standards. You know, we 
are a little bit concerned right now with the numbers we have 
from December, the Christmas rush, where I think 38 percent--
only 38 percent of the local first class delivery was on time, 
and that is down from 91 percent in the previous year.
    So, let me--let me just say this.
    Mr. DeJoy. I would just say--I would say that is not 
accurate information.
    Mr. Lynch. Well, that is the information we have from the 
Post Office. So, that is all I got to work with.
    All I got to say is this. If the business plan for the Post 
Office is to deliver an inferior product, and we are in 
competition with FedEx and UPS and Amazon, that spells trouble. 
That leads me to believe that we would be going into a downward 
spiral.
    The solution can't be to not deliver the mail or to deliver 
it three to five days. You know, instead of next day delivery, 
when we can get around to it delivery. That won't work. Just 
like, you know, going to five days did not work because that is 
not what the customer wanted.
    You know, the customer wants seven days delivery, not five 
days, and thankfully, my colleagues on the other side of the 
aisle finally agreed with that and dropped their proposal.
    So, for what it is worth, that is my sense of it. I thank 
you again for your willingness to attend the committee and I 
yield back the balance of my time.
    Chairwoman Maloney. Thank you.
    The gentlewoman from North Carolina, Ms. Foxx, is 
recognized for five minutes.
    Ms. Foxx. Thank you, Madam Chair, for holding this hearing.
    All of us are affected by the Post Office. All of us use 
the Post Office. All of us want the Post Office to be 
efficient. I want the Post Office to be self-funded as it was 
planned to be many, many years ago. I use the Post Office a 
lot. The local folks in my area are great and I enjoy talking 
with them.
    And I want to thank our witnesses for being here today. Mr. 
Dimondstein, I have a question of you. My understanding is you 
represent 200,000 of the 600,000, postal union workers. I want 
to ask you how your union and the others are going to help 
assure the success of the Postal Service operational reform 
efforts that the Board of Governors and the Postmaster General 
have jointly designed.
    And I don't want you to mention more money. What are you 
all going to do better than you have done before? Because you 
have a real self-interest in this issue.
    Mr. Dimondstein. Well, better than we have done before. I 
think the postal workers do a great job and I think the postal 
workers--and we have seen that in a pandemic, underscored in 
these stressful and dangerous times.
    The postal workers themselves and the unions that represent 
them actually have done a lot to try to deal with the staffing 
issues, to try to deal with the overtime issues, and, in fact, 
have addressed questions of pay rates and benefits in a way 
before my time, I should say. But----
    Ms. Foxx. But my understanding is that benefits are 
climbing as mail volume is decreasing----
    Mr. Dimondstein. Well----
    Ms. Foxx [continuing]. Even though there may be a very 
slight decline in employees. So, the number of employees is not 
going down commensurate with the mail volume going down. But 
your benefits are going up.
    Mr. Dimondstein. Our benefits--look, we--obviously, the 
union believes that all workers should have decent living wages 
and good benefits. The unions have given up a lot of wages and 
including some of our benefits structure over time.
    Ms. Foxx. Name an example, one specific example.
    Mr. Dimondstein. OK. In 2011, the Postal Board of Governors 
chair testified before Congress that the American Postal 
Workers Union gave up $4 billion of wages and benefits in that 
one contract for the life of the contract, and that keeps 
giving, going forward.
    We have increased the contribution, unfortunately, from our 
point of view, but the contribution that workers pay for their 
health care premiums have tremendously increased to the 
detriment of the worker, all for----
    Ms. Foxx. But, Mr. Dimondstein----
    Mr. Dimondstein. That is an example.
    Ms. Foxx [continuing]. Don't most people in the private 
sector pay some on their health care benefits? I think most 
people in the private sector do pay for their health care 
benefits.
    Mr. Dimondstein. But I am--again, I don't want to argue. I 
am sure you are aware that postal workers paid 28 percent of 
their premiums for a family health plan. That is over $6,000 a 
year that the postal worker pays out of their pocket. It is 
over----
    Ms. Foxx. OK. What--do you want the Post Office to be self-
funded? Do you want to be self-funded, self-sufficient, and not 
have to keep coming back to Congress to ask for money?
    Mr. Dimondstein. I don't know anytime outside of the COVID, 
in my history as the president and a union activist before 
that--I know of none--no time outside of the COVID emergency 
relief that taxpayer dollars since the--since it changed under 
the law in 1970 that taxpayer dollars have been used to going 
to the Postal Service nor has the Post Office, as far as I 
know, come before this body seeking money. I am not sure where 
all this bailout idea comes from when it is the opposite.
    Ms. Foxx. OK. Should the Postal Service give incentives for 
the retirement of older employees and hire new employees?
    Mr. Dimondstein. That is a decision that management makes. 
If you are if you are asking about early outs, Congresswoman, 
while there has been history at times----
    Ms. Foxx. Just yes or no. Just yes or no.
    Mr. Dimondstein. The question is--that is a Postal Service 
decision. Yes.
    Ms. Foxx. OK. Thank you.
    Mr. Dimondstein. Sure.
    Ms. Foxx. OK. IG Whitcomb, I have a question. According to 
CBO, the Medicare trust fund will run out of money as early as 
2023. Integrating postal retirees will expedite the collapse of 
the Medicare program. What happens to postal retirees then?
    Ms. Whitcomb. That is--if the Medicare trust fund runs out 
of money, is that what you are asking?
    Ms. Foxx. Yes, and the employees are put into Medicare as 
opposed to their own health care fund.
    Ms. Whitcomb. Yes. I am sure that is a bigger challenge 
than the postal employees. But it is not work that we have done 
at this point.
    Ms. Foxx. But that is the--they want to get into the 
Medicare plan, knowing that it is going to run into trouble 
before your own medical plan is going to run into trouble. So, 
what does that say about the approach to this?
    Ms. Whitcomb. Again, that is something that is a bigger 
challenge than the Postal Service and not one that our work 
addresses or that I am prepared to address. But we can get back 
to you if you are interested in us doing some work in that 
area.
    Chairwoman Maloney. The gentlewoman's time has expired.
    Ms. Foxx. Thank you. Madam Chair, one more quick question. 
Not a question. I have some material I would like to enter into 
the record with----
    Chairwoman Maloney. Without objection.
    Chairwoman Maloney. Thank you.
    Ms. Foxx. Thank you.
    Chairwoman Maloney. The gentleman from Tennessee, Mr. 
Cooper, is recognized for five minutes.
    Mr. Cooper. Thank you, Madam Chair.
    Many of our colleagues have mentioned the goal of self-
funding for the Post Office, and it is a worthy goal.
    But, Mr. DeJoy, it is not a goal that you pursued in your 
private sector companies, right, self-funding of health 
benefits over 75 years? That would have been disastrous for 
your company, right?
    Mr. DeJoy. Well, we had self-funding plans, but they were 
not advanced the way--you know, actuarially for the rest of 
everybody's life. So no, we would not have had that.
    Mr. Cooper. And no other Federal agency has this 
requirement?
    Mr. DeJoy. Not that--not that I am aware of, sir.
    Mr. Cooper. So here, we are putting a burden on the Post 
Office that is extraordinary and, perhaps, fatal and this 
Congress is, hopefully, going to lighten that burden.
    But this self-funding requirement, I think, has more 
implications. I think it would be better if we all agreed that 
we need to minimize the subsidies because the cost of 
delivering mail in Alaska is, clearly, higher than in a more 
urbanized state, right?
    Mr. DeJoy. It costs more to get to Alaska and that is a 
different question than----
    Mr. Cooper. But Alaska is a part of the United States, just 
as rural citizens are part of the United States, and it costs 
more to deliver the mail the last mile to those people.
    Mr. DeJoy. It does, but there is a process.
    Mr. Cooper. It is a largely unacknowledged cost because the 
price of the stamp is the same everywhere.
    Mr. DeJoy. But that is the intent of universal service, 
sir.
    Mr. Cooper. But that implies a hidden subsidy and a hidden 
tax within each stamp because some people pay more, some 
people--everybody pays the same.
    Mr. DeJoy. It implies a cost for the service as designed by 
the Congress. It is a service. You have--it is not a tax. You 
have a choice not to mail something.
    Mr. Cooper. Well, most people rely on communication, and 
the private competition that you face is much more flexible at 
varying their rates. The Post Office has a flat fee pretty much 
for everybody, even though the costs vary widely.
    Mr. DeJoy. That is, again, the design of the system. I 
think the problem is we have not been able to address that 
pricing over--for 14 years until just recently. That has been 
most of the damage that has been done to the organization.
    Mr. Cooper. But puts the Post Office at a systematic 
disadvantage, right? Because of the design of the program. It 
is flat rate postage, and it goes anywhere--Alaska, Hawaii, the 
territories. Same price.
    Mr. DeJoy. Well, we talk about market-dominant mail 
products, which we--that is what you are speaking about now, 
which we really don't have other, you know, competition in that 
area other than digital communications and our failure to 
evolve over the last 10 years.
    So, I don't really--I really don't understand what you are 
getting at.
    Mr. Cooper. Would FedEx, Amazon, UPS be doing as well if 
they didn't rely on the Post Office so heavily for last mile 
coverage?
    Mr. DeJoy. FedEx, that is a competitive product, which we 
need to get better at doing. We have operational--we have not 
evolved.
    Mr. Cooper. But they rely heavily on our last mile coverage 
because we are the only people who provide that.
    Mr. DeJoy. That is not really true. Right. FedEx actually 
doesn't do--their last mile delivery with us has been 
significantly reduced over the last year.
    Mr. Cooper. But they still rely on the Post Office to 
deliver and you have actually been making money on the increase 
in package deliveries that have been sent the Post Office 
direction, right?
    Mr. DeJoy. Package volume has been up significantly.
    Mr. Cooper. And that has been a silver lining in the cloud.
    Mr. DeJoy. Well, the cost coverage on competitive package 
volume is different than the cost coverage on mail, as the 
pricing is designed. And it is important--it is important that 
we recognize the difference in what it is you are identifying 
here, package delivery versus mail delivery, going to every 
address versus going to where we can price competitively, 
because that is a big part of the problem that we are 
attempting to solve with our new plan.
    Mr. Cooper. I think Mr. Dimondstein mentioned that $45 
billion that has been saved up for health benefits for 
employees. Now it is only invested in low-yield Treasury bonds.
    It would be interesting if that money had been invested in 
the stock of Amazon, FedEx, and UPS. Would the employees be 
doing a whole lot better today than they are now with the low-
yield Treasury bonds?
    Mr. DeJoy. Yes, sir.
    Mr. Cooper. How much better?
    Mr. DeJoy. Bazillions of dollars.
    Mr. Cooper. Bazillions of dollars. So, again----
    Mr. DeJoy. We are all familiar with the investment strategy 
of Federal Government's and Social Security investment 
strategy, as it is--that has been long debated is you give up 
risk, you know, for a price. I mean, that is a whole another 
discussion that you all have had for years.
    Mr. Cooper. Finally, Mr. DeJoy, you are a political 
appointee, a holdover. No one knows how much longer you are----
    Mr. DeJoy. That is incorrect. I am not a political 
appointee. I was selected by a bipartisan Board of Governors, 
and I would really appreciate if you would get that straight.
    Mr. Cooper. Well, how much longer are you planning to stay?
    Mr. DeJoy. A long time. Get used to me.
    Mr. Cooper. As long as the board approves your staying?
    Mr. DeJoy. That is the--as far as my commitment to see our 
plan through, I am here until I can see it tangibly produced 
the results we intended to. I believe the board is committed to 
that----
    Mr. Cooper. But that is not determined by you. It is 
determined by the board.
    Mr. DeJoy. Well, it could be determined by--I could resign, 
right?
    Chairwoman Maloney. The gentleman's time has expired. The 
gentleman's time has----
    Mr. DeJoy. I could get tired of it. I have other things I 
can do.
    Chairwoman Maloney. The gentleman's time has expired.
    Mr. Jordan from Ohio is recognized for five minutes.
    Mr. Jordan. Thank you, Madam Chair.
    Mr. DeJoy, did you have any protesters at your house last 
night?
    Mr. DeJoy. Not last night.
    Mr. Jordan. President Biden called for you to resign, Mr. 
DeJoy?
    Mr. DeJoy. No, the president has not called for me to 
resign.
    Mr. Jordan. Any member of your board called for you to 
resign?
    Mr. DeJoy. No, sir.
    Mr. Jordan. None of the Democrat and Republicans on the 
board haven't called--any of the Democrats called for it?
    Mr. DeJoy. We have--you know, it is hard to tell in our 
board meetings because we all very much act in a bipartisan 
manner focused on postal issues. But there are two gentlemen 
that--you know, the chair identified that he is a registered 
Democrat and I think there is another gentleman on the board.
    Mr. Jordan. Mr. Bloom is a Democrat, right? He supports 
you.
    Mr. DeJoy. Yes, he is a Democrat. Yes.
    Mr. Jordan. Has the chair--the chair of this committee, has 
she called for you to resign this Congress?
    Mr. DeJoy. She has not.
    Mr. Jordan. She called for you to be suspended last 
Congress. I don't think she has called for you to resign in 
this Congress, has she?
    Mr. DeJoy. We have had good conversations on a variety of--
--
    Mr. Jordan. Yes. And I know where Mr. Connolly's at and 
some of the Democrats. But, I mean, last time you were here you 
had protesters banging on pots and pans outside your house. You 
had 90 some people calling for you to resign. You were the 
worst guy on the planet last time you were here. I just want to 
know what has changed.
    Mr. DeJoy. Maybe--that is not for me to answer.
    Mr. Jordan. I mean, they were so ticked last time, Mr. 
DeJoy, they passed a bill--they called us in on a Saturday in 
August to pass a bill, and then they had a hearing on the bill 
they passed two days later. Do you remember that?
    Mr. DeJoy. So, it was an unfortunate set of circumstances 
for me, for my family, for the postal employees, for the postal 
board. None of it was based in any type of fact. It was 
sensationalization.
    But we are through--I am through that. The board is through 
that. We are just trying to get our plan--get this legislation 
passed and get on with the improvements we need----
    Mr. Jordan. They passed a bill on Saturday, August 22, a 
bill they know had no chance of becoming law, a bill that was 
not even taken up in the Senate. Then they had a hearing on the 
bill they already passed two days later. Normally, you do it 
the other way around.
    Normally, you actually have a committee get together, look 
at the legislation, debate it, discuss it, have witnesses, get 
expert testimony, all that stuff. And then you maybe pass it 
out of committee and go to the floor and do it.
    They called us in special to pass a bill on a Saturday, and 
then had a hearing on Monday and all that weekend they had 
protesters at your house, disrupting your family and, frankly, 
your neighbors as well.
    And now you are telling me you got no one on the Board of 
Governors asking you to resign, no protesters at your house. 
The president hasn't asked you to resign, the chairwoman hasn't 
asked you to resign, and I want to know what has happened.
    What is different between February 24, 2021, and August 24, 
2020? What happened in those six months? What could--what could 
explain the Democrats' difference in attitude?
    Mr. DeJoy. Mr. Congressman, I don't want to participate 
in----
    Mr. Jordan. What do you mean you don't want to--I am asking 
you a question----
    Mr. DeJoy. I believe--I believe there is----
    Mr. Jordan. Can you hazard a guess as what might have 
happened between August 24, 2020, when they passed a bill----
    Mr. DeJoy. I am--I am hoping----
    Mr. Jordan [continuing]. And then had a hearing on it? What 
may have happened between August 24th, 2020, and February 24th, 
2021? What could have happened in the interim there that would 
change the attitude of Democrats?
    Mr. DeJoy. One of two things. Either everyone is anxious to 
hear our new strategic plan or we had an election. One of the--
--
    Mr. Jordan. I am sure that is it. I am sure that is it.
    [Laughter.]
    Mr. Jordan. Still waiting for an answer. I did this to you 
when you were here last time, Mr. DeJoy. I asked you, you know, 
to comment on something. You wouldn't do it then either.
    What happened between August and February? What important 
event happened?
    Mr. DeJoy. We had an election.
    Mr. Jordan. We had an election. It was all a charade. You 
don't have to take my word for it. The Wall Street Journal 
called it a giant conspiracy theory. Called us back in.
    It was all to--it was all part of the predicate for laying 
the groundwork for the mail-in balloting and all the chaos and 
confusion the Democrats wanted, and the laws that I think they 
passed in so many states, frankly, in an unconstitutional 
fashion, it was all about politics.
    It was all about the election. Do you agree with that, Mr. 
DeJoy?
    Mr. DeJoy. It was a very sensitive time for the Nation and 
there was a lot of activity----
    Mr. Jordan. They accused you of things--that they said you 
were--you were restricting overtime. False. They told you, oh, 
you were taking the collection boxes, doing something that had 
never been done before, even though it had been done by every 
previous Postmaster General.
    Twelve thousand of them had been moved by the Obama 
Administration Postmaster General. But, oh, somehow you were 
the worst. Again, all under the guise of creating this crazy 
chaos that they wanted around the election relative to mail-in 
balloting and you were the guy they used to launch it all, to 
start it all in the summer, when everyone was calling saying 
all kinds of--you were--I mean, you were--like I said, they had 
you as the worst guy on the planet back then. And now 
everything, oh, it seems to be so much better now.
    Chairwoman Maloney. The gentleman's time has expired.
    Mr. Jordan. Thank you, Madam Chair.
    Chairwoman Maloney. The gentleman from Virginia, Mr. 
Connolly, is now recognized for five minutes.
    Mr. Connolly. Thank you, Madam Chairwoman. And all the 
gaslighting that we just heard does not change facts. Mr. 
Dimondstein, please move the mic close to your mouth. Thank 
you.
    Am I--am I making this up, as Mr. Jordan apparently would 
have you believe? That the president of the United States last 
summer, Donald J. Trump, publicly said voting by mail would 
lead to massive fraud. Did he say that or is that--am I 
imagining that, Mr. Dimondstein?
    Mr. Dimondstein. I don't think you are imagining it. What I 
recall him saying at one point is he was going to make sure 
that the Postal Service got no financial COVID emergency relief 
because then they would be able to more effectively deliver 
value----
    Mr. Connolly. Thank you. But the point is, it was Donald 
Trump, the Republican nominee, who was planting the idea, aided 
and abetted by disruptive changes proposed by a new Postmaster 
General and a compliant Board of Governors, that actually 
eroded public confidence in the ability to vote by mail. That 
wasn't a Democratic narrative. That was a Republican narrative 
by the president of the United States and his enablers.
    And oh, by the way, inconvenient fact. Mr. Hice would have 
you believe that it was partisans on this committee, and he 
quoted a number of Democrats--by the way, admitted Democrats. 
For the record, I am an admitted Democrat and damn proud of it.
    I didn't vote to overturn an election and I will not be 
lectured by people who did about partisanship. The facts are 
stubborn things. It wasn't--the idea that it was complete 
fiction, that the changes proposed by Mr.--in fact, implemented 
by Mr. DeJoy with a compliant board, led by, now, Chairman--Mr. 
Bloom, who has admitted he went along with them.
    It was a Federal judge who found it politically motivated, 
not a Democratic critic. I refer you to a Reuters story last 
September. U.S. District Judge Stanley Bastian in Yakima, 
Washington, upheld a challenge by 14 states and enjoined the 
Postmaster General to stop what he was doing, and said the 
states have demonstrated that the defendants are involved--the 
defendants being listed DeJoy and company--they are involved in 
a politically motivated attack on the efficiency of the Postal 
Service.
    That is not some partisan Democrat. That is a Federal 
judge, and that wasn't the only ruling that provided the 
injunction to stop the deliberate disruption of the Postal 
Service that was contributing to erosion of confidence in the 
ability of people to vote by mail.
    That wasn't a Democratic plot, and all of the gaslighting 
we are listening to here doesn't change the facts.
    Mr. Bloom, you have admitted that--in fact, you supported 
and do support the changes that Mr. DeJoy undertook that were 
widely criticized not just by Democrats but by actual American 
people who received the mail or didn't, by businesses, by 
stakeholders, by the media. That didn't just originate in this 
room.
    Somehow, people were bothered by it because one of the most 
sacred institutions in America that still works during the 
pandemic, warts at all, was actually being threatened in the 
public mind by these changes and that the reason was political. 
We didn't make that up. A Federal judge confirmed it.
    Mr. Bloom, you agreed with those changes. You agreed to 
hire Mr. DeJoy because you found him qualified. You had--you 
were--according to one of your colleagues, you were all tickled 
pink with the performance of the Postmaster General in the 
height of the controversy during a pandemic. Are you still 
tickled pink with his performance?
    Mr. Bloom. The board supports the Postmaster General.
    Mr. Connolly. Do you--your colleague said 100 percent of 
the board were tickled pink and had complete support. Was he 
speaking for you that you were tickled pink? Just wanted to get 
it in the record that you are tickled pink.
    Mr. Bloom. I am generally not tickled--I am generally not 
tickled pink by things. But as I said, the Board of Governors 
believes the Postmaster General, in very difficult 
circumstances, is doing a good job and we have been involved 
with the development of the plan that we think will make the 
Postal Service much stronger and much better over time.
    Mr. Connolly. I appreciate your candor. I am running out of 
time. Respectfully, I disagree, and I hope President Biden 
disagrees as well and that we take action to replace the Board 
of Governors with people who care about the Postal Service and 
are going to be committed to their job of oversight and 
accountability.
    I yield back.
    Mr. Comer. Madam Chair, point of order.
    Chairwoman Maloney. The gentleman is recognized for a point 
of order.
    Mr. Comer. I just wanted to state for the record Mr. 
Connolly pointed over about voting to object in the election. I 
have never--ranking member, I have never voted to object to a 
Presidential election. But I will tell you who has. Nancy 
Pelosi in 2004. So, I just wanted to state that for the record.
    I yield back.
    Chairwoman Maloney. The gentleman yields back.
    Mr. Connolly. Madam Chairwoman, I would--if I may, I 
appreciate the distinguished gentleman's comment. I did not 
name anybody who voted to overturn the election. Certainly did 
not mean to include Mr. Comer if he didn't do it.
    Chairwoman Maloney. The gentleman yields back.
    The gentleman from Wisconsin, Mr. Grothman, is recognized 
for five minutes.
    Mr. Grothman. Thank you. First of all, I would like to 
just, in general, thank you for getting out the contracts with 
regard to the new delivery vehicles. I think you did a great 
job in selecting new vehicles and I am sure that they are going 
to be a great asset to the Postal Service.
    Mr. DeJoy. Thank you, sir.
    Mr. Grothman. Next, I have kind of a technical question 
here, and I guess it could be either one of you. I know a lot 
goes--you know, a lot of--there is a lot of controversy about 
this prefunding the pension plan, and I have talked to people 
back in my district who are very emotional about it.
    But they don't know how it works. So, I figure between the 
two of you folks up here today, you should know how it works.
    If we have three different individuals, and they began this 
prefunding in the first decade here, 2006 or 2----
    Mr. DeJoy. Can you speak--I can't hear you.
    Mr. Grothman. OK. I believe they began the prefunding in 
around 2006, 2005, around then?
    Mr. DeJoy. Yes, sir.
    Mr. Grothman. OK. If I have three different employees, one 
employee began working at the Postal Service in 1975 and ended 
in 2005. So, he entirely worked before the new mandate came in.
    We got another employee who began work in 2000. He is going 
to retire in 2030. So, he kind of straddles the period before 
the prefunding and the brief period after. We have got another 
employee who starts working in 2010 and winds up retiring in 
2040. So, his entire tenure is part of the prefunding.
    When we calculate the prefunding, how is it calculated, 
first of all, on the guy who retires before the prefunding 
begins? Is that pay as you go for his pension?
    Mr. DeJoy. His--the fellow who retires before prefunding 
began, the cost of his retirement benefits would actuarially be 
calculated in being in our underlying costs. So--but he would 
not have the prefund.
    There is two elements. There is the liability, the 
projected liability, and then there is the prefunding mandate 
of that projected liability.
    Mr. Grothman. OK. But the guy who retires before the 
prefunding starts, do we operate, and the union president jump 
in here too, is that pay as you go then? Are they--is that----
    Mr. DeJoy. No. If they retire--the prefunding aspect of it 
is--I believe the way tabulation works is we take all employees 
that are in Postal Service employ, whether they are there for 
three years or four years and they got another 30 years ahead 
of them, and we start calculating what their future retirement 
benefit would be and amortizing that over some period of time.
    Mr. Grothman. Right. I understand. But so the person who 
already retired he hit--the way we pay for his pension or 
medical is unrelated to what happened in 2005, 2006, right?
    Mr. DeJoy. If he retired before--you are right on that. 
Yes.
    Mr. Grothman. Right. So, he goes--OK. And the person who 
starts after that, when we calculate that that is an entirely 
amortized thing and, you know, we calculate how much money we 
got to put in there so when he retires, we are ready to go, 
right? The guy in the middle, the guy who, say, starts working 
in 2000 and retires in 2020 or something, so that is a hybrid.
    Mr. DeJoy. Yes.
    Mr. Grothman. We prefund some but not all?
    Mr. DeJoy. No, we would prefund--once the prefunding 
mandate came in, you would calculate what--whoever was on the 
rolls you would calculate what that liability was, and then 
that would be amortized in terms of part of the prefunding.
    Mr. Grothman. So, do we--this is the question. So, do we 
try to catch up or not? Because if we have a postal employee 
who began working before the mandate but retires after the 
mandate, when he retires we still--then we still have some of 
that liability unfunded. Is that correct?
    So, when he retires part of it should be the money we have 
set aside, which we haven't, but part of the money is set aside 
and part pay as you go. Is that the way it works?
    Mr. DeJoy. Yes, well, the overall liability is calculated 
based on every everybody that is on the payroll, right, and 
retirees. That is the overall liability. That actuarially gets 
adjusted, you know, every year.
    The prefunding portion was to--the prefunding portion was 
to advance--to put more money into the--into the fund for the 
future retirement benefit of everybody that is on the work 
force.
    So, some may retire--may never get--they are not vested. 
They may never get to a retirement status with the Postal 
Service. Yet, we are prefunding their liability.
    Mr. Grothman. OK. I guess I used up all my time. Too bad. 
No fun. Sounds like I confused him.
    Chairwoman Maloney. Yes. The gentleman from Illinois, Mr. 
Krishnamoorthi, is recognized for five minutes.
    Mr. Krishnamoorthi. Thank you. Good morning, Mr. DeJoy.
    I just want to clear up a couple of things. As you said at 
your testimony at page nine, the USPS' performance in the 
election in delivering millions of mail-in ballots was quote, 
unquote, ``a great success story,'' correct?
    Mr. DeJoy. Yes, sir.
    Mr. Krishnamoorthi. And as you detail in your testimony, 
you provided, quote/unquote, ``secure and timely delivery'' of 
the ballots that were entrusted to you, right?
    Mr. DeJoy. Yes, sir.
    Mr. Krishnamoorthi. You did everything possible to prevent 
fraud in mail-in balloting, correct?
    Mr. DeJoy. I don't know that we were in--we are in charge 
of fraud. I don't know what you are referring to.
    Mr. Krishnamoorthi. You did everything to prevent fraud 
with regard to the mail-in ballots in your custody, correct?
    Mr. DeJoy. Within our custody, we protected the security of 
the mail. Yes.
    Mr. Krishnamoorthi. And you are not aware of any fraud with 
regard to the mail-in ballots that you delivered?
    Mr. DeJoy. No.
    Mr. Krishnamoorthi. Joe Biden won the election, right?
    Mr. DeJoy. Yes, sir.
    Mr. Krishnamoorthi. Let me turn you to a chart that the 
Washington Post produced on February 6. It talks about the 
delivery--the on-time performance of the delivery of two-day 
and three-to five-day first class mail and, basically, it 
charts what has occurred with regard to this on-time delivery 
from January 2020 through December 2020.
    And at the top it, basically, says that on--in January 
2020, on-time delivery was, roughly, around 90 percent and on-
time delivery for three-to-five-day mail was, roughly, 80 
percent. So, 90 percent for two-day delivery, 80 percent for 
three-to-five-day delivery of first class mail.
    You took office around the end of July, around June 20, 
right?
    Mr. DeJoy. Mm-hmm. June 15.
    Mr. Krishnamoorthi. June 15. Fair enough. And after you 
took direction or leadership at USPS, what happened with regard 
to two-day delivery is it went from, roughly, the 90's all the 
way down to around 70 percent toward the end of the year, and 
with regard to three-to-five-day it went from, roughly, 80 
percent when you took charge of USPS down to approximately 40 
percent, and that is according to the data from the USPS.
    So, sir, when you get to 40 percent, basically, what you 
are telling your customers is, you have a, roughly, four in 10 
chance that their three-to-five-day delivery standard is going 
to be met, and that is starting to sound like Vegas.
    And the problem is that sending a letter through the USPS 
should not be a game of chance, and that is why my constituents 
are so outraged.
    But let me talk to you about two-day mail for one second. 
According to the February 12 Washington Post, there is an 
article in there that says that you have quote, unquote, 
``discussed plans to eliminate two-day delivery for first class 
mail.'' You don't dispute that you are considering as part of 
your 10-year plan the elimination of the two-day delivery first 
class mail standard, are you?
    Mr. DeJoy. We are evaluating all service standards.
    Mr. Krishnamoorthi. Sir, will you commit to keeping two-day 
delivery of first class mail locally?
    Mr. DeJoy. I will--there will be two-day mail class in our 
plan. Some percentage of that, where the reach is right now, 
may change.
    Mr. Krishnamoorthi. So, you are--but what you are saying is 
that for local mail, first class----
    Mr. DeJoy. You need to define local and I don't--second, I 
don't agree with any of your premise about my--are you trying 
to suggest----
    Mr. Krishnamoorthi. You can take that up with the--you can 
take that up with the Washington Post, sir. Let me--let me 
direct you----
    Mr. DeJoy. Well, it is unfortunate that that is where you 
get your information, because it is going to take more than 
that to fix the Postal Service.
    Mr. Krishnamoorthi. Well, sir, The Washington Post sourced 
it from the USPS, so you can talk to your data source at the 
USPS, sir.
    Mr. DeJoy. The Washington Post is like many members here. 
Really don't know what is going on within----
    Mr. Krishnamoorthi. Let me turn your attention to another 
issue, sir, which is this. According to your own testimony, you 
said that the first step in your reorganization or your 
operational changes is we became more disciplined by running 
our trucks on time and on schedule, according to page 14 of 
your testimony.
    The L.A. Times ran a story and investigation showing that 
trucks that ran on time left half empty and left mail at their 
processing facility.
    So, Mr. Dimondstein, let me just ask you this. To the 
constituent who comes to me complaining that their medications 
haven't arrived on time, I shouldn't tell them that the trucks 
were on time, should I?
    Mr. Dimondstein. Our position has always been that it is 
called----
    Mr. Krishnamoorthi. Sir, just a yes or no question.
    Chairwoman Maloney. The gentleman's time has expired.
    Mr. Dimondstein. You should not have to----
    Chairwoman Maloney. The gentleman may answer the question.
    Mr. Dimondstein. I am sorry.
    Mr. Krishnamoorthi. Go ahead.
    Mr. Dimondstein. The question----
    Mr. Krishnamoorthi. To the constituent who complains that 
their medications haven't arrived on time, I should not go to 
them and just say the trucks ran on time. Don't worry, the 
trucks ran on time.
    Mr. Dimondstein. You are correct and we agree with you.
    Mr. Krishnamoorthi. Thank you. I yield back.
    Chairwoman Maloney. The gentleman from Texas, Mr. Cloud, is 
recognized for five minutes.
    Mr. Cloud. Thank you, witnesses, for being here today. Can 
you hear me? Thank you for being here today. Really appreciate 
the opportunity to address what is this important topic.
    Certainly, the Postal Service has been on the high risk 
list, I think, since 2009, the previous Obama/Biden 
administration. So, it is time for we--for us to address it for 
sure.
    I want to especially welcome back Postmaster DeJoy. It is 
great to have you back here in what hopefully is a more 
substantive conversation than the last time you were here. Last 
time it was, unfortunately, in such a hyper-politicized 
environment that it seemed impossible to really get anything 
done in the ways of conversation.
    Now, Chairman Bloom, could you remind us as to how 
Postmaster DeJoy became the postmaster? Was this a political 
appointee? Was this a partisan standard? Could you--could you 
remind us of that, please?
    Mr. Bloom. Sure. The end of last year, the then existing 
Postmaster General indicated that she intended to retire and 
the board embarked on a search process, a rather traditional 
search process. Hired an outside firm who specializes in 
search. We wound up identifying 200 people who were potentials. 
That list was then winnowed. There were--and a number of people 
interviewed, and finally the board came to a decision.
    Mr. Cloud. And this is a partisan board? A bipartisan 
board?
    Mr. Bloom. The board at the time and today has both 
Democrats and Republicans on it.
    Mr. Cloud. And that vote was a partisan vote or how did 
that vote come down?
    Mr. Bloom. The vote was unanimous.
    Mr. Cloud. OK. That is what I recalled, and that was part 
because of your great logistics experience in the private 
sector. And it seemed to me that you came into the position and 
began to make some systemic changes.
    I know one of the things that my colleague just mentioned 
was the fact that one of the things you looked at was that 
overtime costs were going up. Meanwhile, our bulk delivery was 
going down.
    How much mail we were delivering was going down, and so you 
began to look at that as, hey, here is a way we can maybe save 
some money for the American taxpayer.
    Maybe you didn't understand the political environment that 
we were in at the moment, but it seemed like that has been the 
case that the attempts have been to address some of the 
systemic issues.
    The GOA, the Government--the GAO, I should say, put out a 
report in May 2020 that said that the United States Postal 
Service's current business model is not financially sustainable 
due to the declining mail volumes, increased compensation and 
benefits costs, and increased unfunded liabilities and debt.
    We have known for a long time that the USPS is not in a 
sustainable business model, especially with the competitors we 
see and the changing dynamics of how we communicate and how we 
ship and do mail.
    Does this bill address any of these issues?
    Mr. DeJoy. Sir, in our plan, there are three to four 
different elements, segments of it, that bring us to 
sustainability and growth in serving the American people.
    And this is an important part of it. This is about a third 
of--gets us a third of the way where we need to be in the plan 
that we have put together. So, it is very important to the 
future sustainability, which I believe we, with our design, we 
have a sustainable and viable Postal Service.
    Mr. Cloud. OK. But that is in--that is in your report to be 
given to us in short order, right? That has not been presented 
yet?
    Those proposals aren't in this bill?
    Mr. DeJoy. They are not but, really, it is the only 
legislative ask where we are proceeding within our plan.
    Mr. Cloud. OK.
    Mr. DeJoy. So, if you want a viable Postal Service and can 
trust that we have a plan to move forward, this is--this is, 
you know, a good way to help.
    Mr. Cloud. OK. Could you talk about some of the logistics? 
Do you believe that the rise in third-party logistics companies 
offers opportunities for the Postal Service to increase work 
sharing?
    Mr. DeJoy. I am not a fan of evaluating work share. I think 
it is--in many ways it has done--it has enabled people to run 
around and network and it is part of the reason we have a 
hollowed out network, and a network is the biggest part of our 
problem.
    But I do see third-party logistics companies, they have 
customers and customers need to get to the American people, and 
it is part of our long-term plan. We think we need to have a 
stronger marketing and product-oriented type of service that 
attracts all types of companies to put more--mail is becoming--
you know, packages is mail.
    We saw that during the pandemic a big--you know, our 
competitors stopped delivering to many different areas. We 
continued to deliver to 160 million addresses a day. We only 
deliver 35 percent of the packages to the American community 
right now.
    I think we have an opportunity to grow that and serve the 
people, and having partnerships with commercial businesses and 
being fully integrated with them, as third-party organizations 
really know how to do, is a big--is a big opportunity for us.
    Mr. Cloud. Thank you.
    Chairwoman Maloney. The gentleman's time has expired.
    The gentleman from Maryland, Mr. Raskin, is recognized for 
five minutes.
    Mr. Raskin. Thank you very much, Madam Chair, and I want to 
first thank Mr. Connolly for his devastating refutation of the 
propaganda that we were treated to today.
    But I want to talk about the future.
    Chairman Bloom, do you and the board agree with Mr. DeJoy's 
contemplated elimination of first class mail currently 
delivered in two days?
    Is this something that you and the board have discussed and 
do you think that this would improve the public's satisfaction 
with current delivery performance?
    Mr. Bloom. Congressman, as I said earlier, the plan has not 
been finalized. But so I have to simply rely upon my broad 
statement, which is the plan--and you will obviously have a lot 
of opportunity to diligence it--but the plan is committed to 
revitalizing and strengthening and growing the Postal Service.
    There will be elements of it, I suspect, that some don't 
like and there will be elements that others do. But I guess I 
would ask, Congressman, that when you evaluate it, you look at 
it in its totality, and ask whether in its totality it moves 
the Postal Service forward.
    Mr. Raskin. Well, then, Mr. DeJoy, let me come to you.
    In terms of the totality of this idea, which you seem to 
have some buy-in from Chairman Bloom about, what is the logic 
of eliminating first class service, which generally delivers 
the mail in, roughly, two days and moving instead to a three-
to-five-day window? How will that improve the appeal and 
resiliency of the Post Office?
    Mr. DeJoy. Well, the--we believe that the appeal of the 
Postal--this change--we feel that the Postal Service will 
survive these minor changes that we are making.
    Not coming up with an operating model that can get out of 
losing $10 billion a year will--you know, somebody mentioned, 
you know, a debt--a future death spiral. I would suggest that 
we are on a death spiral. We cannot--even with this 
legislation, we cannot continue to lose money.
    Now, local, what we are looking at with regard to--we are 
not--first class is still a very, very big part of our service 
to the American people and it is a very, very big part of our 
model.
    We have--in order to meet first class standards----
    Mr. Raskin. Let me--let me interrupt you there, sir, 
because--let me just pursue that for one second. Do you plan to 
prevent first class mail from being--reclaiming my time, Mr. 
DeJoy.
    Mr. DeJoy. In order to meet first class standards, we have 
operated many, many different networks that cost us 
significantly and have not made performance.
    Chairwoman Maloney. OK. The time belongs to----
    Mr. Raskin. Do you plan to prevent first class mail from 
being shipped by airplane?
    Mr. DeJoy. I am sorry?
    Mr. Raskin. Do you plan to prevent first class mail from 
being shipped by airplane?
    Mr. DeJoy. In our strategy, if we, in fact, get the relief 
that we need in terms of time, we will put more mail on the 
ground? And I will tell you that a big, big reason for our 
service performance failures this peak season had to do that 
our air carriers performed at 50 to 60 percent, and----
    Mr. Raskin. Well, oh, so if you would just explain the 
philosophy behind this contemplated change. How does changing 
the standards to lengthen delivery times to double or triple 
delivery times successfully address service problems?
    Mr. DeJoy. Well, you can't--you cannot--when you--do you 
want--you really--you want me to answer that? I will talk about 
mail, for instance.
    Mr. Raskin. I do. I think America wants to know what you 
mean getting rid of first class delivery.
    Mr. DeJoy. Well, we can talk about mail. We can talk about 
three days to get from New York to California. We can talk 
about that. We can't do that on a truck. And if you look at 
what happens, right, we have to--we take mail.
    We process it in an originating plant. We load it on a 
truck. We take it to an air terminal. A terminal will handle, 
loads it on a plane. Then we fly it to some other location 
somewhere around the country to be sorted by somebody else, 
then to maybe get on another plane to fly to the other 
location, right, to go to a terminal handling charge station, 
to go load it on a truck to go to an area mail distribution 
center, to go to a destination plant, to go to a DDU to get 
delivered by a carrier, and we got three days to do that.
    And that network--that network, sir, over the last year has 
been performing at about a 55 to 60 to 70 percent rate, right, 
and that is a big, big reason for a lot of our failure, 
especially through the Christmas holiday.
    We have had packages, first class packages, not even in 
that--in that statistic being held up at air belt facilities 
across the country. It is not reliable. It has grown 
inconsistently reliable.
    Mr. Raskin. One question that we have all heard from our 
constituents, it sounds like--it sounds like your solution to 
the problems you have identified is just surrender. You are, 
basically, saying because the mail has been late under your 
leadership, we are just going to change the standards and build 
it into the system that it will be late.
    Mr. DeJoy. Sir, the standards have not been met--the three-
to-five-day standards have been running at 80 percent for 
years. It is not reliable. You can--you could sit here and 
think that I am bringing all this damage to the Postal Service.
    But as I said earlier, the place was operationally faulty 
because of lack of investment and lack of ability to move 
forward, which is what we are trying to do.
    Chairwoman Maloney. The gentleman's time has expired. The 
gentleman's time has expired.
    Mr. Raskin. With that, I would yield. Thank you.
    Chairwoman Maloney. The gentleman from Ohio, Mr. Gibbs, is 
recognized for five minutes.
    Mr. Gibbs. Thank you, Madam Chair.
    First, I want to try to clear up a little discussion that 
happened to my friend from Ohio, Jim Jordan, being accused of 
gaslighting from my colleague from Virginia.
    And, you know, I don't think it is the Post Office issue. 
They deliver the mail. When election boards were--in certain 
states were mailing out universal mail-out ballots with no 
verification, that wasn't your problem. That was the election 
board problem and to take this, as my gentleman--my colleague 
from Virginia did, took it out of context.
    You know, you guys deliver the mail. You know, what the 
election boards put out, that is what they put out and you mail 
it--you deliver it. And so that was--I think that is just taken 
out of context and it is, really, playing politics.
    Obviously, we are here at this hearing for the financial 
condition of the Postal Service and, you know, in my 
experience, there is generally two types of businesses: 
businesses that make things and businesses that provide 
services.
    You know, if you make a--if you make a crappy product, you 
go out of business. You perform a crappy service, you go out of 
business.
    And, unfortunately, what I have seen happen and I hear from 
my constituents and my own experience, the service is really 
bad. I am going to give just a couple of examples because I 
think it has actually gotten worse since the holiday period.
    I just talked to my CPA yesterday. He mailed a 10'' by 12'' 
envelope with the proper postage from Cleveland to Columbus 
mailed on January 5, 166 miles, approximately. It arrived 
yesterday.
    I have a local county veterans service center that sent a 
five-figure check certified mail with return receipt, mailed on 
December 9 to Falls Church, Virginia. It was delivered on 
January 7.
    On January 21, they did another package, another envelope, 
and it took them a month again. I have--a constituent reported 
a five-week delay to send an envelope five miles in my district 
from Navarre to Massillon.
    These examples go on and on. My personal examples, you 
know, it is pretty embarrassing when you have to call up a 
local retailer, in this case it was J.C. Penney, because I 
received a J.C. Penney bill last week that was due on January 
25, and the next day I got the J.C. Penney bill that is due on 
February 25.
    And so I, personally, I have lost all confidence in the 
postal system. I get mail that doesn't arrive. Last week, I 
signed up--earlier I signed up where you--they take the 
photographs, and last week I get the email I had to first class 
pieces of mail. One showed up. The other one hasn't showed up 
yet.
    So, personally, I am doing everything I can to--I won't 
send payments through the mail anymore. That is how much 
confidence I have lost in the system.
    And so, Mr. DeJoy, you have a huge challenge ahead of you 
because, you know, I am a baby boomer. I have confidence in the 
mail. I am not Generation Z or a Millennial. I had confidence 
and I have completely lost it.
    Right now, personally, my goal is to be able to get to the 
point where I put my mailbox in the garbage can. So, that is 
how I feel about the service that has been--it has just been 
deplorable.
    Medicaid--Medicare integration, I think I fully support 
that. I see in some of my background notes here a typical 
retiree from the Post Office service does not enter into 
Medicare because their monthly premium would be normally $148 a 
month and they are getting a better deal by not doing that, and 
I think that is, you know, unbelievable how that happened in 
the past.
    I think, as far as I can tell, I know Postal Service 
workers are different than Federal employees. It is kind of 
like an arm of government, we want to say. I think they are the 
only ones that don't have to sign up into Medicare.
    Mr. DeJoy and Bloom, I am curious, when you talk about the 
$160 billion loss over 10 years projected, obviously--we fixed 
Medicare integration and the prepayment and all that--are you 
also--what are you factoring in for volume?
    Are you factoring losing more volume or do you think you 
are going to be able to get this ship reckoned up to the point 
where you will be able to compete with your two big competitors 
and, of course, the Amazons of the world? And, you know, we are 
seeing what is happening there. So, what do you think on the 
volume in that 10-year projection?
    Mr. DeJoy. This is--the plan that we are putting forward 
does have a growth--does have a growth plan in it for--as I 
discussed, we tried to have a balanced plan of legislation, 
cost improvements, and revenue growth and we are preparing the 
organization.
    Mr. Gibbs. So, you are that--are you basing that on 
increased volume or decreased volume?
    Mr. DeJoy. Increased volume mostly in the package business 
and some mail--excuse me.
    Mr. Gibbs. Well, I hope--I hope you are right. I guess I 
would just challenge a little bit because what I am seeing, you 
know, I bought some stuff through, like, Amazon. I get the 
stuff two days later. They tell me when it is coming. No 
shipping costs because----
    Mr. DeJoy. A lot of it comes through us.
    Mr. Gibbs. What is that?
    Mr. DeJoy. A lot of it comes through us----
    Mr. Gibbs. And that is why I am letting you make that 
point.
    Mr. DeJoy [continuing]. Because it gets emptied to our 
delivery unit----
    Chairwoman Maloney. The gentleman's time has expired. The 
gentleman may answer his question.
    Mr. Gibbs. You can answer.
    Mr. DeJoy. First of all, on your first point about this 
being, you know, about the service, I have to remind this 
committee that the Postal Service is living in a nation where 
the pandemic exists also, OK, and that has a significant impact 
on us.
    But if product got--if mail and packages got to our 
delivery units, we deliver to 161 million addresses six days a 
week at over 90--over 96 percent of the time. That is through 
the--all those service things through--even through peak.
    The problem was getting mail and packages through our--
through our network. Significant air capacity was lost. 
Significant transportation capacity was lost.
    Forty percent package volume over any peak plan that we 
had, right, which--a truckload of mail is 500,000 pieces. A 
truckload of packages is 5,000, right. It is significantly 
different.
    And then we had a huge--and this is America. This is not 
Amazon in the network. This is American consumers. Nobody in 
our network volume took up more than two or three, four percent 
of the volume, right.
    Then we had nonmachinables, which were 100 percent more. 
Big boxes that our workers have no machinery, nothing to deal 
with, right. This was the environment.
    We had--we had a 650,000-person organization that hired 
200,000 people last year, right, and the numbers didn't go up. 
That was turnover, turnover because of the environment and the 
stress and historical lack of good tactical procedures with 
regard to our work force.
    So, this is the culmination of what happened to your 
service, right, and this is--this is the plan that we are going 
to address and try and fix, going forward, and it does have 
growth in it. It has significant growth in it and we need the 
support for this bill.
    Mr. Gibbs. I appreciate it. Thank you.
    Chairwoman Maloney. Thank you. The gentleman's time has 
expired.
    The gentleman from Maryland, Mr. Mfume, is recognized for 
five minutes.
    Mr. Mfume?
    Mr. Mfume. Yes, Madam Chair, thank you very much. Thanks 
for calling this hearing. Like you and so many other members of 
this committee, I am grateful that we are having an opportunity 
to put in place a process whereby the Postal Service would be 
in a position that guarantees its sustainability well into the 
future.
    Last August, I sat with many of you on this committee and 
inquired about the changes implemented under the leadership of 
Mr. DeJoy and that of the Postal Service and Board of 
Governors.
    Chairwoman Maloney. Mr. Mfume, can you center your mic or 
your computer so we can see your face? By law we have to show 
you during the questioning, and we can't see you right now.
    Mr. Mfume. I did not know, Madam Chair, that you could not. 
My----
    Chairwoman Maloney. OK. Yes. Fine now. Thanks.
    Mr. Mfume. Sorry about that.
    I questioned the relationship during that meeting between 
the accelerate--or about the accelerated removal of sorting 
machines and collection boxes, and the decreases in mail 
arrival times.
    I also asked Mr. DeJoy and the chairman if they were aware 
that the expedited street to afternoon sortation program 
implemented in July had a
    [inaudible] across the United States and was opposed by the 
National Association of Letter Carriers and opposed by postal 
workers across the board.
    Now, the people on this committee and citizens across the 
country are free to ascribe whatever definition they choose to 
the response I got. But in my opinion, the response was empty 
words, and worse yet, empty words that continued to lead to 
empty mailboxes.
    I appreciate the ranking member's previous line of 
questioning to the witnesses, but he asked each one of them if, 
in fact, they thought that Mr. DeJoy's intent was to slow down 
the delivery of mail prior to the election, and I would say to 
the gentleman and remind myself that unless one is a heart 
surgeon or a brain surgeon that it is almost impossible for a 
third-party witness to accurately determine what a person's 
intent is in their heart or in their brain.
    But, Madam Chair, when we take that question and turn it 
around and ask instead about what was the effect, perhaps the 
better questions to the witnesses wouldn't have been did Mr. De 
Joy's actions have the effect of slowing down the mail. The 
disassembling of sorting machines, the removal of mailboxes 
from communities, and the denial of many overtime requests--did 
they have the effect of slowing down the mail, and I would dare 
venture to say that most, if not all, would say yes, that is 
the effect and that was the effect.
    My office, like many of yours, receives a daily significant 
number of complaints from constituents who have gone days, some 
weeks, without receiving their mail and receiving it on time.
    In Baltimore City, Baltimore County, and Howard County, 
Maryland, that has been the case now for months. It is very 
difficult, and I don't want this lost. I know we are talking 
about trying to find a way to create and craft new legislation.
    But I don't want it lost on the fact that there are a lot 
of people who have suffered and had to pay extra money, late 
fees for bills that were not late but, rather, delivered late. 
And there were many of those who missed out on their medication 
schedules because their medications were not on time.
    These delays have had harmful impacts on the lives of our 
constituents and, yet they continue to worsen. And so like my 
colleagues, I am grateful that the chairwoman has decided to 
hold this hearing because now we will have the opportunity to 
construct and review legislative proposals to place the Postal 
Service on a sustainable footing.
    But let us not rewrite history. The good was what happened 
between then and now was that we had a free and fair election, 
in which we owe a debt of gratitude to postal workers all over 
this country who, against great odds, delivered the mail as 
essential workers on time. They delivered ballots on time.
    The bad news is that we are still left with the effects of 
the cuts. Not the intent, the effects. So, the Postal Service's 
financial condition, as we all know, has deteriorated over the 
years due to a number of factors. We don't need to get into 
finger pointing.
    I do believe that these proposed legislative opportunities 
can reinstate service standards and implement the kind of 
protections for postal workers if we can get away from casting 
aspersions in the very first hearing that has been set up to 
find a way out of this problem.
    So on that, Mr.--Madam Chairman, I would yield back, Mr. 
DeJoy, thank you for coming back again. I would ask, though, 
before I yield back my time, can you tell us when your 
strategic plan will be revealed and will you commit here today, 
if it is the pleasure of the chair, to come back before this 
committee to explain it in detail and to receive the critique 
and the questions and, perhaps, the support even the members of 
this committee?
    Mr. DeJoy. Sir, we--probably within the next two weeks we 
should be ready with our plans, and I am always happy to come 
before this committee and explain it.
    Chairwoman Maloney. Thank you.
    Mr. Mfume. Thank you, Madam Chair. I yield back
    Chairwoman Maloney. The gentlewoman from Missouri, Ms. 
Bush, is recognized for five minutes.
    [No response.]
    Chairwoman Maloney. Ms. Bush, would you please unmute?
    Ms. Bush. I am having some technical difficulties here. I 
am having some technical difficulties.
    Chairwoman Maloney. We are going to--we are having some 
technical problems. We are going to go to the gentleman from 
Florida, Mr. Donalds. You are recognized for five minutes.
    Mr. Donalds. Thank you--thank you, Madam Chair.
    I am going to just--there has been a lot of speeches in 
this hearing so I am going to just get to questions.
    Mr. Kosar, my number-one question is can you describe the 
legislative reforms that Congress can explore to assure that 
work force costs do not unnecessarily increase, going into the 
future?
    Mr. Kosar. Sure. Thank you, sir, for asking.
    You know, one thing is there was a bill that I very much 
like introduced by Representative Lynch which would address the 
Retiree Health Benefits Fund through a method that is a little 
different than what was being discussed today, and what it 
would do is take the approximately $42 billion in the Retiree 
Health Benefits Fund and authorize a portion of it, 25 to 33 
percent, to be invested in index funds the same way that 
Federal workers have a TSP which is able to be invested in 
index funds. And the result of that is rather than getting low 
yields from Treasuries in the RHBF, the money would grow 
faster.
    And the Postal Service Inspector General did a study on 
that and it is the best strategy out there, as far as I can 
tell. I think my feeling is that the Postal Service in general 
needs operational freedom to figure out ways to drive down 
costs.
    I know Congress likes to mandate every year that six-day 
paper mail delivery continue. They dropped this in the Annual 
Appropriations Act. But I don't know why that needs to be 
mandated. If the Postal Service and the public truly demand it, 
then why not remove the mandate and let the Postal Service 
adjust accordingly?
    I think the Postal Service also needs to be empowered to or 
encouraged to solve the overtime issue. In 2019, the Postal 
Service use something like $5 billion--spent $5 billion in 
overtime.
    Whether that means they need to hire more employees or 
temporary employees so that they are not having to have people 
run extra overtime costs, or through some other solution, I 
think that is worth exploring. And I have also noted that an 
idea kicked around for a very long time is collective 
bargaining.
    Right now, when--the Postal Service bargains with its four 
unions, and if it can't come to agreement, it goes to 
mediation, and in the course of that the Postal Service's 
financial condition is not explicitly required to be 
considered.
    And so putting it in a statute that it at least be a factor 
considered, not a determining factor for the results but at 
least considered explicitly, could possibly bend cost curves 
over the long term.
    Mr. Donalds. Thank you, Mr. Kosar.
    Ms. Whitcomb, my question for you is can you expand on your 
testimony and describe how big of an impact to the Postal 
Service's current financial crisis, the documented overreliance 
on overtime work, has been?
    Ms. Whitcomb. Yes. We did that work and released it last 
summer, and found that there were significant increases from 
Fiscal Year 2014 to 2019 in overtime. I believe Mr. Kosar just 
mentioned that work as well.
    Obviously, we were in a different time period. COVID had 
not been in consideration at that point. So, I think there is 
maybe some different considerations now. But overtime had grown 
considerably during that six-year period.
    Mr. Donalds. Thank you so much.
    Postmaster General Mr. DeJoy, I am going to give you the 
rest of my time to answer this one. Would you actually support 
shifting the divine benefit pension--the defined benefit 
pension to a defined contribution more in line with the private 
sector?
    Mr. DeJoy. I didn't hear you, sir.
    Mr. Donalds. Would you support shifting the defined benefit 
pension to a defined contribution more in line with the private 
sector?
    Mr. DeJoy. No, I think the compensation and benefit plans 
that are in the Postal Service right now have been negotiated 
over a number of years and I am not prepared--that is not 
anything that we are looking at.
    We respect the--we work with the union leadership and the 
plans as the way they are right now is not--not changing them. 
It is not part of our--you know, is not part of our strategy.
    We think there are better ways. There are many, many, many 
ideas about what to do with the Postal Service. I will submit 
that we have spent eight months with a couple hundred 
leadership people in leadership at the Postal Service in 
defining what the best solution, holistic solution, was to 
serve the American people and we have come up with a plan that 
I will release soon, and messing around with employee benefit 
plans is not part of what--you know, what I am interested in 
right now.
    Mr. Donalds. All right. Thank you.
    Thank you, Madam Chair. I yield back.
    Chairwoman Maloney. The gentleman yields back.
    The gentlewoman from Michigan, Ms. Tlaib, is recognized for 
five minutes.
    Ms. Tlaib. Thank you, Chairwoman. Thank you so much for 
this hearing. I truly appreciate it.
    I would like to spend some time here addressing a serious 
concern that I have heard from my residents about ongoing 
service issues in my district.
    So, Postmaster DeJoy, I want to bring your attention to the 
photo on the screen, and I will give the committee some time to 
post it.
    [Photo is shown.]
    Ms. Tlaib. So, Postmaster DeJoy, this is a delivery barcode 
sorter machine, correct?
    Mr. DeJoy. Yes, ma'am.
    Ms. Tlaib. OK, so thank you for that. And these machines 
can process, roughly, what, 35,000 pieces of mail per hour, 
correct?
    Mr. DeJoy. I would--I don't know exactly. But let us 
assume--seems like you know, so I will accept that.
    Ms. Tlaib. I appreciate that. So yesterday, just yesterday, 
I spoke to our local Detroit American Postal Workers Union 
president, Keith Combs, about the ongoing service issues in 
southeastern Michigan.
    He made me aware that four delivery barcode sorter machines 
that were removed prior to the 2020 election have actually been 
reinstalled in the USPS facility in Detroit. So, I thank you 
for that.
    However, which is very odd, these machines have actually 
sat idle for months, apparently, because the USPS' central 
region has not given the Detroit facility permission to use 
them. So, I find this really concerning since my residents are 
still experiencing significant delays or receiving their--in 
receiving their mail.
    For example, I spoke with one elderly veteran recently, you 
know, one of the block club presidents in my community, who had 
not gotten any mail, was, I think, getting it once a week.
    So, this is not an isolated incident, as you know, so I am 
just really interested, Mr. DeJoy, were you aware that the 
central region had not given the Detroit facility a directive 
to start using these machines?
    Mr. DeJoy. I am not but--and as I can attest, communication 
within the organization is sometimes not accurate. So, I would 
have to check if that is----
    Ms. Tlaib. That is a huge--I don't know, Postmaster. That 
is a huge miscommunication. I mean, do you commit to 
immediately begin working with the central region staff to get 
the Detroit facility the directive to use these four sorting 
machines that will get 35,000 pieces of mail sorted in an hour 
and go out the door.
    Mr. DeJoy. Well, you are assuming your information--let me 
just be clear. You are assuming your information is accurate. 
What I am saying is that----
    Ms. Tlaib. OK. So----
    Mr. DeJoy [continuing]. You know, that that--I don't know.
    Ms. Tlaib. OK. So, reclaiming my time. Is it good to see--
it is good to see that you are at least consistent about 
targeting--you know, basically, addressing not knowing and 
having these issues and struggles within the agency.
    So, we have four sorting machines in Detroit and somebody 
needs to get permission to use the machines. I mean, why bother 
putting them in there last year, reinstalling them in there if 
you are not going to be able to use them?
    I mean, so do you agree that that is an issue?
    Mr. DeJoy. So, I would have--no, I don't agree. I don't 
know what the issue is. There are 650,000 people, thousands of 
machines, 50,000 truckloads of that moving down in a day.
    Ms. Tlaib. Postmaster DeJoy, I am asking you for a 
partnership here.
    Mr. DeJoy. You are asking me about an area which has 
historically had significant delivery problems.
    Ms. Tlaib. Mr. DeJoy, I am not giving you a narrative. I am 
telling you--DeJoy, I am reclaiming my time.
    I am really sincere here. I am asking you for a 
partnership.
    Mr. DeJoy. As am I.
    Chairwoman Maloney. The gentlelady reclaims the time.
    Ms. Tlaib. OK. I am telling you there is four machines that 
were used for taxpayer dollars installed in Detroit to help get 
mail out the door. They haven't given the green light to use 
them.
    So, I need you to do your due diligence as the Postmaster 
General. We just heard from a Member of Congress asking you to 
go investigate, check it out, find out where the 
miscommunication is, and get these machines up and running. Do 
you want to at least commit that you will look into this?
    Mr. DeJoy. I will--first of all, I want to--I would like 
to--we don't receive taxpayer dollars. But I will look into 
what the story is on this machine and my office will get back 
to you.
    Ms. Tlaib. OK. Well, the machines are there. Somebody spent 
money on these machines, reinstalled them there, Mr. DeJoy. I 
am just asking you to do your job and find out why they haven't 
started using those machines.
    You know, just acknowledge that the information I am giving 
you, at least in very good faith, that something is wrong when 
four machines are sitting idly by.
    So, I would like to close by really looking to the future 
here and really wanting, again, to help you.
    I want to ask President Dimondstein, given all these 
ongoing issues, what do you think needs to really truly happen 
you with UPS' service standards, going forward, to better serve 
the American people?
    Mr. Dimondstein. Congresswoman, we--the union believes in 
the--in the law, of prompt, reliable and efficient services, 
and it breaks our heart. It frustrates the employees. It angers 
the employees, because we treat the mail as our own and we want 
to treat it as if it was coming to our family members and our 
friends, and you have heard many other things today.
    So, going forward, legislation is a key part. Helping to 
provide the financial support by getting rid of this burden of 
prefunding by the Medicare integration and by the investment of 
some of the funds in the retiree plans.
    But the Postal Service, they have taken a positive step on 
this. They need to deal with the chronic understaffing. They 
have agreed recently to hire about 11,000 more people around 
the country in mail processing. That will help.
    They should look at expanding services such as financial 
services and charging stations for electric vehicles in front 
of Post Offices. There are all sorts of things that can be done 
that just make the Post Office that much more relevant in 
people's lives.
    But there is no getting around it. This situation is 
deplorable with the mail, and you heard a Congressman here 
say--and it breaks our heart because I have friends saying, I 
have family members saying the same thing--how can I trust the 
Postal Service to get the work done and serve me as a person of 
this country.
    Ms. Tlaib. Thank you. Thank you so much.
    Mr. Dimondstein. But, going forward, Congress can really 
help. I urge you all to keep it tight. I know my time is up. I 
went on too long. I am sorry, Madame Chairman.
    Chairwoman Maloney. The gentlewoman's time has expired. 
Thank you.
    The gentleman from Louisiana, Mr. Higgins, is recognized 
for five minutes.
    Ms. Tlaib. Chairwoman--Chairwoman, before you move on--if I 
may, Chairwoman, please
    [inaudible].
    Chairwoman Maloney. Without objection.
    Mr. Higgins. Madam Chair, was I recognized?
    Chairwoman Maloney. Yes, you were recognized.
    Mr. Higgins. Thank you, Madam Chair, and thank you for 
holding this hearing and I thank both the
    [inaudible]. I am sorry, Madam Chair. This is Congressman 
Higgins.
    Chairwoman Maloney. We are having a communications problem. 
We can't hear you, Mr. Higgins. OK. OK.
    Mr. Higgins. I am sorry, Madam Chair.
    Chairwoman Maloney. OK.
    Mr. Higgins. This is Congressman Higgins.
    Chairwoman Maloney. OK. We are having a communications 
challenge.
    Mr. Higgins. I see that we are having technical 
difficulties. I am unmuted. You will have to move on, Madam 
Chair.
    Chairwoman Maloney. OK. Mr. Keller is now recognized for 
five minutes.
    Mr. Keller. Thank you, Madam Chair.
    Based on testimony in today's hearing, the Postal Service 
is in the process of finalizing its long-term business plan.
    Mr. Higgins. Madam Chair, I am unmuted. OK. Good.
    Chairwoman Maloney. Mr. Keller has now been recognized, 
unless he yields back to you.
    Mr. Keller. Well, I will just continue to go and maybe we 
can figure out Mr. Higgins' problem.
    Chairwoman Maloney. OK. He is going to--the time is his 
now. He was recognized. OK.
    Mr. Keller. As I was saying, the Postal Service is in its 
process of finalizing its long-term business plan, some high-
level summaries of which are included in today's testimony.
    While I would like to take the promise of its release at 
face value, this committee has been waiting on a comprehensive 
long-term business reform plan for several years.
    Mr. Bloom, when will this committee be in receipt of the 
plan? Mr. DeJoy can answer to help out. When will we have the 
plan?
    Mr. DeJoy. We are--we are a couple of weeks away from the 
mission plan.
    Mr. Keller. Can you give me a date? What day--what date 
will we have it? What is the date? I mean, if you are working 
on the plan----
    Mr. DeJoy. In March. I will tell you in March. You will 
see----
    Mr. Keller. By the end of March we will have the plan?
    Mr. DeJoy. Yes, by the end of March. Yes.
    Mr. Keller. OK.
    I am struggling to understand why a hearing has been called 
on reforming the Postal Service and their long-term business 
plan has yet to be finalized. It is my expectation that a 
followup hearing will be conducted to fully examine this plan 
and its suggested reforms.
    When I was in private industry, the first step we took 
toward fixing something that was broken was the first measure 
where we were as an organization and only then develop a 
strategy to improve. Bailouts or other unrestricted assistance 
for the Postal Service would be irresponsible and ineffective.
    For the United States Postal Service, reform starts with 
the universal service obligation and overall mission to provide 
trusted, safe, and secure communications between our government 
and the American people, businesses and their customers, and 
the American people with each other.
    I appreciate the hard work of our postal workers and letter 
carriers. They are the ones who get the job done every day, and 
any frustration with the lack of progress we have seen is 
directed at the organization's leadership.
    Mr. DeJoy, you mentioned in your testimony that service 
performance cannot improve in an environment where costs are 
increasing, the network needs attention, customers expect more, 
and revenues are declining. It seems to me that as a 2018 White 
House Task Force recommended, we may need to more narrowly 
define what the universal service obligation requires.
    In other words, we may want to better define the Postal 
Service's mission in order to move forward toward solvency. 
What are your thoughts on that?
    Mr. DeJoy. Sir, I think our plan addresses the two 
fundamental things that are in legislation right now, 
continuing to deliver six days a week and be--get to be self-
sustaining.
    In that process, when we talk about narrowing the mission, 
I think we could--our plan sticks with the mission. It makes 
some adjustments to unachievable hurdles. It makes some 
adjustments for things that we are asked to do that that are 
extremely costly.
    But still, at the end of the day, we are delivering--in 
this plan, we are delivering six days a week to every household 
in America and we are--we are growing our business by aligning 
to the new economy and positioning our organization to--you 
know, to fulfill its obligations.
    We depend--our network depends on a series of, you know, 
transportation contractors that drive up our costs and have 
significant--have had significant impacts on our delivery 
schedule, and our operating plans are not integrated from our 
plans into our transportation.
    There are billions of dollars in this network that we that 
we plan--in our own self-help plans that we try to achieve. It 
is not consequential, you know, to employees. It is not 
consequential to the American public. It is just better 
operational management of what we are doing.
    Mr. Keller. And we will see that--we will see that in the 
plan?
    Mr. DeJoy. Yes, you will.
    Mr. Keller. And there is one thing I would like to clear 
up. We have a post-employment benefit plan for our--for our 
postal workers, which we need to keep the promise of and that 
is funding the retirement plan or the pensions.
    And we do that as we go. That is currently funded, correct?
    Mr. DeJoy. Yes, that is----
    Mr. Keller. That is just a yes or no. It is currently 
funded?
    Mr. DeJoy. Yes.
    Mr. Keller. And we pay that as we go. We should do the same 
thing with the health care. It is not prefunding, and we need--
we need to talk about this so we can keep the promise to the 
people that do the work every day. It is not prefunding. It is 
paying as you go.
    In other words, they are earning that post-retirement 
benefit, and to think that just the money is going to appear 
the day they retire is irresponsible.
    So, let us really have the honest discussion of if we have 
to catch up because we didn't make payments in the past, that 
is one thing. The other thing is we need to--we need to make 
sure we catch that up and that we pay as we go.
    So, the terminology is very, very clear. As a private 
individual, when you have a retirement account and you expect 
to be able to afford things when you retire, you make the 
contributions over a series of years. The contribution plus the 
investment equals the necessary cash to fund that benefit.
    So, it is not prefunding. It is paying as you go. And I 
realized I have run over but I wanted to make that important 
part, and that is how we need to do it.
    Mr. DeJoy. But so we can have--we do have significant 
balances, much more than the Federal Government does, in all 
our retirement accounts, and the issue before us here right now 
is Medicare integration for our retirees.
    We have $35 billion that we have paid in to Medicare and 27 
percent or 25 percent of retirees do not take advantage of it. 
And the prefunding that we do is based on a requirement by the 
Congress to have inputs in it for the actuarial calculations 
that will never--may never--people may never need those 
benefits they will not retire. So, I think--I think----
    Mr. Keller. But if we don't make the contribution--excuse 
me.
    Mr. DeJoy. I agree with you. I agree with you how you 
classified it. But I still think this is--that this is an 
unfair treatment of the Postal Service and it is something that 
needs to be corrected.
    Mr. Keller. Well, I think in order to make sure we protect 
the benefits that the people are earning----
    Mr. DeJoy. This is all about that.
    Mr. Keller [continuing]. It would be responsible of us to 
make sure we call it pay as you go, not prefunding. Thank you.
    Mr. Lynch. [Presiding.] The gentleman's time has expired.
    The chair now recognizes the gentleman from Illinois, Mr. 
Davis, for five minutes.
    Mr. Davis. Thank you, Mr. Chairman, and I also want to 
thank Chairwoman Maloney for calling this hearing. I am very 
pleased to know that everybody who have indicated or asked have 
indicated that they are in favor of getting rid of the 
prepayment of retiree benefits.
    Matter of fact, I recall being on the committee when we 
passed that legislation, and I didn't like it then and but we 
voted it in and that is what was voted.
    Mr. Postmaster, I am sure that you and--not you, some of 
the members of your staff have seen some of the news reports of 
the tremendous problems that we have had in the Chicagoland 
area.
    Everything that has been mentioned, of course, have been 
our problems and our issues. In addition to the traditional 
Chicago climate, the weather in the winter time gets pretty 
bad.
    The people have been screaming, crying, climbing up the 
wall, wanting to know when they are going to be able to get a 
delivery or wanting to know when there is going to be some 
relief.
    I know we are talking primarily futuristically in terms of 
the future direction of the Postal Service. But could you tell 
me what is being done to bring some relief to the Chicagoland 
area right now?
    Mr. DeJoy. So most of--a number of our urban areas have 
been hit hard for--a number, beginning with COVID and 
beginning--and also with the recent weather.
    We have worked, you know, within--without--as volume has 
come down, because we were overwhelmed with volume up and 
through the second--up until almost the third week of January. 
We were still clearing out for the holiday season. We are 
beginning to see, you know, relief in that area and it is just 
really not--I mean, we are working hard, working plants 
overtime, adding people.
    But the real relief is coming from the volume coming down 
and that enables us to use our capacity to get out and deliver.
    In certain areas--I mentioned a statistic earlier--we, a 
650,000, 660,000-person organization with hiring 200,000 people 
and that moving the needle up. That means that is tremendous 
turnover within the ranks that we have had this year, and it 
magnifies itself in our urban areas. It really----
    Mr. Davis. Let me ask you, are you hiring new carriers?
    Mr. DeJoy. We have been hiring across the board. Yes, sir. 
Fifty thousand people just in the last two months of last year, 
200,000 over the year.
    As President Dimondstein just said, we converted 10,000 
into December and I am very committed to working to stabilize 
the work force. I think that has been a real, real big issue 
for us with our noncareer turnover rate, trying to stabilize 
that and give long-term career opportunities for most of the--
--
    Mr. Davis. Let me ask you an operational question.
    Mr. DeJoy. Mm-hmm.
    Mr. Davis. How much authority or autonomy do local 
management teams have in budgeting and in making decisions 
relative to personnel needs?
    Mr. DeJoy. Mm-hmm. So, we are doing a lot of work on the 
organization for a variety of reasons, and that was one of the 
big changes I made. We had a big area. We divided the country 
up into seven areas in all the different operations.
    Every aspect of the organization were in those seven areas 
that reported up to one, you know, chief operating officer, and 
it was--the organization itself, not the people, the 
organizational strategy itself had too many broad functional 
aspects for individual teams to actually manage any kind of 
impact.
    We have begun to flatten the organization, spread it out, 
have more functional lines from corporate headquarters right 
down to the--to the local Post Office and have really started 
to work on process. We needed a lot of process improvement.
    When you don't have a lot of committed process, then you 
have a lot of people second guessing everything, which is what 
I think you are leading to. We are working very, very hard to 
clean that--to clean--make--bring a lot of clarity to everybody 
from, you know, a senior executive right down to a delivery 
unit, a mail carrier. I have good people on it. We are moving 
forward.
    Thank you.
    Mr. Davis. Thank you. Thank you very much, Mr. Chairman, 
and could I submit for the record two items, one, a audit 
report titled ``Mail Delivery and Customer Service Issues 
Select Chicago Stations,'' and a letter from seven Members of 
Congress who represent that area to the Postmaster General, 
inquiring about services and delivery?
    Mr. Lynch. Without objection, so ordered.
    Mr. Davis. I yield back. Thank you.
    Mr. Lynch. The gentleman's time has expired. The gentleman 
from Louisiana, Mr. Higgins, is now recognized for five 
minutes.
    Mr. Higgins. Thank you, Mr. Chairman. We had some technical 
difficulties earlier.
    Mr. Lynch. I think those have been resolved. OK.
    Mr. Higgins. Yes, sir. So, I can be heard at this time, Mr. 
Chairman?
    Mr. Lynch. Yes, sir. Go right ahead.
    Mr. Higgins. Thank you, my friend. I thank the Postmaster 
General DeJoy for appearing before us today to discuss the 
current status and challenges of the Post Office.
    Additionally, I very much appreciate the letter you 
distributed to members of the committee on February 18, 
Postmaster DeJoy, and I will refer to that in a moment.
    Let me say that I love the Post Office. I support the Post 
Office and employees. It is an indelible part of American 
history. It is arguable that we could--we could never have 
formed a solid republic, a representative republic of the many 
sovereign states, without a reliable Post Office. We might not 
have an America to discuss without a solid Post Office.
    So, you know, my support for the Post Office is reflective 
of my love for country. And, yet, you know, we have to admit 
some serious challenges there. So, I would like to jump into 
that, Mr. DeJoy.
    The COVID-19 pandemic placed burdens on every aspect of 
business across America. Would you concur that the combination 
of massive quantities of mail-in ballots for the election cycle 
occurring at the beginning of the holiday season and COVID 
protocols that the USPS had to deal with, like every other 
business across the United States, would you agree that that 
was, generally, the root cause for increased inefficiencies at 
the Post Office?
    Mr. DeJoy. Sir, I believe that that just dramatically 
increased the consequence of a continuous erosion that was 
happening anyway, right. So I think----
    Mr. Higgins. But it was in--it was in rough shape. We all 
know that. Listen, but this is not news. It should all get 
fixed now. My colleagues across the aisle, they have the White 
House, the House, and the Senate. So, we should get the Post 
Office fixed pretty quick.
    But, historically, it has been an issue. When I was in high 
school, my history teacher drew a map of the United States and 
asked us all to name a city in the United States, and we did. 
And at the time, there was great debate of the price of a stamp 
going from 13 cents to 15 cents.
    And once we all identified a city, he asked any one of us 
who could drive there for 15 cents--who could go and deliver a 
letter for 15 cents.
    Of course, none of us could, and this is a lesson that has 
stuck with me, and that now a stamp is 55 cents. The point is 
that, of course, historically, the Post Office has always gone 
through struggles and now is no exception. We have to find a 
way past it.
    And I am going to leave my remaining time to you, 
Postmaster DeJoy, to answer the following question. You will 
have about a minute and 45 seconds.
    In your letter, you said we can improve and strengthen this 
institution for future generations, that much work needs to be 
done by all of us. But with your support, you said, I am 
confident in our plan and optimistic about our future.
    Postmaster DeJoy, please tell America why they should be 
confident and optimistic in the future of the Post Office. I 
will leave you my remaining minute and 20 seconds.
    Mr. DeJoy. Sir, what I have found at the, you know, Postal 
Service is 633,000 committed employees that believe in the 
mission and commit to the mission under relatively--sometimes 
extreme circumstances like as demonstrated during the COVID, 
during the pandemic, and also when you see when we have 
hurricanes or forest fires, they are usually the first part of 
getting back to normalcy when you see people come back into the 
communities.
    The thing--the number-one fundamental reason I am an 
optimist in terms of the plan moving forward is you look at in 
all the pressure the organization has been under the last eight 
months.
    We still--if we got mail and packages to delivery units, 
delivered to every household, over 98 percent of the time and 
that is--that is an advantage. That is a--that is the tool that 
we plan to use in our plan, you know, moving forward to get 
mail and packages to that--those delivery units in the most 
efficient manner, least cost manner, yet timely manner, and 
then use that delivery network to address the new economy as it 
moves forward to, you know, grow--you know, grow our business. 
This is about not----
    Mr. Higgins. I thank the gentleman. I thank the gentleman 
for his dedication. My time has expired, and Mr. Chairman, I 
yield.
    Mr. Lynch. The gentleman's time has expired. The gentleman 
yields.
    The chair now recognizes the gentlewoman from California, 
Ms. Porter, for five minutes.
    Ms. Porter. Thank you very much.
    Mr. DeJoy, do you know how big the Postal Service's deficit 
is?
    Mr. DeJoy. So, we lost $9.2 billion last year. Is that what 
you are asking? Or if you are asking about the $40 billion net 
equity?
    Ms. Porter. Yes. Also the unfunded liabilities and debt.
    Mr. DeJoy. I am sorry?
    Ms. Porter. The unfunded liabilities and debt, please.
    Mr. DeJoy. Total is about $80 billion right now.
    Ms. Porter. OK. When was the last time the Postal Service 
recorded a net profit?
    Mr. DeJoy. Seven years ago. Six or seven years ago, eight 
years ago.
    Ms. Porter. I believe it was 2006. Mr. DeJoy, how much 
longer until the Postal Service runs out of cash?
    Mr. DeJoy. We could run out of cash tomorrow if I pay our 
bills.
    Ms. Porter. OK. And so at current levels, we can agree that 
2021, now, soon. So, my question for you is you developed--last 
time we talked, you made some changes to the Postal Service in 
the summer and the fall, and according to the USPS inspector 
general, the last time you made changes you did not do any 
analysis of if those changes would save money.
    This is according to the USPS Inspector General. You are an 
executive and you did no analysis? Now, I have heard that you 
have a new strategic plan. But I am really concerned that this 
plan may neither be strategic nor a plan.
    Have you figured out if this new plan would save money and 
improve performance?
    Mr. DeJoy. First of all, I will--while I respected the 
Inspector General, I disagree with your--the premise of the 
conclusion that you have reached and if that was in the report, 
I disagree with that also.
    But having said that, we have extensive studies over the 
last eight months to improve reliability, reliability of 
service and reduce costs and grow that----
    Ms. Porter. Wonderful. Mr. DeJoy, will you provide those 
analyses to this committee?
    Mr. DeJoy. When we announced that when we announce the 
plan, we will--we will produce a certain amount of information 
with regard to how we came about, you know, what our solutions 
are.
    But the committee has its powers to request whatever it is 
that it needs and it will go through the process. And, you 
know, we are not--we are not embarrassed by the work we did. We 
are actually quite proud of it.
    Ms. Porter. OK. So, we will look forward to requesting 
those analyses and those extensive studies you just referenced. 
Did you hire any consultants to help with these studies?
    Mr. DeJoy. So, the organization has had embedded 
consultants for a long time, and to the extent that the 
management team use consultants to support----
    Ms. Porter. Reclaiming my time.
    Mr. DeJoy, are those consultants employed by the Postal 
Service or by outside organizations and hired on a contract?
    Mr. DeJoy. I consider all consultants--when you say the 
word consultant, I am thinking they are outside organizations 
that are--that are hired by, you know, by the Postal Service.
    Ms. Porter. Reclaiming my time.
    Mr. DeJoy, who are those consultants?
    Mr. DeJoy. We have hundreds of consultants, ma'am. I 
couldn't----
    Ms. Porter. Would you please provide a list to the 
committee of the consultants that were involved in this 
strategic plan?
    Mr. DeJoy. I can provide you whatever information we have. 
What I was about to tell you, if you will let me finish, was 
that most of this plan was designed by about 150 people within 
the organization.
    It was a Postal-produced analysis, and to the extent that 
any of those groups had consultants working within the 
organization, they may or may not have used that. But this is a 
Postal leadership plan that was--you know, that was put 
together.
    Ms. Porter. Thank you.
    Mr. DeJoy, you have said you are committed to managing the 
U.S. Postal Service with excellence.
    With that in mind, what are the aspects of the Postal 
Service today that you view as most critical, that you treasure 
the most, building a little bit on what my colleague from 
across the aisle, Mr. Higgins, just asked you?
    You mentioned the employees. But what do you value about 
what the Post Office does? What are you not willing to change 
just to make a buck?
    [Laughter.]
    Mr. DeJoy. I think the, as I said earlier, one of the key 
attributes of the Postal Service that I think is very 
important, both from the standpoint of what it--what it does 
for the Nation and also for its viability, because this 
Congress, as previous Congresses, say it needs to remain self-
sustaining. And until that law changes----
    Ms. Porter. Mr. DeJoy--reclaiming my time.
    Mr. DeJoy, what is it that the----
    Mr. Lynch. The gentlelady----
    Ms. Porter [continuing]. Post Office does that you 
treasure?
    Mr. Lynch. The gentlelady's time has expired, and I think 
the gentleman has tried to answer the question.
    Thank you very much. The chair now recognizes the gentleman 
from Texas, Mr. Sessions, for five minutes.
    [No response.]
    Mr. Lynch. Mr. Sessions, you might be muted. I am not sure.
    Can't hear you. Are you there? OK.
    Mr. Sessions. Chairman, is that better?
    Mr. Lynch. I can hear you now. Yes.
    We should give that gal a raise.
    Voice. Hey, let us try this one.
    Mr. Sessions. Tell him to--tell him to move on to another 
witness
    Mr. Lynch. No. No. You are on. You are on. Go ahead.
    Mr. Sessions. Oh, we are on now? OK.
    Mr. Lynch. We didn't take out any time. Go ahead. Give 
minutes.
    Mr. Sessions. Thank you, Chairman.
    Chairman, thank you very much and I appreciate you and the 
chairwoman having this committee hearing today.
    Mr. DeJoy, I would like to tell you how much I appreciate 
and respect you and your colleagues coming today to the hearing 
in Washington, up on the Hill. That is important for the 
American people to hear as well as Members of Congress.
    I previously served on the last Postal Subcommittee back in 
1997, 1998, 1999, and 2000, whenever it was, and we recognized 
how important the Postal Service was--the employees, the 
service they provided to the country, and debated vigorously 
just as we are today, not just the usefulness but the use of 
and about the employees. We owe you a lot. You are out every 
day. Your men and women are in rain, sleet, snow, everything 
that the saying goes by. And I recognize that there are Members 
of Congress who are frustrated.
    But I think that you and the entire team today, including 
those that are union members but still postal employees, have 
talked about as trying to get it together the best way you see 
fit to run the operation.
    And I wish we would have given you more credit for that 
instead of trying to second guess you and trying to nitpick and 
micromanage you. But that is also our job.
    What I would say to you, sir, is that I would like to have 
your answer when you come up with it about what the long-term 
view is to include outside-the-box thinking. Like I am a part 
of--in my background, I spent 16 years with AT&T, which is a 
telecommunications company here in this country, a very large 
one.
    And we went through changes that were constant. Change is 
constant. But we had to look at it sometimes in a way of not 
just what our mission was but the right way to serve it, and I 
hope that you will look at all the things that you believe are 
necessary for sustaining the Post Office, sustaining their 
mission, but also looking at things that might be out of the 
box.
    What would that mean? Well, that may mean something that we 
need to change in your mission statement, something that we 
need to give you the flexibility to run your business the way 
it will sustain it, the way you believe and the employees 
believe you can move forward to make it happen together.
    I am from Waco, Texas, and have had a strong relationship 
with my postal carrier and the postal carriers at my home and 
at my business, and they are dedicated honest people who come 
to work every day.
    We need to support them. But we also need to make sure that 
the long-term effort when we look at it 10 years from now, that 
we can offer the words sustaining with that, too. So, it is my 
hope you will use at least my time with you today to say thank 
you.
    Thank you for your devotion. Thank you for your effort. And 
thank you for having each of your people who are there today 
work together. I look forward to that answer that comes and 
hopes--hope that you will give us some sort of thinking outside 
the box of ways that Congress needs to think about the way we 
think about you to sustain that.
    And I yield back my time.
    Mr. Lynch. The gentleman yields back.
    The chair now recognizes the gentlewoman from Missouri, Ms. 
Bush, for five minutes.
    [No response.]
    Mr. Lynch. Thank God for staff, huh?
    Ms. Bush. All right.
    Mr. Lynch. There we go.
    Ms. Bush. I can hear you now. OK. Perfect.
    [Laughter.]
    Mr. Lynch. Ms. Bush, you are up.
    Ms. Bush. Technology, right? OK.
    St. Louis and I thank you, Madam Chair, and--sorry, Madam 
Chairwoman. I am sorry. Mr. Chair. Sorry, Madam Chairwoman--for 
convening this important hearing.
    St. Louis is home to more than 50 Post Offices and Postal 
Service--and the Postal Service employs more than 5,320 postal 
workers in my district. The United States Postal Service helps 
families and loved ones stay connected, provide jobs, delivers 
life-saving medicines, sustain small businesses, and gives 
people access to the ballot box.
    Our community respects the USPS as a fundamental public 
service.
    Chairman Bloom, by statute, the Postal Service's Board of 
Governors comprises 11 individuals, including nine people 
appointed by the president with the advice and consent of the 
Senate, and then the Postmaster General and the Deputy 
Postmaster General who are all appointed by the Board of 
Governors.
    How many members does the board have today?
    Mr. Bloom. The board has six external Governors and the 
Postmaster General.
    Ms. Bush. OK. How long has the board lacked full 
membership?
    Mr. Bloom. Oh, goodness. I believe we haven't been at full 
strength in quite a number of years. I will get back to you on 
the exact number, but I believe it is at least six or seven 
years since we had a full board.
    Ms. Bush. OK. How have the Postal Service in general and 
the board specifically suffered from having incomplete 
membership on the Board of Governors?
    Mr. Bloom. Well, Congresswoman, I guess what I would say is 
that Congress intended us to have a full board, and so I think 
an organization functions best when it has the full diversity 
of views that comes from a, you know, a full group.
    Congress, in its wisdom, set up nine as the number. I think 
it is a good number. I sat on other boards with nine. I think 
it is a good--for external Governors I think it is a good 
number.
    So, I think the board would always benefit from additional 
perspective.
    Ms. Bush. Given that there are still three Governor 
positions unfilled and you are in your final year of service, I 
believe, Chairman Bloom, for President Biden, are you not?
    Mr. Bloom. Actually--I am actually in my--I am actually in 
my holdover year, Congresswoman. Yes.
    Ms. Bush. Your holdover year? OK.
    OK. Thank you for clarifying.
    Well, so President Biden has the chance to fill three open 
positions on the board. What--can I ask you, Chairman Bloom, 
what career field do the majority of Governors on the board 
come from?
    Mr. Bloom. We have a diversity of backgrounds. Just 
thinking off the top of my head, there is one gentleman who has 
been involved in a large trucking company so has some relevant 
logistics experience. There is another gentleman who has been 
in finance, another business-oriented individual. There is a--
one of the Governors has been involved as an airline pilot and 
a union leader.
    Ms. Bush. OK.
    Mr. Bloom. So, it is a diversity of backgrounds.
    Ms. Bush. What is the average net worth of Governors on the 
board?
    Mr. Bloom. I have no idea.
    Ms. Bush. OK. How about any black, indigenous, or people of 
color on the board?
    Mr. Bloom. The board is comprised today of six white males.
    Ms. Bush. How many women serve on the board?
    Mr. Bloom. It is six white males, Congresswoman.
    Ms. Bush. Exactly. Again. We need women to the front.
    So, currently, the board includes only white men.
    Mr. Bloom. That is correct.
    Ms. Bush. This grotesque lack of representation is a 
critical opportunity to diversity the board's ranks. An agency 
of over 640,000 employees that come from every walk of life and 
serve the entire American public should have representation at 
the top reflective of the broader American population.
    More than 35 percent of postal workers are people of color 
while zero percent of Governors are. Meanwhile, the positions 
that are filled and are not--are not supposed to be represented 
by special interests include--actually include Wall Street 
bankers are fossil fuel lobbyists.
    This question is for Postmaster General DeJoy. Do you see 
it as a problem that the Board of Governors of the United 
States Postal Service looks like a millionaire white boys club?
    Mr. DeJoy. What I would say is that the Postal Service's 
not having a full board is not enabling it to reach its full 
breadth of impact and I welcome that, and I would say also 
there was a period where there were no board members on the 
Postal Service.
    But that is not a problem with the Postal Service. That is 
a problem of whatever administration that is in power and the 
Senate at the time. The Postal Service would love to have a 
diverse board that reflects its population.
    But this is not something that is within our--you know, 
within our power, and I would say that the period where 
whatever Postmaster General and leadership team was there at 
the time, which I think it was my predecessor, that had to be 
an unbearable time and a totally--it had a huge consequence on 
her ability to lead and the ability for the organization to 
move forward, and I feel very strongly about that and I think 
the quicker we get some new board members from the 
administration the less we can talk about this and move on to 
the plan and the real, real problems that we need to fix here.
    So, I welcome your discussion on this and whatever you can 
do to advance this process, I certainly would appreciate it.
    Ms. Bush. Thank you, Postmaster General.
    I would like to reclaim my time.
    Chairwoman Maloney. [Presiding.] The gentlewoman's time has 
expired.
    Ms. Bush. OK.
    Chairwoman Maloney. OK. The gentleman from Arizona, Mr. 
Biggs, is recognized for five minutes.
    Mr. Biggs. Thank you, Chairwoman Maloney and Ranking Member 
Comer, for leading this hearing. I thank the witnesses for 
being here today and appreciate all my colleagues' work to find 
a fiscally responsible future for the Postal Service and I am 
looking forward to working with you on this effort.
    But today, I want to discuss some of the 2020 events that 
affected the Postal Service's ability to deliver mail in a 
timely fashion. No, they don't have to do with COVID-19.
    Last year, our Democratic colleagues turned a blind eye to 
nationwide mayhem, destruction, rioting, and looting conducted 
by Black Lives Matter and Antifa activists. Many businesses and 
government agencies, including the Postal Service, saw their 
entities burn and operations halted because of the persistent 
violent riots.
    Frederic Rolando, president of the National Association of 
Letter Carriers, stated, quote, ``The postal property and 
vehicles have been ransacked during the recent wave of civil 
unrest and letter carriers have been assaulted and robbed on 
their routes. Their irresponsible actions harmed postal 
employees and the citizens we serve,'' closed quote.
    Here are a few examples of how the Postal Service was 
impacted by these events. In Minneapolis, two Post Offices were 
burned and USPS vans were stolen and torched by rioting 
protestors. Also in Minneapolis, the USPS shut down mail 
delivery at seven Post Offices. The Kenosha Post Office in 
Wisconsin had to close indefinitely due to the violent riots.
    In Chicago, at least six Post Offices were broken into and 
burglarized, affecting mail deliver operations, and in 
Lancaster, Pennsylvania, a Post Office was pelted with debris 
as riots erupted across that city.
    To make matters worse, a member of this committee went on 
national television, ostensibly to discuss the USPS funding 
crisis, and called for continuing violence and unrest in the 
streets.
    And as if it weren't enough, Postmaster DeJoy faced 
protests outside of his home in D.C. perpetrated by false 
narratives from my colleagues on this committee.
    Given all this evidence, I think our Democrat colleagues 
owe an apology to Postmaster General DeJoy and all the 
hardworking Postal Service workers who were affected by the BLM 
and Antifa riots of 2020.
    Mr. DeJoy, can you elaborate, please, on how the civil 
unrest from last year affected your agencies operations, 
including the financial impact from the destruction it 
suffered?
    Mr. DeJoy. So, they are always, you know, consequential, 
disruptive, and costly both in terms of our assets and stress 
on our employees. Fortunately, in many of these cases, we have 
advance notice and we are able to get our people out, lock up 
our buildings. The real consequence comes to the people that 
live in those communities because they are the pride of the 
service, and whenever the areas open up again, it takes time to 
reopen our facilities and deal with any of the disruption.
    So, these had impacts. They were specific to the individual 
locations that it occurred, and I would say our overall broader 
issues last year were more systemic nationally that created a 
real consequence. But those areas do impact those people that 
live in the communities and our workers that are in the 
communities.
    Mr. Biggs. Thank you. And, Madam Chair, I ask unanimous 
consent to enter into the record reports documenting the 
violence against USPS, including the letter that I quoted from 
Mr. Alejandro from the National Association of Letter Carriers.
    Chairwoman Maloney. Without objection.
    Mr. Biggs. Thank you. An article from the StarTribune.com, 
entitled, ``Burned Post Offices Destroyed in Minneapolis. 
Unrest Leave a Void;'' of the Gateway Pundit from May 29, 
``U.S. Postal Service Vans Stolen and Torched by Rioting 
Minneapolis Protestors;'' one from Fox9.com: ``USPS Shuts Down 
Mail Delivery at Seven Post Offices in Twin Cities for 
Friday;'' one from Breitbart dated August 24, 2020: ``Kenosha's 
Main Post Office Closes Indefinitely Due to Violent Riots;'' 
one from the Chicago Sun Times, June 5, 2020: ``Reward Offered 
for Details in Post Office Looting;'' one from RT.com.USA: 
``Antifa Lays Siege to Lancaster Police Precinct Following 
Latest Officer-Involved Shooting;'' and one dated August 17, 
2020 from Black Enterprise.com: ``Rep. Ayanna Pressley Calls 
for Unrest in the Streets Over the Failures of the Trump 
Administration;'' and one August 15, 2020 from WUSA-9: 
``Protestors Gather Outside of USPS Postmaster General's Home 
in D.C. Amid Voter Suppression Allegations.''
    Chairwoman Maloney. Without objection.
    Mr. Biggs. Thank you, Madam Chair.
    Chairwoman Maloney. The gentlewoman from Florida, Ms. 
Wasserman Schultz, is recognized for five minutes.
    Ms. Wasserman Schultz. Thank you, Madam Chair. I want to 
turn to another topic that is addressed by this legislation, 
and that is one of transparency. After the postmaster general 
implemented operational changes in mid-July of last year, 
service performance was substantially impacted. My district 
office was flooded with calls from constituents experiencing 
mail delays, and I received countless pictures of pallets of 
undelivered mail and idled sorting machines. In early 
September, I was urged to visit USPS facilities during a 
morning shift to investigate the reports that I was getting 
about the dysfunction going on inside. I provided USPS 
management ample notice and had employees willing to escort me 
through the facility, and yet I was denied entry. This was not 
isolated incident. I became aware that several other Members of 
Congress were also denied permission to make timely tours of 
postal facilities in their districts.
    Mr. DeJoy, in the interest of transparency and enhancing 
public confidence in the Postal Service, will you commit to 
remedying this issue and permitting Members of Congress access 
to tour postal facilities upon request? And please do not say 
that at the time, the Hatch Act was justification for not 
allowing access. The Office of Special Counsel, which is the 
principal enforcement agency of the Hatch Act, has made it 
clear that the Hatch Act does not prohibit Federal employees 
from allowing Members of Congress to tour Federal facilities 
for an official purpose, which these tours were.
    Mr. DeJoy. Ma'am, I will check with our legal counsel, and 
if there is a new position that they wish the Agency to take, 
personally, I have no issue where you go or what you see, but 
there are Agency rules and positions we take because we are an 
independent agency, and----
    Ms. Wasserman Schultz. OK. Let me be specific. Reclaiming 
my time. I am talking about upon request, not told that we have 
to give 48 hours' notice, or two weeks' notice, or a week's 
notice. Even around an election, nothing should bar a Member of 
Congress being able to tour a postal facility for an official 
purpose. And we aren't around an election now, but no matter 
when we ask, there isn't any rule that I am aware of that would 
bar us from being able to tour a postal facility. Obviously, 
adequate notice is, you know, the morning of, the night before, 
the afternoon before. But would you agree to remedy 
unreasonable notice requirements so that Members of Congress 
can tour facilities, particularly because this entire hearing 
has been about the challenges that the Postal Service is having 
with delivering mail.
    Mr. DeJoy. So, as I said, I mean, the position on whether 
the Hatch Act applies or not, I am not able to comment on it. 
With regard to having Members of Congress visit our plants, we 
will get back to you, but I don't have a particular objection 
to it. But if you really want to go look at where our problems 
are, I suggest you go to airports to look at backed-up mail.
    Ms. Wasserman Schultz. OK. Reclaiming my time. I don't need 
any suggestions about where I go. I want to be able to inspect 
postal facilities, and I expect that you would ask your counsel 
to communicate with the Office of Special Counsel about the 
Hatch Act specifically and make sure that Members of Congress 
can tour facilities upon request. That is what I want an answer 
to, and that is what I want to do and other members to do as 
well. So, moving on, I look forward to getting an answer from 
you as soon as you can.
    Mr. DeJoy. Mm-hmm.
    Ms. Wasserman Schultz. The other thing I wanted to touch on 
is mail delays and service standards. Mr. DeJoy, when I decided 
to tour the local postal facilities, and I appreciate Ms. Tlaib 
bringing this up as well, many of the reports I received were 
about decommissioned sorting machines. And I understand that 
the reason for decommissioning some of the sorting machines was 
that letter volume was down while package volume skyrocketed. 
However, these machines, which can label and sort thousands of 
letters, bills, ballots each hour are a vital tool for our 
postal workers, especially during an election season and other 
busy times.
    Now, I have asked you this question before and didn't get a 
clear answer, so I am going to try again. Will you commit to 
giving local plant managers the flexibility to reinstall 
sorting machines when mail volume is high?
    Mr. DeJoy. No, I won't commit to that.
    Ms. Wasserman Schultz. Why not?
    Mr. DeJoy. Because there is a process that we go through 
within the organization that determines what----
    Ms. Wasserman Schultz. OK. Reclaiming my time. I want to 
make sure I ask Mr. Diamondstein about this issue. There have 
been reports that USPS leadership are pursuing policies that 
are deliberately slowing down the mail by decreasing service 
standards. Are you concerned about making sure that there is 
the local ability of supervisors to be able to request to plug 
in sorting machines and also make sure that we can maintain 
current service speeds? And what has happened in the past when 
the USPS slowed down the mail by decreasing service speeds?
    Mr. Diamondstein. Well, I think the best way I can answer 
that question is we are for the Postal Service having an 
operation where people get the prompt service they are promised 
under the law. And if that means local autonomy, then there 
should be enough local autonomy to do that and have that 
decisionmaking going. Obviously, the union doesn't get involved 
with the relationships between the managers, but there has to 
be an operation that is nimble enough and committed enough to 
make sure that that mail moves. And if it means local authority 
to do certain things, then that is what it should include.
    Ms. Wasserman Schultz. Thank you. That is why the President 
needs to fill the Board so we can get a postmaster general who 
actually is committed to making sure that that happens. Thank 
you, Madam Chair. I yield back the balance of my time.
    Chairwoman Maloney. Nancy Mace is now recognized for five 
minutes.
    Mr. DeJoy. I would suggest that would not solve your 
problems.
    Chairwoman Maloney. Nancy Mace?
    [No response.]
    Chairwoman Maloney. We will go to Yvette Herrell? Yvette 
Herrell?
    Ms. Herrell. Thank you, Madam Chair, and thank you for 
hosting this committee meeting. It is very important. It is 
important to our constituents all over the country. And one of 
the things I heard here today that I do agree with is that the 
status quo is not acceptable. I will also yield part of my time 
at the end for a couple of answers from Chairman Bloom and from 
Mr. DeJoy. But right now, what I want to ask is, can you 
discuss and expand on the reforms you have made--this is to Mr. 
DeJoy--at the U.S. Postal Service? When you arrived in June 
2020, what did you see and how did you decide what to tackle 
first?
    Mr. DeJoy. I am sorry. I didn't understand the question.
    Ms. Herrell. Let me see if I can do it this way.
    Mr. DeJoy. There you go.
    Ms. Herrell. OK. Thank you. Can you discuss and expand on 
the reforms you have made at the U.S. Postal Service? When you 
arrived in June 2020, what did you see and how did you decide 
what to tackle first?
    Mr. DeJoy. When I first arrived, I spent a lot of time with 
the leadership team, management team, doing inquiries. 
Actually, I started about 45 days before that doing that, so 
when I arrived onsite, I had spoken to most of the leadership 
team. I reviewed many, many internal audit reports and so 
forth. And we also have to remember when I came on, at that 
particular point in time, the Agency was forecasted to lose $22 
billion that year, up from about $7 or $8. We ended at $9, and 
run out of cash in September.
    One of the top things that I looked at, and part of it was 
supported by OIG report, was our none of our trucks were 
running on time. It is the key to a network operation. I asked 
the management team, which included area vice presidents, 
operational vice presidents, and the COO, let's go look, which 
these were not new ideas. This was on the table already. Let's 
go look and actually make a move to try and have this work, 
reduce extra trips and run trucks on time. Why? Because we run 
50,000 truckloads a day and at 25 percent full, all right? So, 
it should have been something to be able to accomplish.
    We went ahead and implemented that, and it crashed. We 
recovered in several weeks, and I learned from that and that is 
why I began the reorganization. A big part of that consequence 
was what led me to reorganize the organization, which we are in 
the process of doing right now. The rest of the rumors about 
machines, shutting down machines, cutting overtime, all that 
stuff is not accurate.
    Ms. Herrell. OK. Thank you. And earlier today, I heard 
somebody on the committee say that the service standards have 
been damaged. In your opinion, under your watch, have these 
service standards been damaged, or, in your opinion, do you 
think there have been some improvements made, because I do 
appreciate that you are undertaking this entire process more in 
the light of running the entity like a business, which I think 
is a very smart thing to do. But I am curious about the comment 
that was made earlier about the service standards that were 
damaged.
    Mr. DeJoy. Well, our performance against our service 
targets for the standards have deteriorated significantly. They 
have been on a path for the last seven or eight years of 
deterioration, and we are going to continue and will continue 
to do that unless we adopt a plan to not make the changes that 
we want to make. This was exacerbated by the peak season, the 
pandemic, and a significant breakdown in our transportation 
network, and due to extreme volume and increased physical size 
characteristics of the volume presented to us.
    Ms. Herrell. Thank you. And my last question is to Chairman 
Bloom. Just I wanted to give you a chance to respond to 
partisan accusations that you were attempting to purposely slow 
mail in voting prior to the election. Can you elaborate on that 
for just a few seconds?
    Mr. Bloom. Yes, sure. The Board of Governors was in full 
support of all of the extraordinary measures that were taken to 
try to fulfill our obligations to deliver election mail as 
promptly as we possibly could. That was a key commitment of the 
whole Postal Service, strongly supported by the Board.
    Ms. Herrell. Thank you, Madam Chair. I will yield back. And 
for the record, I am tickled pink to be in this committee 
hearing today.
    Chairwoman Maloney. OK. The gentleman from Vermont, Mr. 
Welch, is recognized for five minutes.
    Mr. Welch. Thank you very much, Madam Chair. Mr. DeJoy, 
Vermont has a number of companies that depend on catalog sales, 
and they are really important companies in Vermont. And as you 
can appreciate, they are very concerned about the potential of 
increased costs of the catalogs, and my understanding is that 
under consideration now is about a seven percent increase this 
year, and over five years, 35 percent. Could you speak to that 
and what your analysis is about the impact that would have on 
those businesses? And what they tell me, just so you can 
respond specifically to them, is that with that kind of price 
increase, they will really have to reduce that marketing tool 
and probably go to digital. And, A, they don't want to do that, 
and B, obviously that might have an impact on revenue, that 
even though you are raising prices, the revenue will go down.
    Mr. DeJoy. So, I have been speaking to many people in the 
industry about the recent, you know, PRC rule. This is our 
regulator. We had a 10-year test, right, with the legislation, 
and they took four years to evaluate it. And they came to the 
conclusion that, more or less, that the reduction in mail 
volume has had significant consequences to the Postal Service, 
you know, over the last 14 years. They didn't fix any of that, 
right, but that could have been somewhere between $25 and $50 
billion, you know, that would have helped the health.
    Mr. Welch. Just to focus this, I am really concerned and 
they are concerned about price increases and the impact on 
their----
    Mr. DeJoy. And they should be.
    Mr. Welch. Yes.
    Mr. DeJoy. They should be concerned about it because it is 
one of the tools and it is one of the levers we get to pull, 
right? And our regulator has established that we have a certain 
amount of pricing increases that we can do now based on a four-
year analysis in costs. Now, as I told the industry, that is a 
lever. That is part of our plan: pricing. This legislation is 
part of our plan, and operational cost savings is part of our 
plan, and growth is part of our plan. To the extent that we 
don't get anything else done but this PRC ruling, then I am 
going to have to use it all to keep us in business. If we get 
cooperation and we get to move forward with the plan, we get 
this legislation, we are not out to profit. We are out to break 
even as your laws, as the congressional laws, mandate us to. 
That is all this is about. So, the sooner we can get moving on 
legislation, get moving on the operational improvements that we 
need to make, which may include some minor service adjustments, 
the less we will have to use price. The Board, myself, the 
management team, we want to be an economic, affordable user for 
everyone.
    Mr. Welch. So, you know, I hear you acknowledging that a 
price increase would put pressure on these marketers and their 
marketing plans. You are mindful of that.
    Mr. DeJoy. I am very, very mindful, sir, of, you know, 
delivering an affordable service. Now, I will also say that 
there are many, many users of the mail system to deliver mail 
and packages. Some may be in your constituents' situation, but 
a big part of our mail volume, they are our customers and we 
appreciate them, but over 60 percent of our business are 
commercial users, corporations that have a profit, that attempt 
to make profit. So certainly, no one likes price increases, but 
that does not mean that it leads to any further reduction in 
mail.
    Mr. Welch. Thank you. In my last 45 seconds, can you tell 
us the bipartisan proposals that are under consideration that 
you support? I mean, there has been talk here by the chair and 
our ranking member----
    Mr. DeJoy. Right.
    Mr. Welch [continuing]. About some provisions they agree 
on.
    Mr. DeJoy. Well, I think what the chair and the ranking 
member are speaking about is the Medicare integration that is 
in the bill and the elimination of the pre-funding. The rest of 
the bill has some reporting and stuff like that----
    Mr. Welch. So, you do support that, those----
    Mr. DeJoy. Yes, sir. Yes, sir, I support it. Our Board 
supports it. Our union leadership supports it. It has been an 
unfair situation for the Postal Service. It needs to be 
corrected.
    Mr. Welch. Thank you, Mr. DeJoy.
    Mr. DeJoy. Mm-hmm.
    Mr. Welch. Madam Chair, I yield back. Thank you.
    Chairwoman Maloney. The gentleman yields back, and I now 
recognize the gentleman from Kansas, Mr. LaTurner. You are not 
recognized for five minutes.
    Mr. LaTurner. Thank you, Madam Chairwoman. I want to thank 
you for holding this hearing to help the committee and Congress 
focus on the challenges facing our Postal Service, which are 
many. In rural America, we understand the importance of postal 
mail to connecting our people and communities. In these 
unprecedented times, the United States Postal Service, which 
was already having financial issues, has been put under even 
further strain. Our founders recognized the importance of 
postal mail to uniting our country by including the 
establishment of post offices and postal roads in our 
Constitution.
    The Post Office is vital to commerce across America. Any 
postal reform considered by Congress must guarantee continued 
and long-term access to mail delivery for rural areas like 
Kansas, while also being financially responsible. Every one of 
my constituents back home, including corporate constituents, 
like Hallmark Cards, will suffer if we don't get this right. We 
must enact meaningful reforms that will place the Postal 
Service on a long-term path to financial sustainability, while 
at the same time increasing efficiencies and improving 
services. It is my hope that in this hearing and subsequent 
hearings, we will focus on the United States Postal Service's 
challenges, both financial and operational, instead of focusing 
on politics.
    Mr. DeJoy, how are you doing today, sir?
    Mr. DeJoy. I am great. Thank you.
    Mr. LaTurner. I wanted to ask, when you talk about your 
bold operational reform agenda, what aspects of this plan are 
you most worried about, that are most at risk to immediate 
resistance?
    Mr. DeJoy. I think there are visions and aspirations for 
the Postal Service in terms of delivery that are just 
achievable, you know, with our current network. We talk about 
flying. We don't own planes, right, so we have, you know, a 
deteriorated transportation network. And so we spend a lot of 
money, a lot of inefficiency in trying to achieve these 
composite-type standards that are just not doable in the 
current environment. And then we get down to questioning if we 
are committed to six-and seven-day-a-week delivery, does it 
make a difference if it is an extra day, you know, to get a 
letter, because something has to change. We cannot keep doing 
the same thing. Last year, we did $80 billion worth of service 
to the American people and we charged $70, right?
    So my goal, our goal here, is to potentially charge $72 and 
get another $2 or $3 out of the operational costs, which is 
very, very achievable, but we can't achieve it just doing 
everything we are continuing to do. So, I am worried about 
continued resistance to change, which everybody here seems 
concerned about and recognizes that there is an issue, but to 
get consensus to make a move when we have a plan--this is a 
well-thought-out balanced, robust plan--would be a real shame 
for everyone not to, you know, jump on it and support it.
    Mr. LaTurner. Thank you. And a question for Mr. Quadracci 
on Zoom. Earlier you talked about the elements that you think 
need to be added to this bill. Can you elaborate on that, 
please?
    Mr. Quadracci. Yes. I know we had some technical 
difficulties.
    Mr. LaTurner. Yes.
    Mr. Quadracci. But basically----
    Mr. LaTurner. Thank you.
    Mr. Quadracci [continuing]. There are four main items. It 
was to avoid, you know, triple and quadruple rate increases 
that the postmaster general just talked about, that the Postal 
Rate Commission has allowed for. You know, I will come back to 
that. But then six-day delivery, which has already been talked 
about, investing in higher retirement returns for the 
employees, which has already been talked about, and really 
return the overpayment to the Civil Service Retirement System. 
You know, this is stuff that was paid by the customer through 
postage. We are not asking for that back for the customer. We 
are asking it to be used for the Post Office's stability, and 
that is billions of dollars.
    But back to, you know, the triple and quadruple rate 
increases, if I take you back to--this was personally very 
painful for me--it was the last year that the Post Office was 
allowed to increase by any rate it wanted before they were 
capped by CPI under the PAEA. And when that came out, it was 
anywhere from a 10 to 40 percent increase in rates that would 
kick in in 2008. Immediately, we saw our volume drop like a 
rock. The industry lost between 25 and 30 percent of its 
volume. A lot of people blame the Great Recession on that, but 
I will tell you as someone who is very close to his clients, 
that that is not true. It started before the wheels came off in 
the economy because of that big increase. Those catalogers that 
were just discussed and many others dropped mail like a rock.
    Chairwoman Maloney. The gentleman's time has expired.
    Mr. Quadracci. And once the economy came back----
    Chairwoman Maloney. The gentleman's time has expired.
    Mr. Quadracci. OK. Thank you.
    Mr. LaTurner. Thank you, Madam Chairwoman.
    Chairwoman Maloney. The gentleman from Georgia, Mr. 
Johnson, is recognized for five minutes.
    Mr. Johnson. Thank you, Madam Chair. Mr. DeJoy, you have 
led a distinguished career in business, having served as the 
CEO of New Breed Logistics from 1983 to 2014. And thereafter, 
when that company was acquired by XPO Logistics, you served as 
the CEO of XPO Logistics' supply chain business. So, you have 
got a long and successful career in logistics. Isn't that 
correct, sir?
    Mr. DeJoy. Yes. Yes, it is.
    Mr. Johnson. And you brought that training with you when 
you accepted the position at the Postal Service, beginning your 
tenure in May 2022, correct?
    Mr. DeJoy. June 2020, sir.
    Mr. Johnson. I said 2022. That is what I meant, 2020, but 
you corrected me in terms of May. It was June, not May. But can 
you name for me, sir, one enterprise, governmental or private 
sector, that is required to fully pre-fund health benefits for 
its retirees and current employees?
    Mr. DeJoy. I don't know of any. I don't know of any. I have 
heard of something someplace, but for the most part, it is non-
existent.
    Mr. Johnson. And this requirement has created a crushing 
blow for the Post Office's ability to maintain solvency on a 
year-to-year basis. Isn't that correct?
    Mr. DeJoy. Yes, sir.
    Mr. Johnson. And so when people talk about the Post Office 
not making money, and being insolvent, and needing to be 
replaced, that is just not true, is it?
    Mr. DeJoy. Well, I don't think any of that is true, but we 
have financial problems. This----
    Mr. Johnson. Well, I will tell you that the decline in 
first-class mail is one of those factors, isn't it?
    Mr. DeJoy. Yes, sir. We lost over 45 billion pieces of mail 
a year 10 years ago.
    Mr. Johnson. And is that any reason why you would want to 
create a situation where the first-class mail was not delivered 
within the current timeframe that is set for it to be delivered 
within, and you would want to stretch it out and deliver the 
first-class mail, let it be delivered at a slower pace than the 
pace that is set in stone for right now?
    Mr. DeJoy. I mean, that is----
    Mr. Johnson. Why would you want to cause first-class 
delivery to be degraded?
    Mr. DeJoy. So, I think first-class delivery is degraded 
already because we don't make our service standards. We are not 
able to make our service standards. We have never made our 
service standards, and it is going to be increasingly----
    Mr. Johnson. Well, you are----
    Mr. DeJoy. It is going to be increasingly difficult to, in 
fact, you know, make them. If we were to try to proceed with a 
plan----
    Mr. Johnson. But you are trying to change the service to 
allow for first-class mail to be delivered over a longer period 
than the guidelines currently call for.
    Mr. DeJoy. You are guessing at what I am trying to do.
    Mr. Johnson. Why would you do that?
    Mr. DeJoy. We haven't released a plan yet.
    Mr. Johnson. Well----
    Mr. DeJoy. I will say that at the end of the day----
    Mr. Johnson. Well, why would you want to do that?
    Mr. DeJoy [continuing]. If we move forward with a plan, 
only about 30 percent of first-class mail would be impacted 
with any additional delays.
    Mr. Johnson. Well, let me ask you this.
    Mr. DeJoy. And it comes because we are not able to reach 
the markers.
    Mr. Johnson. Let me ask you this question, sir. Let me ask 
you this question. During the middle of a pandemic and in a 
climate where there were going to be millions more ballots cast 
in an upcoming election----
    Mr. DeJoy. Yes.
    Mr. Johnson [continuing]. You decided to change the service 
delivery standards for the mail, and, as a result, the 
performance of the Post Office went into a steep decline. Why 
did you do that?
    Mr. DeJoy. Well, are you talking about the past or are you 
talking about the future? You are confusing me.
    Mr. Johnson. No, I am talking about this past summer----
    Mr. DeJoy. Yes. So----
    Mr. Johnson [continuing]. Right before the judge ordered 
you to replace those----
    Mr. DeJoy. The intent of the changes that I made, you would 
think, would make the mail move on time. We were asked to put 
together a plan to have our trucks dispatch from the plants on 
time. We had significantly late vehicles, 50,000 a day, running 
around with 25 percent full. That is what I did. We failed at 
the execution. We fixed that----
    Mr. Johnson. Well, the service standards went down.
    Mr. DeJoy. And that was all done within----
    Mr. Johnson. They were lowered as a result of your actions.
    Chairwoman Maloney. The gentleman's time has expired. The 
gentleman may answer the question.
    Mr. DeJoy. The transportation change that I made in July 
was remedied by the last week of August. It had no impact. 
After that, we ran extra trips. We ran late trips. We did 
everything we possibly could. The system was overwhelmed by 
package and mail volume, underwhelmed by the performance of our 
carrier networks, and also, quite frankly, our own operations 
within our plant facilities. We talked earlier about embargos. 
These were not embargoes. We had lines outside our plants 
because we couldn't fit anything else in our plants. That is 
not an embargo. That is being physically overwhelmed. However, 
had we gotten mail and packages to our delivery units, it got 
delivered 98 percent of the time within a day. So, nothing that 
has gone on over the last four months had anything to do with 
my asking the trucks to run on time in July.
    Chairwoman Maloney. The gentleman's time has expired. The 
gentleman from Georgia, Mr. Clyde, is recognized for five 
minutes.
    Mr. Clyde. Thank you, Madam Chair, for holding this 
important hearing and to our witnesses for their testimony. It 
is no secret that the election in my home state of Georgia was 
plagued with improprieties and irregularities. While I am not 
here to get into the specifics of those, nor am I looking to 
point fingers at the Postal Service, I am trying to understand 
some terminology used more than 10 times in the Postal 
Service's 2020 Post-Election Analysis Report, that being the 
term of ``extraordinary measures.'' This term was used 
throughout the report to highlight the Postal Service's success 
in having achieved the results that it did. Your report notes 
that some extraordinary measures deployed in the 2020 election 
had been deployed in previous years. I also want to make it 
known that some of the extraordinary measures deployed in 2020 
were court mandated, as was in the case of Georgia, and ballots 
processed under such measures were excluded from total counts.
    As a businessman and a former Navy logistics officer, the 
term ``extraordinary measures,'' as it pertains to promoting 
metrics achieved and results delivered, leads me to think that 
you took steps above and beyond expectations. ``Extraordinary 
measures'' also generally requires the reshuffling of resources 
and labor away from other primary tasks and duties. But in the 
case of the Postal Service, those extraordinary measures taken 
were measures that helped you meet expectations and fulfill 
your missions, not to exceed them, nor did you put proper 
accounting processes in place.
    My Democratic colleagues are encouraging states to expand 
mail-in ballots, and are pushing a bill, H.R. 1, that would 
restrict states' rights to determine the vote-by-mail 
eligibility of its residents. For an entity already flailing 
and saddled with billions of dollars in liability, I cannot 
imagine that said extraordinary measures are sustainable. So, 
to Mr. DeJoy, in a few sentences, how critical is it for 
Congress to take steps toward reforms that bolster efficiency 
to make these extraordinary measures, as they pertain to 
meeting minimum expectations, a relic of the past? What do we 
need?
    Mr. DeJoy. I kind of got a little lost. What is the 
question, the specific----
    Mr. Clyde. How critical is it for Congress to take steps 
toward reforms that bolster efficiency to make these 
extraordinary measures that we have been talking about, as they 
pertain to meeting minimum expectations, a relic of the past?
    Mr. DeJoy. What was the last word?
    Mr. Clyde. A relic of the past. Enunciation is really 
terrible here.
    Mr. DeJoy. Yes, the last two words.
    Mr. Clyde. A relic of the past.
    Mr. DeJoy. A relic of the past.
    Mr. Clyde. Yes. Thank you.
    Mr. DeJoy. So, extraordinary measures have been a set of 
procedures that the Postal Service has done historically around 
mail-in ballots, and it really is quite, you know, something to 
see. We actually hunt inside plants for ballots to make sure it 
gets processed, often to the degradation of other type of 
services around election time. We are probably the most stable 
thing in the mail-in ballot process. We have 50 states and a 
number of districts that, you know, have electoral boards, and 
all their processes are different. And that is, you know, a big 
reason for some of the consequence of why we need to go through 
the extraordinary measures we do to get ballots out to the 
voters and back to the electoral boards. So, to the extent that 
anything can be done to streamline that, even a simple thing as 
a barcode in the first-class, you know, mailing of ballots, 
would be very, very helpful to the Postal Service.
    But I would say to you, taking on that and going back to 
our plan in the future, there are extraordinary measures going 
on within the Postal Service everywhere. We have, you know, 
composite measures and metrics that we need to fulfill that are 
just not able to be filled.
    Mr. Clyde. OK.
    Mr. DeJoy. And it creates an operational process that, at 
the time, I found quite chaotic.
    Mr. Clyde. OK. All right.
    Mr. DeJoy. And of the things that, you know, this plan that 
we have----
    Mr. Clyde. Thank you, Mr. DeJoy. I just have one more 
question for you----
    Mr. DeJoy. Yes.
    Mr. Clyde [continuing]. And I just have a few seconds left, 
on the topic of the Postal Service's role in upholding the 
sanctity of our elections. We know that a 2017 investigation by 
the Office of the Special Counsel found some Postal employees 
violated the Hatch Act. Can you please submit for the record 
answers to the following: one, detail of changes made to 
prevent violations during the 2020 election cycle, especially 
as it pertains to ballots processed under extraordinary 
measures; and two, is the Office of the Special Counsel 
currently investigating or planning to investigate possible 
violations of the Hatch Act that might have occurred last year.
    Mr. DeJoy. Yes. I am not aware of any of that, nor am I 
aware of any violations that are even being, you know, talked 
about, but we will go back and, you know, look through the 
records.
    Mr. DeJoy. I think there was a commitment by the 630,000 
men and women of the Postal Service to perform, you know, to 
within the letter of the law to move, you know, ballots 
through, and I don't think anything other than that happened.
    Mr. Clyde. OK. Thank you very much. I yield back.
    Chairwoman Maloney. The gentlelady from California, Ms. 
Speier, is recognized for five minutes.
    Ms. Speier. Thank you, Madam Chair. Mr. DeJoy, the 
President provided an executive order upon becoming President 
that he wanted electric vehicles to be used to the greatest 
extent possible. A GSA analysis on the lifetime basis of EVs 
versus conventional vehicles found that they were about equal 
because of the lower cost of maintenance and the cost of gas, 
and as batteries become cheaper, they will probably actually 
decrease in price. So, my question is, you have just purchased 
a number of vehicles. My understanding is not one of them is an 
EV.
    Mr. DeJoy. Well, that is not true. We announced the 
acquisition yesterday. As you know, our vehicles are 30 years 
old and catch on fire----
    Ms. Speier. Yes. If you would just answer the question. How 
many EVs did you purchase?
    Mr. DeJoy. We have in our plan a commitment to buy 10 
percent of----
    Ms. Speier. Of the fleet? Well, why would it be 10 percent? 
Why not 90 percent?
    Mr. DeJoy. Because we don't have the $3 or $4 extra billion 
in our plan right now that it would take to do it, but we are 
happy to talk with the Administration and with this Congress if 
they want to help us.
    Ms. Speier. All right. Thank you.
    Mr. DeJoy. But we did spend about $500 million on 
convertible.
    Ms. Speier. Reclaiming my time. Reclaiming my time.
    Mr. DeJoy. Every vehicle could be, you know, converted to 
electric. We have very well----
    Ms. Speier. All right. I thank you, Mr. DeJoy. I would like 
to go on to another issue. In October 2020, CBS News reported 
that XPO Logistics landed a $5 million highway shipping 
contract with USPS, which was the first regular contract for a 
postal route that XPO Logistics had signed with the USPS in 
more than a year. An ongoing investigation by a crew in 
Washington revealed that USPS also awarded XPO Logistics 
another highway shipping contract of nearly $26,000 to run from 
November 2020 to 2022. You were, of course, formerly employed 
by XPO Logistics and had maintained an interest when you came 
on board as postmaster general. In October of last year, the 
Office of Government Ethics issued a certificate of divestiture 
to you showing that you had finally agreed to divest. Have you 
completely divested of XPO Logistics?
    Mr. DeJoy. I have completely divested of XPO Logistics.
    Ms. Speier. Have you transferred any of your interests to 
your adult children?
    Mr. DeJoy. No.
    Ms. Speier. Has the----
    Mr. DeJoy. I have not transferred any of my XPO interest to 
my adult children. You said ``any of my interests.''
    Ms. Speier. To your wife.
    Mr. DeJoy. No.
    Ms. Speier. To any of your family members?
    Mr. DeJoy. So, you said any of my interests. I have lots of 
interests. If you are talking specifically about XPO, I haven't 
transferred that to anybody.
    Ms. Speier. Do you have any interests associated with the 
Postal Service contracts that have been with the Postal Service 
in the past?
    Mr. DeJoy. Ma'am, I have had a number of investigations 
with regard to my ethics. An OIG report came back without 
recommendation. I did it all right. I don't know where you are 
going with this, but there are no ethical violations in my time 
at the Postal Service, nor anywhere else in my career.
    Ms. Speier. Well, evidently----
    Mr. DeJoy. Evidently?
    Ms. Speier [continuing]. The OIG did not review some of 
your accounts, and the name of the entity associated with those 
accounts is redacted. I am just curious, Ms. Whitcomb, if there 
has been an updated review of Mr. DeJoy's compliance with 
ethics requirements.
    Mr. DeJoy. I comply with all ethics requirements. I did it 
immediately as I came into the organization.
    Ms. Speier. No, I am asking this of Ms. Whitcomb. Is she on 
the line?
    Ms. Whitcomb. Yes, I am here. Yes, since the issuance of 
that report, we completed our work and found that Mr. DeJoy 
followed guidance from Postal ethics staff and provided written 
recusal notifications, set up screening arrangements to avoid 
potential conflicts----
    Ms. Speier. Thank you.
    Ms. Whitcomb [continuing]. And divested appropriately.
    Ms. Speier. Thank you. Let me end by asking you this, Mr. 
DeJoy. In my area, my constituents, I just got two yesterday. 
One got a letter that took 12 days from Dallas, Texas to San 
Francisco. I think people are willing to accept one day, but 12 
days presently is only going to become greater in the future. 
In the Bay Area, there are 100 non-carrier positions and 100 
letter carrier positions before the November election that were 
unfilled. The Bay Area cost is very high. You could get a job 
at the In-N-Out Burger drive-through for $18 an hour. My 
understanding is it is about $17 an hour as a starting salary 
for USPS. And so my question is, are you willing to look at a 
different rate of salaries for those who live in high-cost 
areas?
    Chairwoman Maloney. The gentlewoman's time has expired. The 
gentleman may answer the question.
    Mr. DeJoy. So, the union leadership and our H.R. team 
negotiate rates. But what I will tell you is that I am 
committed to improving on the pre-career status of some 200,000 
employees within our organization and have them really see a 
path to full-time employment, and I think that is really where 
we can improve on the retention and still stay competitive in 
the marketplace. And that is work I am very, very active in 
doing and recently converted 10,000 people in December, and 
that has not been done in many years here.
    Ms. Speier. I yield back my time here.
    Chairwoman Maloney. Thank you. The gentleman from Texas, 
Mr. Fallon, is recognized for five minutes.
    Mr. Fallon. Thank you, Madam Chairwoman. The Federal 
Government and this institution, Congress, we are world-class 
experts at kicking the can down the road and also burying our 
heads in the sand. In short, we are terribly proficient at 
ignoring glaring, alarming, and potentially devastating 
problems, not just here, but in a myriad of ways. Solving the 
current dire financial status of the Postal Service should not 
be partisan. It seems it is because I have been watching this 
for several hours now, but it shouldn't be. We should take 
partisanship and throw it in the trash, particularly when we 
are looking at the realities of math.
    Between 2007 and 2019, the Postal Service lost $79 billion, 
and in 2020, I believe that figure was $9.2 billion. Former 
Postmaster General Megan Brennan testified a couple years ago 
that in the absence of real legislative and regulatory reform, 
the Postal Service would be flat broke by about 2024. And what 
are some of the answers that are being proposed today by our 
friends on the other side of the aisle? Is it cutting costs? Is 
it reducing work force compensation? Is it limiting unfunded 
liabilities? Is it requiring the financial condition of the 
Postal Service to be considered during future collective 
bargaining? No. No, not one of those things. Medicare 
integration has been talked about a lot, and it looks as if, by 
estimates, it will save about $40 billion dollars over the next 
decade. But we are trying to close $160 billion gap, and 
taxpayers shouldn't be on the hook for that anyway. It is not 
as if Medicare is a shining example of financial safety and 
stability.
    Mr. DeJoy, I have a very quick question for you. How many 
of the proposed reforms from the 2018 task force--I believe 
there may be, like, six major ones--have been implemented? Have 
there ever been any?
    Mr. DeJoy. I can't hear you.
    Mr. Fallon. I am sorry. Can you hear me?
    Mr. DeJoy. Yes.
    Mr. Fallon. How many of the proposed reforms from the 2018 
task force have been implemented?
    Mr. DeJoy. So, if you haven't noticed, we have had kind of 
a restriction on implementing a lot of different processes. But 
the task force, I did study the task force, and there was some 
good directional elements of it, and there were some things 
that I would not sign on to. But some of those elements that we 
announced the plan, I will be, you know, happy to discuss it. 
And in that report, I mean, the White House report absolutely 
supported, you know, that it should remain a public entity, and 
that we needed to look at new ways of marketing our services, 
but recognized that there are cost and operational issues which 
our plan addresses.
    Mr. Fallon. OK. Is it fair to say that that was 
constructive, though, as far as the task force? They had some 
ideas that were worth looking into?
    Mr. DeJoy. As a public agency, we take all input.
    Mr. Fallon. OK. And I apologize and thank you, and I think 
you are doing a great. I just am short on time. Mr. 
Diamondstein, I want to ask you a few questions, if I could. 
Your union currently has on its website a link to a 2021 union 
contract survey, and in it, you also tell your members, and I 
am going to quote here, ``Contract negotiations are most 
challenging with management always trying to chip away at our 
wages, rights, and benefits.'' And I would just have to share 
that I think demonizing the Americans that work at the Postal 
Service and in the Postal Service leadership doesn't do 
anything to solve the crisis that we are facing. It doesn't do 
anything to close that gap. So, you know, when we are looking 
at background material here, when we were reading through it--
it was rather extensive, I was really alarmed by the $160 
billion in unfunded liabilities and debt; $50 billion unfunded 
liabilities for pension benefits, $60 billion in unfunded 
liabilities for worker compensation liabilities, and $19 
billion for compensation as well. It is glaringly obvious that 
this $160 billion chasm has to be closed, or at least narrowed, 
by limiting at least some somewhat the aforementioned unfunded 
benefits, or they are going have to be trimmed.
    So, I just had three quick questions for you. Is your union 
willing to acknowledge that, and what is your union doing to 
help the Postal Service become profitable, obviously other than 
fighting management. And then last, do you oppose or support 
requiring the financial condition of the Postal Service to be 
taken into account during future collective bargaining? And I 
can ask those questions again.
    Mr. Diamondstein. You expect me to remember those three 
questions.
    Mr. Fallon. OK. Well, I will go first. Are you willing to 
acknowledge that this $160 billion chasm is large, it is 
glaring, and we are going to have to do something to trim that?
    Mr. Diamondstein. OK. I appreciate that question because a 
lot has been thrown around today about the dire financial 
situation. But the reality is that a heck of a lot of this 
liability and debt is paper, and it was created. If the Postal 
Service is broke, we could say it is broke on purpose. And so, 
actually our pension plans are over funded. Our retiree 
healthcare funds are funded in a way that no other company or 
no other Federal agency does. There is a lot of money there. So 
to me, it doesn't get us to where we need to go by creating 
this picture that is really not the case.
    Now that isn't diminishing that we feel there is some real 
challenges, so one of the questions you asked is what are we 
doing about it. We are huge advocates of expanded services. 
Expanded services bring in new revenue, such as in the 
financial service world, such as paycheck cashing, such as 
licensing, such as electric charging stations in front of many 
post offices. There are all sorts of things that we can do that 
we are willing to work with management on.
    Now, your third question--I think I remembered them all--is 
the question of what have we done. The Postal workers have 
given up a lot. And I am glad you are reading our website, but 
you should go back to our 2010 collective bargaining agreement 
where we didn't get pay raises for two years at all, where we 
lowered the standards to the point that the Post Office 
unfortunately is having trouble hiring. We didn't want to go 
that way, all right? But we believe in good living wage jobs, 
good benefits, and the problem with the Postal Service is not 
that we have a collective bargaining process where if it ends 
up in interest arbitration, they can't take into account the 
financial----
    Chairwoman Maloney. The gentleman's time has expired.
    Mr. Diamondstein [continuing]. Post Office. We are model 
employers under the law, and we should remain that way. But I 
do take issue with this idea of the hundreds of billions of 
dollars that is thrown around when it is really not case, and 
Congress can fix it----
    Chairwoman Maloney. The gentleman's time has expired.
    Mr. Diamondstein [continuing]. With many of the ways we 
have talked about.
    Chairwoman Maloney. The gentleman from Maryland, Mr. 
Sarbanes, is recognized for five minutes.
    Mr. Sarbanes. Thank you, Madam Chair. Can you hear me OK?
    Chairwoman Maloney. Yes, we can.
    Mr. Sarbanes. OK. I appreciate the hearing, and I 
appreciate the good work on the bill that we have been 
discussing today. And thank you for your staff's efforts on 
that, and hopefully we can make some forward progress with it.
    Postmaster General DeJoy, you, I think, conceded a couple 
of rounds back that there was some failure of execution in 
terms of the plan that you were implementing last spring and 
summer. I thank you for that acknowledgement. What the head 
scratcher for me was that you would barrel forward with your 
plan as the pandemic was ramping up. I just never understood. I 
mean, leave aside the pros and cons of the plan, and I have a 
lot of concerns about it, but why you wouldn't go into some 
kind of a pause mode at a time when the postal work force was 
going to be under incredible pressure, I have never completely 
understood.
    But be that as it may, I want to, Mr. Diamondstein, talk to 
you for a moment. First of all, thank you for your 
representation of American Postal Workers Union. You have very 
strong members and leadership in the Baltimore area. I want to 
thank you for that because they have given us good insight on 
some of the challenges that the Postal Service is facing. One 
of the components of the bill that we are talking about in the 
discussion draft, in addition to the Medicare integration and 
eliminating the requirement to pre-fund retiree health 
benefits, has to do with service performance reporting. And it 
is the idea that there will be required targets for the Postal 
Service to meet in terms of performance and then reporting what 
goes with those targets, and that will reflect nationwide 
performance, area performance, district levels, et cetera, and 
form the basis of a plan that can go to PRC on addressing the 
failure to meet standards in the future.
    My question for you is, can you speak to how that effort, 
and that focus, and that reporting regime relates to the Postal 
Workers Union and other union support for restoring 2012 
service standards, which I know is something that you all have 
spoken to. Talk to me a little bit about how you see those 
relating, and talk to me as well about your confidence and 
experience with the Postal Service management pulling the union 
into the conversation around how to meet those standards and 
address any gaps between the standards and actually what is 
happening in practice.
    Mr. Diamondstein. Well, to take the second part first, my 
union has not been consulted as management sought input on 
their 10-year planning. It is not like we never have 
conversations here and there with our counterparts, but we 
never were consulted by the Board of Governors or by this 
Administration, and we think that is a real problem. We know 
what is going on in the workroom floor. We are all Postal 
workers ourselves and union leadership were in touch with our 
members, and we have a lot to offer.
    In terms of the language of the bill, the draft discussion, 
we are glad that you are taking on the question of service 
standards. We think it should be stronger in our first read, 
and we have made no bones about it that we would like to see 
overnight delivery restored within our towns, one side of the 
street to the other, that that would be good for the business. 
It would be good for the customers. It would be good for the 
workers. It is a win-win-win, and that is what revised 2012 
standards would do. But we do appreciate the committee's 
efforts to try to address the service issues, which folks on 
both sides of the aisle are obviously very concerned about and 
Postal workers are deeply frustrated with.
    Mr. Sarbanes. Well, thank you.
    Mr. Diamondstein. I hope I have answered your question.
    Mr. Sarbanes. No, I appreciate that, and I would just say 
there is no hope of achieving any service standards that meet 
the public's expectation if the work force, and the unions, and 
the people that are on the front lines aren't collaboratively 
involved in that conversation, whether it is, in this instance, 
with respect to our committee and how we discuss proposed 
legislation, or, just as importantly, with the management of 
the U.S. Postal Service.
    Chairwoman Maloney. The gentleman's time has expired.
    Mr. Sarbanes. So, thank you for your----
    Chairwoman Maloney. The gentleman's time has expired. Ms. 
Kelly is now recognized for five minutes.
    [No response.]
    Chairwoman Maloney. Ms. Kelly of Illinois.
    Ms. Kelly. Thank you, Madam Chair. The coronavirus pandemic 
has caused a great increase in the volume of packages that are 
moving through the postal system, increasing in some weeks by 
60 percent over the same period last year, as we have been 
discussing. According to press reports, over last year's peak 
holiday season, the surge in package volume essentially 
overwhelmed many postal processing facilities, with packages 
piling up so much that it became difficult for workers to move 
freely in order to do their jobs.
    I am getting calls daily from my district, people crying, 
screaming into the phone, their mail drastically delayed by 
three to four weeks. The surge in package volume was 
undoubtedly a major factor. There have been reports that UPS 
and FedEx ``dumped packages'' that they could not deliver on 
time. Mr. Postmaster, what do you have to say about that?
    Mr. DeJoy. Well, I agree with you that we have been 
overwhelmed by packages, as I said earlier in my testimony. The 
extent to which UPS and FedEx dumped, I don't know if that is 
the right word, but they are able to refuse package volume, and 
we chose not to. So, to the extent that they were not taking 
volume, we were the only outlet for the American people, and we 
got a whole bunch of it, and that resulted in what you were 
describing in your district all over the country. Those 
conditions existed.
    Ms. Kelly. Yes, I just got a Christmas card last week. Why 
did the Postal Service seem so unprepared for the package 
surge?
    Mr. DeJoy. Well, I am here eight months, and this has been 
going on for 10 years, right, the network, the erosion in the 
network, the imbalance in our operating schedules. But even if 
I was here for 10 years, we are in a pandemic, Congresswoman, 
and the 40-percent increase over peak volume for our 
organization was probably even too much to predict. I mean, I 
don't think FedEx and UPS like not taking volume, right, 
because they are profit oriented.
    So, you know, we were overwhelmed with packages in the 
regular business, you know, before the pandemic, right? We had 
not outfitted any of our operations significantly enough with 
package sortation equipment, the right transportation 
methodology, the right plant-to-plant movements, significant 
issues in moving packages. So this----
    Ms. Kelly. OK. Let me ask Mr. Diamondstein, what was the 
experience of workers during the surge, particularly with 
respect to coronavirus safety in postal facilities? And I am 
sorry I am not on camera. I am trying, but it just won't let me 
on.
    Mr. Diamondstein. Well, first and foremost, it was 
obviously very stressful. Postal workers as frontline essential 
workers, like so many other frontline essential workers, are 
still dedicated to the mission, but we have had a lot of 
sickness. We have unfortunately had an unfortunate share of 
deaths and, of course, we have had a lot of people that weren't 
able to come to work because of the childcare issues, with 
schools, and all sorts of things. Now, in terms of the health 
and safety, I think that the parties, the union and management 
at the national level of the Post Office, really did quite a 
good job putting in a lot of protocols to make the workplace as 
safe as possible in a dangerous time.
    It was a little shaky in the beginning because people were 
hit kind of unawares, but there has been plenty of PPE. There 
has been a lot of safety shields between the folks that staff 
the windows and the customers. There has been extra cleaning. 
There has been extra chemicals. There has been extra wash-up 
time. So, I think on that part, we did excel as both union and 
management. It doesn't mean it has always been applied evenly 
and equally throughout the country.
    Ms. Kelly. Right.
    Mr. Diamondstein. But there is certainly the vehicle there 
for folks to protect themselves. We also agree with 
management----
    Ms. Kelly. I am running out of time.
    Mr. Diamondstein. I am sorry.
    Ms. Kelly. So, I just want to say to the postal workers, 
thank them for their service, but we need to take steps to make 
sure the Postal Service is on firm footing going forward----
    Mr. Diamondstein. Absolutely.
    Ms. Kelly [continuing]. Because it is a disgrace if you 
could just hear all the phone calls. Thank you. I yield back.
    Mr. Diamondstein. Great.
    Chairwoman Maloney. The gentlewoman from Michigan, Mrs. 
Lawrence, is recognized for five minutes.
    Mrs. Lawrence. Thank you so much. Mr. Bloom, I am looking 
at the tenure of Board of Governors, and it seems like the 
longest one that has been in place is 2018, so the majority of 
all you have been serving almost entirely in the pandemic 
experience. Have any of you ever gone through an entire 
structure reorganization like what is being proposed or the 
service standards? Do you have any experience in that?
    Mr. Bloom. Well, we are----
    Mrs. Lawrence. Yes or no?
    Mr. Bloom. I have had a lot of experience with 
restructuring, yes.
    Mrs. Lawrence. As it impacts service standards? Where did 
you work before, sir?
    Mr. Bloom. The experience I had was working for the Federal 
Government with the General Motors restructuring, working for 
the Steelworkers Union and the integrated steel industry and 
other----
    Mrs. Lawrence. And they don't have service standards, sir, 
correct?
    Mr. Bloom. No. No, that would not----
    Mrs. Lawrence. Sir, my next question is to the postmaster 
general. Yes or no, do you recognize that during your tenure 
since you have been here, you have been compromised by COVID, 
holiday mail, and election mail, a record amount of election 
mail, during this period? Yes or no.
    Mr. DeJoy. What do you mean by ``compromised?''
    Mrs. Lawrence. You have been impacted, your ability to do 
your job.
    Mr. DeJoy. Yes.
    Mrs. Lawrence. Can you confirm that the staffing, as has 
been stated by the union representative, has been compromised 
or impacted by COVID? So, you don't have the 600,000 employees 
that you have on paper. They haven't been able to work, so you 
have been working with a reduced staff, correct?
    Mr. DeJoy. Yes, in fact, we have had 200,000 new hires, and 
our population stayed the same. That is a tremendous amount of 
new entries into----
    Mrs. Lawrence. Absolutely. It is because of their work 
environment, I am told. So, my question is to you, Mr. DeJoy. 
You recognize that the Postal Service is in a competitive 
market with UPS, FedEx, and other delivery companies, correct?
    Mr. DeJoy. I do.
    Mrs. Lawrence. So, as a customer, if you are going to 
reduce the standards----
    Mr. DeJoy. Mm-hmm.
    Mrs. Lawrence [continuing]. And raise the amount of mail, 
and you have another company sitting right beside you that will 
continue to have those standards, would that decrease the 
volume of people who would come to the Postal Service, because, 
as of now, it is affordable, and even in 2020, you were in the 
90's for service standards, but now you have reached one of the 
lowest ever. And I am not putting it all on you, sir. You are 
new to the job. You have been impacted by these. But why is 
there any common sense behind changing an organization in the 
middle of a pandemic? You haven't even stabilized your work 
force because there is a revolving door. There are so many 
things that you need to do. I appreciate you saying you are 
being bold, but that is just like me saying that I am going to 
restructure an organization in the middle of a pandemic when 
half my work force isn't there. I had an unprecedented amount 
of mail volume, and then I had this huge impact of COVID with 
parcels.
    Let me tell you one of the challenges. In my district, you 
have NDC, which is a parcel processing plant, that did not know 
what was incoming mail and what was outgoing mail. The mail was 
literally gridlocked. That is a lack of management. You have to 
fix the management that you are responsible for before you 
start ripping everything apart. To me, and I have said this to 
you personally, I don't understand how you come in just ripping 
the organization apart during a pandemic when you haven't even 
come in to show your leadership of being able to run an 
efficient, accountable organization. It has changed. I called 
the postmaster about the gridlock of trucks sitting for 20 
hours to drop a load in Detroit. He told me I can't answer that 
question because ``I have no responsibility over processing.'' 
I said, well, give me the person. They told me to go to Denver. 
I called Denver. They couldn't give me an answer right away. 
So, here we are with this disjointed organization. You haven't 
shown, and I am not saying you can't, but you haven't shown 
your leadership, and now you want to rip it apart.
    Mr. DeJoy. Congresswoman, we have had good conversations 
before. I think this type of description of what is going on is 
not really accurate, ``rip it apart,'' or ``nobody knowing what 
is going on.'' I would suggest to you, if we look back over the 
past 10 years----
    Mrs. Lawrence. It is factual. It is going on.
    Mr. DeJoy. I am sorry?
    Mrs. Lawrence. It is going on. You had a gridlock, and you 
know that----
    Mr. DeJoy. OK.
    Mrs. Lawrence [continuing]. Where no one knew----
    Mr. DeJoy [continuing]. And where do we want to put that 
responsibility?
    Mrs. Lawrence. Well, it ultimately rests in your hands, 
sir. You're the postmaster general.
    Mr. DeJoy. OK. And we have a plan to fix that, but----
    Chairwoman Maloney. The gentlewoman's time has expired.
    Mr. DeJoy. But I would say to you that the problem is more 
than one-dimensional, right? With regard to the organization, 
that is one of the things that we are very much working 
aggressively on to have an organizational strategy that 
actually knows who is responsible for these things. I would 
suggest to you, before you may think people knew they were 
responsible, but if they did, when we ran trucks on time, they 
would have went with mail and they didn't. So, and we are also 
facing----
    Mrs. Lawrence. Fix it.
    Mr. DeJoy [continuing]. With regard to your service----
    Mrs. Lawrence. Fix it.
    Mr. DeJoy [continuing]. With regard to your service 
question----
    Chairwoman Maloney. The gentlewoman's time has expired.
    Mrs. Lawrence. Fix it.
    Chairwoman Maloney. OK. The gentleman from California, Mr. 
DeSaulnier, is recognized for five minutes.
    Mr. DeSaulnier. Thank you, Madam Chair. I want to thank you 
for having this hearing, and I also want to associate myself 
with the comments from my colleague from Louisiana some time 
ago about the historical importance of the Postal Service. All 
these years since before the founding, postal delivery has been 
important to this country and it has adapted, and clearly, we 
have a challenge now in this global economy.
    I would like to say before specifically asking a couple 
questions of Mr. Diamondstein, as a former small business owner 
in a very low-margin business--the restaurant business in San 
Francisco Bay Area--this cultural thing that the private sector 
is always right, it drives me slightly to distraction. Having 
been from the private sector, but now having spent a lot of 
time on ride-alongs looking at government services about the 
local, state, and Federal level and ride-alongs with the Postal 
Service here in the East Bay of San Francisco Bay area, and a 
lot of discussions, including with the former postmaster 
general, the public sector can learn from the private sector. 
The private sector is not all-knowing, and we can see 
shortcomings from the private sector as well. You mentioned 
companies like Enron and WorldCom, and the recession, and 
housing crisis.
    And then the issues of subsidies, I wish we had more 
accurate descriptions about how taxpayers subsidize the private 
sector and what we get, to be politically agnostic, were those 
returned to people. So, in this instance, again, as a former 
retailer, one of the great strengths of the Postal Service is 
the retail aspect of people liking their delivery person. The 
letter carriers are out there every day, again, having been on 
ride-alongs with postal workers. My success when I was in 
private sector was directly related always to my employees and 
the relationship I had in management, even though I often 
wasn't physically there, although it wasn't a large corporation 
like the current postmaster general's background. I think to 
destroy that branding in any way has been a great disservice to 
the American taxpayer. So, specifically, having these 
performance standards, and I look forward to this legislation 
and having a real discussion focused on performance standards, 
the background of instilling that and getting a reward from it, 
but still protecting a lot of the important assets, 
particularly the rank and file in the Postal Service.
    So, Mr. Diamondstein, it is interesting to me, along the 
tone of my comments, is that 7,500 mid-managers don't have the 
ability to go to the Merit System Protection Board. So, could 
you tell me some of the challenges to that and some of the 
things we need to do to allow due process, but also to this 
very important group of people to make sure that their morale 
is good and they feel like they are being protected while we 
still demand high standards from them?
    Mr. Diamondstein. Well, Congressman, we obviously don't 
represent the mid-managers that you are speaking of, but we 
have no opposition to people in the organization having the 
maximum due process that the law can provide, and the MSPB is 
certainly a route there. So, you know, we focus on our 
collective bargaining agreements and our rights within that, 
but we have not put up any up obstacles on that question.
    Mr. DeSaulnier. And in terms of the people you do 
represent, the benefit for them to be able to access the due 
process that the Merit System allows them, could you give us a 
few comments about that, and understanding there is a balance 
here. Management and rank-and-file have a traditional 
relationship. We want it to be as healthy as we can, but we 
want a collective benefit to go to the taxpayer or the 
customer.
    Mr. Diamondstein. OK. Well, again, just be careful about 
the taxpayer since it is not a taxpayer-funded entity, and I 
think that is important to keep in mind.
    Mr. DeSaulnier. Right.
    Mr. Diamondstein. In terms of our members, we have due 
process under a collective bargaining agreement, and within 
that, there are groups of employees or disabled veterans who 
also have access to MSPB under the law. So, we are satisfied 
from the point of the people that we represent that the due 
process rights are there. They work.
    Mr. DeSaulnier. Yes, I appreciate the comment about 
taxpayer. I am sorry. I slipped into my former party 
affiliation from many years ago when I was registered as a 
Republican, so I appreciate that, but just a last comment. I 
really think the Congress would be well served if we had a 
better understanding of the relationship between subsidies and 
support, whether it is in the infrastructure and transportation 
system, and the benefit that we all get as Americans from that. 
So, thank you, Madam Chair. I yield back.
    Chairwoman Maloney. The gentleman yields back. The 
gentleman from California, Vice Chair Gomez, is recognized for 
five minutes.
    Mr. Gomez. Thank you so much, Chair Maloney. I really 
appreciate this hearing. I just want to start off by expressing 
my appreciation to the men and women of the U.S. Postal 
Service, the letter carriers, the postal workers, for just 
being out there every single day during this pandemic. I know 
the pandemic has had an impact not only when it comes to almost 
every aspect of American life, but also to the men and women 
who are still going to work every single day, delivering the 
mail, making sure that things try to get there on time. It 
hasn't been easy at all, and I know that they are deeply 
concerned about the decrease in performance. They are also 
deeply concerned about just the direction of the U.S. Postal 
Service across the board.
    So, I am in complete support of making sure that we can 
provide as much financial support to the U.S. Postal Service as 
possible. Americans do see it, that it should not be run like a 
business, but as a public service, and I think that there is a 
reason why, because oftentimes a business just attempts to 
maximize profit, not necessarily how it caters to their 
clientele, just how do we maximize profit. And when you just 
try to maximize profit, it doesn't mean that you automatically 
get the best result.
    I want to ask Mr. DeJoy about a couple of things. Coming 
from California, trying to have more electric vehicles on the 
road, and combatting climate change is a big deal. You 
mentioned 10 percent of the fleet would be electric. Real 
quick, just a few questions, and I am just trying to figure it 
out. You are replacing a lot of these old mail delivery trucks. 
What is the new miles per gallon for each new truck, especially 
since the old one was, I guess, 10 miles per gallon?
    Mr. DeJoy. It is more. I don't recall off the top of my 
head what it is. You know, we have a year decide what the final 
complement is on the electric vehicle, and we are very much 
pursuing it, but we need to kick the project off.
    Mr. Gomez. Listen, I am glad you are moving forward. I 
heard that you guys have been trying to find somebody to 
actually do this since 2015, so I am glad it is moving. But if 
you are replacing just inefficient vehicles, right, the 
American people want to know how you made that decision. Was it 
based on miles per gallon? Great. And then at the same time, 
what kind of tailpipe emission standards are they achieving? 
How much are they reducing in greenhouse gas emission? Just 
kind of figuring out, like, because that is a big deal if you 
are not going through more electric, right, by raw numbers, 
which we would know are cleaner.
    You said also that you could convert these new trucks to 
electric if you got more resources. How much would it cost to 
convert a truck, and was that taken into the consideration when 
deciding just to purchase 90 percent fossil fuel vehicles?
    Mr. DeJoy. First of all, the evaluation factor on what you 
were speaking as a total cost of ownership over a 10-, or 15-, 
or 20-year period when we did it, which includes everything, 
the cost per truck is a little misleading because it is really 
the cost of the electric infrastructure around the Nation that 
we would need to implement. And this is a procurement-sensitive 
statistic. I can't, you know, disclose in total, but it was 
significantly more.
    Mr. Gomez. Reclaiming my time. I just want to be very 
clear. Congress is going to be supportive of trying to get 
electric vehicles in the Postal Service fleet, and we also 
understand that it is part infrastructure, and we can take that 
into consideration when we allocate resources. I think you 
should take a harder look on what kind of fleet you are going 
to be using, especially since the issues regarding the climate 
crisis are just growing. One last thing----
    Mr. DeJoy. I was hoping for the invitation, sir.
    Mr. Gomez. Yes. You said ``we are proud of what we have 
done.'' And I look at the Postal Service, and I must admit I am 
really disappointed in where it is at, and rightly or wrongly, 
and I think it is rightly, you are being stuck with just the 
deterioration of the public's confidence in it.
    Chairwoman Maloney. The gentleman's time has expired.
    Mr. Gomez. I hope that the Board of Governors takes steps 
to review it, but with that, I have to yield back since my time 
is up. Thank you so much.
    Chairwoman Maloney. Thank you. The gentleman yields back. 
The gentlewoman from Massachusetts, Ms. Pressley, is recognized 
for five minutes.
    Ms. Pressley. Thank you, Madam Chair. Thank you for 
convening today's hearing. The United States Postal Service is 
one of our Nation's greatest institutions. Its public servants 
are our greatest individuals on the front lines of this ongoing 
pandemic. In the Massachusetts 7th, which I represent, nearly 
3,000 postal workers across 38 facilities--shout out to NALC 
Local 34--they are risking their health to deliver everything 
from lifesaving medication to unemployment checks. It is 
critical we enact legislation to bring stability to USPS and 
the lives of all of its employees. But make no mistake, there 
is no legislative fix.
    [Inaudible] of Postmaster General DeJoy and the current 
Board of Governors. They have caused the postal work force to 
suffer, they hey have caused delivery and critical services to 
be cut, and they have caused our communities great hurt. These 
actions are a clear dereliction of duty and service to the 
American people. They demand accountability, which is why I 
have repeatedly called for the removal of Mr. DeJoy and the 
entire Board of Governors, and the appointment of a new diverse 
board with the experience and skills needed to represent the 
public interest and to restore the public's faith and integrity 
of the USPS.
    The USPS needs leadership that respects the fundamental 
role the Agency plays in our society, and Congress can leverage 
the resources, dedicated workers, and infrastructure of the 
Postal Service to meet the Agency's fiscal needs and to serve 
the broader American public. Postal banking presents a unique 
opportunity to simultaneously increase revenue for the U.S. 
Postal Service while advancing economic justice. An estimated 
one in four people in America are unbanked or underbanked, 
including 50 percent of black and Latinx communities, resulting 
in thousands of dollars in fees and resilience on predatory 
check cashing services and payday loans. This burden 
disproportionally falls on communities of color. Sixty-three 
percent of majority black census tracts do not have an active 
bank branch. These banking deserts, however, do have post 
offices. If post offices offered financial services, such as 
money transfers, bill payment, and check cashing, our Nation 
would take a significant step toward closing the racial wealth 
gap. Mr. Diamondstein, can you provide any details on the 
history of postal banking in our country?
    Mr. Diamondstein. Well, for over 60 years--I can't remember 
the exact dates, Congresswoman--I think 1911 to 1967 or so, 
there was actually a savings bank in the Postal Service. The 
Postal Service now provides financial services, such as money 
orders, some types of check cashing, and I completely agree 
with your comments around postal banking. We would like to 
start with the basic thrust of improved, and enhanced, and 
expanded financial services as a step that may get us some day 
to a public option on postal banking. But the advantage of the 
steps is it is within the Postal Service itself. It will not 
take legislation to do those things. We think it would be great 
for the people, the social justice issues you raised, and we 
think it would be great for the Postal Service itself. And the 
postal workers that we represent are ready to rock and roll.
    Ms. Pressley. Thank you, Mr. Diamondstein. And could you 
further unpack, elaborate as to why the USPS is uniquely 
positioned to provide banking services to those who are 
unbanked and underbanked? And also, could you just answer, is 
there support for postal banking among postal workers?
    Mr. Diamondstein. Yes, there is definitely support amongst 
postal workers for postal banking, for expanded financial 
services. People see it as an important service and an 
important part of our future. Your first question, 
Congresswoman, please again?
    Ms. Pressley. How is the USPS uniquely positioned to 
provide these services?
    Mr. Diamondstein. Well, we are in all these neighborhoods 
where banks have pulled out. We are trusted. We are trained. We 
are accountable. We are dedicated. And 91 percent of the people 
of the country, through the entire political spectrum, support 
the Postal Service and trust postal workers. So, we are in a 
great position to provide these expanded services.
    Ms. Pressley. Thank you. Thank you. And there are so many 
who are eligible for stimulus relief during the pandemic, but 
are unable to access those funds because they are unbanked. In 
a public report, the Office of the Inspector General concluded 
that, ``Financial services have been the single-beset new 
opportunity for post offices to earn additional revenue. For 
the Postal Service, this might translate into $8.9 billion per 
year.'' Ms. Whitcomb, how could providing financial services 
improve the financial footing of the USPS?
    Ms. Whitcomb. Yes, the report that you cited, we issued a 
while back, and we did an analysis of the positioning of the 
Postal Service to provide financial services. And, as you 
stated, posts around the world are very active in the financial 
services industry. Many posts achieve significant financial 
benefits by providing financial services to the citizens in 
other countries. So, we are happy to discuss this----
    Ms. Pressley. I am so sorry. I am running out of time. 
Reclaiming my time just for one minute----
    Mr. Comer. Madam Chair, out of time, and we have votes on 
the floor.
    Chairwoman Maloney. The gentlelady's time has expired.
    Ms. Whitcomb. We can discuss it further with the committee 
staff.
    Ms. Pressley. Thank you.
    Chairwoman Maloney. OK. That concludes all of our witnesses 
today and questioning. But before I close, I ask unanimous 
consent to place in the record letters of support for reforms 
to the Post Office. Without objection.
    Chairwoman Maloney. And before I close, I would like to 
offer Ranking Member Comer a chance to ask any wrap-up 
questions to the witnesses or to make any closing remarks. 
Ranking Member Comer, you are now recognized.
    Mr. Comer. Well, thank you, Madam Chair, and I appreciate 
very much that you held this hearing, and I appreciate very 
much the ongoing conversations that we have to try to get to a 
real bipartisan postal bill that actually does reform. I want 
to say, Mr. DeJoy, you said earlier, your only request is for 
those included in the draft bill, but requests aren't the same 
as needs. And our side has sought to clarify that you have 
support of the Board and that Democrats' charges against you 
are baseless. It is clear, as Mr. Connolly said, that they want 
you gone.
    So, your plan when it comes out might be fantastic, but 
however long you do end up staying, it is not going to be 
forever. So, we need policies that are going to address the 
aspects of the Postal Service's problems over and above those 
dealing with retiree benefits. And when I asked you what 
happened the last time you tried to make those operational 
changes, it wasn't to have you detail how those changes 
impacted service. It was to highlight how entrenched interests 
fought you tooth and nail at every turn, and the likelihood is 
that is what is going to happen in the future.
    But I felt it was essential for us to discuss the obstacles 
facing the Postal Service and hear about some difficult 
decisions that we will have to make in Congress. With this 
information, we have a real opportunity for the Postal Service 
to enact meaningful change. It is often a mantra that we should 
start with the easy pickings. The temptation to do so in the 
case of postal reform is strong because of how much we hear 
from our constituents and stakeholders, nervous about any 
possible changes to how things have always been done. Fixing 
some accounting issues and doing things like switching the pot 
of money from which employee healthcare is funded will no doubt 
cleanup the books and create some short-term relief for the 
Postal Service, but they are not nearly enough, and everyone 
knows that. They will not solve the problems confronting the 
Post Office, and the American people are not going to see them 
as an improvement on the services they rely on.
    As Mr. Bloom said in his written statement, ``If I have 
learned one thing, it is that the single largest impediment to 
achieving a successful outcome is that stakeholders will 
support the abstract need for change, but will seek to avoid 
changing anything that impacts their particular interests.'' 
So, in other words, the chairman of the Board of Governors is 
saying that stakeholders know something is wrong, they know 
something needs to change, so they all say the right things 
about it. But when push comes to shove, they refused to 
consider any changes that will force them, in turn, to adapt or 
evolve in a way that ensures the Postal Service can survive and 
thrive.
    We here on this committee should not limit ourselves to the 
easy pickings and leave the more difficult decisions to some 
later date. If we do, it will be too simple to pat ourselves on 
the back for finally enacting some postal legislation and 
ignore the opportunity to create real lasting change that will 
allow the Postal Service to serve the American people better. A 
postal bailout alone without any structural changes is not a 
real reform bill.
    So, Mr. DeJoy, we look forward to your forthcoming plan. We 
appreciate the working relationship that you and Mr. Bloom and 
the entire Board have, and we appreciate the fact that the 
Board supports your forthcoming changes. So, Madam Chair, I 
look forward to working with you as we move forward to pass a 
real bipartisan postal bill that reforms the Post Office. I 
yield back.
    Chairwoman Maloney. I thank the gentleman for his comments 
and his willingness to work together for real postal reform. I 
now recognize myself for five minutes.
    First, I would like to express my appreciation to all the 
postal workers who have been on the frontlines of helping the 
American people during this time of COVID. I want to ask 
Postmaster General DeJoy about a bill that is on a slightly 
different topic which I will be introducing today, the Vote By 
Mail Tracking Act. This bill would require all ballots mailed 
in Federal elections to include a Postal Service bar code, 
allowing the ballot to be tracked by the Postal Service, 
election officials, and the voter. This bill would go a long 
way toward ensuring that ballots are sorted, processed, and 
delivered efficiently, and would provide more transparency and 
accountability to voting by mail. Mr. DeJoy, does the Postal 
Service support the use of barcodes to track all Federal ballot 
mail?
    Mr. DeJoy. Yes, ma'am, we do.
    Chairwoman Maloney. Thank you. Ensuring that ballots are 
delivered on time and giving election officials and the public 
additional transparency can only improve our elections.
    And in closing, I want to thank everyone for a fruitful 
discussion today on this incredibly important topic. We have 
heard it many times throughout this hearing--it bears 
repeating--the Postal Service is one of our Nation's most vital 
and respected institutions. It deserves our full support. 
Sadly, its financial situation is far too unstable and requires 
that Congress act in a bipartisan manner to ensure that it can 
continue to serve the American population for years to come. 
The draft reform legislation that we discussed today will help 
the Postal Service accomplish that goal. Medicare integration 
will save the Postal Service at least $10 billion in the next 
10 years. Eliminating the unfair pre-funding mandate will take 
over $35 million off the Postal Service's debt sheet, and 
additional requirements to help the Postal Service meet its 
service performance targets will give the American people 
increased certainty that their Postal Service truly works for 
them in an efficient and effective manner.
    I appreciate the contributions of my colleagues today on 
both sides of the aisle. I appreciate the testimony of Mr. 
DeJoy and all of our panelists, and I hope that we can continue 
to work together to introduce a bipartisan bill that can pass 
the House in the very near future and be sent to the Senate and 
hopefully pass there, and signed into law.
    I yield back, and the meeting is adjourned. Thank you.
    [Whereupon, at 3:15 p.m., the committee was adjourned.]

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