[Senate Hearing 117-554]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 117-554

                             NOMINATIONS OF
                      HON. DANIEL M. TANGHERLINI,
                         AND HON. DEREK T. KAN

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS


                             SECOND SESSION

                               __________

           NOMINATIONS OF HON. DANIEL M. TANGHERLINI TO BE A
                   GOVERNOR, U.S POSTAL SERVICE, AND
        HON. DEREK T. KAN TO BE A GOVERNOR, U.S. POSTAL SERVICE

                               __________

                             MARCH 31, 2022

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

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs
        
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                              __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
48-702                     WASHINGTON : 2023                     
          
-----------------------------------------------------------------------------------  

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware           ROB PORTMAN, Ohio
MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona              RAND PAUL, Kentucky
JACKY ROSEN, Nevada                  JAMES LANKFORD, Oklahoma
ALEX PADILLA, California             MITT ROMNEY, Utah
JON OSSOFF, Georgia                  RICK SCOTT, Florida
                                     JOSH HAWLEY, Missouri

                   David M. Weinberg, Staff Director
                    Zachary I. Schram, Chief Counsel
                      Claudine J. Brenner, Counsel
            Annika W. Christensen, Professional Staff Member
                Pamela Thiessen, Minority Staff Director
    Andrew Dockham, Minority Chief Counsel and Deputy Staff Director
       Amanda N. Neely, Minority Director of Governmental Affairs
                    Ryan L. Giles, Minority Counsel
       Renee T. Sheehy, Minority U.S. Postal Service OIG Detailee
                     Laura W. Kilbride, Chief Clerk
                     Thomas J. Spino, Hearing Clerk

                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Peters...............................................     1
    Senator Portman..............................................     2
    Senator Carper...............................................    14
Prepared statements:
    Senator Peters...............................................    19
    Senator Portman..............................................    21

                               WITNESSES
                        Thursday, March 31, 2022

Hon. Daniel M. Tangherlini to be a Governor, U.S. Postal Service
    Testimony....................................................     4
    Prepared statement...........................................    23
    Biographical and professional information....................    26
    Letter from U.S. Office of Government Ethics.................    52
    Responses to pre-hearing questions...........................    59
    Responses to post-hearing questions..........................    77
Hon. Derek T. Kan to be a Governor, U.S. Postal Service
    Testimony....................................................     6
    Prepared statement...........................................    85
    Biographical and professional information....................    87
    Letter from U.S. Office of Government Ethics.................   107
    Responses to pre-hearing questions...........................   113
    Responses to post-hearing questions..........................   127

 
               NOMINATIONS OF HON. DANIEL M. TANGHERLINI,
                         AND HON. DEREK T. KAN

                              ----------                              


                        THURSDAY, MARCH 31, 2022

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:18 a.m., in 
room 342, Dirksen Senate Office Building, Hon. Gary C. Peters, 
Chairman of the Committee, presiding.
    Present: Senators Peters, Carper, Hassan, Sinema, Ossoff, 
Portman, and Scott.

            OPENING STATEMENT OF CHAIRMAN PETERS\1\

    Chairman Peters. The Committee will come to order.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Peters appear in the Appendix 
on page 19.
---------------------------------------------------------------------------
    Today, we are considering the nominations of Daniel 
Tangherlini and Derek Kan to be the Governors of the United 
States Postal Service (USPS). Welcome to each of you and thank 
you for joining us here today. Congratulations on your 
nominations and thank you for your willingness to take on these 
very important roles.
    Since the founding of the United States, the Postal Service 
has been a vital part of the fabric of our Nation. For 
generations, it has served as an essential public service that 
delivers critical mail, like medications and financial 
documents, and helps families stay connected with their loved 
ones and more. As the only carrier that delivers to every 
community in the country, serving more than 160 million 
households and businesses, this vital public service operates 
as a critical lifeline for seniors, for veterans, small 
businesses, rural and underserved populations in communities 
across our country.
    However, for more than 15 years, the Postal Service has 
been burdened by unfair financial requirements that undermined 
the institution and harmed service for the millions of 
Americans that it served. I am pleased that we were able to 
deliver significant, historic reforms by passing the bipartisan 
Postal Service Reform Act, which Ranking Portman and I 
authored. This long overdue legislation will provide stability, 
protect key services, and set the Postal Service on a 
sustainable financial footing.
    The United States Postal Service Board of Governors plays 
an essential role in the Postal Service's future. As the 
governing body of the Postal Service, they oversee its 
operational strategy to ensure the Postal Service continues on 
a good path, both financially and by providing reliable service 
to its customers. To be successful, the Board must have 
qualified leaders who can govern, conduct oversight of Postal 
Service's management, and work with lawmakers to ensure our 
postal workforce has the right support to deliver to the 
American people each and every day.
    However, it is equally important to have Governors who 
understand that the Postal Service is ultimately a public 
service and will work tirelessly to make sure it is acting in 
the best interest of the public.
    If confirmed to the Board, each of you will play a critical 
role in these efforts.
    Mr. Tangherlini, you have significant leadership experience 
as a top official at the General Services Administration (GSA) 
in D.C. and so much more. Your specialized knowledge in finance 
and technology from serving in senior roles in the public, 
nonprofit, and private sectors demonstrates that you are well 
equipped to facilitate and provide counsel on the financial and 
managerial aspects of the Postal Service.
    Mr. Kan, your experience at the Office of Management and 
Budget (OMB), Department of Transportation (DOT), The National 
Railroad Passenger Corportation (Amtrak), and as an executive 
in the private sector will bring operational and logistical 
knowledge to the Board.
    I have appreciated the opportunity to work with you in some 
of your previous roles and look forward to hearing about your 
vision for the Postal Service today.
    Given the Postal Service's critical mission, it also 
essential that each of you in your respective roles maintain 
the Board's tradition of working in a bipartisan manner. I am 
so pleased we have a bipartisan pair of nominees here today to 
maintain the full complement of Governors on the Board, and I 
look forward to hearing more from each of you about your vision 
for continuing the Postal Service's critical mission.
    Now I would like to recognize Senator Portman for his 
opening comments.

            OPENING STATEMENT OF SENATOR PORTMAN\1\

    Senator Portman. Thank you, Chairman. Thank you to my 
friend, Derek Kan, for his willingness to step forward and to 
serve. Mr. Tangherlini, I do not know you yet, but I hear good 
things about you from the other side of the aisle. We are 
delighted that both of you are willing to take on what is 
really an important task right now.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Portman appears in the 
Appendix on page 21.
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    The Governors of the United States Postal Service is always 
an important job but particularly important right now in the 
wake of our passing this legislation to help provide some 
breathing room really for the Postal Service, but that is all 
it provides. It requires you all to make significant reforms. 
Should you be confirmed, you are going to be in the middle of 
this. I trust from knowing Derek and hearing about you, Mr. 
Tangherlini, that you guys are willing to take it on and make 
some tough decisions.
    It is a little like the board of directors of a private 
company but different, and it is different in the sense that 
you have an additional responsibility which is unlike private 
sector directors. You have to, quote, represent the public 
interest generally. That is a pretty broad mandate. The 
decisions you make are going to affect everybody really, every 
family in America, every business in America.
    The Governors set will approve the rates of mail and 
package products, as you know. They also select the Postmaster 
General (PG) and oversee the performance of the PG, and of 
course, you determine the overarching strategy for the Postal 
Service as a whole. It is very important and one we take very 
seriously here on this Committee, particularly now that we are 
all so invested in making this Postal Service work, dealing 
with the serious and unsustainable financial situation that we 
are currently in.
    There have been a lot of challenges that have been driven 
by the fact that there is just a lot less First-Class Mail. So 
people are using their iPhones more than your postal stamps to 
send mail between friends and relatives, and that is a huge 
challenge. On the other hand, the Postal Service picked up a 
lot of packages, which is an opportunity. You have also 
struggled with poor service, particularly during the pandemic 
and particularly during the 2020 holiday season where all of us 
heard a lot from our constituents about that.
    I will say there are some improvements in service around 
the country that we are seeing, but just last month the Postal 
Service Inspector General (IG) reported delayed mail and 
improper parcel scanning in the audits of three postal 
facilities in the Columbus, Ohio, area. The Postal Service is 
not out of the woods yet. We have still got service issues we 
have to address in addition to, again, the financial crisis 
that we would otherwise face unless reforms were made.
    Veterans, the elderly, rural residents in particular really 
depend on the Postal Service to deliver lifesaving medications.
    We have no excuse. Absentee voting in Ohio. We are very 
dependent on the Postal Service to ensure our election system 
works properly. It is a good system that has worked well, but 
if the vote does not reach the election office in time the 
election officials, are handicapped and people's votes are not 
counted. So nothing could be more important.
    In Ohio, a lot of small businesses use the post office. 
They still use that as their means to communicate with their 
customers.
    I have concerns, but also I think there is a reason for 
optimism because you do have, as you saw in the votes, 79 to 19 
here with the Postal Service Reform Act, a lot of bipartisan 
support for the Postal Service and for the mission of the 
Postal Service because it matters to every one of our 
constituents.
    I do think, as I said, this Act is just the first step. I 
think the current Postmaster General Louis DeJoy's ambitious 10 
year plan to transform the post office by finding more 
efficiencies and generating additional revenue from existing 
products is a step forward. I hope you will, if you are 
confirmed, be supportive of moving forward with an aggressive 
plan, as I said, making tough decisions, some of which may not 
be popular.
    But we have to make sure the Postal Service is back on its 
feet and providing good service and able to survive over the 
long haul financially. There is no doubt that this is a 
challenging road ahead, but I think by thoughtful engagement on 
these issues and working with all the stakeholders committed 
leaders at the Postal Service can address the challenges and 
ensure a brighter future for the Postal Service. We look 
forward to working with you, if you are confirmed, closely to 
help to ensure that this happens.
    Again, my thanks to you for your willingness to serve, and 
we look forward to the dialog this morning.
    Chairman Peters. Thank you, Senator Portman.
    It is the practice of this Committee to swear in witnesses, 
so if each of you would please stand and raise your right hand. 
Do you swear that the testimony that you will give before this 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Mr. Kan. Yes, sir.
    Mr. Tangherlini. I do.
    Chairman Peters. You may be seated.
    Our first nominee is Daniel Tangherlini. Mr. Tangherlini is 
currently the Managing Director of Emerson Collective, a 
private philanthropic firm dedicated to removing barriers 
particularly in the education, immigration, health, and 
environmental spheres. Currently, he serves as an advisor to 
several technology firms and provides consulting and 
facilitation support to businesses and nonprofits.
    Previously, Mr. Tangherlini served as the Chief Financial 
Officer (CFO) at the Department of the Treasury, where he was 
the principal policy advisor on the development and execution 
of the Treasury's budget and performance plans, and he also 
served as Administrator of the General Services Administration 
during the Obama Administration.
    Welcome to the Committee, you may proceed with your opening 
comments.

TESTIMONY OF THE HONORABLE DANIEL M. TANGHERLINI, NOMINATED TO 
               BE A GOVERNOR, U.S. POSTAL SERVICE

    Mr. Tangherlini. Thank you very much. For the sake of time, 
I will submit my full testimony for the record.\1\ I ask 
permission to summarize those statements.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Tangherlini appears in the 
Appendix on page 23.
---------------------------------------------------------------------------
    Chairman Peters. Absolutely.
    Mr. Tangherlini. Chairman Peters, Ranking Member Portman, 
Members of staff, and the Senate Homeland Security and 
Governmental Affairs Committee (HSGAC), it is an honor to be 
before this body again today to seek your support for my 
nomination by President Biden to serve as a member of the Board 
of Governors of the United States Postal Service.
    I am grateful to be joined today by my wife of 26 years, 
Theresa, who has served the public in her own way as a 
pediatric nurse practitioner and lactation consultant.
    I am particularly grateful for her support and 
encouragement of my work in public service.
    I am also joined by one of our two children, Cassandra. Her 
sister, Francesca, could not join us today. She is hard at work 
finishing her last year of college in Portland, Oregon.
    I am also joined by a good friend and longtime colleague, 
Tanya Carter.
    I cannot say that service to our nation and its people is 
an idea I came to on my own. My family has a long tradition of 
public service. My grandfather, who emigrated from Italy to 
Boston, Massachusetts, served in the Army during the First 
World War. My father followed him into the Army and fought in 
the Second World War, including the Battle of the Bulge. One of 
my most singular honors was joining in Bastogne, Belgium, for 
the celebration of the 75th anniversary of that battle in 2019. 
My brothers both served the public in their work, my younger 
brother as an Assistant Chief in the San Francisco Fire 
Department (SFFD), my older brother as a professor at the 
University of California, Berkley.
    I came to Washington in 1991, eager to work in government 
and serve the Nation. As a newly appointed Presidential 
Management Fellow (PMF), I accepted my first job with the 
Office of Management and Budget and stayed for six years, 
working in a variety of capacities. After my next job with the 
U.S. Department of Transportation, I began what would become a 
10 year stint with the Government of the District of Columbia, 
not including a year I spent with the Washington Metropolitan 
Area Transit Authority (WMATA) as the Interim General Manager.
    Working for Mayor Williams and, later, Mayor Fenty, I had 
the pleasure to watch the fortunes of our nation's capital turn 
nearly full circle. I also learned the significant role that 
government can play in people's lives, both positive and 
negative.
    Subsequently, I was honored to be confirmed by the Senate 
as the Assistant Secretary for Management and Chief Financial 
Officer of the Treasury Department under Secretary Geithner and 
President Obama. Later, in 2012, I was asked by the President 
to serve as the Acting Administrator of the General Services 
Administration after a scandal forced the departure of the 
Agency's leadership. I was honored when later that year this 
Committee sent my nomination to be the Administrator on to the 
full Senate for approval. Since 2015, I have worked outside of 
government in the financial, real estate, technology, and 
philanthropic sectors.
    Should I be fortunate enough to receive your support today 
and be confirmed, my work with the Board of Governors of the 
United States Postal Service will pull together all the various 
strands of my professional work. I am looking forward to the 
chance to seek answers to the big questions of Postal Service 
financial sustainability, quality customer service, new product 
development, as well as employee engagement, satisfaction, and 
investment.
    In short, with the recent passage of bipartisan Postal 
Service reform legislation, the Postal Service stands at the 
starting line of a new era of progress and evolution. There is 
an exciting future for the USPS, and I look forward to finding 
innovative ways to utilize their network, delivery footprint, 
and talented workforce to better serve a new generation of 
Americans.
    Over the centuries of its existence, the USPS has gained 
the reputation of the best national postal service in the world 
and has one of the most recognized and trusted brands of any 
organization, public or private. It delivers on its universal 
service obligations by visiting many of the 160 million 
individual addresses it serves six days or seven days. With a 
retail presence of more than 30,000 post offices, one within 10 
miles of nearly 99 percent of U.S. households, USPS provides a 
physical infrastructure that connects our communities.
    Coronavirus Disease 2019 (COVID-19) has demonstrated the 
challenges of providing a critical service, and the men and 
women of the USPS have risen to the challenge at personal risk 
to keep the American people connected. The recent program to 
distribute millions of test kits has demonstrated the potential 
of this physical connection to provide vital services in times 
of critical need.
    I am humbled and honored to have the possibility of serving 
the Nation in this new capacity should I be confirmed. Thank 
you for allowing me to appear before you today, and I look 
forward to your questions.
    Chairman Peters. Thank you, Mr. Tangherlini, for your 
opening statement.
    Our second nominee is Derek Kan. Mr. Kan currently serves 
as an Executive Director at Deliverr, an e-commerce fulfillment 
company that brings together software engineers and operations 
experts to build fulfillment infrastructure for online 
purchase.
    Previously, Mr. Kan served as Deputy Director of the Office 
of Management and Budget, in the Executive Office of the 
President (EOP) in the Trump Administration, and also served as 
the Under Secretary at the U.S. Department of Transportation. 
Earlier in his career, he worked on Capitol Hill for nearly 
four years as a policy advisor in the Senate Office of the 
Majority Leader and for the Senate Republican Policy Committee 
(RPC). He also served as a Presidential Management Fellow at 
the White House Office of Management and Budget.
    Welcome to our Committee, and you may proceed with your 
opening comments.

 TESTIMONY OF THE HONORABLE DEREK T. KAN,\1\ NOMINATED TO BE A 
             GOVERNOR, UNITED STATES POSTAL SERVICE

    Mr. Kan. Thank you, Chairman Peters. For the sake of time, 
I will keep my remarks brief and ask that my written testimony 
be placed into the record.
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    \1\ The prepared statement of Mr. Kan appears in the Appendix on 
page 85.
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    Chairman Peters, Ranking Member Portman, and distinguished 
Members of the Committee, I am honored to come before you as 
President Biden's nominee for the Board of Governors of the 
United States Postal Service. I want to thank Senator McConnell 
for his support.
    I am grateful for my wife of 17 years, Connie Kan, who has 
always been supportive of my public service. I am also grateful 
for our three children, Avery, Evan, and Jordan. They have made 
significant sacrifices over the past five years so that I could 
serve in government, including leaving family and friends in 
California to move here. We have since moved back to 
California, and the kids are in school right now, which is why 
they could not join me at this hearing.
    Our youngest, Avery, was nearly three years old during my 
confirmation hearing for the position of Under Secretary for 
Policy at USDOT. She started crying partway through, and my 
wife quickly whisked her out of the room. She was almost six 
years when she attended my confirmation hearing for the 
position of Deputy Director of the Office of Management and 
Budget, and she spent the bulk of that hearing doodling and 
reading her books. Now at almost eight, she keeps asking me 
what have I done to keep testifying before the Senate. I think 
she thinks I keep getting in trouble, especially in front of 
this Committee.
    I am also thankful for my parents, Scott and Julie, who 
have worked so hard to give me incredible opportunities 
throughout my life. They emigrated here from Taiwan over 40 
years ago to pursue the American Dream. My mother, who never 
graduated from college, taught me the value of hard work and 
persistence, and that work and persistence today is a lifesaver 
as she is battling late-stage cancer. My father, an engineer, 
taught me the value of rigorous analysis and to be civically 
minded. Together, they taught me to have a deep respect of 
authority, a love for this great country, and an unwavering 
faith in God. I hope I make them proud.
    The Postal Service is particularly meaningful to me. The 
parents of many of my friends were Postal Service workers. They 
were immigrants who sought a better life and pursued the 
American Dream. Many of my friends' parents were mail carriers, 
processing clerks, sales associates, and branch supervisors. 
The prized shifts were on the retail front so that their shifts 
would be in the daytime and at night they would help their 
children with their school work, and the Postal Service was how 
many first-generation immigrants earned a living wage in this 
country, supported their families, and gained a sense of 
dignity and a profound sense of connection to their communities 
and to this country.
    For the past two and half centuries, the U.S. Postal 
Service has served this country admirably, having built the 
largest physical and logistical infrastructure of any 
nonmilitary institution in the world. The Postal Service is key 
in facilitating communication and building a sense of 
community. Just think of it when you see your local carrier.
    However, today, the Postal Service is facing significant 
challenges ranging from changing consumer preferences to an 
ever-changing workforce, with headwinds around recruitment and 
retention to questions about the Postal Service's long-term 
financial viability. While the recently enacted Postal Service 
Reform Act, which passed 79 to 19, coupled with the recently 
released 10-year plan, will put the Postal Service on stronger 
financial footing, more can be done to ensure that the Postal 
Service will continue to fill its statutory obligations around 
universal service.
    Should I be so fortunate as to be confirmed, I will bring 
my experiences in the public and private sectors to improve 
operations and customer support, introduce new technologies and 
innovation, and seek to strengthen the long-term financial 
viability of the Postal Service. Having been a civil servant at 
OMB, a Senate staffer, a board member of Amtrak, and a policy 
official at DOT and OMB, I would be grateful for this 
opportunity to serve on the Board of Governors of the Postal 
Service. You have my full commitment that, if confirmed, I will 
work collaboratively with the Board, the Postal Service 
management, Congress, Postal Service employees, customers, and 
other stakeholders to strengthen this great organization.
    Thank you for the opportunity to come before you, and I 
would be pleased to answer any questions you may have.
    Chairman Peters. Thank you, Mr. Kan.
    There are three questions that this Committee asks of every 
nominee, and I am going to ask each of you to respond briefly 
with just a simple ``yes'' or ``no.''
    First, is there anything you are aware of in your 
background that might present a conflict of interest with the 
duties of the office to which you have been nominated? I will 
start with you, Mr. Kan.
    Mr. Kan. No, I am not.
    Chairman Peters. Mr. Tangherlini?
    Mr. Tangherlini. No, sir.
    Chairman Peters. Second, do you know of anything personal 
or otherwise that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated?
    Mr. Kan. No, sir.
    Mr. Tangherlini. No, sir.
    Chairman Peters. Lastly, do you agree without reservation 
to comply with any request or summons to appear and testify 
before any duly constituted committee of Congress if you are 
confirmed?
    Mr. Kan. Yes, sir.
    Mr. Tangherlini. Yes, I do, sir.
    Chairman Peters. Great. Thank you. As both of you know, the 
Board's role is to oversee strategy and help ensure the long-
term success of the Postal Service as well as ensure it is 
reliably serving customers all across our country each and 
every day. Congress has provided a solid foundation for this 
work by passing the historic postal reform legislation, which I 
know has been a top priority for the Postal Service and the 
Board for well over a decade, perhaps approaching 15 years. So 
it is good to get that done. Implementing this bill should 
continue to be, in my mind, the center of the Postal Service's 
strategy moving forward.
    My question to both of you is, are you committed to 
implementing the Postal Service Reform Act to ensure that its 
benefits to the public and the financial benefits to the Postal 
Service are fully realized? Mr. Tangherlini, do you want to 
take the first crack at that?
    Mr. Tangherlini. Thank you, sir. Yes, I am, and I am very 
excited that the opportunity to serve on the Board is 
concomitant with the passage of the law because it creates an 
opportunity then as a member of the Board, if I am confirmed, 
to oversee then the strategy of implementation, particularly of 
some of the important customer service-related and service 
performance-related aspects of the law.
    Chairman Peters. Great. Thank you.
    Mr. Kan.
    Mr. Kan. Chairman, thank you for the question. I applaud 
this Committee for navigating the passage of the postal reform 
bill, especially given how long it has taken. I fully commit to 
ensuring implementation of the bill will comport and comply 
with the intent of Congress.
    Chairman Peters. Very good. This next question is for both 
of you as well. We will start with you, Mr. Kan, but--the Board 
can do passive oversight, as you know, or it can be more 
engaged and hands-on. My question for both of you is, will you 
commit, if confirmed, to taking an active oversight role with 
the Postal Service management and working with Congress on 
implementing this bill as well as other aspects, and if you can 
elaborate on that, please?
    Mr. Kan. Thank you, Chairman Peters. Having been at OMB, it 
is clear that oftentimes when legislation is passed a lot of 
work continues to be done after passage--the formulation of 
regulations, the work with different agencies. That is 
certainly the case here with respect to OPM's implementation of 
some of the Medicare provisions.
    In addition, the bill has a fascinating provision around 
reporting of operational data, which I helped shepherd similar 
programs through DOT, and I look forward to working with 
management to ensuring that those provisions are implemented 
according to statutory requirements.
    Chairman Peters. Very good.
    Mr. Tangherlini. Senator Peters, I appreciate the question, 
and I am glad that you took the framing that you did because I 
would have been disappointed if you had asked if I was going to 
be a passive board member.
    Chairman Peters. I am glad to hear you are not.
    Mr. Tangherlini. Yes. No, I think it would be foregoing a 
tremendous opportunity to provide additional service if I was 
not active. I am also excited to be paired with Derek and his 
tremendous talents. I think having a chance to work with him 
and other board members to actively engage in seeing through 
what has been a decade-plus fight on the part of Congress to 
get this legislation passed is a tremendous opportunity.
    Chairman Peters. Great. As both of you know, people in 
communities across the country are expecting their mail to be 
delivered on time, absolutely critical, particularly with 
lifesaving medications and other priority mail. We prioritize 
on-time delivery and transparency in the reform act, which 
included the website and local service data, which Mr. Kan 
referenced in your previous answer. Certainly the Postal 
Service and the Board have a responsibility to focus on 
building customer trust by delivering on time.
    I would like to hear from both of you. How would you make 
that a priority, to ensure that we have both timely and 
reliable delivery? We will start with you, Mr. Kan.
    Mr. Kan. Thank you, Chairman Peters. When I read Title 39, 
Section 101, the original U.S. Code around the Postal Service, 
it is clear that providing high quality service is a core 
element of the legislative and statutory requirements around 
USPS.
    I think there are a few things that could be done. One is 
clear reporting and operational data that rolls up to the Board 
is going to be key, and I think also creating additional 
clarity and cohorting some of the data so that we see are there 
splits between urban and rural, are there splits across States. 
I think as we roll out some of the data reporting provisions, 
the more granular we can get the better we can identify where 
there are specific problems. I am looking forward to working 
with the management team, with other board members, folks like 
Dan, should we be confirmed, to making sure that we have good 
granular data identifying where there are opportunities to 
improve customer service.
    Chairman Peters. Very good.
    Mr. Tangherlini. Mr. Chairman, I would simply build off of 
what Derek said and reiterate that the universal service 
obligation (USO) of the Postal Service, when combined then with 
service level expectations, is what makes the USPS such a vital 
service to the American citizens. I think, recognizing that the 
role of the Board is to help set strategy and then evaluate 
performance of the management team, that gets to the essence 
then of your question. Creating clear expectations in terms of 
service delivery, creating clear expectations in terms of even 
delivering the tools that the Congress has given the Postal 
Service then for people to evaluate and see that performance is 
a fundamental responsibility of a Governor. Should I be 
confirmed, that will be my highest priority.
    Chairman Peters. Great. The Board oversees Postal Service 
expenditures, and we all know that the Postal Service has 
fallen behind on some very key capital investments due to its 
financial situation. One of these is buying new vehicles. After 
an acquisition process that began in 2015, the Postal Service 
is finally procuring new, safe, next-generation delivery 
vehicles to replace thousands of, quite frankly, dangerous 
vehicles that are over 30 years old.
    In Michigan, we know the auto industry moves quickly and 
the future is also going to be found in electric vehicles. I 
have continually pushed the Postal Service to invest in as many 
electric vehicles that it possibly can and have also championed 
funding to maximize the electric vehicle fleet broadly across 
government.
    So my question to both of you--and, Mr. Tangherlini, I will 
start with you on this and then go to Mr. Kan. Will you commit 
to taking a close look at the Postal Service's capital 
investments, including electric vehicles, to make sure that the 
Postal Service is taking advantage of the up-to-minute 
technology that is available in the auto industry, to maximize 
both long-term efficiency as well as safety while also meeting 
its basic needs?
    Mr. Tangherlini. Mr. Chairman, I see that as one of the 
most exciting opportunities about joining the Board is to be at 
the crossroads of so many technological evolutions for the 
Postal Service, the fleet being the most prominent and obvious 
one. As a former general manager of a transit authority, the 
vitality, the necessity of the fleet as a way of delivering the 
service, I understand why that is so important. The need to 
then make sure that the infrastructure that supports that 
fleet, as you modernize it, has to be there as well. The Postal 
Service capital plan, is one of the things I am most interested 
in learning more about should I have the chance to be 
confirmed.
    Chairman Peters. Great. Mr. Kan.
    Mr. Kan. Chairman Peters, I just want to echo Dan's answer, 
and I actually feel like good boards will leverage each other's 
experiences. I look forward to partnering with Dan as he was a 
former GSA administrator. A lot of his experience will be 
extremely germane in terms of acquisition. I hope to bring my 
experience from OMB as well.
    As you know, acquisitions are extremely complicated. They 
take forever, and oftentimes by the time you are ready to 
procure and outlay funds, technology has changed. I look 
forward to working with the Committee, with USPS management, to 
ensure that we use up-to-date technology to ensure that 
procurement makes sense.
    Chairman Peters. Very good. Ranking Member Portman, you are 
recognized for your questions.
    Senator Portman. Thank you, Mr. Chairman. I was not going 
to start here, but I will, with regard to the vehicles. Just 
last week, they announced they plan to order 50,000 new 
delivery vehicles, including 10,000 electric vehicles. The 
Chairman is right; some of these vehicles are 30 years old. 
This procurement actually started several years ago, and it has 
taken forever. I think it is important to move forward.
    You both served on the boards of transportation 
organizations, I noted, and you have had to manage major 
capital expenses like this. What are your thoughts about this 
purchase?
    I will give you mine for what it is worth. I think they 
ought to be careful not to go down a track--Mr. Kan, you just 
implied this or at least I inferred from what you said--where 
we are buying expensive new technology that is not proven out 
or the infrastructure is not in place. I mean, this is your 
fiduciary responsibility, should you be confirmed, to make sure 
the taxpayer dollars are being used wisely.
    So are there any pitfalls you would advise the Postal 
Service to avoid in a major purchase like this? Maybe start 
with you, Mr. Kan.
    Mr. Kan. Thank you, Ranking Member Portman. Absolutely. The 
Postal Service has like a quarter-million vehicles today, and 
all those vehicles rely upon an infrastructure that currently 
exists, which is gas and diesel-fueled vehicles.
    One of the main pitfalls is ensuring not only is that what 
you are buying is adequate to be produced but also the 
infrastructure around it is sufficient. If we buy 10,000 
electric vehicles and we deploy them to Montana or to some 
rural parts of the country, there may not be the 
electrification of the grid to support these vehicles, and so I 
think a major pitfall is ensuring that all of the components 
needed for a procurement are in place.
    We have run into this problem many times where you may 
procure something but you may not have procured the 
transportation of the thing you are buying. Similarly with 
electric vehicles, ensuring that we have the infrastructure to 
support 10,000 or, in this case, potentially even more electric 
vehicles is going to be, I think, a key pitfall that we need to 
be mindful of.
    Senator Portman. Mr. Tangherlini.
    Mr. Tangherlini. I would like to echo Mr. Kan's comments 
and say that the biggest pitfall in any longstanding 
procurement is rushing too fast ahead and getting ahead of the 
capability of the organization to absorb the technology. What I 
would like to understand is how has the Postal Service planned 
for the accommodation of a change in this technology. We had 
similar experiences with natural gas buses and hybrid electric 
buses, and so the actual cost was not the vehicles itself but 
the infrastructure and then the need to make sure that the 
service ultimately that you are responsible for is being 
delivered because at its core it does not matter what the 
vehicle is as long as the mail is getting to people's 
residences.
    The question then is the cost structure. Have they thought 
through the implications of a long-term purchase, and how do 
they accommodate the eventual technology shift? I think these 
are all questions that a good, active board is challenging the 
management to think through and respond to.
    Senator Portman. I appreciate those responses. I know there 
are some green advocates who have said it has to be all 
electric and, let us go for it. I am the owner of my fourth 
hybrid vehicle. I would have gotten an electric if it was 
available. The F150 only comes in hybrid right now, soon 
electric.
    But you know, I just think your job will be to ensure that 
the money is properly spent, and so looking into the future is 
fine. But looking too far into the future means that, as Mr. 
Kan has indicated--and I think you have, too, indirectly, Mr. 
Tangherlini--you could end up with a huge expense either on the 
lack of infrastructure or on the maintenance and service side 
of this. So just being smart about it, I think, makes sense and 
not being committed, to one path or the other but, rather, 
being sure that it is the right mix.
    On the Postal Service election reforms, during the 2020 
election, there were lots of problems involving election mail. 
The post office chose to reduce processing capacity close to 
election deadlines. We were told the USPS sent 46 letters out 
to 46 different States, including Ohio by the way, saying that 
their State election rules were incongruous with the Postal 
Service's delivery standards, meaning that ballots requested 
near the deadline under the State law would not be returned in 
mail in time to be counted. I mean, that is a big problem. 
People vote, and they expect their vote to count.
    How can the Postal Service improve its role in Federal 
elections? How can States improve their roles? What can we do 
in terms of a reform effort here in Congress? Mr. Tangherlini, 
why don't you start on this one?
    Mr. Tangherlini. Thank you very much, Senator. I think that 
the Postal Service should have a stronger connection with the 
States if the States are going to rely on its service for this 
vital democratic process. I do not quite know yet enough about 
what happened then or how the Postal Service is thinking about 
it now, but I do commit that that is--a repeat of that, of 
those outcomes, of that concern would be something I would want 
to very much avoid if I get to be a Governor.
    Senator Portman. Mr. Kan.
    Mr. Kan. Thank you, Ranking Member Portman. I just want to 
buildupon Dan's answer. I think that the Postal Service 
statutory requirements are clear that there is a basic and 
fundamental service that needs to be fulfilled here, and I 
would want to better understand the specific details and the 
current relationships with States to ensure that that basic and 
fundamental service is fulfilled.
    It seems like what happened in 2020 is unacceptable. 
However, I do not have access to all the facts at this point, 
but I would really want to understand and understand specific 
decisions of what led us here and making sure that that does 
not occur in future elections.
    Senator Portman. We are working on some legislative ideas 
here, and we may in touch with you, should you be confirmed, 
about that. But I think it is important that the post office be 
frank with what their capabilities are but also improve those 
capabilities going into an election season.
    The Postmaster General. Some groups have called on 
President Biden to nominate Governors who commit to removing 
Postmaster General DeJoy. Both of you, have either of you made 
any commitment regarding whether you would support the removal 
of the Postmaster General or not if you are confirmed? Mr. Kan.
    Mr. Kan. No. Nobody has asked either.
    Senator Portman. Mr. Tangherlini.
    Mr. Tangherlini. No, sir.
    Senator Portman. Has anybody asked you that?
    Mr. Tangherlini. No, no one asked.
    Senator Portman. No one has asked you to support his 
removal?
    Mr. Tangherlini. No one has asked me to support his 
removal.
    Senator Portman. OK. With regard to the Postal Service 
reforms, the path to financial sustainability was a huge part 
of what we were trying to do, and it goes along with an 
internal reform effort. In other words, as I said earlier, our 
part was just to provide some breathing room for necessary 
reforms that would have to be made for this to be sustainable 
over time.
    What do you see as the most important actions the Postal 
Service can take to generate more efficiencies? Mr. Kan.
    Mr. Kan. I think the 10-year plan is a good start. There 
are a number of parts of the 10-year plan. One is maintaining 
strong customer service but also trying to improve the 
infrastructure and the network and leveraging the network to 
generate more revenue. I think those are both sensible places 
to start. The 10-year plan, if faithfully implemented, will 
likely result in higher margin and more opportunities for the 
U.S. Postal Service to have long-term financial viability.
    Senator Portman. Mr. Tangherlini.
    Mr. Tangherlini. Like Mr. Kan, I am very interested in the 
actual details of the 10-year plan. I have had a chance to 
review some of the high-level materials. I think ideas about 
service, about leveraging retail, about extending products 
offerings.
    I am very interested in something I did not see in the 10 
year plan, which is the potential value of Postal Service real 
estate and whether there are some opportunities for finding 
efficiency there.
    I think, the conversation about fleet and dramatically 
improving the quality and the capability of that fleet, and 
then the work that this Committee did on the Postal Service 
reform legislation really does set the stage for opportunities 
to dramatically improve the effectiveness and efficiency of the 
Postal Service.
    Senator Portman. Thank you, Mr. Tangherlini. Thank you 
both. I appreciate it.
    Thank you, Chair.
    Chairman Peters. Thank you, Ranking Member Portman.
    Senator Carper, you are recognized for your questions.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thank you, Mr. Chairman. My thanks to you 
and the Ranking Member for holding this hearing.
    Our thanks to our two nominees for their willingness to 
serve in these important capacities and my thanks to their 
families for their willingness to share you for this work and 
for the service you have provided to our country in any number 
of other ways in the past.
    We are proud of the legislation that we passed. We are very 
proud that it was a bipartisan bill about to be signed into 
law, we expect, by the President very shortly.
    One of the outstanding concerns with respect to the bill is 
the concern that maybe the largest fleet of vehicles in the 
country, which is now all gas and diesel, that it might 
continue to be largely gas and diesel as we go forward and 
replace, I guess, 230,000 vehicles in the years to come.
    I think it was Senator Collins, who said, there are some 
parts of Maine that are pretty rural and electric does not work 
there, and in some cases maybe hybrid does, in some cases maybe 
electric does. I realize that we have to an all-of-the-above 
approach, but the idea of ending up 10, 15, 20 years now with a 
fleet that is still largely gas and diesel, I think, would be a 
huge missed opportunity.
    I would just ask if I could for both of you, Mr. Kan and 
Mr. Tangherlini, if confirmed, will you review the Postal 
Service's analysis and underlying assumptions that are driving 
the decision to currently invest in apparently no more than 20 
percent electric vehicles, at most, in the future?
    Mr. Tangherlini. Absolutely, Senator Carper, if confirmed, 
I would be very interested in learning how they arrived at 
their decisions and how they plan to make those investments 
going forward.
    Senator Carper. Yes. Mr. Kan, a ``yes'' or ``no'' would be 
good.
    Mr. Kan. Yes.
    Senator Carper. I like that answer. As a follow-up, 
gentlemen, what steps would you take to review this analysis 
and conclude for yourself whether it is, one, operationally 
and, two, financially advantageous for the Postal Service to 
invest in more electric vehicles or other technology?
    My understanding is one of the assumptions that they used 
in deciding to go forward with this kind of purchasing order is 
the price of gasoline and diesel would be about $2.25 a gallon, 
which we know is not--well, it could be. Hopefully, it will be. 
That might be the triumph of man's hope over experience.
    But the question for each of you is, how would you review 
the Postal Service's analysis?
    Mr. Kan. Yes, sir.
    Senator Carper. The follow-up to that would be, what steps 
might you take in reviewing the analysis and conclude for 
yourself whether it is both operationally and financially 
advantageous for the Postal Service to invest in more electric 
vehicles or other clean technology? What steps would you take?
    Mr. Kan. Yes, sir, I would review those assumptions, and I 
would take whatever the appropriate steps are within the 
context of the way the Board meets and discusses strategy to 
evaluate and discuss them further and see if there are changes 
that are necessary.
    Senator Carper. Thank you. Mr. Tangherlini.
    Mr. Tangherlini. Senator Carper, I would want to review the 
economic assumptions and the terms of the procurement and if 
there are tranches of it, and I would want to discuss that with 
management to ensure that it has been a thoughtful procurement 
process.
    Senator Carper. Good. If confirmed, it might be helpful for 
you both, or for the Board, to consult with companies like UPS, 
like Fedex, like Amazon, to see what their plans in this 
regard.
    Also, in talking with folks at Ford Motor Company, I think 
they have indicated they reckon they do not plan to build 
vehicles beyond 2030 that are gas and diesel-powered. Mary 
Barra, I think, told me from General Motors (GM) that the 
expectation is that GM will not build gas and diesel vehicles 
beyond 2030. I think that is all highly relevant in this 
regard.
    A follow-up, if I could, first to Mr. Kan, to you, and then 
Mr. Tangherlini. Seventy percent of the Postal Service's long 
life vehicles (LLVs), the ones that we all see delivering mail 
to our homes every day, well outlived their expected 24-year 
service life. They break down more often, and they are more 
costly to maintain. They lack modern safety features. They get 
on the average, I am told, about 8 miles gallon, maybe 8.2 
miles per gallon. It stands to reason that investing into 
technologies for the Postal Service, whether they be electric 
vehicles or some other vehicle--what is your approach for 
adopting new technologies, particularly vehicle technologies, 
into a government entity? Would you share some thoughts with us 
on that?
    Mr. Tangherlini. Sure. I have had several opportunities to 
have experience in doing that, and I think it is very important 
that you understand that if you are going to make a long-term 
investment, a 24-year investment in the case of the LLVs, that 
you really understand how they work and how you operationalize 
them. In general, I think if USPS could get back to being the 
innovator that it historically has been and understanding that 
innovation involves experimentation and experimentation, good 
experimentation, involves data collection and understanding 
what the costs and the benefits are, I think we could arrive at 
a conclusion that ultimately would be in the best interest of 
the Postal Service, its customers, and the American people.
    Senator Carper. Thank you. Mr. Kan, same question, just 
briefly.
    Mr. Kan. A similar answer to Dan, I would really want to 
look at some of the data to see where across the country have 
we seen vast depreciation of some of the long-life vehicles and 
if there is any correlation with weather patterns and usage 
rates and understand how do we increase the length of some of 
this new procurement.
    Senator Carper. When the Postal Service was first really 
envisioned in the Constitution of our country, and Ben Franklin 
became the first Postmaster General, the idea there was to try 
to bind our country together for communications and really for 
economic development and movement of goods and services.
    I have heard described very often the requirement for the 
Postal Service to deliver six days a week to every mailbox in 
the country. Albert Einstein would say in response to that, in 
adversity lies opportunity. How does the Postal Service 
monetize that obligation and turn it into an advantage?
    One way is to vote by mail. There are plenty of other 
opportunities as well. I think one of the things we will be 
looking to you and the Board, if confirmed, is how does the 
Postal Service monetize this obligation. Any quick comments and 
thoughts on that, Mr. Tangherlini, please?
    Mr. Tangherlini. Yes, sir. I think the Postal Service's 
assets, the 30,000-plus retail outlets, the fact that there are 
160 million addresses that it touches, as much as six times a 
week is actually the Postal Service's biggest asset, and we 
should be very careful about making any substantial changes to 
that asset without exploring the opportunities that we could 
realize more revenue from.
    Senator Carper. Good. Thanks. The last comment, Mr. Kan. 
Same question, how does the Postal Service monetize and take 
advantage of this burden and turn it into an opportunity?
    Mr. Kan. The Postal Service currently operates one of the 
largest pieces of infrastructure in the world today. I think 
figuring out ways to monetize that infrastructure, leveraging 
it, could be a way to increase topline revenue.
    Senator Carper. Yes. I would say in closing, Mr. Chairman 
and to our witnesses, when we were working on reconciliation 
legislation, one of the elements of reconciliation is 
infrastructure, including for gasoline-powered vehicles, for 
electric-powered vehicles, for hydrogen-powered vehicles. I 
think there is an obligation we have if we want to encourage 
the Postal Service to move away from gas and diesel vehicles. 
We have an obligation to help buy down the cost of those 
vehicles and buy down the cost of the infrastructure that will 
support them, and I hope we will keep our eyes on that.
    Thank you. Thank you both and thanks for your willingness 
to take this on.
    Mr. Chairman, I have known these gentlemen for a long time, 
and I notice every time that Dan appears before this Committee 
or any other committee I can see his wife's lips moving 
whenever he speaks. I think, fortunately, she has his back. I 
think the Postal Service and our country would be in better 
shape if she did. It is a great team. Thank you.
    Chairman Peters. Thank you. Thank you, Senator Carper.
    A final question from me for both of you. The Postal 
Service has recently changed some of its service standards, 
which they are saying will improve reliability, but certainly I 
have heard from a number of folks who have raised real concerns 
about these changing service standards.
    My question to both of you, will you take the hands-on 
approach, which you have already said you will on a variety of 
issues, on this issue as well to see how these standards are 
working? If they are causing any problems or should be 
reconsidered, will they be reevaluated? Mr. Kan, I will start 
with you.
    Mr. Kan. Absolutely, sir, I commit to taking a look at some 
of the new service standards as it pertains to the long term 
strategic plan and ensuring we operate a high customer service.
    Chairman Peters. Great.
    Mr. Tangherlini. Yes, sir, Mr. Chairman. I think ultimately 
it is those service standards that are a measure of the 
effectiveness of the Postal Service and its keeping its 
commitment to a universal service obligation. I see that as of 
the highest priority of the Board of Governors.
    Chairman Peters. Great. Thank you again to both of you for 
your willingness to take on these roles. Congratulations on 
your nominations. These are incredibly important positions. 
This Committee, I think I speak for all us on our Committee 
although Senator Carper wants to speak on his own behalf. Go 
ahead, Senator Carper.
    Senator Carper. Thanks so much. I have been looking through 
some numbers provided for me by my staff. I mentioned 230, 
roughly 230,000 vehicles. About, 1,000 of those are apparently 
privately owned vehicles that are used to deliver the mail. So 
the total number for the Postal Service mission is about 
230,000, but some of those vehicles are privately owned. I just 
wanted to mention that as well.
    I think we will leave it at that. Thanks.
    The fact that there are relatively few members here today 
is actually a good thing. If this room were packed, you ought 
to be worried. But this is, I think, an acknowledgment that you 
bring extraordinary skills and experience to this undertaking, 
and we are delighted that you are willing to do it. Thank you.
    Mr. Tangherlini. Thank you.
    Chairman Peters. I will concur with Senator Carper. This is 
a good sign that both of your qualifications speak for 
themselves, but it is wonderful to have you with your families 
here.
    Again, these are incredibly important positions. Everyone 
on this Committee wants to support the Postal Service, and we 
understand that your positions put you right on the front line 
of providing essential services to Americans all across our 
country.
    Thank you again for your willingness to take on these big 
roles, and if confirmed, we all look forward to working closely 
with you to make the Postal Service as strong and as viable as 
possible for the foreseeable future, another couple hundred 
years at least. Right, Senator Carper? Although I will not be 
here to see it with you. We hope you set it on the proper 
course.
    Senator Carper. Could I just also add? I have worked on 
these issues, as you may know, for years and years and years. 
Senator Collins and I, worked on these issues for years and 
years and years. This man to my right, Senator Peters, was 
Chairman of the Committee for like barely a year, and we passed 
the legislation that the President is going to sign in a couple 
days, and I just want to take my hat off to him and to our 
staffs. We had wonderful, wonderful support on this. Thank you.
    Chairman Peters. Great. Thank you, Senator Carper. You are 
recognized anytime you want to make those statements. Just let 
me know. I appreciate that.
    Senator Carper. I want to talk about how wonderful your 
wife is.
    Chairman Peters. You may proceed with unlimited time.
    Senator Carper. On these issues. We do not do these jobs by 
ourselves. We know you do not either. Thank you.
    Chairman Peters. Thank you. The nominees have made 
financial disclosures and provided the required responses to 
biographical and pre-hearing questions submitted by this 
Committee.\1\ Without objection, this information will be made 
part of the hearing record\2\ with the exception of the 
financial data, which are on file and available for public 
inspection in the Committee offices.
---------------------------------------------------------------------------
    \1\ The information of Mr. Tangherlini appear in the Appendix on 
page 26.
    \2\ The information of Mr. Kan appear in the Appendix on page 87.
---------------------------------------------------------------------------
    The hearing record will remain open until 12 p.m. tomorrow, 
April 1st, for the submission of statements and questions for 
the record.-
    This hearing is now adjourned.
    [Whereupon, at 11:10 a.m., the Committee was adjourned.]

                            A P P E N D I X

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