[House Report 104-438]
[From the U.S. Government Publishing Office]





                                     



                                     

 
 
                           [COMMITTEE PRINT]

                                             deg.Union Calendar No. 213

        104th Congress, 1st Session -  -  -  -  -  -  -  -  -  - House 
Report 104-438

                           VOICES FOR CHANGE

                               __________

                              SIXTH REPORT

                                 by the

                        COMMITTEE ON GOVERNMENT
                          REFORM AND OVERSIGHT


                                     


                                     


 December 21, 1995.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed
              COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

     WILLIAM F. CLINGER, Jr., 
      Pennsylvania, Chairman
CARDISS COLLINS, Illinois            BENJAMIN A. GILMAN, New York
HENRY A. WAXMAN, California          DAN BURTON, Indiana
TOM LANTOS, California               CONSTANCE A. MORELLA, Maryland
ROBERT E. WISE, Jr., West Virginia   CHRISTOPHER SHAYS, Connecticut
MAJOR R. OWENS, New York             STEVEN SCHIFF, New Mexico
EDOLPHUS TOWNS, New York             ILEANA ROS-LEHTINEN, Florida
JOHN M. SPRATT, Jr., South Carolina  WILLIAM H. ZELIFF, Jr., New 
LOUISE McINTOSH SLAUGHTER, New York  Hampshire
PAUL E. KANJORSKI, Pennsylvania      JOHN M. McHUGH, New York
GARY A. CONDIT, California           STEPHEN HORN, California
COLLIN C. PETERSON, Minnesota        JOHN L. MICA, Florida
KAREN L. THURMAN, Florida            PETER BLUTE, Massachusetts
CAROLYN B. MALONEY, New York         THOMAS M. DAVIS, Virginia
THOMAS M. BARRETT, Wisconsin         DAVID M. McINTOSH, Indiana
GENE TAYLOR, Mississippi             JON D. FOX, Pennsylvania
BARBARA-ROSE COLLINS, Michigan       RANDY TATE, Washington
ELEANOR HOLMES NORTON, District of ColumbiaHRYSLER, Michigan
JAMES P. MORAN, Virginia             GIL GUTKNECHT, Minnesota
GENE GREEN, Texas                    MARK E. SOUDER, Indiana
CARRIE P. MEEK, Florida              WILLIAM J. MARTINI, New Jersey
FRANK MASCARA, Pennsylvania          JOE SCARBOROUGH, Florida
CHAKA FATTAH, Pennsylvania           JOHN B. SHADEGG, Arizona
            ------                   MICHAEL PATRICK FLANAGAN, Illinois
BERNARD SANDERS, Vermont (Independent)HARLES F. BASS, New Hampshire
                                     STEVEN C. LaTOURETTE, Ohio
                                     MARSHALL ``MARK'' SANFORD, South 
                                     Carolina
                                     ROBERT L. EHRLICH, Jr., Maryland
  James L. Clarke, Staff Director
    Kevin Sabo, General Counsel
     Judith McCoy, Chief Clerk
Bud Myers, Minority Staff Director
                                 ------                                

                     Subcommittee on Postal Service

JOHN M. McHUGH, New York, Chairman
BARBARA-ROSE COLLINS, Michigan       MARSHALL ``MARK'' SANFORD, South 
MAJOR R. OWENS, New York             Carolina
GENE GREEN, Texas                    BENJAMIN A. GILMAN, New York
CARRIE P. MEEK, Florida              CHRISTOPHER SHAYS, Connecticut
                                     DAVID M. McINTOSH, Indiana
                                     ROBERT L. EHRLICH, Jr., Maryland

                               Ex Officio

CARDISS COLLINS, Illinois            WILLIAM F. CLINGER, Jr., 
                                     Pennsylvania
     Dan Blair, Staff Director
 Robert Taub, Professional Staff 
              Member
        Meryl Cooper, Clerk
     Denise Wilson, Minority 
        Professional Staff

                                  (ii)
                         LETTER OF TRANSMITTAL

                              ----------                              

                                  House of Representatives,
                                 Washington, DC, December 21, 1995.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: By direction of the Committee on 
Government Reform and Oversight, I submit herewith the 
committee's sixth report to the 104th Congress.

                                   William F. Clinger, Jr.,
                                                          Chairman.

                                 (iii)

                                     


                            C O N T E N T S

                              ----------                              
                                                                   Page
Introduction.....................................................     1
Background.......................................................     2
Results in Brief.................................................     2
Principal Findings...............................................     3
    Key Issues...................................................     3
    Subcommittee Hears That Reform Is Needed.....................     5
    Despite the Voices for Change, Little Consensus Emerges......     5
    Summary of Testimony.........................................     6
    Additional Hearings: H.R. 1963 and Is It Time for Change?....     9
Appendix I--General Oversight Hearings 1995......................    11

                                  (v)

  
                                                 Union Calendar No. 213
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-438
_______________________________________________________________________

                           VOICES FOR CHANGE

                                _______


 December 21, 1995.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Clinger, from the Committee on Government Reform and Oversight, 
                        submitted the following

                              SIXTH REPORT

    On December 14, 1995, the Committee on Government Reform 
and Oversight approved and adopted a report entitled ``Voices 
for Change.'' The chairman was directed to transmit a copy to 
the Speaker of the House.

                          INTRODUCTION

    During the first session of the 104th Congress, the 
Subcommittee on the Postal Service conducted ten hearings, the 
first eight providing general oversight and review of the 
operations of the U.S. Postal Service--a government monopoly 
that accounts for about $54 billion in annual revenue. The 
ninth hearing focused on H.R. 1963, introduced by the Chairman, 
and the final hearing--``The Postal Reorganization Act 25 Years 
Later, Is It Time for Change''--set the stage for the 
Subcommittee's 1996 agenda.
    Unlike most other executive branch entities, the Postal 
Service touches the lives of all American households and 
businesses every day. Whether the issues relate to the quality 
of delivery service, the money paid for postage, or the impact 
of this government corporation on the lives of its 
approximately 850,000 employees, the American public has basic 
concerns about the effectiveness and efficiency of postal 
operations.
    As the Subcommittee prepared to begin hearings to 
scrutinize proposals for fundamental reform of the Postal 
Service, Chairman McHugh undertook this review of the oversight 
hearings to determine: (1) the key issues regarding the future 
role of the U.S. Postal Service that emerged in the hearings; 
(2) whether witnesses expressed a need for reform of the laws 
that govern the U.S. mail system; and (3) the specific 
legislative changes, if any, on which consensus emerged among 
the witnesses.

                           BACKGROUND

    From February 23 through July 25, 1995, the Subcommittee on 
the Postal Service held oversight hearings to explore the 
operations of the Postal Service and discuss the need for 
reform of the current system. The Subcommittee heard testimony 
from the Postmaster General on two occasions, the General 
Accounting Office, the Postal Rate Commission, the Postal 
Service's Board of Governors, major mailing groups, postal 
union and management associations, postal-dependent businesses 
and competitors, and the Inspector General of the Postal 
Service. These witnesses represent a broad spectrum of 
stakeholders in the Postal Service. All of the Subcommittee's 
hearings are summarized at the end of this report, and Appendix 
I lists the hearing dates and witnesses.

                        RESULTS IN BRIEF

    Four key issues emerged in the oversight hearings, 
including the mail monopoly, labor-management relations, 
ratemaking, and new postal products. First, much of the 
testimony received by the Subcommittee indicated that Congress 
may need to address the extent to which, if at all, the Postal 
Service's exclusive right to deliver letter mail should be 
repealed or substantially reduced in scope. Second, with 
longstanding labor relations problems persisting on the 
workroom floor, it became clear that Congress must consider how 
it can encourage and assist postal management and unions to 
address these severe problems. Third, many witnesses documented 
long delays and conflicts arising out of the Postal Service's 
efforts to change postal rates, suggesting that Congress should 
examine what legislative and/or administrative changes are 
needed to reduce the time and expense required to adjust postal 
rates and better recognize the mission, role, and expectations 
of the Postal Service in today's communications environment. 
The final issue that emerged was the extent to which the Postal 
Service should offer new and nontraditional electronic-based 
services, such as ``E-mail'' communication, or stick to hard 
copy delivery services. While the Postmaster General and other 
witnesses testified that the Service needs greater authority in 
introducing new products in its various markets, other 
witnesses, such as postal competitors, disagreed.
    According to the testimony of many witnesses, Congress 
needs to consider fundamental reform of the quarter-century old 
Postal Reorganization Act because of the challenges confronting 
the Postal Service in a changing communications environment. 
Although the Postal Service expects that overall mail volume 
will continue to grow in the coming years, advances in 
communication technology and competition from the private 
sector could affect the size, structure, and overall mission of 
the Service that was envisioned by the Postal Reorganization 
Act of 1970. According to many witnesses, the Postal Service's 
ability to confront these changes is limited by its inability 
to effectively set prices, introduce new services, or manage 
the workforce. Several witnesses predicted that absent changes 
in the law, the next century will see major losses of Postal 
Service business that could trigger more frequent and larger 
postage increases, and could lead to further reductions in the 
Service's business.
    Although the dozens of witnesses raised a variety of issues 
and suggested a broad range of proposals for improving mail 
delivery, no unanimity emerged for any specific approach. 
However, maintenance of universal service and a need to either 
strengthen or modify the postal rate setting process were the 
legislative-related issues consistently discussed by a large 
majority of witnesses.

                       PRINCIPAL FINDINGS


                               key issues


    Four key issues emerged in the oversight hearings. 
Witnesses discussed these issues most often and as such they 
appear likely to dominate future congressional debate and 
deliberations. The most frequently discussed issues included 
the mail monopoly, labor-management relations, ratemaking, and 
new postal products.
    Under a set of laws known as the Private Express Statutes 
dating back to the 1700s, private carriers cannot deliver 
letters unless the Postal Service receives the postage 
otherwise due on those letters and other conditions are met, 
such as the letters are placed in a sealed envelope and the 
envelope is addressed.\1\ Many witnesses, such as the 
Postmaster General, justified the Statutes on a public policy 
and economic basis. The Postal Service has a statutory mandate 
to provide universal mail service, and, from an economic theory 
standpoint, only one supplier (the Postal Service) should 
deliver mail, lest private carriers capture the easier to serve 
(i.e., low cost) areas, thereby reducing the overall efficiency 
of mail delivery services. Many witnesses stated that for these 
reasons, the monopoly should remain in place. They noted that 
the 1970 Act has been interpreted to allow the Postal Service 
to ``suspend'' any portion of the letter mail stream from the 
Private Express Statutes; for example, the Postal Service 
suspended extremely urgent letter mail in 1979.\2\ Such mail is 
often delivered by FedEx or United Parcel Service, among 
others. However, according to the testimony of the General 
Accounting Office, more than 80 percent of the total mail 
volume (177 billion pieces in 1994) is covered by the Private 
Express Statutes. Other witnesses, such as major mailing groups 
and postal competitors, testified that the justifications for 
the mail monopoly are outdated and that Congress should repeal 
or substantially reduce in scope the Postal Service's exclusive 
right to deliver letter mail. These witnesses predicted greater 
efficiency and effectiveness of mail service in the U.S. if 
changes to the monopoly occurred.
    \1\ 18 U.S.C. Sec. Sec. 1693-1699 and 39 U.S.C. Sec. Sec. 601-606. 
The Act of March 3, 1845, Sec. Sec. 9-12, 5 Stat. 732, provides the 
basis of the modern Private Express Statutes.
    \2\ 39 C.F.R. Sec. 320.6. The Postal Service has considered that 39 
U.S.C. Sec. 601(b) permits it to suspend one or all of the conditions 
under which letters may be carried outside the mails.
---------------------------------------------------------------------------
    Almost all witnesses testified that longstanding labor 
relations problems persist on the workroom floor of the Postal 
Service. Testimony on the subject indicated that unionized 
organizations like the Postal Service can make little progress 
in reinventing the organization or changing its culture if 
relations between management and labor leaders remain 
adversarial. The Subcommittee heard spirited testimony from 
labor and management representatives on the subject. Both labor 
and management testified regarding the low level of trust that 
exists between them, and labor disagreed with the assertion of 
management and some mailing groups that the collective 
bargaining process was broken. The General Accounting Office 
reported that labor-management conflicts on the workroom floor 
were longstanding and were caused by an autocratic management 
culture, adversarial employee and union attitudes, and 
inappropriate and inadequate performance management systems. 
The key issue seemed to be how Congress and the executive 
branch could encourage and assist postal management and unions 
to address these severe labor-management problems.
    Nearly all witnesses documented for the Subcommittee the 
long delays and conflicts arising out of the Postal Service's 
efforts to change postal rates. Postal Service witnesses, among 
others, argued that certain pricing criteria contained in the 
1970 Act, such as restrictions on volume-based pricing, no 
longer serve its competitive interests. These witnesses 
explained to the Subcommittee that past studies had resulted in 
recommendations (but no substantive actions) to change both the 
process and the policies governing the revision of postal 
rates.\3\ Witnesses recommended a plethora of legislative and 
administrative changes that they suggested are needed to reduce 
the time and expense required to adjust postal rates and better 
recognize the mission, role, and expectations of the Postal 
Service in today's communications environment. Although some 
witnesses advocated a complete overhaul of the current rate 
policy and processes, other mailing groups urged that Congress 
strengthen the existing system by increasing the powers of the 
Postal Rate Commission.
    \3\ See Postal Ratemaking in a Time of Change, a report by the 
Joint Task Force on Postal Ratemaking submitted to the Board of 
Governors of the United States Postal Service and the Postal Rate 
Commission, June 1, 1992; U.S. Postal Service: Pricing Postal Services 
in a Competitive Environment a report by the United States General 
Accounting Office to Congress (GAO/GGD-92-49, Mar. 25, 1992); and The 
Ratemaking Process for the U.S. Postal Service, report of the Institute 
of Public Administration to the Board of Governors of the U.S. Postal 
Service (New York: Institute of Public Administration, Oct. 8, 1991).
---------------------------------------------------------------------------
    The Postmaster General testified, and some mailing groups 
concurred, that the Postal Service needs greater authority in 
introducing new products in the various markets. The Postal 
Service witnesses explained that it has a number of market 
research efforts underway that could result in new product 
offerings. For example, in some areas of the country, the 
Postal Service is offering what it calls ``Fastnet,'' which is 
next day delivery of parcels ordered over interactive 
television (the home shopping network). However, other 
witnesses, notably the Postal Rate Commission, suggested that 
the Postal Service should stick to hard copy delivery services. 
The conflicting testimony presents the Subcommittee with the 
fundamental question of defining the mission of the Postal 
Service: should Congress encourage or otherwise facilitate the 
Postal Service's ability to offer new and non-traditional 
electronic-based services, such as ``E-mail'' communication, or 
should Congress require the Postal Service to focus solely on 
its traditional hard copy delivery services?


                subcommittee hears that reform is needed


    Many witnesses testified that reform of the Postal 
Reorganization Act is needed, although they did not agree on 
whether that meant minor modifications to the current framework 
or a major overhaul of the existing statute. Almost all 
witnesses agreed that the Postal Service has come under stress 
since its establishment in 1970 as a result of new technology 
and competitors in communications and parcel delivery. The 
witnesses suggested that this has led to problems with mail 
service and the loss of substantial portions of Postal Service 
markets to both electronic media and ``hard copy'' competitors.
    Witnesses reported that the Postal Service lost most of the 
markets in overnight delivery and parcels to the private sector 
several years ago. As described by some of the major mailers, 
the statutory monopoly on letter mail, provided for in the 
Private Express Statutes, has not stopped the development of 
alternative means of communications and delivery, and many 
mailers stated that they are actively seeking out these 
sources. According to one frequently mentioned scenario, major 
losses of Postal Service business could trigger more frequent 
and larger postage increases, and could lead to further 
reductions in the Service's business.
    Witnesses differed as to whether these problems could be 
more effectively addressed by better Postal Service management 
and minor legislative changes or by fully updating the 
statutory framework. Some critics of the Postal Service, 
including some mailing groups and competitors, pointed to the 
Service's protection from competition, its inability to control 
costs, and the pay of postal employees as the cause of such 
problems as delivery delays, losses of mail, and ``excessive'' 
increases in postal rates. These witnesses told the 
Subcommittee that oversight and regulation of the Postal 
Service should be strengthened.
    Other witnesses argued that the Postal Service was 
disadvantaged by an inherent conflict in its mandate to operate 
on a self-sustaining businesslike basis while also carrying out 
a broad mission with public service elements.\4\ Such witnesses 
suggested that pursuit of these sometimes conflicting goals 
posed a difficult challenge to the Postal Service in today's 
communications environment, and therefore, statutory changes 
were required to give the Service more flexibility in managing 
its workforce, setting postal rates, and introducing new 
products.
    \4\ 39 U.S.C. Sec. 101. Witnesses also suggested that this conflict 
emerges in the laws pertaining to setting rates and establishing 
classes of mail (i.e., 39 U.S.C. Sec. Sec. 3621-3623).
---------------------------------------------------------------------------


        despite the voices for change, little consensus emerges


    Although more than thirty-six witnesses testified on the 
challenges facing the postal system and the need for reform, 
little consensus developed on specific solutions. Witnesses 
suggested a variety of general options for improving mail 
service in the United States, ranging from limited internal 
reform of the Postal Service to conversion to an entirely 
private entity that, as a true private corporation, would 
compete with others to provide mail service. Although no 
unanimity support emerged for any specific approach, general 
agreement seemed apparent on maintenance of universal service 
and reform of postal ratemaking.
    With the exception of one major mailing group and one 
postal competitor, all other witnesses stated that nationwide 
universal mail service was vitally important to maintain in any 
U.S. postal system. In addition, most witnesses suggested that 
Congress should change the postal rate setting process to 
either (1) streamline the process in order to respond to the 
challenges of postal competition, or (2) increase regulatory 
controls of the Postal Service to maintain better oversight of 
its finances and operations. However, few witnesses offered any 
specifics on how these changes could be accomplished.


                          summary of testimony


    During his first appearance, Postmaster General Marvin 
Runyon testified that it was his intent to make the Postal 
Service more businesslike and more responsive to the American 
people. He stated that the Postal Service was meeting its 
mandate to serve the nation by delivering to 125 million 
addresses each day and providing universal service access to 
261 million Americans. Financially, the Postal Service had a 
preliminary net income of $531 million during the first five 
months of the fiscal year, and expenses were running $176 
million below operating estimates. The Postmaster General 
further stated that after restructuring the Postal Service in 
1992, there has been a saving of $1 billion a year.
    However, the Postmaster General indicated that though the 
Postal Reorganization Act of 1970 had worked well, the Act did 
not envision the highly competitive communications industry 
that exists today. He said that it is time to reexamine the Act 
in order to make the Postal Service more competitive by freeing 
postal employees from bureaucracy and burdensome rules, by 
simplifying and speeding up the price-setting process to 
respond to market needs, and by making postal products more 
customer oriented and modern through pricing flexibility. He 
also stressed that the Postal Service should be run like a 
business. The Postmaster General stated that the collective 
bargaining process is now broken and that the employee dispute 
resolution mechanisms are faulty.
    At the same hearing, the General Accounting Office (GAO) 
testified that poor labor-management relations continue at the 
Postal Service and arbitration has been needed to settle four 
of the six contract negotiations since 1978. Service delivery 
problems together with continual labor management problems 
persist. Furthermore, GAO underscored that service and customer 
satisfaction indicators have remained stagnant over the past 
years. GAO also reported that postage meter revenue was 
declining due to fraud and deficiencies in program controls. 
Furthermore, the implementation of automation continued to be 
behind schedule and the program had not realized the savings 
that were anticipated. In the meantime, the private sector with 
newer technology is replacing some of the conventional types of 
postal service.
    At the second hearing, Postal Rate Commission Chairman 
Edward Gleiman underscored the important role which the 
Commission plays in postal affairs because of its mandate to 
ensure that postal rates and fees are reasonable and equitable. 
Its primary responsibility is to recommend postal rates, though 
only the Postal Service may initiate a rate case. The Rate 
Commission also hears mail classification proceedings to 
determine the groupings, classes and subclasses to which rates 
will be assigned. Currently, there are 17 subclasses of mail 
and more than 100 worksharing discounts affecting the amounts 
of postage paid by various mailers. While current law provides 
that the Commission may take up to 10 months for consideration 
of an omnibus rate case, Chairman Gleiman emphasized that the 
Commission rendered its 1994 recommended decision in nine 
months. The Chairman said that the Commission is interested in 
streamlining and expediting these proceedings. They initiated 
meetings with the Postmaster General after the last rate 
decision and invited public comments on improving the process. 
The Commission also reissued rules (which went unused for five 
years) giving the Postal Service the authority to accelerate 
changes in Express Mail rates to meet market pressures.
    Chairman Sam Winters testified on behalf of the 
Presidentially-appointed Board of Governors at the third 
hearing. He said the Governors agreed that the Postal Service 
is one of the most complex enterprises in our country and they 
are well aware of their responsibilities. They also agreed that 
though the Postal Service was doing well, it could do better . 
. . and the same applied to postal employees. The Board has 
three committees: audit, compensation, and strategic planning. 
It directs the overall policy of the Postal Service and acts as 
the people's representative in managing the Postal Service in a 
businesslike manner. Additionally, the nine Governors determine 
the amount of mail rate increases. Mr. Winters noted that 
despite all of these responsibilities, a Governor's 
compensation is modest and has not been increased in 25 years.
    Mr. Winters expressed the Governors' sentiments that mail 
was being delivered in a timely, reliable manner and that 
efficiency was improving. However, he thought that operating in 
a businesslike manner is taxing because of the cumbersome 
restraints written into the Postal Reorganization Act. For 
instance, the Service was hampered during the 1992 
restructuring because of the Merit Systems Protection Board 
(MSPB) determination that employees had lost ``status'' and 
because the Department of Justice would not represent the 
Postal Service against the MSPB--the Postal Service must rely 
on the Department of Justice as it is prohibited from using its 
own lawyers in a case against a government organization. Mr. 
Winters also referred to restrictions imposed by Congress in 
its efforts to support deficit reduction and the Postal 
Service's inability to be competitive because of the results of 
collective bargaining. The need for pricing at market rates was 
preferred to the present method of ratemaking which he said is 
too time consuming, constraining, and costly; the Postal 
Service has not been able to offer discounts to high volume 
mailers in the same manner as the private sector can. In 
conclusion he stated that the Postal Service should be operated 
in a businesslike manner and as a modern government enterprise.
    Eleven witnesses representing major mailing groups 
(commercial mailers, publishers, nonprofit mailers) testified 
at the fourth general oversight hearing. All had distinct 
opinions on privatization, the usefulness of the Postal Rate 
Commission, the reform of the Postal Service and the effect of 
labor-management relations in the mission of the Postal 
Service. However, all but one said they were not in favor of 
privatization of the Postal Service. The Subcommittee heard 
their various views regarding the Postal Service filing for 
reclassification.
    Postal employee unions and management organizations 
testified at the fifth hearing. Three of the unions were 
immersed in contract talks and were critical of management, 
particularly at postal headquarters. The President of the rural 
letter carriers union reported that his members had job 
satisfaction, motivation, and pride in their jobs. They have an 
evaluated pay system that measures such things as mileage 
driven and mail volume; these criteria, the Subcommittee was 
advised, would not be directly transferable to urban carriers. 
The unions spoke with one voice on retaining universal delivery 
and uniform postage cost; they testified that the Postal 
Reorganization Act, including collective bargaining, served 
them well. Management, they stated, must be streamlined--there 
are too many intermediate steps diffusing lines of 
communication. The three management groups focused on labor/
management issues, adverse actions, and compensation. These 
organizations also agreed that though the Postal Service can be 
improved, the Postal Reorganization Act should not, and need 
not, be revamped in the area of labor relations but they 
expressed support for more flexibility on setting rates and 
introducing new products.
    The sixth hearing featured 12 witnesses representing postal 
related businesses and competitors. The first panel of three 
included trade associations and a business franchiser. The 
second panel was composed of postage meter manufacturers and 
suppliers and the final panel was made up of parcel and urgent 
mail competitors. These diverse entities expressed varied 
opinions regarding the letter mail monopoly, the international 
mail market, the inequity of the Postal Service in being 
exempted from rules and regulations applicable to private 
sector businesses (for instance, taxes, parking fines), and the 
commercial and research value in the sale of postage meters to 
users in lieu of renting them. Clearly, some of these 
organizations valued their partnership with the Postal Service 
whereas others held the Service as an impediment to 
competition. The hearing explored the extent to which the 
Postal Service affects business opportunities for small and 
large concerns, contracting, manufacturing, transportation, 
inter- and intrastate commerce, and international law.
    In Postmaster General Runyon's last appearance before the 
Subcommittee, he expressed a desire to remain on the job for 
several more years and appealed to Congress to help him by 
rewriting the collective bargaining laws that he said have 
advanced pay for postal workers 20 percent higher than 
comparable civilian jobs. Mr. Runyon agreed to consider giving 
postal workers the right to strike, but added that in return 
management would have to be granted the right to hire 
replacements for strikers. He suggested providing postal unions 
the same bargaining rules as railroad workers, under which the 
President can impose a cooling off period before a strike and 
can use the power of his office to jawbone the parties into 
reaching a settlement. The Postmaster General defended his 
agency, declaring it had ``come a long way'' since delivery 
debacles in 1994, and he urged the Subcommittee to reject calls 
to sell the agency. However, he complained that his efforts to 
make further gains are hitting a wall of red tape and 
regulations. The Postmaster General said that he has found a 
powerful consensus for freeing the nation's mail service from 
some of its rules and regulations.
    The final hearing consisted of an appearance by the 
Inspector General of the Postal Service, Kenneth Hunter. As he 
is the watchdog of Postal Service operations, the hearing 
mainly focused on the operational, financial, and security 
challenges facing the agency. The Inspector General echoed many 
of the statutory restrictions on pricing, new products, and 
managing the workforce that the Postmaster General told the 
Subcommittee are creating problems for the Postal Service's 
future viability. Mr. Hunter noted that immediate abolition of 
the postal monopoly would be devastating to the Postal Service 
and the concept of universal service. However, he stated that 
if everything that the Postmaster General wants in the area of 
postal reform were granted, the monopoly could be eliminated.


       additional hearings: h.r. 1963 and is it time for change?


    The Subcommittee held two additional hearings following 
completion of the oversight hearings.
    In the hearing on H.R. 1963, the Postmark Prompt Payment 
Act--the Chairman's legislative proposal that would mandate 
that the date a bill is postmarked is the date it is considered 
paid--proponents of the measure testified on the legislation. 
Payments would have to be properly addressed and have adequate 
postage to qualify under the bill. Stamps, not postage from 
meters, would be required. Representing the 35 cosponsors, a 
half-dozen House members testified in support of the bill. 
Members noted that the bill was needed to address the concerns 
of conscientious citizens who mail their payment on time but 
through no fault of their own are assessed late fees and 
penalties. For example, Representative Andrew Jacobs, Jr. 
stated that H.R. 1963 ``. . . would straighten out a lot of 
disagreements and save a lot of litigation.''
    National radio talk show host Bruce Williams, the driving 
force behind H.R. 1963, also testified. Mr. Williams, whose 
show is carried by more than 400 stations, stated that the idea 
was ``a grass roots initiative'' that would resolve bill-paying 
questions faced by all Americans. He presented 4,000 to 5,000 
postcards that he has received from his listeners endorsing the 
measure. Mark Silbergeld, co-director of Consumers Union and 
also speaking for the Consumer Federation of America, testified 
in support of the bill as well. He predicted that its passage 
would prompt businesses to increase pressure on the Postal 
Service for faster delivery service. Opponents of the measure 
were invited to testify, but did not do so. Some submitted 
statements for the record and Chairman McHugh, in acknowledging 
their concerns, promised to provide them with another 
opportunity to testify during the second session of the 104th 
Congress.
    The Subcommittee also held a hearing on postal reform. 
Witnesses discussed whether, and in what manner, the quarter-
century old Postal Reorganization Act should be changed. In the 
first of what is planned as a series of hearings on the 
subject, the Subcommittee heard from a number of witnesses 
whose views spanned the spectrum of perspectives on postal 
legislative reform. Representatives Phil Crane and Dana 
Rohrabacher, cosponsors of H.R. 210, discussed their bill which 
would turn the Postal Service over to its employees under an 
employee stock ownership program. Both lawmakers argued that 
the Postal Service is on the verge of a crisis as electronic 
communication diverts more first-class mail from the agency, 
and that the Subcommittee needs to act before the crisis 
arrives.
    The Subcommittee also heard testimony it requested from the 
Congressional Research Service of the Library of Congress on 
options for reform of the Postal Service, as well as former 
Postmaster General Anthony Frank, former Postal Rate 
Commissioner Patti Birge Tyson, and Murray Comarow, a member of 
the Kappel Commission whose recommendations became the basis of 
the 1970 Act. In its testimony, the Research Service presented 
its findings of what was ailing the Postal Service, describing 
many of the technological and competitive challenges 
confronting the Service as well as the problems presented by 
the mandate to operate on a businesslike basis while carrying 
out a broad public service. Although several options for reform 
were described, the Research Service noted that the ultimate 
solution is ``an issue for political resolution.'' Although Ms. 
Tyson advocated that the Subcommittee keep the current 
structure while providing some flexibility in pricing, Mr. 
Frank and Mr. Comarow proposed more fundamental changes. Both 
criticized the power postal unions have amassed since the 
Postal Service was created in 1971 and further criticized the 
lack of supervision that the Postal Service's Governors give 
the agency. Mr. Comarow outlined a variety of areas for the 
Subcommittee to examine, but ultimately concluded that a second 
commission was needed to study postal issues. Mr. Frank argued 
that top postal executives need to be paid more and that the 
Postal Service needs less regulation from the Postal Rate 
Commission.
          APPENDIX I--GENERAL OVERSIGHT HEARINGS 1995

                           February 23, 1995

    WITNESSES: Postal Service and the General Accounting Office
          Marvin T. Runyon, U.S. Postal Service
          Michael E. Motley, General Accounting Office

                             March 2, 1995

    WITNESSES: Postal Rate Commission
          Edward J. Gleiman
          W.H. LeBlanc
          George W. Haley
          Edward Quick Jr.
          Wayne A. Schley

                             March 8, 1995

    WITNESSES: Postal Service Governors
          Sam Winters
          LeGree S. Daniels
          Einar V. Dyhrkopp
          Susan E. Alvarado
          Bert H. Mackie
          Norma Pace

                              May 23, 1995

    WITNESSES: Major mailing groups and organizations
          Art Sackler, Mailers Council
          Ian D. Volner, Advertising Mail Marketing Association
          Richard Barton, Direct Marketing Association
          David Todd, Mail Order Association of America
          Timothy May, Parcel Shippers Association
          Tonda Rush, National Newspaper Association
          Cathleen P. Black, Newspaper Association of America
          George Gross, Magazine Publishers of America
          Steve Bair, Association of American Publishers
          Alan Kline, Alliance of Nonprofit Mailers
          Lee Cassidy, National Federation of Nonprofits

                              June 7, 1995

    WITNESSES: Postal employee and management groups
          Moe Biller, American Postal Workers Union
          Vincent Sombrotto, National Association of Letter 
        Carriers
          Scottie Hicks, National Rural Letter Carriers 
        Association
          William Quinn, National Postal Mail Handlers Union
          W. David Games, National Association of Postmasters
          Bill Brennan, National League of Postmasters
          Vincent Palladino, National Association of Postal 
        Supervisors

                             June 14, 1995

    WITNESSES: Postal reliant business and competitors
          John V. Maraney, National Star Route Mail Contractors 
        Association
          Randall Holleschau, National Association of Presort 
        Mailers
          Don Harle, Mail Advertising Service Association
          Robert Muma, Envelope Manufacturers Association of 
        America
          Anthony W. Desio, Mail Boxes, Etc.
          Kathleen Synnott, Pitney Bowes
          Neal Mahlstedt, Ascom Hasler
          Michael A. Allocca, Friden Neopost
          George W. Gelfer, Postalia
          James Rogers, United Parcel Service
          James Campbell, Federal Express
          Peter N. Hiebert, DHL Worldwide
          Harry Geller, Air Courier Conference of America

                             June 28, 1995

    WITNESSES: Postal Service
          Marvin Runyon, Postmaster General
          Michael Coughlin, Deputy Postmaster General

                             July 25, 1995

    WITNESSES: Postal Service Inspector General
          Kenneth J. Hunter, Inspector General

                        ADDITIONAL HEARINGS 1995

                            October 19, 1995

    WITNESSES: Proponents of H.R. 1963
          Representative Sherwood Boehlert, Member of Congress, 
        23rd District/New York
          Representative Andrew Jacobs, Member of Congress, 
        10th District/Indiana
          Representative Steve Stockman, Member of Congress, 
        9th District/Texas
          Representative Thomas Barrett, Member of Congress, 
        5th District/Wisconsin
          Representative Peter Blute, Member of Congress, 3rd 
        District/Massachusetts
          Resident Commissioner Carlos Romero-Barcelo, Puerto 
        Rico
          Mark Silbergeld, Consumers Union
          Bruce Williams, syndicated radio talk show host

                           November 15, 1995

    WITNESSES: Individuals discussing reform of the Postal 
Reorganization Act
          Representative Philip Crane, Member of Congress, 8th 
        District/Illinois
          Representative Dana Rohrabacher, Member of Congress, 
        45th District/California
          Congressional Research Service
          Anthony M. Frank, former Postmaster General
          Patti Birge Tyson, former Postal Rate Commissioner
          Murray Comarow, former Executive Director of Kappel 
        Commission

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