[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
HEARING WITH THE COMMISSIONERS OF
THE POSTAL REGULATORY COMMISSION
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON GOVERNMENT
OPERATIONS
OF THE
COMMITTEE ON OVERSIGHT AND
GOVERNMENT REFORM
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
SECOND SESSION
__________
JUNE 4, 2026
__________
Serial No. 119-65
__________
Printed for the use of the Committee on Oversight and Government Reform
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available on: govinfo.gov, oversight.house.gov or docs.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
63-892 PDF WASHINGTON : 2026
=======================================================================
COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
JAMES COMER, Kentucky, Chairman
Jim Jordan, Ohio Robert Garcia, California, Ranking
Mike Turner, Ohio Minority Member
Paul Gosar, Arizona Eleanor Holmes Norton, District of
Virginia Foxx, North Carolina Columbia
Glenn Grothman, Wisconsin Stephen F. Lynch, Massachusetts
Michael Cloud, Texas Raja Krishnamoorthi, Illinois
Gary Palmer, Alabama Ro Khanna, California
Clay Higgins, Louisiana Kweisi Mfume, Maryland
Pete Sessions, Texas Shontel Brown, Ohio
Andy Biggs, Arizona Melanie Stansbury, New Mexico
Nancy Mace, South Carolina Maxwell Frost, Florida
Pat Fallon, Texas Summer Lee, Pennsylvania
Byron Donalds, Florida Greg Casar, Texas
Scott Perry, Pennsylvania Jasmine Crockett, Texas
William Timmons, South Carolina Emily Randall, Washington
Tim Burchett, Tennessee Suhas Subramanyam, Virginia
Lauren Boebert, Colorado Yassamin Ansari, Arizona
Anna Paulina Luna, Florida Wesley Bell, Missouri
Nick Langworthy, New York Lateefah Simon, California
Eric Burlison, Missouri Dave Min, California
Elijah Crane, Arizona Ayanna Pressley, Massachusetts
Brian Jack, Georgia Rashida Tlaib, Michigan
John McGuire, Virginia
Brandon Gill, Texas
Richard McCormick, Georgia
------
Mark Marin, Staff Director
James Rust, Deputy Staff Director
Ryan Giachetti, Chief Counsel
Jennifer Kamara, Director of Strategic Initiatives
Luke Moll, Research Assistant
Bill Womack, Senior Advisor
Mallory Cogar, Director of Operations and Chief Clerk
Contact Number: 202-225-5074
Robert Edmonson, Minority Staff Director
Contact Number: 202-225-5051
------
Subcommittee on Government Operations
Pete Sessions, Texas, Chairman
Virginia Foxx, North Carolina Kweisi Mfume, Maryland, Ranking
Gary Palmer, Alabama Member
Tim Burchett, Tennessee Eleanor Holmes Norton, District of
Brian Jack, Georgia Columbia
Brandon Gill, Texas Maxwell Frost, Florida
Emily Randall, Washington
C O N T E N T S
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OPENING STATEMENTS
Page
Hon. Pete Sessions, U.S. Representative, Chairman................ 1
Hon. Kweisi Mfume, U.S. Representative, Ranking Member........... 3
WITNESSES
Hon. Robert Taub, Vice Chairman, Postal Regulatory Commission
Oral Statement................................................... 5
Hon. Ann Fisher, Commissioner, Postal Regulatory Commission
Oral Statement................................................... 10
Hon. Thomas Day, Commissioner, Postal Regulatory Commission
Oral Statement................................................... 12
Hon. Ashley Poling, Commissioner, Postal Regulatory Commission
Oral Statement................................................... 13
Written opening statements and bios are available on the U.S.
House of Representatives Document Repository at:
docs.house.gov.
INDEX OF DOCUMENTS
* Article, Brookings, ``When Slower Mail Becomes a Health
Risk''; submitted by Rep. Mfume.
* Statement from ANM; submitted by Rep. Mfume.
* Statement from EPatel; submitted by Rep. Mfume.
* Statement from Keep-US-Posted; submitted by Rep. Mfume.
* Statement from NNA; submitted by Rep. Mfume.
* Statement from NPMHU; submitted by Rep. Mfume.
* Statement from EMA; submitted by Rep. Sessions.
The documents listed above are available at: docs.house.gov.
HEARING WITH THE COMMISSIONERS OF
THE POSTAL REGULATORY COMMISSION
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THURSDAY, JUNE 4, 2026
U.S. House of Representatives
Committee on Oversight and Government Reform
Subcommittee on Government Operations
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:04 a.m., in
room 2154, Rayburn House Office Building, Hon. Pete Sessions
[Chairman of the Subcommittee] presiding.
Present: Representatives Sessions, Foxx, Palmer, Burchett,
Jack, Gill, Mfume, Norton, Frost, and Randall.
Also present: Bell, Walkinshaw, and Budzinski.
Mr. Sessions. Good morning. The Subcommittee on Government
Operations will come to order, and I would like to welcome
everyone with some explanation.
I had cataract surgery last week and find myself in bright
lights. So, I am going to make my ophthalmologist happy, and
she tells, me too, by avoiding further damage to my eyes. So, I
probably will end up getting a call from Bono asking me to quit
trying to impersonate him, but I would ask some bit of leverage
on myself to at least be able to read what I am doing.
So, without objection, I may declare a recess at any time
as Chair.
I recognize myself for the purpose of making an opening
statement, and good morning to each of you who have taken time
to be at this important hearing.
OPENING STATEMENT OF CHAIRMAN PETE SESSIONS
REPRESENTATIVE FROM TEXAS
First of all, I would like to welcome everybody to today's
hearing with the Postal Regulatory Commission. It is the latest
installation of the Subcommittee's ongoing effort to oversee
the troubled landscape of the United States Postal Service. The
PRC--Postal Regulatory Commission--is a key stakeholder in the
postal universe and has been at the center of core issues:
service performance, revised service standards, and, of course,
postal rates. And each of these Members that are here today
will be given not only a chance to articulate their thoughts
and ideas, but we want to welcome them because they are the
effort between, as part of the regulatory oversight, to make
sure that we get their side of the story. Yet the Commissioners
of the PRC have not testified before this Committee since 2018.
We felt like it was time, so I thought it was high time not
only for this visit, but also the update at these times, which
continue to be changing, and what has been a recurring event
the Postal Service finds itself, self-identified and by others,
at a time of crisis.
In March, the Postmaster General testified before this
Subcommittee that the Postal Service would run out of cash in
about 12 months, meaning that it would be impossible to
maintain anything close to the level of service that not only
Congress, but that the American people and customers would
expect. Since that time, he has suspended employer
contributions to the Federal Employee Retirement System (FERS)
and placed restrictions on non-essential spending. I am not
aware of an official estimate of how much these additional time
measures have bought the Postal Service, but I am given the
understanding it might be several years.
Regardless, the Postal Service needs our attention. It
needs the attention of not only Congress but, of course, the
Postal Regulatory Commission and others who are in this space
who provide added service, benefit, and opportunity to the
Postal Service, to customers, and certainly as payers into the
system. So, it just does not make sense that we would simply
ignore these issues that need to come forth, but rather talk
about them because I, too, am concerned about postal workers.
I, too, am concerned about us treating not only workers fairly,
but making sure that their future is secure. And I, too, care
very much about our Postmaster General, who I think has the
right attitude about his service to the United States of
America and in service to the Postal Service.
I will once again take the opening opportunity to commend
former Postmaster Louis DeJoy for doing his best to come up
with an enduring solution to the Postal Service's problems. He
had lots of ideas, he had lots of things that he put into
place, but I also see how the Delivering for America plan did
not provide the results that he had hoped that it would. So, we
are not just back at the table, we are back to where we have to
work with each other. Similarly, I commend the current
Postmaster General, my friend, Mr. Steiner, for taking on this
important task. I am not sure how many people would have
accepted the call from President Trump to do this. He willingly
did and is taking this issue on with his team forthrightly.
During our March meeting, Postmaster General Steiner told
this Subcommittee he needs congressional action to increase the
Postal Service's borrowing authority, and just two days ago, he
presented the Committee with a number of additional legislative
requests. There is no reason to assume additional borrowed
funds infused into this unintended business model would be
anything more than throwing good money after bad results. So,
that is part of why we are here today: to get closer on our
collaboration not only with the United States Postal Service
and its great employees, but also with the Postmaster General.
We also have the U.S. Senate that has a number of ideas about
this, and we will include their ideas in.
So, to be clear, this is not a shot at my friend, the
Postmaster General. He himself has said Congress and the
American people need to decide what they want, and I think this
want, while it is the big issue of the day, we need to be clear
that we need to get closer on a lot of the activities that add
up to that ``want,'' and that is the day-to-day running, the
decisions that are made, and also the obligations under law and
necessary to support the American workers that are called
postal workers, and the systems that they are, too, a part of.
So, it is not just a matter of what a customer wants. It is
not just a matter of what we want as Members of Congress. It is
called working together. If we want the status quo, or at least
what would be described as the good parts of status quo from
some people's perspective, we are going to have to pay for it
one way or another. We are going to have to understand these
are different times. But I would say that since its conception,
the Postal Service has provided numerous societal benefit,
laborers that work increasingly to the benefit of customers,
and we need to make sure we more clearly understand those
requirements and expectations. So, it must deliver everywhere,
not all the time, but darn near close to it. So, regardless of
how remote or the resources that it takes, we need to focus on
the goal at hand, and that is closer understanding what we are
trying to aid and be a part of.
So, what we are going to do here today is to take feedback.
We are going to take feedback not only from the Postal
Regulatory Commission, but we are going to hear from Members of
Congress. I would say to you, and I think it is no surprise to
Mr. Mfume, almost every single Member of Congress has an
opinion about the Postal Service also, and I am sure the Postal
Service has lots of opinions that they cannot always express,
but that is what today is about, to hear from the Postal
Regulatory Commission, and I am delighted that they are here.
At this time, I would yield to the distinguished Member
from Maryland, my friend, the Subcommittee Ranking Member, Mr.
Mfume. The gentleman is recognized.
OPENING STATEMENT OF RANKING MEMBER KWEISI MFUME
REPRESENTATIVE FROM MARYLAND
Mr. Mfume. Thank you very much, Mr. Chairman. Good morning,
everyone. I want to thank Chairman Sessions for calling this
hearing on what we all agree is a very important topic. This is
the fourth, in case you did not know, in a series of
Subcommittee hearings on the Postal Service, this time with the
Postal Regulatory Commission, as we can see. And we are at a
very critical juncture for the Postal Service, which, as most
of us know, is facing an estimated $9 billion net loss, a
nearly 50-percent decline in mail volume since 2006, and is at
risk--serious risk--of running out of cash in the near future.
The Postal Service powers communities by providing
universal, reliable, and efficient mail services across all 50
states and territories. That is not anything new. That is what
the Service has been doing since it was created. Mail delivery,
as we can all agree, is a public service and it is a public
service to all Americans, and it relies on the Postal Service's
regulatory oversight bodies and Congress to find a way to work
together to ensure its survival.
The independent Postal Regulatory Commission, also known as
PRC, regulates, as all of you know who are here to testify
today, the mail monopoly of the Postal Service. The PRC
regulates and establishes regulations and procedures on setting
postal rates, and analyzes the Postal Service's finances,
service performance, and compliance with the Universal Service
Obligation. In addition to that, the PRC has the authority to
hear public appeals of post office closures and receives and
investigates public complaints alleging that the Postal Service
may or may not be violating its statutory and regulatory
requirements. The PRC currently has, as we know, and excuse of
redundancy here, four Commissioners with critical expertise in
the functions of the Postal Service and is a critical component
of the postal system, which ensures that rates are fair and
maintains a transparent, accountable, universal mail system. As
the Postal Service faces and comes to grips with its own
future, that Service must continue to cut costs and to find
ways to creatively increase revenue.
When Congress passed its last major reform bill to support
the Postal Service, then Postmaster General DeJoy spent $40
billion on capital investments, reduced performance targets,
weakened the service in underserved areas, and any solution
that Congress is willing to undertake must include more
safeguards to hold this and any future Postmaster General and
the Board of Governors to the public by making sure that they
are accountable in various ways. So, I am particularly
interested in discussing potential guardrails that strengthen
the role of the PRC, and while I am encouraged by the
Postmaster General's efforts to prioritize service performance
as he leads the Postal Service during this difficult time, I
think even more has to be done.
So, I look forward to the discussion on how we can all work
together to put the Postal Service back on, as they say, the
right track. I yield back, Mr. Chairman.
Mr. Sessions. Mr. Mfume, thank you very much. So that this
Subcommittee understands, the gentleman from Maryland and I are
very, not only very good personal friends, we try and operate
this Subcommittee based upon the ability to work together, to
talk with each other about even difficult subjects. And while
he is given the authority and responsibility, as am I, to hold
our own opinion, we try and work together. And I want to
publicly thank the gentlemen, not only for this attribute that
he has ability to do it, but to also let him know that I will
continue that as we move forward in this process that seemingly
has a lot of work to go. So, thank you very much, Mr. Mfume.
Without objection, Representatives Walkinshaw of Virginia,
Budzinski of Illinois, Lynch of Massachusetts, and Bell of
Missouri are waived onto this Subcommittee for the purpose of
questioning the witnesses at today's Subcommittee hearing.
I am very pleased today to welcome our witnesses who are
before us today. Robert Taub is the Vice Chairman of the Postal
Regulatory Commission, formerly sitting in the Chairman's seat
for over six years, and totaling over 40 years of public
service experience. I first met Robert a couple hundred years
ago when I sat on the Postal Subcommittee of Government Reform
at the time that we had a Postal Subcommittee, and, Robert, I
am delighted that you are here today.
Ann Fisher: Ann Fisher has been a Commissioner at the
Postal Regulatory Commission since 2019. She has served in the
Federal Government for 32 years, to include holding a number of
positions in the U.S. Senate and the United States Postal
Service. During her Senate tenure, she was the lead Republican
aide overseeing passage of the 2006 Postal Accountability and
Enhancement Act.
Thomas Day: The gentleman has been a Commissioner at the
Postal Regulatory Commission since 2023. He also has served 45
years in the Federal Government, to include 35 years at the
Postal Service where he held a number of senior executive
positions.
Ashley Poling: Ashley Poling has been a Commissioner at the
Postal Regulatory Commission since 2019. Prior to her service
on the Commission, she held a number of senior roles to serve
the U.S. Senate and the American people.
So, I want to say thank you to each of you for joining us
today. It was important for me, as I told Mr. Mfume, as I had
discussions with you yesterday to prepare us for today. I felt
like that your insight, your opportunity to express your views
and beliefs are very important, and it is my hope today that
each of you will be able to not only complete the sentence that
you start at the end of 5 minutes, but will make sure those
points are well made, and I have a slow gavel, as Mr. Mfume
knows.
So, I would now ask each of our witness to please stand up.
Pursuant to Committee Rule 9(g), the witnesses will rise and
raise their right hand and answer or affirm as I ask them.
Do you solemnly swear or affirm that the testimony that you
are about to give is the truth, the whole truth, and nothing
but the truth, so help you God?
Mr. Taub. I do.
Ms. Fisher. I do.
Mr. Day. I do.
Ms. Poling. I do.
Mr. Sessions. Let the record show that the witnesses have
answered in the affirmative. Thank you very much. You may now
take a seat. We are delighted that you are here, and we
appreciate you being here today.
I would like to remind the witnesses that in order for us
to maintain proper opportunity for each of our Members to come
and participate, that we are going to ask that you try and make
sure that your time here is succinct and well done. But with
that said, we have the clock that you are aware of, the green
light, yellow light, red light. As we get to the red light,
please think about closing your statements that you would have.
So, we are delighted that you are here, and I now would go
to our witnesses and, Mr. Chairman, will allow you to come
first. The gentleman is recognized.
STATEMENT OF HON. ROBERT TAUB
VICE CHAIRMAN, POSTAL REGULATORY COMMISSION
Mr. Taub. Chairman Sessions, Ranking Member Mfume, and
Members of the Subcommittee, thank you for convening this
hearing on the state of the Postal Service and the critical
role the Postal Regulatory Commission plays in providing
transparency and accountability for the American people. The
President designated me Chairman of the Commission for more
than six years, from December 2014 until January 2021. For the
past two years, I was elected Vice Chairman of the Agency by my
fellow Commissioners who join me here today. We have a vacancy
in the Chairman position, so pursuant to law, the Vice Chairman
acts as Chairman. As current Agency head, my remarks this
morning reflect the full Commission testimony.
In some ways, not much has changed since my last testimony
before this Committee more than nine years ago in February
2017. If anything, the situation has gotten worse. Almost three
months ago, the Postmaster General testified here and presented
a dismal fiscal forecast. He stated that they would run out of
cash and stop delivering mail just under nine months from now.
He also presented three doors from which Congress could choose
a solution: two doors leading to continued dismal results and
the quickened demise of the Postal Service, such as stopping
mail delivery, severely reducing service, closing post offices,
and raising prices. And one he referred to as the Goldilocks
choice, which he championed would be just right, solving all
the problems. The proposal includes increasing its borrowing
cap from $15 billion to $30 billion, among other options, such
as reallocating retiree liabilities, diversifying retirement
funds, and modifying current actuarial assumptions to reduce
pension payments.
Our written testimony dives deeper into the many reasons
why the Postal Service is in the situation it is in today and
highlights how the Commission has repeatedly raised concerns
over the past few years. While the Commission broadly agrees
with the Postmaster General on some of the causes, some of the
Postal Service's explanations give us pause. Its proposed
solutions should also be viewed cautiously. However, we agree
with the Postmaster General on the most important solution:
only by first specifically defining what America needs of its
Postal Service and what that costs, will Congress then truly
know how best to fix the fundamental funding structure while
preserving appropriate service and delivery standards,
specifically defining the public service mission. That is, the
Universal Service Obligation, or USO for short, of this vital
government institution should be job one.
Before further discussing this important issue of the USO,
some words of caution about the Postmaster General's suggested
approach in his testimony of just granting the Service more
freedom to operate like a truly independent entity and ridding
it of any regulatory or statutory requirements, then hoping
that will make everything better. That approach, combined with
the Goldilocks choice, can generally be described as `give us
more money with less oversight.' The Postal Service is not an
independent private business. It is a government establishment
with extensive special legal privileges, including two
statutory monopolies valued at nearly $6 billion over letter
delivery and mailbox access that no other private sector
company is allowed to maintain. This is why Congress
established specific and limited statutory and regulatory
guardrails, and has relied on the Commission for the past 56
years to protect American consumers and businesses from
potential monopolistic abuse, such as predatory pricing, poor
service, and unfair competition by this government
establishment operating in commercial markets.
The Commission also cautions against endorsing the Postal
Service's plan to move full steam ahead with what, in essence,
is the Delivering for America plan--DFA--a plan that promised
break-even operations by 2023 and a cumulative ten year net
income of $200 million. In fact, now in year six of the ten
year DFA plan, the Postal Service has incurred $31 billion in
losses and is on the path to losing even more in the remaining
four years of its implementation. It is a plan that promised to
streamline and save the Postal Service $28 to $40 billion by
2030 as initially estimated. Yet, implementation of the plan
has slowed mail delivery across the United States, particularly
in rural areas, which, to a greater extent, rely on affordable
and reliable mail delivery. Further, the mounting financial
losses continue, the situation the Commission warned about on
several prior occasions.
Congress has enacted significant financial relief in recent
years, including $10 billion in COVID relief, $3 billion for
electric vehicles, and approximately $57 billion in balance
sheet relief under the 2022 law. Without these extraordinary
measures, Postal finances would be even worse. The 2022 law
also required Medicare enrollment for Postal retirees, which
was estimated to generate longer-term cost savings of $2-and-a-
half billion over the 2021-2031 period.
In addition, in 2021, the Commission provided the Postal
Service with additional rate authority above inflation for its
monopoly products, such as letters. There are no limits on
rates for their competitive parcel and packaged products. This
additional pricing authority helped offset costs related to
inflation as well as two sources of costs that the Postal
Service argues are outside of its control. The Commission
agreed, and we created additional rate authorities targeted at
offsetting those specific costs of mail density and retirement
obligations. Since the effective date of the Commission's new
rules in 2021, the Postal Service has used all this authority
to raise rates by 45 percent for most classes. Rate authority,
due to inflation granted during that time, totals 23 percent,
which means the Commission provided additional revenue-raising
authority to the Postal Service of 22 percent.
Looking at the first-class stamp price, the Postal Service
accelerated the rate in just five years from 55 cents to 82
cents effective next month, a 49-percent increase. Now more
money is being requested with no fundamental solution in sight.
The Commission is doubtful that just $15 billion more is going
to solve the problem: extend the date of the ultimate crisis,
yes, but prevent it, no.
Understanding the situation and working to address it, the
Commission, building on its record of trying to identify
creative pathways forward, undertook a major action in April
that fundamentally alters the Postal Service's pronouncements
that it could be out of cash in less than a year. The
Commission provided the Postal Service with a total of
potentially $15 billion or more in relief through 2030 to help
avert a cash crisis in the near term by issuing a waiver of our
regulations requiring minimum retirement payments. I will say
that again so it is very clear how circumstances have changed
since the Postmaster General's testimony in March. The
Commission provided the Postal Service a total of potentially
$15 billion or more in relief through 2030 and averted a cash
crisis in the near term by issuing a waiver of its regulations
requiring minimum retirement payments.
The Commission's action offers some breathing room and
extends the time before the Postal Service's reported
insolvency and the stated crisis of stopping mail delivery to
at least another several years, provided the Postal Service
makes judicious decisions about its expenditures starting now.
To be clear, this is not a panacea nor a permanent or long-term
fix to the Postal Service's problems, but it does allow
Congress an opportunity to enact thoughtful and fundamental
change as opposed to choices of desperation. There are several
areas where we disagree with the Postal Service on how it got
into the position it is in now or how it will get out of it.
However, I would like to focus on the areas where we agree with
the Postal Service and the singular action the Commission
believes is critical that Congress enact.
Define the Universal Service Obligation. Clearly defining
the USO means describing what the country needs from our Postal
Service and setting up a system to fully pay for it. We fully
agree with the Postmaster General on this point, as he
testified: ``Just tell us what you want us to do and how to pay
for it, and we will do it.'' It really is just that simple. As
the Government Accountability Office testified to you that same
day, the existing Postal Service operating model is
unsustainable. The Commission strongly agrees, and we have
urged action in this regard since 2008. This position has been
echoed in recent years by the GAO, the Postal Inspector
General, President Trump's Task Force on the Postal System led
by the Secretary of the Treasury, among others, which is that
the United States needs to clearly define the public service
mission for this wholly government, not private, establishment.
In other words, what is the Universal Service Obligation?
Defining the USO involves answering tough questions, but in
doing so it also, and perhaps more importantly, forms the basis
for the infrastructure and financial arrangements needed to
ensure our fellow Americans receive the postal services they
need. Those tough questions may include how many days of
delivery each week are needed in 2026 and beyond? What are
acceptable delivery service times across the nation? Does the
Postal Service need to offer fewer or more products and
services? Should delivery service and access be the same across
the Nation?
The Commission has extensive experience evaluating the USO.
In the 2006 postal law, Congress directed the Commission to
produce a comprehensive report on universal service, and it
identified seven specific attributes that comprise the USO. I
think it is important to name them. One, geographic scope; two,
range of products; three, access to services and facilities;
four, delivery frequency; five, affordable and uniform pricing;
six, service quality; and seven, an enforcement mechanism. The
first four of these attributes--geography, products, access,
and delivery frequency--directly impact the costs incurred by
the Postal Service. The fifth attribute--pricing--directly
impacts the revenue of the Postal Service, and the sixth
attribute addresses service performance. To date, however,
other than mandating six day-a-week delivery, Congress has not
specifically defined the other features of the USO. Once the
Postal Service's duties under the USO are defined, the costs
for providing them can be assigned, and a viable financial
structure can be established to support the level of universal
service required. Only by defining the USO clearly can we begin
to design a system that will fund the services required. It is
our Nation's mission statement for the Postal Service, and it
needs to be clear.
The law requires the Commission to annually estimate the
USO costs, and we currently estimate that the total cost of the
USO is more than $6.6 billion. Unlike many other countries, the
USO within the United States is largely undefined and instead
is comprised of a broad set of policy statements with only a
few legislative prescriptions. In the absence of a clear
definition of the USO, particularly given the current financial
challenges, each of us, including the Postal Service, will have
different views of what services and operations it must provide
to fulfill the USO, and all our views will have different price
tags.
As part of the financial pressure of generating sufficient
funds to remain solvent, make capital investments, and pay
retiree costs, the Postal Service must fund this $6.6 billion
annual and growing cost for its Universal Service Obligations.
Given the Commission's substantial work on the USO, we would
welcome the opportunity to collaborate with this Committee on
designing a viable solution with a possible legislative
approach detailed in the written testimony.
We appear before this Committee today fully aware of the
difficulties that lie ahead. I believe the Commission has a
clear understanding of the serious and numerous financial
challenges that face America's postal system. As you all know
well, the mail stream of today has been diminished by
electronic means of communication that replace mail, that
replace stamps, and thus, they replace the revenues necessary
to operate our key mail delivery system. Some may even suggest
that the time of the Postal Service has passed, but the fact is
for all the challenges the Postal Service of the 21st century
faces, it still retains an integral place as a key cog in how
American businesses conduct their affairs and how Americans all
across this land communicate.
The U.S. postal and delivery sector represents a nearly $2
trillion-a-year industry with almost eight million jobs, making
it vital to our economy. However, the Postal Service is in a
serious financial crisis, operating under an unsustainable
model, and the Commission, along with the GAO, the IG,
President Trump's Treasury Task Force on the Postal System, and
the Postal Service itself, have all pointed the way forward:
define the USO. Again, as the Postmaster General testified here
in March, ``Just tell us what you want us to do and how to pay
for it, and we will do it.''
Mr. Sessions. Mr. Chairman, thank you very much.
Mr. Taub. Thank you, Mr. Chairman.
Mr. Sessions. As I suggested to you yesterday and
reiterated this morning, I think your presentation was
necessary, balanced, and contained certainly a challenge for
this Subcommittee, Members of Congress, and certainly the
American people. Thank you very much.
Mr. Taub. Thank you, Mr. Chairman.
Mr. Sessions. Ms. Fisher?
STATEMENT OF HON. ANN FISHER
COMMISSIONER, POSTAL REGULATORY COMMISSION
Ms. Fisher. Good morning, and thank you, Chairman Sessions
and Ranking Member Mfume, for holding this hearing.
The Postal Service faces an incredibly tough mandate. It
must operate like a business by funding itself through its own
revenues, yet it must serve the public as a universal service
provider, delivering to every single address regardless of
profitability, all while under persistent financial distress. I
fully support the comments of my longtime colleague, Vice
Chairman Taub. At its core, the question before this Committee
is whether the current rate system and broader statutory
framework give the Postal Service a realistic path to long-term
solvency while preserving universal service.
With the 2006 enactment of the Postal Accountability and
Enhancement Act, Congress directed the Commission to establish
a rate-making system designed to achieve a set of interlocking
objectives laid out in the law. Particularly relevant to the
discussion on postal finances is Objective 5: to ensure
adequate revenues, including retained earnings to maintain
financial stability. True financial stability requires a system
that can lawfully generate the reserves and retained earnings
needed to invest in vehicles, facilities, and modern
infrastructure. Without long-term viability, the universal
service mandate cannot be sustained. If Objective 5 were the
only objective the Commission had to consider, rates would need
to rise about 50 percent to add $10 billion in net income and a
$1 billion buffer, likely triggering a roughly 30-percent
volume decline and accelerating customer loss.
Fortunately, that is not the way the rate system is
designed. Objective 5 must be balanced with seven other
objectives that call for, among other things, maximizing
incentives for operational efficiency, cost reduction, and
maintaining predictable, stable rates and high-quality service
standards. The Commission cannot simply allow the Postal
Service to price its way out of structural deficit without
seriously eroding the very mail volumes that still fund the
universal service.
Members of Congress routinely hear from their constituents
about service problems. High-quality, reliable service is the
expectation, but that carries an undeniable multibillion-dollar
cost. In postal economics, cost efficiency trades off with
service quality. Leaner networks cut costs, but high, reliable
service demands significant operating premiums. High-quality
service is not just management. It requires costly operational
buffers: extra staff, overtime, and added transport. For a cash
constrained Postal Service, every gain in service scores has a
direct price tag. About 70 percent of postal costs are labor.
This past fiscal year, overtime jumped by five million hours,
even as total hours fell by 12 million and headcount by 15,000,
yet higher benefits, more career conversions, and volatile
overtime still drove compensation costs up.
In 2020, the Commission modified the rate-making system and
granted the Postal Service additional flexibility to raise
market-dominant rates above inflation to help address
structural deficits. We had to strike a very careful balancing
act, allowing prices high enough to cover the actual costs of
processing and delivery, but not so high that they accelerate
volume declines and drive customers out of the mail altogether.
Those tools have helped stabilize revenue, but they cannot
overcome the combination of declining mail volume, rising
structural costs, and balance sheet obligations. The Postal
Service was designed to be self-funded, but has not reported an
annual profit in roughly the last decade. Over just the last
three years, cumulative net losses total about $25 billion,
underscoring that the current trajectory is not self-
correcting.
Given this backdrop, the Commission has had to make
difficult decisions. Vice Chairman Taub noted the waiver we
recently granted the Postal Service allowing for emergency
liquidity relief. The Postal Service is also seeking
congressional assistance in the form of an increased debt limit
and annual appropriation to fund universal service and other
items, all of which deserve fair consideration. I hope that
issuance of the waiver, though, will provide Congress with time
to decide what the Nation needs from the Postal Service and how
best to finance that mandate. From a regulatory perspective,
short-term liquidity fixes are not a substitute for a
sustainable, long-term funding model for universal service.
On a personal note, I want to thank Chairman Sessions for
his recent visit to South Dakota. Having spent much of my life
there, I have observed firsthand how the slowdown in rural and
remote mail delivery can affect daily routines. The concern is
not only slower delivery times, but also reduced access. Last
year, the Postal Service closed 14 postal counters in Sioux
Falls, Hy-Vee, and Lewis drugstores, leaving two full-service
post offices to serve the state's largest city. A local
newspaper quoted a Postal Service representative as saying,
``The 14 closures better enabled the Postal Service to fulfill
its commitment to serve our communities with efficient and
reliable access to retail services.'' It seems to me the
opposite is happening because for many residents, access has
become more limited.
At the same time, the broader delivery landscape is
evolving. In my own experience, I am extremely well served in
the packaged delivery area. I often receive prompt, same-day
door delivery on countless items from private carriers. By
contrast, Postal Service packages are delivered to a cluster
box a quarter mile from my home, which can be difficult to
access during winter conditions in South Dakota. In some
instances, alternative shipping options through local retailers
are sometimes less expensive and a shorter drive than my post
office, and my mother, who lives even further away, receives
necessary medication via a private carrier. My point is that
while delivery options and consumer expectations continue to
evolve, rural and remote communities still rely on the Postal
Service for affordable delivery of mail and packages. This
presents both a challenge and an opportunity to evaluate the
current needs of Postal Service stakeholders.
I encourage Congress to consider this evolving landscape
when determining how best to ensure a responsive and viable
Postal Service into the future. Thank you.
Mr. Sessions. Ms. Fisher, thank you very much. The
gentlemen, Thomas Day, and Mr. Day, you are recognized.
STATEMENT OF HON. THOMAS DAY
COMMISSIONER, POSTAL REGULATORY COMMISSION
Mr. Day. Good morning, Chairman Sessions, Ranking Member
Mfume, and Members of the Subcommittee. Thank you for calling
this hearing to discuss the current situation confronting the
Postal Service. I look forward to the opportunity to discuss
the critical role of the Postal Regulatory Commission, as well
as what I believe it could do to assist in securing a
sustainable future.
I have been professionally associated with the Postal
Service for 42 years. Following nine years in the U.S. Army, I
began my postal career in 1984, and in 35 years in the Postal
Service, I served at all levels of management, from Frontline
Supervisor to Senior Executive Vice Presidents. I also worked
all aspects of operations and virtually most, if not all, of
the supporting functions as well.
I am in full agreement with the factual background that
Vice Chairman Taub's testimony provided, the summary of
performance and the path forward to achieving resolution and
improvement. I would like to emphasize a few points, however. I
fully agree we must define the scope of the Universal Service
Obligation. It is important to understand this complex task
will likely take some time to be completed. In the meantime,
there are other critical steps that can be taken to improve the
Postal Service to reduce cost, improve service, and ensure a
safe and secure work environment for its employees. Under
current postal leadership, there is a clear effort to improve
service and reduce cost. More than just an effort, real results
are being achieved. That said, continued use of the network
created for Delivering for America Plan--DFA--cannot achieve an
optimal solution.
As indicated in the advisory opinion of the PRC back in
January 2025, the DFA plan is fundamentally flawed. The flaws
in the DFA limit what realistically can be achieved. To be
clear, under current effort, improvement will take place. It
simply will not be the best that could be achieved. I could go
into a lengthy academic discussion explaining the deterministic
models that the Postal Service utilized as opposed to the
stochastic models that they should have utilized. What it
ultimately comes down to is variation: variation throughout the
network.
No two places are the same. At each of the regional
processing distribution centers--the RPDCs--there is a unique
community to be served. The density of population varies, the
types of roadways and traffic vary, and even the types and
amount of mail vary. Despite this variation, the Postal Service
decided to implement a single, uniform format for RPDCs, a
seemingly arbitrary 50-mile radius. Beyond 50 miles, most mail
goes to the regional transportation optimization--the RTO--
network. Most RTO offices have a single truck each day to both
pick up mail from the previous day and to drop off the mail for
delivery that day. An example used during our advisory hearing
was Miami, Florida. When you look at the Miami-Florida RPDC
location, if you go 15 miles to the east, you are in the
Atlantic Ocean. Go 15 miles west, you are in the Everglades.
Just one example of how a uniform 50-mile radius is objectively
and fundamentally flawed.
Only four of the RPDCs, of the 50 or so that are out there,
are in new locations. The overwhelming majority of the RPDCs
and the hundreds of the local processing centers--the LPCs--
were all placed in the existing network. The DFA network simply
modified transportation routes between existing facilities and
processing operations within those existing facilities.
Properly modeling and designing an optimal network does not
require an overwhelming investment. Modeling, design, and
implementation of an optimal network should improve service,
reduce cost, and provide employees with a more stable work
environment.
The PRC was clear in its advisory opinion. More than a year
later, the facts and data are clear. We were correct in what we
stated last year. It is almost certainly a better solution for
the Postal Service to step back from DFA and properly design
and implement an optimized network within the physical network
that already exists. It will take some time to study and
approve the implement of a revision to USO. As that effort is
underway, properly designing and implementing a revised postal
network is critical. This is of value for the immediate future,
but it also will create a framework for future updates as
change will continue to take place throughout the postal
industry. Proper network design and updates will be needed for
the foreseeable future.
Thank you again for the opportunity to testify before this
Subcommittee. I hope my testimony is informative, and I look
forward to any questions you may have.
Mr. Sessions. Thank you for your service to the U.S.
Government and the people of the United States. Thank you very
much.
Ms. Poling, you are now recognized.
STATEMENT OF HON. ASHLEY POLING
COMMISSIONER, POSTAL REGULATORY COMMISSION
Ms. Poling. Thank you. Chairman Sessions, Ranking Member
Mfume, and distinguished Subcommittee Members, thank you for
taking the time to hear from the Commission on this critically
important issue: the future of the United States Postal Service
and the role of the Postal Regulatory Commission. First, I
would like to echo the statement of the Vice Chairman and state
for the record that I appreciate his strong and steady
leadership during these rapidly changing times in the postal
community.
The situation facing the Postal Service is a five-alarm
fire. Volume of traditional mail continues to decline, a result
of both ongoing electronic diversion and an acceleration due in
part to the Postal Service's aggressive pricing strategy. And
at the same time, service quality continues to suffer as the
leadership of the Postal Service has decided to slow service
standards for several mail products over the last five years,
including twice for the flagship first-class mail product,
while also lowering its service performance targets. What this
means is simple: the American people are paying more while
fewer mail pieces are being delivered in the expected
timeframe.
As declining mail volumes and an increasing number of
delivery points continue to put financial pressure on the
Postal Service, the incentive to underperform service
expectations can be expected to increase. It is likely time for
Congress to consider authorizing additional oversight to ensure
the Postal Service meets its statutory obligations to the
American people, especially if those obligations are spelled
out in an explicit Universal Service Obligation. With that in
mind, I would like to focus the remainder of my remarks, not on
what aspects of the Postal Service's broken business model
Congress should address, but on why addressing the
sustainability of the Postal Service is so critically
important, even in a world dominated by electronic
communication.
Especially for the nearly 66 million rural Americans, the
Postal Service continues to fill an important role, not just as
a communication channel, but as a lifeline for rural residents
ordering pharmaceuticals and other necessary medical items, and
an economic engine for local small businesses reaching their
customers. And every year, there are numerous stories of letter
carriers saving the lives of elderly residents throughout the
country, simply by showing up at their doors every day and
noticing that they have not collected their mail.
I started my career in postal issues working for several
Senators from states with large rural populations, including
Montana, North Dakota, and Michigan. I saw firsthand the impact
of missed daily mail deliveries and how a post office can serve
as the beating heart of a rural community. And in many areas of
this country, the Postal Service is the most visible, daily
interaction that people have with their Federal Government. In
this way alone, it continues to bind the Nation together, and
it is important to remember that the Postal Service is, first
and foremost, a basic and fundamental service provided to the
people by the Government of the United States.
As Congress works to clearly define the scope of the USO,
it is important to acknowledge that the Postal Service has a
number of resources that can be utilized for the benefit of the
American people: a nationwide delivery network serving every
community, from New York City to Nome, Alaska; a physical
presence in almost every community in the country, with over
30,000 post offices and almost 163,000 delivery vehicles making
daily rounds to every address; and a large workforce of highly
trusted, dedicated public servants. Each of these assets could
be leveraged to provide value-added services to the American
people.
Although the Postal Service Reform Act of 2022 granted the
Postal Service additional authority to provide new products and
services to Federal, state, local, and tribal governments, a
recent Office of Inspector General report notes that the Postal
Service has barely begun to scratch the surface on these new
revenue opportunities. So, a critical question for Congress as
it approaches the issue of universal service is not only where
and when it wants the Postal Service to deliver to the American
public, but also what it wants them to deliver. There is hope
for the future, but congressional intervention to address the
root causes of the Postal Service's problems is a prerequisite
to meaningful reform.
So, what do you do when a fire threatens to rage out of
control? It is my belief that now is the time for everyone to
grab a bucket and work together to secure the future of the
Postal Service that provides high-quality universal service to
all parts of our country, and the Commission stands ready to
assist in any way we can to help preserve this 250-year-old
national treasure. Thank you again for convening this very
important hearing.
Mr. Sessions. I want to thank you also for your service to
the American people and to thank each of you for being here
today. We will now move to the Members' opportunity to engage
you, and we will move first to the distinguished gentleman, Mr.
Burchett from Tennessee. The gentleman is recognized.
Mr. Burchett. Thank you, Chairman Bono. It is always a
pleasure being with you.
[Laughter.]
Mr. Burchett. I was on a radio station one time in my
youth, and I could not pick the music because I would have just
picked all country and western, but they kept playing this
dadgum U2 stuff. And I said I remembered I was sitting on a
corner in Belfast, and this guy was saying, ``Yes, mate, I am
about ready to get out of the music business.'' I said, ``No,
Bono, you need to stick with it,'' and literally weeks later,
people came up to me and said, ``Did you really know Bono,''
and I go, ``No, no.'' Anyway, gullible folks.
Anyway, thank you all so much. I am a big fan of the Post
Office. You know, back before my congressional career, I was a
prolific eBayer. I had over a thousand sales, and I agree with
what one of you all said about the postman coming to people's
houses. They are really a lifeline for seniors, and sometimes
it is the only contact they have with the folks out there. And
I have had my share of tussles with your all's higher-ups
because of some management decisions, but that is not with you
all, but anyway, this is for all you all. What are the market-
dominant products offered by the United States Postal Service?
Mr. Taub. Congressman, those are the overwhelming majority
of letter, flats, periodicals, newspaper/magazines. So, when
you think of your first-class letters and cards, that is the
market-dominant product. The result is based in statute, which
is the idea that if the Postal Service either has a statutory
monopoly over that, for example, letters no one else can
deliver, or there is an economic test in law, but the Post
Service has market dominance at a level that they can raise
prices substantially, either degrade service, without the
significant risk of losing business----
Mr. Burchett. Right.
Mr. Taub [continuing]. That is the statutory test--it is
regulated as market dominant. If it is not, it is competitive
where they have immense flexibility to price, like parcels.
Mr. Burchett. What you said there, does every category of
Marketing Mail make money, including the flats?
Mr. Taub. Flats is one of the areas, Marketing Mail flats,
where they are losing money, but the rest of Marketing Mail is
actually contributing quite a bit to the overhead.
Mr. Burchett. Okay. Now, given that those are unprofitable,
would you all recommend the Postal Service phaseout or restrict
some of those products?
Mr. Taub. What we have done in the rate system that we have
designed is to require the Postal Service to increase those
rates to better cost coverage as well as look at reducing the
costs. There is, in fact, in the 2022 law a requirement that
the Postal Service study this to get to that issue. We have
looked at it. Unfortunately, it is a perennial problem that we
have been concerned about for quite a long time.
Mr. Burchett. And what percentage of the Postal employees
fall under the collective bargaining agreements compared to
possibly the non-Postal Federal employees?
Mr. Taub. Certainly, the large bulk of their workforce--I
do not have the percentage offhand we can get to you--are
collectively bargained employees. Those are the clerks; the
carriers, rural and city; and the mail handlers. That is the
bulk of the Postal Service workforce.
Mr. Burchett. Now, does the high percentage of union folks
give the Postal Service more or less flexibility to adjust
postal functions?
Mr. Taub. The collective bargaining requirements have been
embedded in the statutes since the Postal Service was created,
so that does create a mandated process that would be different
than other Federal employees where they are not under
collective bargaining restrictions and mandates.
Mr. Burchett. And this may have to go under what you said
you were going to get for me. What percentage of the Postal
Service operating costs go to labor, and how can the Federal
Government decrease that amount?
Mr. Taub. Generally speaking, historically, the Postal
Service, roughly 70 percent of the costs are for labor. It is a
very, you know, handicraft-focused business, but generally, it
has been about 70 percent of the total cost of the Postal
Service are for labor. While revenue has been increasing over,
say, the last decade, the expenditures have been going up more
than that. Just in the last five years, their costs have been
going up ten percent. A variety of factors, but if you have got
70 percent of that bogie as employee costs, that is going to be
obviously driving expenditures.
Mr. Burchett. Now, I know that Chairman Sessions served
with him or grew up with him, but wasn't Benjamin Franklin the
first Postmaster General?
Mr. Taub. Indeed, yes, 1775.
Mr. Burchett. And it is in the Constitution. The Post
Office is in the Constitution.
Mr. Burchett. Article I----
Mr. Sessions. We made sure it got in there.
[Laughter.]
Mr. Burchett. You are not recognized, Mr. Chairman.
[Laughter.]
Mr. Taub. Article I, Section 8, Clause 7, yes.
Mr. Burchett. Okay. One last question. I have got 7
seconds. What action can the Postal Service take right now to
extend the timeline before running out of money, and does
Congress have to intervene?
Mr. Taub. We provided a waiver of a regulation that
required payments into the retirement. If the Governors of the
Postal Service choose to activate that waiver, which means
notifying the Secretary of Treasury, that frees up $2.4 billion
this year. We did it with a time limit until 2030. That is
potentially $15 billion of breathing room in the near term, but
it does not solve the problem by any means, but gives us some
room.
Mr. Burchett. All right. Thank you, Mr. Chairman. Just for
the record, I am a fan of the Post Office, obviously, and the
people that work there. I am maybe not a fan of some of their
management in the past, but I would hope that we could work
together on both sides of the aisle to help alleviate some of
these problems because the Post Office is a godsend for a lot
of people. My rural folks in my area get their medicine and
things like that, and when it is delayed, their medicine is
delayed and that hurts me. So, thank you, Mr. Chairman. Thank
you all.
Mr. Sessions. I want to thank the gentleman. I think that
the witnesses who are here, as well as others, know that Mr.
Burchett attends each of our hearings, has a view that I think
is very important, and I want to personally thank you for being
involved. I think I have told this to the young Congressman,
and he has agreed: we are all part of the problem, not just
each of us individually or as a group. Each of us are going to
be a part of that solution. I told him that I appreciate him
staying at the table to make sure we get closer to that, so,
sir, I want to thank you very much.
The gentlewoman, Ms. Norton, is recognized.
Ms. Norton. Thank you. I want to begin by thanking Postal
Service employees for their dedication and hard work.
In 2020, the Postal Regulatory Commission granted the
Postal Service the power to raise mail rates above the rate of
inflation. Over the past six years, the Postal Service has
repeatedly exercised that power to impose higher costs on
American consumers. Since July 2021, first-class mail rates
were increased by 42 percent with an additional five percent
increase scheduled next month. At the same time, delivery
standards have gotten worse. First-class mail now takes three
to five days to deliver, whereas previously, it took two to
three days. President Trump's reckless actions and misguided
policies have resulted in sharply higher gas, grocery, and
other prices, and Americans are paying more in postage for
worse service. This is simply not acceptable. Millions of
people across the country rely on the Postal Service to be an
effective, affordable way to pay their bills, file their taxes,
and run their businesses. Higher prices means shutting out many
Americans from full participation in our society.
Vice President Twark [sic], as the Postal Service
Commission reviews and approves postal rate changes for the
Postal Service, to what extent are you weighing the
deterioration of service?
Mr. Taub. Congresswoman, we take that very seriously, and
we are deeply concerned about that. As you referenced, about
five years ago, the Commission modified, as is a requirement
under the law, the price cap system for these market-dominant
products where the Postal Service has captive customers, those
that you were talking to, you know, who have no other
alternatives than the mail. That had been locked at CPI. There
are nine somewhat conflicting objectives in law that the
Commission must balance, and those include things like rate
predictability, stability. It includes the financial stability
of the Postal Service and a variety of others.
We looked at that system and found it was not meeting those
objectives, so we provided the Postal Service, as you
indicated, some additional rate authorities above inflation to
capture costs that are outside of their control. They made
clear they were going to be judicious in their use. They have
been maximalist in that use, and as you indicated, we are
seeing degraded service during that time. So, in essence, folks
are paying more for worse service, and hearing those concerns,
we started a review earlier on this system. One of the changes
that we actually promulgated in January was limiting the Postal
Service, again, on this market-dominant side, competitive
products that could change daily to once a year. They were, in
many cases, doing twice-a-year increases, which really are
attacks on the American businesses and consumers throughout
this United States by a government agency twice a year, and we
limited that to a once a year, but we did not change the
maximum ability to go above inflation, nor the other many
flexibilities that the Postal Service has for pricing.
Ms. Norton. Commissioner Day, the Universal Service
Obligation guarantees that all Americans, regardless of
location, can access public services at uniform rates. What
steps will be required to preserve the Universal Service
Obligation for future generations?
Mr. Day. This is part of what the Vice Chair had already
said. As we look at the USO, we are going to have to clearly
define that. It is an open issue. At this point, the Postal
Service has been able to redefine, as you have already just
said, to go from overnight/two-/three-day to a two-day to five-
day service and even change the service measurement system. The
reality is we are going to have to work our way through that. I
do not have a definitive answer at this point in time. It has
to be done in conjunction with all aspects of the Universal
Service Obligation.
Ms. Norton. Thank you. Commissioner Poling, aside from
raising mail rates, what other options are available to the
Postal Service for generating additional revenue?
Ms. Poling. Thank you so much. I just want to make sure I
had the question correct. You said aside from raising mail
rates, what other forms of revenue raising are available to the
Postal Service? Is that correct?
Ms. Norton. Yes.
Ms. Poling. Okay. I will just go ahead there. I was just
going to say, yes, so I think the Postal Service, one of the
things I talked about in my testimony is I think they have a
tremendous ability to go forward and pursue these additional
revenues. The Office of Inspector General, I think, did a
fantastic report, kind of seizing on in the 2022 law. You know,
it has been expanded in terms of working with state, local, and
tribal governments in terms of doing these added revenues, so I
think that is something the Postal Service should really be
pursuing. I would also say I think there is untapped potential
looking in younger generations as well. I think we need to look
at Gen Z. We need to look at Millennials. We need to look at
what is it, sort of, that people want from their Postal
Service, and ultimately, that is why we need to define this
Universal Service Obligation.
Ms. Norton. Thank you. As I told Postmaster General Steiner
when he testified before the Subcommittee in March, postal
services must be accessible, reliable, and affordable. Raising
prices and lowering delivery standards will not save the Postal
Service from its current financial predicament, and I look
forward to working with each of you on a more sustainable,
long-term solution, and I yield back.
Mr. Sessions. I thank the gentlewoman and also want to
thank her for being at each and every one of these hearings
about the Postal Service, and I appreciate her service to the
country also.
We now move to the distinguished gentlewoman, the Chairman
of the Rules Committee, the gentlewoman from North Carolina,
Ms. Foxx.
Ms. Foxx. Thank you. As many people know, I use the Post
Office a lot for all kinds of things, especially personal
issues, and so do my constituents. We want the Postal Service
to ensure business functions are done, people receive medicine,
pay bills, stay connected with their loved ones. However,
during the last several years, the Postal Service's financial
problems have not abated. Even though Congress provide one-time
relief in 2022, the Postal Service continued down its
unsustainable path of huge annual losses. With no end to the
losses in sight, it is increasingly clear the Postal Service
has lost its way. Rather than a disciplined, efficient
operation, the Postal Service resembles a bloated Federal jobs
program that delivers higher postage rates, delays, and
deteriorating service. The Postal Service must return to its
core mission of providing reliable, affordable, universal mail
service.
Vice Chairman Taub, I am concerned that the Postal Service
is spending money duplicating functions that the private sector
can provide better and at lower costs, such as package labeling
technology and IT solutions. Does the Commission evaluate
whether the Postal Service is duplicating capabilities that
private companies have already invested in and developed?
Mr. Taub. We do not have that direct authority in the law,
but I will say the law requires--and we, I mentioned, modify
the rate system. There is a requirement of law called work
sharing, and it really is based on this idea of a vibrant
public-private partnership where, if the private sector can do
it for less cost than the Postal Service, it makes total sense
to have the private sector doing that.
Ms. Foxx. Well, does the law allow you to seek more
transparency from the Postal Service on how existing commercial
technologies can improve service and reduce cost? I would
assume it does.
Mr. Taub. You know, there is the separation between the
regulator/operator, and so some of what you are describing are
operational decisions by the Postal Service to invest, whether
it is new technology or invest in a whole middle-mile network,
which the current plan is doing, with promises that that is
going to be more efficient. And so, for example, we opened a
docket early on when the signs were clear that this plan that I
think we all hoped would provide the results was not. And so,
indeed, Dr. Foxx, you were right on that is part and parcel of
why the Commission needs to exist, is that providing
transparency to the American public that, otherwise, I would
suggest we may not even have an opportunity to truly get at.
Ms. Foxx. So, what problems arise when the Postal Service
invests in technologies that can disrupt private-sector
solutions, especially when those companies' products are
regulated by the Postal Service itself?
Mr. Taub. Yes, deeply because, you know, just go down the
list. Not only that is then adding and saddling the Postal
Service and the rate payers with more costs that otherwise
could be inflected by leveraging the public-private
partnerships, but it is affecting the private sector of the
United States, a government establishment and commercial
marketplace. We do have authority, based on the 2006 law, to
police through complaint where the Postal Service is using its
regulatory authority to unfairly compete with the private
sector. And so, those are areas that we have had a chance to
police, but we have not actually adjudicated many of those
complaints, but that is a deep concern and we do have authority
over that.
Ms. Foxx. So, the Postal Service keeps raising rates on
mailers well above inflation, which is unsustainable.
Businesses in my district must make tough decisions, such as
laying off staff, and newspapers and magazines must cut print
days, which results in less local news and information reaching
constituents. Everyone involved pays more for a worse product.
What remedies do you believe should be implemented?
Mr. Taub. We have an open docket right now that is ongoing
looking at that market-dominant rate system and whether there
should be changes, including those additional rate authorities
above inflation that I mentioned we provide to the Postal
Service. I would note Postmaster General testified and has
continued to allude to, in that pending docket, the Postal
Service has filed their perspective as to how we should modify
that. And their recommendation is that we should get rid of any
price cap limitations on the Postal Service, just trust the
Postal Service to raise rates as they deem appropriate, and in
the alternative, if we do not do that, their petition suggests
that we grant them upwards of 23 percent one-time authority to
do that.
That is pending before us. It is an ongoing docket. Like,
everything we do at the Commission, it is in the light of day
where we get notice and comment. Administrative Procedures Act,
any party, including the Postal Service, they do not like our
final decision, can take us to the D.C. Circuit. And I would
suggest, a little different than the Postal Service itself,
which is exempt from the Administrative Procedure Act, we are
there to really represent the public interest, and so we are
looking at that issue right now.
Ms. Foxx. I thank all our witnesses, I thank the Chairman,
and I will be submitting some questions after the hearing.
Thank you.
Mr. Sessions. Chairman Foxx, thank you very much. We will
look forward to getting those questions, and of course each of
the witnesses will be expected to respond back to those, as I
know that they will. Thank you very much for your constant
feedback to me. Since the day I took over this job, Virginia
Foxx has made sure that she is a regular visitor with me on
these issues. Thank you very much. The gentlewoman yields back
her time.
The gentleman from Florida, Mr. Frost, you are recognized.
Mr. Frost. Thank you so much, Mr. Chairman. I want to start
by talking about the Regional Transportation Optimization
plan--the RTO--that might impact 72 percent of all post
offices. At a previous Subcommittee hearing, I was able to ask
the Postmaster General about the RTO plan directly, and now I
just want to hear from you all. Commissioner Poling, does the
PRC believe that the RTO plan will achieve its projected cost
savings and improve the financial health of the Postal Service?
Ms. Poling. Thank you, Congressman Frost. The Postal
Regulatory Commission issued an advisory opinion in January
2025, and in that advisory opinion, we actually did find that
the changes the Postal Service was making would
disproportionately harm rural America. RTO was among the things
that we were looking at, right, when we made that
determination. Unfortunately, and the thing is I think we are
all here wanting to make sure the Postal Service is better,
wanting to improve it. I do not think it brings any of us any
joy that some of our findings were right in that advisory
opinion, but as things have been borne out to date, yes, I
think the RTO is something that has proven to be very
challenged. And, you know, again, in the advisory opinion
process, the Postal Service has the ability to look at our
recommendations, but they do not have to follow them because it
is advisory in nature.
Mr. Frost. How might the RTO or similar restructuring
activities negatively affect mail delivery times?
Ms. Poling. I think that is a really good question. I think
we have seen, obviously, service standards change and be
degraded drastically, particularly over the last five years.
Two times service standards have already gone down, so I worry
a lot about what does a local citizen know about their delivery
times. We actually did make a recommendation in our advisory
opinion that said maybe you should put something--to the Postal
Service--put something maybe on these blue boxes saying how
much longer it is going to take, right, when we are adding in
these extra days of delivery. To date, that has not been taken
into account.
Again, I think the biggest thing we have to think about is
what is it that citizens expect from their mail, what do they
need from their mail, and, frankly, they need to be given a lot
more transparency from the Postal Service. They need to
understand how long it is going to take something to be
delivered, and right now I worry about that disconnect between
maybe what the Postal Service is saying with service standards
and these changes that have been made, and then the actual
experience that customers are having on the ground.
Mr. Frost. A hundred percent, and, you know, part of the
reason I ask is I am concerned about time-sensitive mail,
specifically, you know, of course, bills and paying for things,
but also, we have elections coming up, and so mail-in ballots
and different things like that. And so, I am just concerned
about the RTO plan and its impact on elections, and working
people and how they use the Postal Service. I also want to
spend a few minutes talking about the importance of having an
independent United States Postal Service and a knowledgeable
PRC. Vice Chairman, can you speak a little bit about your
qualifications and experience that you feel prepared you for
this role?
Mr. Taub. Sure thing. The Chairman had mentioned he has had
the honor and privilege and joy of working on postal issues for
nearly three decades when he came to Congress and was assigned
to the Postal Service Subcommittee on this Committee at the
time. I happened to be its staff director, and so I have been
on this journey of trying to help ensure that this important,
vital service to America is delivered.
The statute in 2006 when it was modified to create the
Postal Regulatory Commission did add qualifications in statute
for Postal Regulatory Commissioners and includes experience in
things like public administration, accounting, economics, law.
And so, like a lot of the three and four letter independent
regulatory agencies in town, the idea is we have a multi-headed
agency that brings differing perspectives. And so, I think, you
know, that is, in many ways, the strength, and it is an honor
working with my colleagues here today. I know we were all
appreciative, the Chairman, for Public Service Recognition Week
a few weeks ago, came to visit the good, hard-working folks at
the Commission who do that work.
Mr. Frost. Yes. Thank you. I mean, it is clear that you all
care about the financial health of the USPS, and the qualities
you all possess are also important qualities for nominees to
the Postal Service Board of Governors as well. I am very
concerned about the President seeming to nominate people to the
Board that have his best interests in mind and not the best
interest of the USPS, like his most recent nominee, Anthony
Lomangino, who is also one of his top donors. He is a co-
founder who put millions of dollars into a super PAC to help
get the President reelected.
Look, I think it is important that we fill vacancies on the
Postal Service Board of Governors with Senate-confirmed
appointees that meet the qualifications and experiences to help
serve the needs of the people, not the President. The Postal
Service is not a business opportunity, and independent
government boards must remain independent. Thank you, and I
yield back.
Mr. Sessions. Thank you very much. The gentleman yields
back his time, and I also want to thank the gentleman from
Florida. He attends each of our hearings, stays up on these
issues, and I believe brings a balanced comment to people on
this issue, and I want to thank the gentleman.
We now move to the distinguished gentleman, former Chairman
of Policy Committee for the Republican Conference, the
gentleman, Mr. Palmer.
Mr. Palmer. Thank you, Mr. Chairman. The Postal Service
carries roughly $101 billion in unfunded retirement benefits.
You are spending about $10 billion a year trying to meet those
obligations. It is a huge hit on your annual Fiscal Year
budget, and back in April you had to suspend contributions out
of concern that you would run out of cash. I just wonder from
each of you, how much thought you have given to the
recommendations from the Inspector General about diversifying
your retirement investments into other assets beyond Treasury
securities? Again, Mr. Taub?
Mr. Taub. Congressman, one of those things, all of the
above. All of those ideas are worthy to be considered by
Congress. We would simply suggest before Congress jumps into
those decisions, we first focus on what is the public service
mission that America needs from its Postal Service, defining
its Universal Service Obligation.
Mr. Palmer. Well, if you are going bankrupt, which you are
headed in that direction, if you were a private company with an
over a hundred-billion-dollar unfunded liability, you got to
start thinking about this differently.
Mr. Taub. Exactly. That goes to the heart of defining the
mission, but, Congressman, you are right on. There is on that
balance sheet, enormous debt to the American taxpayer for the
retirement obligations that they have not paid for over a
decade. The Commission added additional rate authority for
those market-dominant products that if they chose to do it,
they could finally start making some payments, which they did
do. We stepped in earlier this year at their request to look at
that and waive that requirement. But you are right, it is on
the books, but they have been, in essence, not paying that, in
some ways I would say, in essence, unilaterally.
Mr. Palmer. No, no, no. We are not going to let people who
have spent their career delivering the mail lose any of their
retirement benefits.
Mr. Taub. Right.
Mr. Palmer. But at the same time, you cannot let the
obligations for the retirement benefits bankrupt the entire
operation. So, do you think we are at a point where Congress
needs to consider amending Federal law to allow the Postal
Service to diversify its retirement investments because
everyone that has looked at this believes that this would
significantly reduce the burden.
Mr. Taub. Yes. Again, trying to help the Postal Service,
that has been looked at. I think it is a reasonable suggestion.
Obviously, the Secretary of the Treasury would have some
equities here that would need to be at the table, but from our
perspective, while it is outside the direct lane of the
Commission, definitely all of the above, things that can help
with it. But on the retiree, the action I was mentioning gives
all of us as policymakers and Congress a little bit more
breathing room as opposed to reaching for choices of
desperation right now.
Mr. Palmer. Yes. Well, the fact that you had to suspend the
employer contributions----
Mr. Taub. Yes.
Mr. Palmer [continuing]. Is indicative of how dire the
situation is, and, Mr. Chairman, I think maybe we ought to try
to look at this in a bipartisan manner to give the Postal
Service the ability to diversify its investments. Everyone who
has looked at this agrees, unless some of the other
Commissioners disagree, and I have not heard from them, that
this would largely mitigate the problem. My other question, and
anyone can respond to this, is what other cost-saving measures
is the Postal Service considering?
Mr. Taub. The Postal Service, as you mentioned, not only
unilaterally separate from our actions, suspended the $200
million every two weeks for their current FERS employees, the
Postmaster General just recently issued a directive where they
were not going to hire new positions. They would still
backfill, and limited expenditures on certain things like
travel and all of that. So, Postmaster General has announced,
certainly, the FERS withdrawal gives them quite a bit of money
and the payment, but they are undertaking, right now, efforts
to conserve cash, which again, changes that being broke at the
end of the year to a little more breathing room, but it is not
a permanent fix.
Mr. Palmer. Well, I thought I saw some smiles and nods from
the other witnesses. I do appreciate your response to my
questions, my concerns about this, and I think there are some
opportunities here for us to work together on this issue that
could really help the Postal Service. Mr. Chairman, they are
spending $10 billion a year just on the unfunded part of the
retirement obligations. I appreciate the witnesses being here,
and I yield back.
Mr. Sessions. I want to thank the gentleman, Mr. Palmer,
not only for his comments and insight, but this is part of that
huge issue that each of our Postal Regulatory Commissioners
have spoken of today, something that has been important for the
Postmaster General, that the dialogs between our staffs, the
dialogs between each of us, and that is why it was referred to
as a five-alarm fire this morning that we do need to pay
attention to. It is not one subject. It is a big subject, and
it is the purpose of these hearings, Chairman Palmer, is to do
exactly as you suggest, and that is to get into the intimate
details of the piece-parts about how we are going to pay for
this because it is a big system, and there is a lot at risk.
And I appreciate the distinguished gentlemen for taking time to
be here today.
I, next, would like to go to the gentlewoman, Ms. Randall,
to be recognized at this time. The gentlewoman is recognized.
Ms. Randall. Thank you, Mr. Chairman. Like so many rural
communities across the country, the Postal Service is crucial
to folks in my district. Tribal members, veterans, military
families, aging neighbors across Washington's 6th rely on the
Postal Service to deliver lifesaving medications, to pay bills,
to stay connected to their communities, especially in a place
where reliable internet is hard to come by. One of my
constituents recently wrote to my office after experiencing
multiple serious delays in just the span of one month. A
certified check sent from Carlsborg to her credit union was
expected to arrive in a few days. It took weeks. A priority
mail check sent from Sequim also took roughly two weeks to
arrive, and a bill mailed to her waste and recycling provider
still has not arrived more than two weeks later.
It is not just frustrating. For a household trying to
deposit a tax refund, pay bills, and manage daily life through
a mail system, they need it to be reliable. And in a universal
vote-by-mail state like Washington, those same delays raise
concerns, especially when our democracy and free and fair
elections are under attack. If people cannot trust a check or a
bill will arrive on time, they are going to ask the same
questions about their ballots, and no one should have less
reliable mail service because they live in a rural community,
on tribal land, or at the end of a long delivery route.
Universal service has got to mean universal service, and right
now the numbers that Congress gets are too broad to show what
people in individual neighborhoods and on routes are actually
experiencing.
National average does not tell us whether ballots are
moving on time in Kitsap County where thousands of military
families rely on dependable mail service. It does not show us
whether mail is reaching communities in Forks and Quileute at
the edges of the Olympic Peninsula. We need to know how the
mail is performing community by community, particularly when we
depend on it for our ballot delivery. That means looking at the
three-digit ZIP code data and service performance across every
congressional district.
Commissioner Poling, in a universal vote-by-mail state like
Washington, how should Congress be thinking about Postal
Service performance as part of election access and voter
confidence?
Ms. Poling. Thank you, Congresswoman Randall. I appreciate
the question, and it is certainly very timely. Service
performance, and I also just wanted to say, I really appreciate
what you said about the rural nature of your district and what
you deal with. Working for the states of North Dakota and
Montana, I really got to see it many times when I was out there
and could really appreciate the lifeline that the Postal
Service is, so I really do understand, and I appreciate
everything you said there.
I would say this. So, the Postal Regulatory Commission,
through our Annual Compliance Determination process, we do
measure the service performance of election mail, so that will
come out, of course, a little bit later. I wish it were a
little bit more in time, but the nature of our process measures
the prior fiscal year, but I will say this. I think something
that is very encouraging about election mail historically is
that service performance for these ballots is historically so
much higher, right, than even any other kind of mail. And I
think that is because the Postal Service, they do something
called extraordinary measures during elections, I think, where
they really are paying attention to that.
If I could, I think the greater service performance issue
that we are dealing with is a little bit of what you--I mean,
this is absolutely a part of it, kind of under the umbrella, if
you will. But what you talked about with this disconnect
between, I think, maybe what the Postal Service, these changes
they have made with service performance over the years--the
degradation of service standards, lowering them--and then the
actual customer experience, that is where I think we really
need to figure out what it is, right, that the American people
need from their Postal Service. And we also need more reliable
information and transparency about what is going on.
Unfortunately, I cannot get into a lot of details, but the
Commission is currently looking at service performance through
a Service Performance Measurement docket, which really is
getting at that idea, right, between what is that disconnect
between what is happening on the ground and maybe what the
Postal Service is saying. So, I think all of these things need
to be really carefully looked at by Congress, and I do echo
what the Vice Chairman said very strongly that this Universal
Service Obligation is something I think that needs to be
tackled.
Ms. Randall. Absolutely. Thank you, and I think,
understanding, you know, having more access to the data that
will allow us to see how those performance standards break down
community by community will be----
Ms. Poling. Yes.
Ms. Randall [continuing]. Really helpful for us in the work
that we are doing on behalf of our constituents.
Ms. Poling. I absolutely agree.
Ms. Randall. But we will continue to track the results and
stay in close contact because mail is a lifeline for folks in
communities like mine and all across the country.
Ms. Poling. Thank you.
Mr. Sessions. The gentlewoman yields back her time. Thank
you very much. The gentleman from Texas, Mr. Gill, you are
recognized.
Mr. Gill. Sure. Thank you, Mr. Chairman. Thanks for holding
this hearing and doing a great job leading this Subcommittee,
and allowing us to get some meaningful work done, and thank you
to the witnesses for taking the time to be here. Mr. Taub, I
have got a couple questions for you.
Mr. Taub. Yes, sir.
Mr. Gill. Do you know how much the U.S. Postal Service lost
in Fiscal Year 2025?
Mr. Taub. About $9 billion.
Mr. Gill. Nine billion, and roughly how much did it lose in
the last three years?
Mr. Taub. The last three years, you are looking at roughly
$20-something billion, again, to go off the top of my head. We
know they have lost $31 billion in the five years since they
have undertaken this DFA plan.
Mr. Gill. Thirty-one billion in five years, and despite
massive financial relief in the wake of COVID and the Postal
Service Relief Reform Act of 2022, we are still seeing massive
budgetary holes. Is that correct?
Mr. Taub. That is correct.
Mr. Gill. Got it, and how much do you expect the Postal
Service to lose over the next several years? Do you have an
estimate that you could sort of pull us through?
Mr. Taub. I do not have a good estimate, but I would feel
very comfortable assuring you it is going to be considerable.
Mr. Gill. Yep, and your testimony alludes to the fact that
the USPS believed the Delivering for America Plan would lead to
the Postal Service breaking even by 2023. Is that correct?
Mr. Taub. That was the initial estimated plan, in addition
to a promise of $28 to $40 billion of self-help by 2030.
Mr. Gill. Can you help us understand why that did not
happen?
Mr. Taub. Well, certainly it would seem to suggest a flaw
in the plan. The Postal Service certainly points to a variety
of factors, which are true: inflation, circumstances change.
But at some point after year after year after year, when it
seems that the initially estimated predicate of building out a
middle-mile network to save $28 to $40 billion is not
occurring, it just raises the question, is it time to reassess
if this is the right path we are on.
Mr. Gill. And what about some of the underlying assumptions
on mail volume and package growth pricing? Can you walk us
through some of those, and what you expected and what turned
out to be the case?
Mr. Taub. Well, again, Postal Regulatory Commission is not
the operator. We are a regulator and a try to provide
transparency, and so the DFA plan as the operator's plan, you
know, move forward and continues to this day. But it was, as
you alluded to, predicated on the idea of building out a
middle-mile network to capture what was expected to be
significant growth in the competitive parcel package market,
and with each passing year, we see that market actually
becoming much more competitive. In fact, the volume that the
Postal Service is getting from this is dropping off, and
although revenue is significant in that area for the Postal
Service, in no way can it make up for the large amount of
contribution to the overhead costs that the market-dominant
products--letter mail, periodicals, magazines--those type of
Marketing Mail, those are the ones contributing to the
overhead. So, the whole predicate of the plan, while I think
all of us had hope that it would play out, does not seem to be
where things have gotten us or going.
Mr. Gill. And can you help me understand how employee count
and mail volume have trended over the past few years? Do you
know how many employees did the USPS have in 2010?
Mr. Taub. In 2010, I do not have that number offhand,
Congressman.
Mr. Gill. Okay. It is about 671,000 employees. Do you know
what it was in 2025?
Mr. Taub. I believe in roughly the same neighborhood.
Mr. Gill. So, about 624,000 employees, so a reduction of
45,000 roughly.
Mr. Taub. Yes.
Mr. Gill. Do you know how mail volume trended during that
period?
Mr. Taub. Overall, mail volume continued its unrelenting
decline.
Mr. Gill. Yep, declined by about 36 percent during the
period. Do you think that the difference between the decline in
mail volume and the decline in employee count had something to
do perhaps with the decline in profitability?
Mr. Taub. Oh, certainly. You know, one of the measures that
the Postal Service has used since 1963 is what they call total
factor productivity to measure the efficiency of the Postal
Service. The last several years have seen the worst in a five
year period, and, in fact, you know, two of the worst since it
was being measured. The second of the three was in 1979. And
so, if you have got volume going out, and you have got your
inputs, shall we say to handle that, not going down as quickly,
the math just does not work.
Mr. Gill. Right, and what do you think is sort of the
obvious policy response to that from the Post Office
standpoint?
Mr. Taub. Well, certainly when you see, while revenue has
gone up, expenses going up faster, got to be a focus on where
can things be saved. And yet, as I said, this DFA, immense
amount of capital investments, and for the foreseeable future,
they are looking to continue those at, you know, questionable
levels of sustainability, $4 to $5 billion going forward in the
future.
Mr. Gill. Yes, sir. My time is up, so I will yield back to
the Chairman. Thank you.
Mr. Sessions. Mr. Gill, I want to thank you for taking time
of not only attending each of our hearings, but coming with
contributions that I consider enormous and successful, and
thank you very much.
Mr. Bell, we have waived you on for the purpose of
questioning, and now the gentleman is recognized.
Mr. Bell. Thank you, Mr. Chairman. I want to take a moment
to talk about something my constituents have been raising with
me since I came into Congress. Their mail is not showing up
when they need it, whether it is prescriptions, tax returns,
bills, or letters from their loved ones. People in St. Louis do
not know where their mail is or when it is coming. Last year,
the USPS Inspector General's Office conducted an audit of seven
delivery facilities across our region. They found delayed mail
at every single one. My constituents did not need an audit to
tell them that. They have known it for years, but now it is
documented, it is on the record, and there is no excuse for it
not to be fixed. That is why I introduced the St. Louis Up to
PAR Act to address accountability for documented systemic
failures like these. My constituents in St. Louis are not
following postal policy debates in Washington. They are just
trying to get their mail. So, today I want to hear from the
Commission about what it can actually do when the Inspector
General identifies problems like these.
Ms. Poling, is it fair to say that the Commission's
oversight authority is primarily focused on national
performance metrics rather than operational conditions at
individual facilities?
Ms. Poling. I would say that is fair.
Mr. Bell. And when the Inspector General documents failures
at specific facilities the way they did in St. Louis, what role
does the Postal Regulatory Commission play in making sure these
findings lead to real changes on the ground?
Ms. Poling. That is a great question. I would say
currently, we do not have a specific role when it comes to
that, those exact changes on the ground. Where we do have a
role is, and we are actually the only ones that do, is in the
advisory opinion process. So, when the Postal Service decides
to make a nationwide or substantially nationwide change in
service, they have to come before the Commission. It is
advisory as it sounds, but that is where we have our team of
technical, legal, economic experts really dig into how these
changes are going to affect the entire country. And that does
flow down, right, to St. Louis and how it would affect you all,
but I think that is somewhere that could stand to be
strengthened, frankly, that part of the process. I think it
would be very helpful--again, my own personal opinion--for the
Commission to have more oversight when it comes to that
process.
Mr. Bell. And that gap is exactly why we introduced this Up
to PAR Act----
Ms. Poling. Yes.
Mr. Bell [continuing]. To require USPS to report directly
to Congress on whether the fixes they promised are actually
happening on the ground because you cannot fix what you do not
measure.
Ms. Poling. Right.
Mr. Bell. That is all I have, Mr. Chairman. I yield back.
Ms. Poling. Thank you.
Mr. Sessions. Thank you very much. The gentleman yields
back his time. So that the gentleman, Mr. Bell, is aware, there
have been many discussions, not only that Members have had with
me on a bipartisan basis, but also internal--I have had them
somewhat with Mr. Mfume--about the need and the desire to look
at specifically St. Louis, not only from a perspective of a
regional, center part of the country, but how it feeds many
other people. It is a huge hub for the Postal Service and comes
into interaction with days that it takes to receive mail back
and forth. So, I want you to know that Mr. Mfume and I will
update you on the plans for what would be a visit by myself and
our staff, including Mr. Mfume, if he were to be able to break
free.
Mr. Bell. Mr. Chair, if I may also say this has been a
bipartisan effort, even amongst our congressional district, and
so I appreciate your remarks and----
Mr. Sessions. Well, Mr. Bell, thank you. In fact, Mr. Mfume
and I insist on making sure that it is something not just
bipartisan, but also players in the arena be able to talk to
each other, whether it be Postal Service or other people who
are engaged in that area also. So, Mr. Mfume has told me that
you would be here, your needs, and we will get back to you, and
I want to thank the gentleman for being here.
Mr. Bell. Thank you, Mr. Chair.
Mr. Sessions. Yes, sir. The gentlemen yields back that
time. The gentleman, now Mr. Jack, is recognized.
Mr. Jack. Thank you very much, Mr. Chairman, and I would
like to start with actually a very positive story related to
your leadership. You held a hearing with Postmaster General a
few months ago, and at that hearing, you provided me an
opportunity to share with him a challenge that I was
experiencing in my district. There was a post office in my home
county that burned down three years ago, and it had suffered
delay after delay, setback after setback. And because of that
hearing and because of the Postmaster General's leadership, and
also that of Kayla Dufresne who works for him, they swiftly
reacted, and this past Monday, I was able to reopen that post
office to the delight of many in my community. And to Mr.
Mfume, if I could share with you, it turns out that the city
councilman in Tyrone, Georgia, actually grew up in Baltimore,
is a big fan of you. So, you also made me look good, for which
I am grateful.
But if I could start with Vice Chairman Taub, just to
follow a little bit on the line of questioning from Mr. Gill.
In a vacuum, do Postal Service's products turn a profit?
Mr. Taub. They certainly are marked up in a way to cover
their costs and contribute to the overhead of the Postal
Service. There are a few products that are underwater.
Marketing Mail flats are one of them, and a couple others that
are the entire class of periodicals/magazines have been a
perennial problem for 20 years in terms of covering their
costs, and then there is an Alaska by-mail, that the last few
years, those costs have risen. Except for those three, on the
market-dominant side, while the volume continues to go down,
they are contributing to the overhead. And, of course, on
competitive products, while not the same level of volume or
kicking to the overhead, they are not only covering the cost,
but contributing too. It is just while that is the good news on
the revenue side, the expenditure side of the equation is going
up faster.
Mr. Jack. I know you have spoken about it at length today,
but talk through a few of the expenditures that in recent years
have really exploded in costs to the Postal Service, and help
us identify what those are.
Mr. Taub. Certainly, when you look at the Postal Service
and their cost structure, and this has been generally the case
for decades, is about roughly 70 percent are for labor, and it
is just the nature of the operation and how it works. And
certainly, a lot of this plan the Post Service has been on is
about trying to achieve savings in the transportation area.
While they have achieved some, they certainly are not what they
predicted or hoped, but when you are looking at, you know,
racking and stacking, ``Hey, where are the areas we need to
look at from expenditures,'' certainly labor, logically, is
going to be the largest cost structure that drives the cost of
the Postal Service.
Mr. Jack. I am curious, have you looked into other
countries, and I am curious, are other countries experiencing
similar difficulties with their own Postal Service systems?
Mr. Taub. Definitely. It is the, you know, nature of the
world we live in now, which is just the unrelenting decline
throughout the world of folks mailing letters less and packages
growing more. I would say, however, Congressman, that most
other countries have gone through the hard exercise of defining
the regulation and licensing contract in statute what they
expect of their national postal administration that must be
done for the American public. In our case, we need to do that,
but for their citizens, and a lot of that is much more narrow
and defined. And so, right now we have a situation where,
except for six--day, it is more, hey, bind the Nation together,
you know, and left to the Postal Service to self-define that.
And that, I think, has created some of the challenges for us as
a Nation and the concerns we hear at the Commission and that
have been expressed today about service.
Mr. Jack. If no action is taken, describe the state of the
Postal Service two years from now, five years from now.
Mr. Taub. Yes. I think at the very end of the Commission's
testimony that I provided is an article from almost exactly 15
years ago by Bloomberg Business Week with an old mail truck
crunched on the front that says, ``End of the Mail as We Know
It.'' End of 2011, they are broke. The numbers have gotten
worse, and so, you know, there is, at some point, something has
got to give. These bills that I have talked about that have not
been paid for retiree benefits, in 2022 law recalculated the
retiree health benefit payments, but it kicks in again in 2031.
That will be $31 billion. So, the question is, can they do what
they have been doing for the last 15 years and just not pay it
and figure that Office of Personnel Management (OPM) and
Treasury will pay those bills when they come due, or at some
point, is, you know, the bill going to be coming due? But you
add on those obligations on top of the requirement of $6.6
billion a year and growing of meeting the Universal Service
Obligation mission.
So, our concern is, unless we do the hard work of defining
the mission and figuring out what that costs, the public
service mission for this government entity, and then figuring
out a funding structure, we are going to be here in two, five,
ten years. You know, somebody who is doing this job--in my
case, the Postmaster General--in 15 years will be attaching an
article like Bloomberg News, and, you know, it is like a
baggage carousel coming around.
Mr. Jack. Well, thank you for your testimony, and to all
the Commissioners, thank you for your testimony. I yield back.
Mr. Sessions. The gentlemen yields back his time. Mr. Jack,
I want to thank you also for taking time to have this be
important to you and your constituents and certainly this
Subcommittee. Thank you very much.
Now, it looks like that we would go to the distinguishing
Ranking Member for his time. The gentleman is recognized.
Mr. Mfume. Thank you very much. Mr. Chairman, it has been a
good hearing. I want to, again, be redundant and thank all of
the witnesses who have come here and shared their time and
their thoughts and their energy. And I want to thank Members on
both sides of the aisle who have been coming and going because
of congressional schedules today, but found it important enough
to be here to participate to some degree.
There is a lot to pick through. I mean, there really,
really is, and I am going to try to do this without any kind of
metrics or order, just based on what I have been hearing and
what I know the challenges are both for this Committee, for the
U.S. Congress, and for the Post Office that we love and must
find a way to keep. And Mr. Taub, you began this by saying
clearly that Post Office is not a private business, and that
one of the things or several of the things we have got to
protect against are monopolistic abuse, predatory pricing, and
that you are very doubtful, as I am with you, that this $15
billion will solve the crisis once and for all. I think that is
poppycock. That is just not going to happen.
So, I want to come back to that, but I would also want to
point out and to thank the others for going on record with some
profound thoughts and assessments about what we can do and what
we ought to do. And one of the things that continues to come up
is the need for a definitive service obligation, a Universal
Service Obligation: one set of rules, one set of practices, one
set of standards that no matter where we are, we can all adhere
to. And the construction of that is really where I am finding
most of my appeal about all of this. If we do not do that, then
we have just not done anything. I mean, we have just kicked the
ball down the road. So, I am going to come back to that, but I
do want to thank several of you for providing----
Ms. Fisher, that is who I want to thank. Thank you for
laying out some of the challenges that sometimes we do not
always think about: this whole notion of vehicles, and
facilities and facility upkeep, and compensation costs, and
volume declines, and cumulative net losses, not the least of
which Mr. Taub referenced when he talked about the retiree
benefits which are going to kick in. Those things really ought
to frighten all of us to know that if we are very, very
serious, we cannot do anything unless we address all of the
things that are in front of us. And it may in some instances be
so large and voluminous that many Members of the Congress will
defer to this Committee and say, ``Well, that is your job.''
Yes, it is the Committee's job, but it is also the job of the
full Congress once we are able to construct and put forward,
with input on both sides of the aisle, a Universal Service
Obligation that is functional. It has got to be adopted and
passed. I want to thank you for that, Ms. Fisher.
Ms. Poling, thank you for switching things around also, and
to point out, while we have these challenges, that there are
some built-in advantages that we ought to recognize, to the
extent that they might be able to help us, and that is the
network of physical vehicles, the significant fleet, the highly
trained workforce, the fact that we are in every community in
the United States with a presence. And off the top of my head,
I do not know how you sew all of those things together, except
that if we are looking at them as interconnecting possibilities
and interconnecting assets that, in the construction of this
Universal Service Obligation, we ought to take those into
considerations.
Now, let me just say one thing about the challenge, and I
appreciate the Chair giving me some extra time here.
Commissioner Poling, businesses across the Baltimore area that
I represent, including newspapers and small mailers and others,
are paying more for worse services. That has been talked about
over and over again today. In Fiscal Year 2019, a single piece
of first-class mail was delivered within three days 80 percent
of the time. Last year, under the five-day standard--not the
three-day, but the five-day standard--on-time delivery had
fallen to 73 percent. So, that is a significant decline in
service for a significantly higher price, and all of us in the
Greater Baltimore Area are feeling that disparity as they are
in other areas, as it has been talked about today, and feeling
it in different ways, not the least of which is the fact that
in three weeks throughout the State of Maryland, we have got
voting that will be occurring, a great deal of that by way of
the United States Postal Service and mail-in ballots. Now, this
is not for you, but just maybe the Postmaster is listening
today. We would like to at least call your attention, sir, to
the fact that Maryland, like other states, really are concerned
about ballots and ballots arriving on time and other things.
So, here is what I want to do. Mr. Taub, I want to end up
with you where I started. I have got a question because I was
really perplexed when I heard the President talking about the
idea of floating the Postal Service into the Department of
Commerce as if that was going to heal many of the things that
you have already pointed out are challenges, and that the
Postmaster General called for significant changes in how PRC
regulates the Postal Service. In fact, former Commissioner
DeJoy went further by saying that the Commission, all of you,
are an unnecessary Agency. That is his own opinion. Many of us
disagree with that. But again, if we are to get to where we
want to get to, which is a definitive, well-defined,
structural, legal Universal Service Obligation that we all play
by, one set of rules, some of those things have to be taken in
consideration.
I would ask you just quickly, Mr. Taub, is that an idea
that continues to resonate, and are Commissioners being forced
to sort of consider that?
Mr. Taub. In terms of the idea of the Department of
Commerce or just the----
Mr. Mfume. The Department of Commerce. Taking the Post
Office and putting it there.
Mr. Taub. I am unaware of efforts there in that regard, but
I would say to your other point, I think it is always important
to level set and remind folks why we exist. Congress created
the Commission in 1970 when it got out of business of setting
postal rates, and recognized they were not going to turn over
rate-setting authority to the Postal Service as a government
Agency with the authorities we had. 2006, last major change to
the statutes, Congress gave the Postal Service more flexibility
to price products, introduce products, compete in the
marketplace. They did not then say, ``You know what? Trust the
Postal Service. They will do it.'' That is where we turn into
the Regulatory Commission.
So, I think that is part and parcel of that seventh feature
of those seven features of universal service, an enforcement
mechanism. We do everything in the light of day, transparent,
accountable to the public. We hear from everyone and weigh what
is in the statute required of us, and as long as Congress still
feels that is important, I think we have to do it. But I would
suggest, I think it is also vitally important, unless and until
someday when the Postal Service is not wielding government
powers with special legal privileges. And I am not suggesting
that should be they, but until then, they are government agency
operating in commercial marketplace, and I think that is why 56
years ago, Congress chose to create the Commission.
Mr. Mfume. And that is why now, if we do nothing else, we
have got to construct some real Universal Service Obligations
so that we know what the path is in front of us. And I raise
that because my hope is, as Chairman Sessions has pointed out
several times here, we find a way in this Committee to work
together. We do not always do it at the highest speed, but we
always end up where we want to go. And this situation really
cries out for smart ideas, which I hope all of you will
consider forwarding to us, and an understanding that this is
where it really starts, so that formulation of ideas assists
all Members of this Committee.
I know Chairman Sessions and I both realize the work that
you do. We also realize the challenges, having gone through so
many of these hearings, as some of you know, but if we do not
do anything here, then the question becomes, why are we here?
So, I am hoping that this really starts to level set, gives us
the opportunity, working together, to come up with an idea of
the things that should go into that construction of the
Universal Service Obligation.
And then, Mr. Chairman, I just want to commit and
rededicate myself to working with you on this. You know, we
have just had so many hearings, but we are determined to find a
way to make it work, and I would yield back. Thank you, sir.
Mr. Sessions. The gentleman yields back his time. We also
committed that we do a lot of things as we are trying to do
about overpayments, misdirected payments, so we have got a full
plate, yes, I know, and thank you for your friendship to get
this done.
We now want to move to what, at this time, is two remaining
Members that you have. Ms. Budzinski from Illinois, you are now
recognized.
Ms. Budzinski. Thank you. Thank you very much, Chairman
Sessions and Ranking Member Mfume, for allowing me to waive
onto this hearing. I very much appreciate this opportunity.
Second, I want to thank Vice Chair Taub and all the
Commissioners for being here today. It is good to see you
again.
The United States Postal Service is approaching a pivotal
point in its long and storied history. In Fiscal Year 2025, the
Postal Service lost over $9 billion and lost around $2 billion
in Quarter two of Fiscal Year 2026. At the most recent Board of
Governor's meeting, Postmaster General Steiner reiterated his
calls for Congress to work with the USPS to find solutions to
the financial issues they are facing. As the co-chair of the
congressional Postal Service Caucus, I am committed to that
mission as well.
Congress must be working with the Postal Service and
stakeholders to protect USPS employees and ensure the Postal
Service has a strong financial footing as we enter the 2030s
and beyond. Additionally, any postal reform bill sanctioned by
Congress must include provisions that protect and strengthen
the role of the Postal Regulatory Commission. Contrary to what
some at the Postal Service have said about the PRC, I believe
they are a critical oversight body. In the coming months and
years, as Congress moves forward with potential reform ideas, I
want to emphasize the importance of an independent Postal
Regulatory Commission and look to expand its oversight ability.
With all of that in mind, my first question is to Vice
Chair Taub regarding the Regional Transportation Optimization
plan. I was wondering if you could talk about why you think the
Postal Service's analysis on the RTO was flawed, and what
lessons can be drawn from future network restructuring
initiatives that impact rural communities like the ones that I
represent in downstate Illinois.
Mr. Taub. Sure. The Commission, under the law, it dates
from the 1970s Act, and it was one of the few holdovers in the
2006 law that left it as an advisory opinion, but recognizing
Postal Service as the operator. When they make changes that are
generally affecting service nationwide, they have to come to us
for advisory opinions. It is a full-blown Administrative
Procedure Act proceeding. We sit en banc. It is on the record.
The Postal Service came to us, as required under the law, in
December 2024 and sought our opinion. We provided that in
January and cautioned that this plan was, A, predicated on
savings that we found were, at best, illusory and, frankly, we
could not really verify; and second, deep concern that we were
seeing what was going to be created was creating a tale of two
Americas, shall we say. Rural America was going to see delayed
service, slower service under this plan.
It gives me no joy to say that, unfortunately, more than a
year in under that plan, which they ignored our advice, in
fact, criticized us, that we did not know what we were talking
about, that were just a burden, has come to fruition.
Ms. Budzinski. Right. Thank you. I have a couple more
questions if you do not mind if we pause there. My second
question is to you again, Vice Chair. As Congress looks at
potential postal reform ideas, I am curious if there are any
historical precedents in other sectors that you think could
provide a blueprint to ensure the Postal Service is able to
continue serving Americans for decades to come.
Mr. Taub. Yes. Congresswoman, the Commission's full
testimony suggests a possible legislative approach that could
be informative if Congress is trying to grapple with the issue
of how do we define the Universal Service Obligation. The
Federal Communications Commission under the 1996
Telecommunications Act was directed by Congress to define, by
regulation in the light of day with notice and comment, and can
be revised by regulation, the USO for the telecom space under
guidelines and guidance and guardrails that Congress put in
place. But Congress, you know, was not expecting to have to go
through the hard work itself of trying to get 218 votes in the
House of 51 or 60 in the Senate on all the detailed
definitions, but look to the FCC to do that from a definitional
standpoint.
Ms. Budzinski. Okay. I will be checking that out. Just one
question, last. Can you discuss what went into the PRC's
decision to grant USPS the temporary conditional waiver on
amortization payments, and how do you think this changes the
short-and medium-term financial outlook for the Postal Service?
Mr. Taub. It was not an easy decision for us because we
provided the Postal Service additional rate authority to go
above inflation on their market-dominant products, and if they
chose to, it was an opportunity for the first time in over a
decade to start paying the obligations for Civil Service
Retirement System (CSRS) and FERS that otherwise they have been
defaulting on. But we recognize the reality of what we are
dealing with in which we are facing suddenly a cash crisis, as
the Postal Service announced, and we stepped forward and
provided a waiver for a few years that is $2.4 billion as of
September 30 this year, and probably payments of about $3
billion or more. It in is the rate base. It has been collected
from restricted cash to unrestricted to allow them to pay the
bills. It is not a panacea or fix, but I think it provides
Congress and all of us an opportunity, a little bit more
breathing room to not reach for choices of desperation, but
think this through in a little more constructive way.
Ms. Budzinski. Thank you very much, and I yield back.
Mr. Sessions. Thank you very much. The gentlewoman yields
back his time. We have also waived on Mr. Walkinshaw, and we
are delighted that he is here. The gentleman is recognized.
Mr. Walkinshaw. Thank you, Mr. Chairman. I appreciate,
again, your willingness to allow me to waive on, and thank you
all for being here. I apologize that I missed your opening
statements, but I did read all of your statements, and it is
clear that, you know, you have all put forward a range of
ideas, as other stakeholders have, to address the financial
challenges, the service failures. But in my view, if we are
going to get to meaningful reform, especially if we are going
to build the kind of support here that is necessary for
meaningful reform, we got to have clear goals that prioritize
both the long-term financial stability and the reliable service
because we cannot have one without the other. And if we are
going to set those goals and evaluate the tradeoffs, and there
certainly will be tradeoffs, we have to have data showing how
these proposals, savings they generate would affect the long-
term finances and service performance of the Postal Service. It
is also necessary to have that data so that we can all hold the
Postal Service accountable.
And that is why, I think it was in March of this year when
the Postmaster General was here, I asked him if he would be
willing to provide this Committee with financial projections
showing how proposed reforms, including the continued
implementation perhaps of Delivering for America and the RTO
initiative, would affect the Postal Service's finances and
service performance. He committed, sitting right there, to
providing--this is a direct quote--``multiple budgets
demonstrating the tradeoffs among different proposals and their
impact on five-year financial projections.'' Unfortunately,
after a few months of asking, we got a two-page response, and I
will just read one paragraph, Mr. Chairman.
It says, ``The Committee on Oversight and Government Reform
recently asked for five-year financial projections in the form
of multi-scenario analyses. While we do not do such financial
projections in the ordinary course of business, we can provide
general information that answers many of these questions.''
They go on to provide some general information that largely
rehashes documents that have been released publicly. They do
not answer the question of five-year or even multiyear
financial projections, which is frustrating to me. Since they
did not find the time or the interest in providing that data
that, in my view, I think are necessary to inform our reform
efforts, let me just ask you all, and maybe you can help me a
little bit.
Vice Chairman Taub, past PRC reports warned that DFA plan
changes would slow service and disproportionately harm rural
communities. Your testimony today that I read, I think, says
essentially that those warnings were prescient. Unfortunately,
in your view and the PRC's view, DFA has slowed service and
disproportionately harmed rural communities, has not achieved
the savings that it was predicted or projected to achieve at
the time. And one of the reasons I am asking for some forward-
looking financial projections from the Postal Service is
because they have repeatedly failed to deliver on their
promises to produce real savings through DFA and other efforts.
So, I just want to ask you, you know, do you share that
concern? Am I wrong to think that an organization with the
scope and scale and import of the United States Postal Service
should not be able to, in the ordinary course of business,
produce some kind of multiyear financial projections for this
Committee or for anyone else?
Mr. Taub. Congressman, again, they are a government agency
working on behalf of the American public, and they, it seems to
me, should be doing that. And in fact, your suggestion and
request was a hundred percent what the Comptroller General of
the Government Accountability Office recommended to the Postal
Service in a recent report they issued in December, and the
Postal Service's response to the GAO was ain't doing it.
Mr. Walkinshaw. Yes. You know, we have, as you all have
pointed out, some important work that we need to do here as
Members of Congress on this issue, and I am asking the Postal
Service to help us help you because I cannot and the Chairman,
I do not think, can go to our colleagues and say we got to make
some tough decisions here without being able to give them some
idea that there is a path that is going to lead to a better
situation if we are willing to make these tough decisions. I do
not know why the Postal Service does not want to help us do
that. Thank you, Mr. Chairman. I yield back.
Mr. Sessions. The gentleman yields back his time. I want to
thank the gentleman for his insistence to be a part of this,
waiving on and being a part of the answer. And ultimately, it
is my hope that you will be a part of and certainly interested
in making sure that whatever we do come up with, we will sell
and it will meet the needs of the American people, and it will
be something that we could be proud of.
I now would move to distinguished gentlemen, Mr. Mfume.
Mr. Mfume. Thank you, Mr. Chairman. I ask unanimous consent
to enter into the record a statement from Elena Patel, co-
director of the Urban-Brookings Tax Policy Center, regarding
today's hearing.
Mr. Sessions. Without objection.
Mr. Mfume. I ask unanimous consent to enter into the record
a statement from the President of the National Postal Mail
Handlers Union regarding today's hearing.
Mr. Sessions. Without objection.
Mr. Mfume. I ask unanimous consent to enter into the record
a statement from the National Newspaper Association regarding
today's hearing.
Mr. Sessions. Without objection.
Mr. Mfume. And I ask unanimous consent to enter into the
record a statement from former Representative Kevin Yoder,
Executive Director of Keep Us Posted, regarding today's
hearing.
Mr. Sessions. Without objection.
I also would enter to the record a data and informational
letter from, what is called the EMA, which is the President,
Marie Clark, the Envelope Manufacturers Association.
Without objection, these will all be entered into the
record, and I thank you very much.
Mr. Sessions. I now will move to my time, and I want to
thank everybody. I think that while this has been a highly
successful collaboration, I think that you have seen, each of
you have seen, and certainly anybody watching, of high
interest, not just in this Subcommittee, but by Members of
Congress. So, I would really like to engage all four of you,
but I would like to start by saying that my attempts at this
effort have been to recognize the larger body of people who are
engaged in this, not just the Postal Service.
We have people who are engaged outside of that, tremendous
commercial interest, tremendous interest of large companies in
this country. And I have tended to believe that we need to work
together, all of us, and that literally everybody, if we work
together, could not only find achievement and success, but that
would lead to a financial integrity that is more in line with
the opportunity to extend each of these businesses--technology,
trucking, timing--all of these things could come together, but
then potentially the customer, the American citizen who wants,
needs, and counts on, as we have heard today from Ms. Poling,
and others, that I understand, Mr. Mfume understands, people
who live back home.
I serve a mostly rural congressional district. I started
when I came into Congress with a rural district. I
intentionally went out with a rural letter carrier and
intentionally saw how he did his work. I tried to do well
enough to get back, but I had a very sore arm from trying to
assist in that delivery. And so, it took me a while, but
learned firsthand of the importance to the American people,
especially in rural areas where someone might be home more
often than not.
So, today I would like to say I am still at the point that
I believe is correct, and that is United States Postal Service,
with its young Postmaster General Steiner, and certainly Peter
and Michael who represent the Postmaster General are here today
and so is the industry. And I want to reiterate to each one of
them that I do believe that we need to work with each other and
in concert with each other. I happen to believe some of the
conversation here about working together means that the Postal
Service might not take these operations on directly by
themself. The Postmaster General knows that. I have had direct
conversations with him. I think that some of the ideas that the
Postmaster General is attempting to accomplish can be made, but
I will tell you that if we do not work together, if we do not
see each other's, not just line of business, but import to the
value-add solutions, we will be in trouble.
With that said, I would like to go to Ms. Fisher, if I can.
Ms. Fisher, you spoke very clearly in some bit of depth that I
appreciate about the loss of mail, about the loss of what we
might call first-class stamps. I happen to believe that whether
it might be magazines, I went to Southwestern University. I got
used to seeing a Southwestern University catalog probably two
or three times a year. It was important to my university. It
was important to me to stay up. These things have gone away.
First-class mail is dwindling. Do you see a world by which we
could get back to increasing pieces of mail, envelopes that
might come, the availability of technology that would aid and
help all of this transformation to be effective and efficient?
How do you see increasing parcels of mail?
Ms. Fisher. I think we can see a return to that, but first
we have to see a lot better service and performance when it
comes to the letter mail. My personal observation seems to be
that the Postal Service, in chasing revenues because of their
dramatic financial losses, has really focused on packages, and
I do not know that they will ever be able to fully compete
there. They can compete, but that space is just being inundated
with more and more competitors, as I relate, even in South
Dakota as I talked about. But in the meantime, it seems they
pay less and less attention to everything that falls under the
scope of the market-dominant products: the magazines, the
letter mail, et cetera, newspapers. That still has a huge
amount of people very reliant upon it, looking forward to it,
and the reliability of the service is dramatically lacking.
So, yes, I do think that can be built back up. There is a
tremendous amount of our economy that relies upon that, but we
have to get the Postal Service in some sort of shape to where
they can try to improve the service and the reliability
overall, and focus more of their effort on what is happening on
the market-dominant side and a little less perhaps on the
competitive side.
Mr. Sessions. Does that mean that there would be some
observations about what I would call rural delivery of these
packages versus city or suburban large areas, middle areas,
parts of the country? How might we look at what you are saying,
or how should we look at to evaluate what the Postal Service is
looking at for deliver these boxes?
Ms. Fisher. The Postal Service still has, in general, the
least costly service available for the delivery of the
packages, but there is an immense effort. I read an article the
other day about how both Amazon and Walmart, who have made a
concerted effort to buildup their space into rural remote
areas, and they have also noticed that it is not just the
people who have lived there, but as more and more people
telework, they are moving into these rural or remote areas. So,
Amazon and Walmart are in a race to try and best serve that
community. You pay a price for it with your membership at each
one, but you can get same day delivery. But from the Postal
Service, if they could just improve, again, their reliability
and perhaps their tracking capabilities, it would go far.
Mr. Sessions. Good. Mr. Day, I had an opportunity, as you
have heard, to go to South Dakota. Part of the conversation in
South Dakota was about problems of getting mail in South
Dakota. A deeper view of that developed, to me, very rapidly,
and that was, it was getting the mail to South Dakota was the
delay. In this case, it happens to be a city where I used to
live--St. Louis, Missouri--and it is in the center part of the
country, and yet we hear a conversation, not just from Members
of Congress, that are worried about that effort. They do not
live in South Dakota. They live in St. Louis, and they are
having problems in St. Louis.
I just want you to know that I would like to have you and
the Commission to provide to me in writing anything about your
observations about the system that the Post Office is using, if
you have any insight into that. You might be aware from your
great service about that service, about getting to St. Louis,
about getting out of St. Louis, about producing things. Do you
think you have any observations related to St. Louis or any
other hub where there might be difficulties?
Mr. Day. Chairman, I could certainly comment on St. Louis.
I have been to St. Louis Processing Center several times. It is
been a while since I have been there. It is actually an
interesting facility with an older section and a newer section
where the floors are actually at different levels. So, I have
been through it, but it is been a while since I have been
there. It does come to that, though. It is the specifics of
this network that has been created under DFA unique to each one
of those facilities. Again, I said it during my testimony.
Mr. Sessions. You did.
Mr. Day. There are only four of all the RPDCs were actually
built from the ground up, brand new, and actually, the very
first one they did was quite a problem for the first couple of
years, the one in Palmetto, Georgia. But that said, a place
like St. Louis has been around for quite a while. It is not a
new concept. I will say this. Back in the day, I remember when
we were first looking at service, whether it was, and this is
the old overnight/two-/three-day, there were some places--I
happened to be working in Maine at the time--we had to get to
Fort Kent every day, down from Fort Kent to Portland back up to
Fort Kent. And that is quite a trip, and you are getting the
mail late at night, and you got to turn it around quick and get
it back up, and our service was not that good, just was not
consistent. And what we eventually were able to do was change
that, and we could tell the people of Fort Kent, yes, now the
standard is not overnight, it is two-day, but we can give you
some consistency. And so, distances/travel does play into it,
but when you start moving mail from South Dakota to St. Louis,
it is just a lot of time on the road.
Just as a quick thought, one of the things you might do,
particularly on first-class individual piecemeal--the bill
payment, the birthday card, the wedding invitation--is to put
it through an initial process, just the initial process in
South Dakota to keep your local mail in-state there, and then
send the rest of the country's mail, wherever that is going, to
St. Louis for processing. That gives you good, consistent
service, hopefully, within South Dakota. So, there are
different ways to do it, and you have got to find the right mix
between cost effectiveness and your obligation to service, and
I think there is no one of those that is the single right
answer. What is the right blend? And I think it is in the name
of the organization. It is the Postal Service. ``Service'' has
always been the key.
And I will just close it with this. I have always found in
my leadership time at the Postal Service--running districts,
running plants--that when the Postal Service provides quality
service with consistency, it also has the lowest cost. It is an
efficient operation.
Mr. Sessions. I believe that is right. Ms. Poling, you have
spoken very eloquently about rural customers' expectations and
the things which are a piece-part to their satisfaction as well
as, as Mr. Day just said, the effective operation of money.
What conversation would you have with me about, a conversation
of competition to that, what might be called last mile, or the
competition angle with the Post Office and other competing
factors, maybe Amazon maybe someone else, UPS could be, but
that is competing in that market? Can you put us in that world
of how that works and what those issues might be?
Ms. Poling. I will do my best. Thank you, Chairman. I guess
I would start with, you know, I think the Postal Service, and,
you know, obviously it is such a national treasure, and that is
why we are here today having this conversation. We all care
about it. We want to make sure it stays viable, hopefully for
many, many more years. And I think, you know, again, getting
back to this Universal Service Obligation, that is sort of why
I think we need to start having these conversations.
What I worry a lot about is that in these rural areas,
right, it is not always as profitable to deliver to them,
right? And so, and unlike the Postal Service, private carriers
have the option of deciding not to, right, not to deliver to
those areas or to charge rural surcharges. The Postal Service
has to be accessible and affordable to everyone. You know, this
has been brought up several times today, so I will not belabor
it, but in our advisory opinion, you know--the Vice Chairman
said this, I thought, so well--you know, it is a tale of two
Americas that could start happening, right, between sort of the
rural folks who live far away, right, and then those who do
not. Again, this is a service that is meant for everyone, that
is supposed to be for everyone, that is absolutely supposed to
be accessible and affordable, and I think we need to be doing
everything we can right now to ensure that.
And I do worry a lot about what happens if we do not have
those conversations about the Postal Service and about the
broken business model that it has because, again, I worry about
the impact that this will have on rural America where it is
costly to deliver to those areas. And these folks, you know, it
is their lifeline and it is something that they really rely on,
so I think all of those conversations need to be had. I will
say this, too: I think there is tremendous opportunity to be
had with the private sector as well. I think there have been a
lot of great relationships that have been created, right, with
Amazon, with others. And I think all of those things--nothing
should be off the table, I think, as we go forward and have
these discussions.
Mr. Sessions. Thank you very much. Mr. Chairman--Vice
Chairman, but Mr. Chairman today to me--there have been lots of
conversations that you and I have had about the Post Office
having to compete, but in that competition, also doing things
that they had utilized other people in the marketplace--
technology, trucking, and all sorts of other services within
this larger operation--that now, seemingly, the Post Office is
finding a way to bring that internally, whether it is
technology or whether it is other things that they do. Do you
have insight into that because I have been skeptical. I am for
the bigger group of people working together and providing a
comfort technology, time, issuance of professionalism. Do you
have any insight into that?
Mr. Taub. Public-private partnerships, for lack of a better
term, have been really the success story of the U.S. Postal
Service since it was created in 1970. I referenced earlier this
idea of work sharing where, if the private sector can present
the mail or prepare it or transport it in a way that saves the
Postal Service that cost or put it further in the system, it is
a win-win for the private sector and the Postal Service. In
fact, in the early years after the 1970 Act, the Postal Service
was pushing back on it and then embraced it, and of course it
was an era of increasing volume, but was a success story. In
2006, Congress recognized that, and there is an uncodified part
of PAEA--the Postal Accountability Enhancement Act--that, in
fact, directed the Postal Service through a sense of Congress
that public-private partnership are critical, whether it is in
the transportation space, and leveraging that.
I was concerned, seeing the evolution over the last few
years with the Dodd-Frank Act, before the new Postmaster
General took over, of this concerted effort to bring more of
that in-house and do it there, and it seemed to be upending a
success story. It is heartening to see recently the Postal
Service just signed a negotiated service agreement with DHL,
which is owned by Deutsche Post, which is a privatized post by
the way, but an opportunity to open up that last mile that
really has been such a strength. And so, I think, 110 percent
with you, Mr. Chairman, with the thought of your question,
which is we really need to be looking at leveraging the success
of that public-private partnership, and recognizing at the end
of the day, the Postal Service has a mission to do from the
public service mission. Why else does it exist?
And if we make sure that is being done, if there are ways
that then we can leverage what are good, efficient ideas in the
private sector, it seems to me that is a path forward as
opposed to just bringing it all in-house, particularly if we
are doing it in a way that is not going to sustain what we as a
Nation need from the Postal Service.
Mr. Sessions. And perhaps more importantly, technology
keeps on moving.
Mr. Taub. Yes.
Mr. Sessions. And there are lots of people that have
technology at their fingertips and that is their specialty.
Today, we have had an opportunity to hear from you, and the
four of you, I want to thank for your service, not just to the
Postal Regulatory Commission but, really, to the process. And I
think both Mr. Mfume and I recognize that we want to keep
working with the people like you, like the Postal Service, and
other groups, on getting this right. I really would say to you
that I said to you, and you know this, what are the tough
decisions that the Postal Service has had to make? What are the
really hard questions that they have had to face down, and you
gave me a good answer.
I want you to know that these are the things that are aimed
right at Congress right now. What really hard decisions are we
willing to, not just ask the questions, but the decisions we
are going to make, and perhaps the one that each of you have
put back right at Mr. Mfume and I, or at least myself, what is
that standard going to be? What is the plan? What is the
service going to look like? These questions need to be answered
before you answer the others. So, we hear you, we appreciate
you, and I want you to know that I think that not just Mr.
Mfume, but our Subcommittee and other Members heard today that
if we fail to answer these questions, we will fail to do our
job, which the American people have put us to. I want to thank
each of you.
Mr. Mfume, do you wish to have any time for a closing
remark?
Mr. Mfume. No, but thank you. I just want to thank our
guests, the witnesses, and do not make this your last time
here. We are open to any communications that you may have to
help guide us on this path. Thank you, sir.
Mr. Sessions. Yes, thank you. Mr. Mfume and I are going to
come down here as soon as we finish this hearing and come down
and shake your hand thank you for being here and get your
picture.
With that said, without objection, all Members have five
legislative days within which to submit material and additional
written questions for the witnesses that then will be forwarded
directly to the Commission.
If there is no further business, without objection, the
Subcommittee stands adjourned.
[Whereupon, at 12:30 p.m., the Subcommittee was adjourned.]
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