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+ - LEGISLATIVE PROPOSALS. TO PUT THE POSTAL SERVICE ON SUSTAINABLE FINANCIAL FOOTING
+
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+
+
+ LEGISLATIVE PROPOSALS
+ TO PUT THE POSTAL SERVICE ON
+ SUSTAINABLE FINANCIAL FOOTING
+
+=======================================================================
+
+ HEARING
+
+ BEFORE THE
+
+ COMMITTEE ON
+ OVERSIGHT AND REFORM
+ HOUSE OF REPRESENTATIVES
+
+ ONE HUNDRED SEVENTEENTH CONGRESS
+
+ FIRST SESSION
+
+ __________
+
+ FEBRUARY 24, 2021
+
+ __________
+
+ Serial No. 117-4
+
+ __________
+
+ Printed for the use of the Committee on Oversight and Reform
+
+[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
+
+
+ Available on: govinfo.gov,
+ oversight.house.gov or
+ docs.house.gov
+
+ __________
+
+
+ U.S. GOVERNMENT PUBLISHING OFFICE
+43-780 PDF WASHINGTON : 2021
+
+--------------------------------------------------------------------------------------
+
+ COMMITTEE ON OVERSIGHT AND REFORM
+
+ CAROLYN B. MALONEY, New York, Chairwoman
+
+Eleanor Holmes Norton, District of James Comer, Kentucky, Ranking
+ Columbia Minority Member
+Stephen F. Lynch, Massachusetts Jim Jordan, Ohio
+Jim Cooper, Tennessee Paul A. Gosar, Arizona
+Gerald E. Connolly, Virginia Virginia Foxx, North Carolina
+Raja Krishnamoorthi, Illinois Jody B. Hice, Georgia
+Jamie Raskin, Maryland Glenn Grothman, Wisconsin
+Ro Khanna, California Michael Cloud, Texas
+Kweisi Mfume, Maryland Bob Gibbs, Ohio
+Alexandria Ocasio-Cortez, New York Clay Higgins, Louisiana
+Rashida Tlaib, Michigan Ralph Norman, South Carolina
+Katie Porter, California Pete Sessions, Texas
+Cori Bush, Missouri Fred Keller, Pennsylvania
+Danny K. Davis, Illinois Andy Biggs, Arizona
+Debbie Wasserman Schultz, Florida Andrew Clyde, Georgia
+Peter Welch, Vermont Nancy Mace, South Carolina
+Henry C. ``Hank'' Johnson, Jr., Scott Franklin, Florida
+ Georgia Jake LaTurner, Kansas
+John P. Sarbanes, Maryland Pat Fallon, Texas
+Jackie Speier, California Yvette Herrell, New Mexico
+Robin L. Kelly, Illinois Byron Donalds, Florida
+Brenda L. Lawrence, Michigan
+Mark DeSaulnier, California
+Jimmy Gomez, California
+Ayanna Pressley, Massachusetts
+Vacancy
+
+ David Rapallo, Staff Director
+ Mark Stephenson, Director of Legislation
+ Ethan VanNess, Professional Staff
+ Elisa LaNier, Chief Clerk
+
+ Contact Number: 202-225-5051
+
+ Mark Marin, Minority Staff Director
+
+ C O N T E N T S
+
+ ----------
+ Page
+Hearing held on February 24, 2021................................
+
+ Witnesses
+
+The Honorable Ron Bloom, Chairman, United States Postal Service
+ Board of Governors
+ Oral Statement............................................... 10
+
+Mr. Louis DeJoy, Postmaster General, United States Postal Service
+ Oral Statement............................................... 11
+
+Ms. Tammy Whitcomb, Inspector General, United States Postal
+ Service
+ Oral Statement............................................... 13
+
+Mr. Mark Dimondstein, President, American Postal Workers Union,
+ AFL-CIO
+ Oral Statement............................................... 15
+
+Mr. Joel Quadracci, Chairman, President, and Chief Executive
+ Officer, Quad/Graphics
+ Oral Statement............................................... 16
+
+Mr. Kevin Kosar, Resident Scholar, American Enterprise Institute
+ Oral Statement............................................... 18
+
+Written opening statements and the written statements of the
+ witnesses are available on the U.S. House of Representatives
+ Document Repository at: docs.house.gov.
+ INDEX OF DOCUMENTS
+
+ ----------
+ * Rep. Connolly's Statement for the Record.
+ * Rep. Lynch's Statement for the Record.
+ * Rep. Lawrence's Statement for the Record.
+ * Letter, Peters and Portman Letter of Support; submitted by
+ Chairwoman Maloney.
+ * ``How to Fix the US Postal Service,'' article, Roll Call;
+ submitted by Chairwoman Maloney.
+ * Letter, National Association of Postal Supervisors; submitted
+ by Chairwoman Maloney.
+ * Letter, Alliance of Nonprofit Mailers; submitted by
+ Chairwoman Maloney.
+ * Letter, Federal Law Enforcement Officers Association;
+ submitted by Chairwoman Maloney.
+ * Letter, Postal Regulatory Commission; submitted by Chairwoman
+ Maloney.
+ * Letter, United Postmasters and Managers of America; submitted
+ by Chairwoman Maloney.
+ * Letter, MPA-The Association of Magazine Media; submitted by
+ Chairwoman Maloney.
+ * Letter, National Active and Retired Federal Employees
+ Association; submitted by Chairwoman Maloney.
+ * Letter, The Association for Postal Commerce; submitted by
+ Chairwoman Maloney.
+ * ``Protestors Gather Outside of Postmaster General DeJoy's
+ Home,'' article, WUSA 9; submitted by Rep. Biggs.
+ * ``Burned Post Offices Destroyed in Minneapolis Unrest Leave a
+ Void,'' article, StarTribune; submitted by Rep. Biggs.
+ * Statement, National Association of Letter Carriers; submitted
+ by Rep. Biggs.
+ * ``USPS Shuts Down Mail Delivery at 7 Post Offices in Twin
+ Cities for Friday,'' article, Fox 9; submitted by Rep. Biggs.
+ * ``Reward Offered for Details in Post Office Looting,''
+ article, Chicago Sun Times; submitted by Rep. Biggs.
+ * ``Rep. Ayanna Pressley Calls for `Unrest in the Streets' Over
+ the Failures of the Trump Administration,'' article, Black
+ Enterprise; submitted by Rep. Biggs.
+ * ``Antifa Lay Siege to Lancaster Police Precinct Following
+ Latest Officer-Involved Shooting,'' article, RT.com.usa;
+ submitted by Rep. Biggs.
+ * ``Kenosha's Main Post Office Closes Indefinitely Due to
+ Violent Riots,'' article, Breitbart; submitted by Rep. Biggs.
+ * ``US Postal Service Vans Stolen and Torched by Rioting
+ Minneapolis Protestors,'' article, The Gateway Pundit;
+ submitted by Rep. Biggs.
+ * Testimony, American Catalog Mailers Association (ACMA);
+ submitted by Rep. Comer.
+ * USPS IG Report, Mail Delivery and Customer Service Issues -
+ Select Chicago Stations, Chicago, IL; submitted by Rep. Davis.
+ * Letter, Chicago Delegation USPS Inquiry; submitted by Rep.
+ Davis.
+ * National Association of Letter Carriers PAC Profile;
+ submitted by Rep. Foxx.
+ * American Postal Workers Union PAC Profile; submitted by Rep.
+ Foxx.
+ * National Postal Mail Handlers Union Profile; submitted by
+ Rep. Foxx.
+ * Letter, Postal Operations Response Letter; submitted by Rep.
+ Gibbs.
+ * Questions for the Record: to Mr. Bloom; submitted by
+ Chairwoman Maloney.
+ * Questions for the Record: to Mr. Quadracci; submitted by
+ Chairwoman Maloney.
+ * Questions for the Record: to Mr. DeJoy; submitted by
+ Chairwoman Maloney.
+
+The documents listed above are available at: docs.house.gov.
+
+
+ LEGISLATIVE PROPOSALS.
+ TO PUT THE POSTAL SERVICE ON
+ SUSTAINABLE FINANCIAL FOOTING
+
+ ----------
+
+
+ Wednesday, February 24, 2021
+
+ House of Representatives,
+ Committee on Oversight and Reform,
+ Washington, D.C.
+ The committee met, pursuant to notice, at 10:13 a.m., 2154
+Rayburn House Office Building, Hon. Carolyn Maloney [chairwoman
+of the committee] presiding.
+ Present: Representatives Maloney, Norton, Lynch, Cooper,
+Connolly, Krishnamoorthi, Raskin, Mfume, Porter, Tlaib, Bush,
+Davis, Wasserman Schultz, Welch, Sarbanes, Speier, Kelly,
+Lawrence, DeSaulnier, Gomez, Pressley, Comer, Jordan, Foxx,
+Hice, Grothman, Cloud, Gibbs, Higgins, Keller, Sessions, Biggs,
+Donalds, Herrell, LaTurner, Fallon, and Clyde.
+ Chairwoman Maloney. The committee will come to order.
+Without objection, the chair is authorized to declare a recess
+of the committee at any time. I now recognize myself for an
+opening statement.
+ Good morning, and I want to welcome all of our witnesses
+and thank everyone for participating in this important hearing
+on the future of the Postal Service.
+ The Postal Service is one of our Nation's most vital and
+respected institutions. It provides service across the country
+to every single address and it adds over a million new delivery
+points every year. It binds our Nation together in the way that
+no other agency or organization does.
+ Unfortunately, the Postal Service is facing a dire
+financial situation that requires us to act. On Friday, we
+circulated draft legislation with proposals to address some of
+the most important factors driving up costs for the Postal
+Service.
+ I will address one of those proposals, Medicare
+integration, and some of my colleagues will address the other
+provisions.
+ First, while all postal employees pay into Medicare through
+their careers, not all retirees enroll when they reach age 65.
+Approximately 73 percent of retirees are enrolled, but the
+other 27 percent are not.
+ The Postal Service has paid about $35 billion dollars into
+Medicare since 1983. The draft bill would require current
+employees to enroll in Medicare when they reach 65. Retirees
+who are already over 65 would be given a three-month period to
+enroll with no penalty.
+ While employees and retirees would keep Federal health
+benefits through a new health plan, Medicare would be the
+primary payer.
+ Keep in mind that these employees have already paid into
+the system. This reform, known as Medicare integration, would
+cut long-term costs by reducing copays and other medical costs
+for retirees.
+ It would also save the Postal Service about $10 billion
+over 10 years. These are critical savings that will help the
+Postal Service become more financially sustainable.
+ In addition to Medicare integration, my colleagues will
+discuss how the bill would eliminate the unfair requirement
+that the Postal Service prefund retiree health benefits for 75
+years into the future.
+ Eliminating this unfair provision would take approximately
+$35 billion off of the Postal Service's books. They will also
+discuss how the bill would increase transparency to ensure that
+service standards are met.
+ On that note, we all know the Postal Service implemented a
+number of changes last year that resulted in widespread service
+deterioration across the country. Part of that was caused by
+the coronavirus pandemic, and postal employees who are on the
+front lines have been hit especially hard.
+ But the other part of the problem was, really, Postmaster
+General DeJoy's actions. As the Inspector General concluded, he
+did not adequately assess the impacts of his changes on service
+and he did not adequately consult with Congress and others
+before doing so.
+ Many people across the country and on this panel have grave
+concerns, and recent events have aggravated them. For example,
+we have been trying to get information about the new strategic
+plan, which has yet to be made public.
+ Of course, my own views of Mr. DeJoy are a matter of public
+record, and all members of our committee are entitled to
+express their own views.
+ However, even as our committee continues conducting
+vigorous oversight of current postal operations, we will not be
+delayed or deterred from our North Star. We need to pass
+meaningful reforms and, hopefully, bipartisan reforms to put
+the Postal Service on more sustainable financial footing for
+years to come.
+ With that, I now recognize the distinguished chairman of
+the Government Operations Subcommittee, Mr. Connolly, for his
+opening statement.
+ Mr. Connolly. Thank you, Madam Chairwoman, and thank you
+for your leadership in focusing on the long-term success of the
+Postal Service at one of the first hearings of this committee
+during the 117th Congress.
+ I am committed to working with you and our colleagues to
+pass a bill through this Congress that finally fixes the long-
+standing financial problems of the Postal Service.
+ Postal Service has been a critical lynchpin of the American
+fabric since 1775. It employs 650,000 people and is the
+foundation for a more than $1.7 trillion mailing industry that
+employs more than 7= million people.
+ Today's hearing serves to inform Congress of the reforms
+necessary to return the Postal Service to viability, financial
+health, and to ensure that Postal Services survive well into
+the future.
+ These efforts are not new, certainly, not new to me. I was
+elected to Congress shortly after the lame duck session of 2006
+in which the Postal Accountability and Enhancement Act was
+passed into law under the guise of being a reform bill.
+ I believe, however, that that bill is the root cause of
+much of the Postal Service's financial difficulty and decline.
+For nearly 15 years, the Postal Service has struggled to comply
+with that law, especially the prepayment requirement, a unique
+obligation no other entity in the world is required to meet.
+ Congress has an obligation, having created this problem in
+its own legislation, to fix it, and that is what the USPS
+Fairness Act provision does. The prefunding requirement
+requires the Postal Service to pay between $5.4 billion and
+$5.8 billion each year for 10 years into the health benefits
+fund.
+ But a decrease in revenue starting around 2006,
+coincidentally, forced the Postal Service to forgo the required
+prepayment since 2010.
+ Postal Service currently has, roughly, $35 billion in
+unfunded retiree health care benefits because of Congress'
+last-minute decision in 2006 to require an onerous prefunding.
+ The money sits in the Treasury account waiting to fund the
+health benefits of those not yet born even when it could be
+used to fortify a struggling Postal Service to replace
+vehicles, for example, that are now on average 25 years or
+older, that literally explode and endanger the work force in
+the second largest vehicular fleet in the country.
+ The language of the USPS Fairness Act would remove a
+manufactured yet real liability from the books, wiping the $35
+billion of debt from the Postal Service's ledger books.
+ The provision is not a panacea but it is a critical pillar
+of the bipartisan comprehensive reform plan that we are focused
+on today. This provision removes the distraction of a
+multibillion dollar debt of Congress' own creation and gives
+the Postal Service time to build a practical business model
+that will--can be adjusted to the changes in technology in the
+marketplace.
+ We have a moral obligation to fix the problem Congress
+created. Most importantly, the provision will allow the Postal
+Service to focus on serving the American people and delivering
+their mail and packages every single day, especially during a
+pandemic.
+ I have been working for 12 years since I entered Congress
+to build broad coalitions of multifarious stakeholders who rely
+on the Postal Service for their businesses and nonprofits, and
+for veterans who get their prescription medications through the
+mail, rural Americans who rely on package delivery to make it
+through the pandemic and individuals who pay their bills and
+businesses who use the mail for their commercial transactions.
+ I am prepared to meet this moment and join with you, Madam
+Chairwoman, and my colleagues on the committee to enact
+meaningful reforms to deliver for this Nation. Congress cannot
+afford to miss this moment.
+ Thank you again for your leadership, and I yield back.
+ Chairwoman Maloney. Thank you.
+ Mr. Lynch--I now recognize the distinguished
+representative, Mr. Lynch, for your opening statement.
+ Mr. Lynch. Thank you, Madam Chair.
+ First of all, I would like to commend you and Ranking
+Member Comer for your continued leadership in addressing the
+urgent challenges facing the United States Postal Service.
+ I would also like to thank Chairman Gerry Connolly, Ranking
+Member Jody Hice, and Representative Brenda Lawrence for their
+work on this important issue.
+ Beginning with the draft text of the Postal Service Reform
+Act of 2021, we now have an opportunity to take a viable path
+toward enhancing the financial viability of our most trusted
+government institution.
+ This legislation is strictly reflective of a fundamental
+reform need that are the subject of bipartisan and stakeholder
+consensus. It is also--its sole purpose is to ensure that the
+Postal Service and its dedicated work force are equipped to
+carry out the vital public service mission in the long term.
+ And as Chairman Connolly pointed out, the strength of the
+U.S. Postal Service really rests with the more than 650,000
+letter carriers, clerks, mail handlers, supervisors, and
+postmasters who work to process and deliver the mail to every
+home and business in America, six and even sometimes seven days
+a week, and any meaningful effort that we undertake to enact
+postal reform must reflect the commitment and the sacrifice of
+the American postal workers.
+ As Chairwoman Maloney stated earlier, the integration of
+postal retiree benefits--health benefit plans with Medicare is
+one of the core reforms included in this draft.
+ This proposal comes down to a basic question of fairness.
+To date, our postal workers have been required to pay nearly
+$35 billion into Medicare since 1983, and it remains the second
+largest Federal work force Medicare contributor after the
+Defense Department.
+ Meanwhile, one quarter of postal employees never receive
+any Medicare benefits. Yet, all postal employees bear the cost
+of resulting higher retiree premiums.
+ So with that, I strongly support our committee's efforts to
+enact common sense and bipartisan reform legislation. This is
+extremely important to a lot of rural communities that rely
+heavily on the Postal Service.
+ And with that, I urge my colleagues on both sides of the
+aisle to get behind a good reform bill and I yield back the
+balance of my time. Thank you.
+ Chairwoman Maloney. Thank you, Mr. Lynch.
+ And I now recognize the distinguished Representative
+Lawrence, who was a postal worker for 30 years and has been a
+great partner in our work to save the Postal Service.
+ Mrs. Lawrence, you are now recognized for your opening
+statement.
+ Mrs. Lawrence. I want to begin by thanking our Chairwoman
+Maloney and Chairs Connolly and Lynch for your partnership as
+we work to craft this postal reform legislation.
+ For years, the financial situation facing the Postal
+Service has grown more and more dire, due in part to factors
+outside of their own control.
+ I am thrilled that this committee is prioritizing postal
+reform as one of its major initiatives during the 117th
+Congress. Our reform provisions would provide the Postal
+Service with desperately needed financial assistance.
+ I want to focus on another important aspect of this
+package, which are service standards and accountability.
+ During my near 30-year career with the Postal Service, I
+and other postal workers took great pride in our efforts to
+meet our service standards and performance targets. It is what
+drove our work ethic.
+ The agency's unofficial motto best sums up the work force
+commitment to achieving those goals: neither snow nor rain nor
+heat nor gloom of night stays these couriers from the swift
+completion of their appointed rounds.
+ For a large period of the last year, the Postal Service was
+in the news for the wrong reasons, consistently delayed mail
+delivery, while more than 600,000 employees of the Postal
+Service has heroically continued to uphold their mission to
+deliver mail in the midst of a global pandemic.
+ Questionable operational changes implemented by Postmaster
+DeJoy has hindered their work and caused the Postal Service to
+miss that mark. Congress must include language to emphasize the
+need for service performance targets.
+ While we have only heard reports of this at this time, I am
+critically concerned about any proposal to alter the Postal
+Service first class mail system. Anything that will reduce the
+agency's ability to meet its standards--its service standards.
+ After months of persistently low delivery times and those
+concerning reports mandating targets for service performance,
+it is absolutely necessary to hold the agency accountable.
+ Last year, 91 percent of Americans had a favorable opinion
+on Postal Service, even though we were struggling with the
+pandemic in our service. That number is based on the agency's
+more than two centuries of robust service standards, something
+that the American people have come to expect.
+ If we do not make every effort to affirm that commitment to
+the service standards and accountability, it will chip away at
+the foundation of what makes this agency so great.
+ While this legislation provides the agency with financial
+reforms it needs, we cannot allow flawed operational changes to
+be a drop in our commitment to its timely service to compromise
+our mission.
+ We must pair these reforms with strong language to repair
+and to require robust service standards.
+ At this time, Madam Chair, during a pandemic is not the
+time to weaken our service standards. Thank you so much, and I
+yield back.
+ Chairwoman Maloney. Thank you. And I will now turn to
+Ranking Member Comer. But before I do, I would like to extend
+my sincere thanks for his graciousness and for his willingness
+to consider working with us in a bipartisan way.
+ And with that, I now recognize Ranking Member Comer.
+ Mr. Comer. Well, thank you, Madam Chair, for holding this
+hearing. Thank you for allowing this hearing to be hybrid and
+thank you for what I think is your sincere desire for
+bipartisan postal reform.
+ After all the talk about the Postal Service over the past
+year, I am very happy we are finally doing something that has
+the potential to address the real issues facing the Postal
+Service and improve service and delivery for the American
+people.
+ But I must add that last year in this committee, Democrats
+spun wild conspiracy theories about Postmaster DeJoy's plan to
+steal the election by removing unnecessary blue postal boxes
+and underused mail sorting machines.
+ History has already shown that baseless conspiracy theory
+to be untrue, and it will go down in history with other
+baseless conspiracy theories like the ones Adam Schiff spun in
+the Intelligence Committee.
+ Postmaster General DeJoy was attacked for trying to tackle
+two glaring problems with postal operations that must be
+addressed: having the trucks leave on time and reducing the
+massive amounts of overtime postal workers accumulate.
+ Again, Republicans debunked the Democrats' mailbox myths
+and said repeatedly we should devote our energies toward fixing
+the Postal Service's broken business model.
+ With election year politics behind us, I am thankful,
+again, Chairman Maloney has agreed to take on the important but
+difficult task of postal reform.
+ Preserving and shaping the U.S. Postal Service is one of
+the most fundamental and important jobs of this committee. The
+core issues that plague the Postal Service is relatively
+straightforward.
+ Demand for first class mail has plunged and costs have
+stayed the same. No business could be expected to survive in
+such a scenario without making tough decisions.
+ A second core issue is emerging. Demand for packages has
+exploded and the Postal Service isn't equipped to deal with
+this massive demand increase.
+ There are other issues, foremost of which should be the
+needs of the American public, which together create a very
+complex challenge to address. One issue likely to be front and
+center today, how to pay for the benefits the Postal Service
+promises to its employees, which now make up well over $100
+billion, $100 billion, in unfunded liabilities.
+ As of now, there is no plan for how to pay for these
+promises. Funding by some estimates will be depleted by the
+year 2030.
+ The Postal Service cannot be left to default on its
+retirees. It will require creative solutions and sacrifices
+from all interested parties, and there are many to make, this
+work.
+ We cannot ignore this problem. There are realities we must
+confront and address. Hard decisions must be made. This
+challenge calls for bipartisanship, and I am thankful
+Chairwoman Maloney has made the offer to work together on this
+effort.
+ Like all Americans, I am deeply concerned about the
+performance of the Postal Service over the past year. The
+delays in mail delivery across the country hurt small
+businesses, prevented the timely delivery of medication,
+hindered bills from being delivered on time, and presented
+numerous other problems for the American people.
+ I have spoken to Postmaster DeJoy about these delays and I
+am eager to learn more today about how this issue is being
+addressed and what needs to be done to prevent it from
+happening again.
+ But I will say this. Mr. DeJoy is finalizing a business
+reform plan. The last Postmaster General, if you will remember,
+promised us to deliver a plan back in 2019. But it never
+arrived.
+ Most of you will remember that hearing when Elijah Cummings
+and Mark Meadows grilled the former Postmaster General, ``Why
+haven't you brought a plan?'' That plan never arrived.
+ The status quo at the Postal Service is not sustainable.
+Postmaster General DeJoy should be commended for doing the hard
+work to confront the realities facing the Postal Service.
+ I am eager to work with both my Republican and Democratic
+colleagues to reform the Postal Service, ensure its fiscal
+sustainability, and improve service to the American people. We
+must tackle and address the real issues facing the Postal
+Service.
+ I look forward to hearing from today's witnesses on their
+ideas to improve the Postal Service.
+ Now I would like to yield to the ranking member of the
+Government Operation Subcommittee, Ranking Member Hice from
+Georgia.
+ Mr. Hice. I thank the ranking member and, Chairwoman
+Maloney, thank you for calling this hearing today, and we all
+agree that the Postal Service is critical for our country and
+it calls for serious debate.
+ But I would agree with the ranking member that for this
+past year, Democrats spread false information and really blamed
+Republicans and the previous administration and the Post Office
+for an attempt to co-opt the 2020 elections. And we are dealing
+with that.
+ And just by way of remembrance, I have got some quotes that
+were made right here in this very room.
+ Quote, ``An attack on our Postal Service and an attempt to
+dismantle our Postal Service out of a selfish desire to
+sabotage our democracy and maintain grip on power is an attack
+on all of us.''
+ So somehow, last year, we were all in here, us being
+accused and Mr. DeJoy in the Postal Service of sabotaging our
+democracy.
+ The speaker said, ``The president, his cronies, and the
+Republicans in Congress continue to wage their all out assault
+on the Postal Service and its role in ensuring the integrity of
+the 2020 election.''
+ So, somehow we were all involved in an attempt to destroy
+the election.
+ Then there was another member of this committee. Mr. DeJoy,
+you will probably remember this. You sat here in this room and
+had to hear this straight up.
+ He said to you, quote, ``How dare you disenfranchise so
+many voters? You know that it is a felony for a Postal Service
+officer or employee to delay delivery of mail. Somehow you can
+delay all the mail and get away with it. They can be
+prosecuted. You can't, even if your actions are a million times
+worse.'' And then he said, ``Mr. DeJoy, is your backup plan to
+be pardoned, like Roger Stone?''
+ How unfair to make those kinds of unbelievable accusations
+and allegations. That same representative went on and suggested
+that we may need to arrest you in order to have you show up
+here for a hearing, which, of course, was unnecessary. You did
+it voluntarily.
+ Then there was a picture that went online, like this one
+here, of a member chained to a mailbox. This did nothing but
+create fear in the American people. This did nothing but put
+distrust in the American people with the Postal Service.
+ And I bring all this up because we endured all this last
+year, all year long. But let us remember what Mr. DeJoy
+actually did with the Postal Service.
+ First, he removed the blue mailbox drop boxes. But in so
+doing, was that an attempt to sabotage the election? Absolutely
+not. It is a routine process.
+ In fact, over the last couple of decades, 35,000 of those
+drop boxes had been removed, some 12,000 under President
+Obama's watch. We didn't hear anything about it then. It was
+only when Mr. DeJoy continues the process of scaling down.
+ One of the other things he did was take out mail sorting
+machines. Perhaps that had something to do with the fact that
+mail volume has drastically declined and these machines take up
+a lot of room, space needed for packaging processing.
+ He also reduced overtime. Well, let us just by remembrance
+bring to mind that the Postal Inspector General is the one who
+documented rampant overtime use and abuse, the cost of which
+was over $1.1 billion in 2018 alone.
+ If that much overtime is the norm in the operating
+procedures of the Postal Service then, yes, there is a serious
+problem with overtime.
+ Now, perhaps all of this that I am saying is water under
+the bridge at this point. I certainly hope so. Maybe now we can
+get back to the real issue at hand, which is authentic reform
+of the Postal Service.
+ And maybe the efforts of Postmaster DeJoy will be put
+behind us and at this point that the election is over perhaps
+things will calm down as it relates to the rhetoric that has
+been so consistent this past year from the Democrats. Or maybe
+it won't. I don't know. We will see.
+ But as we roll into this debate, as Chairwoman Maloney has
+said, she hopes this to be a bipartisan movement. But, again, I
+would say just yesterday another member of this committee made
+the following quote: ``Louis DeJoy is a political hack, a crony
+of Donald Trump and a massive Republican donor. He is taking a
+wrecking ball to the U.S. Postal Service.''
+ So, I don't know that we are going to get over some of the
+rhetoric or not and, quite frankly, I would venture to raise
+the question with that kind of statement made just yesterday,
+are we now to assume that the Biden administration is not going
+to have anyone in any position appointed who has not giving
+money to Democrats?
+ Are we to assume from that kind of statement that now
+Republicans have the green light to day in and day out
+relentlessly go after any member of the Biden administration
+who has donated in the past to Democrats?
+ Well, today's hearing is about the Postal Service. It is
+not supposed to be about Louis DeJoy. But I doubt if that is
+going to be the case. And why does all this matter?
+ Well, at the end of the day, I, like the ranking member,
+have many concerns about the poor performance of the Postal
+Service in recent months. Our office has been covered up with
+complaints. And Mr. DeJoy is the captain of the ship. The buck
+stops with him.
+ But the important thing at the end of the day is that the
+Postal Service have strong leadership and that they have a plan
+to improve rather than sit back and wait for more taxpayer
+bailouts and assistance.
+ But if we are going to demand reform, which we should, why
+should we believe that there is not going to be more of the
+insane damaging rhetoric in the past? And I hope I am wrong
+with that.
+ Why should we believe that any steps other than those in
+the draft bill here, which really erases tens of billions of
+dollars in misplaced payments and unfunded liabilities, which,
+frankly, I support those basic concepts in this draft bill. But
+those things are not enough.
+ But why should we believe that the rabid resistance is not
+going to continue? If moving blue boxes and mail sorters and
+trying to bring sanity to overtime usage is somehow viewed as
+criminal activity by the postmaster, then what in the world is
+going to happen to the business plan that he comes up with and
+what is any postmaster general, be it Mr. DeJoy or someone
+else, going to do to try to right the ship of the Postal
+Service?
+ I will be very much interested in hearing some of these
+questions answered today. We have got to get input and deal
+seriously with reform issues and get beyond nonsensical,
+insane, rabid rhetoric that has been coming for the past year.
+ And I hope we will be able to do that Madam Chairwoman. I
+yield back.
+ Chairwoman Maloney. OK. Now I will introduce our witnesses.
+ Our first witness today is Postal Service Board of
+Governors Chairman, Ron Bloom. Then we will hear from
+Postmaster General Louis DeJoy.
+ Next we will hear from Postal Service Inspector General
+Tammy Whitcomb. Next we will hear from the president of the
+American Postal Workers Union, Mark Dimondstein.
+ Next we will hear from Joel Quadracci, president and
+chairman and CEO of Quad, and finally we will hear from Dr.
+Kevin Kosar, a resident scholar at the American Enterprise
+Institute.
+ The witnesses will be unmuted so we can swear them in.
+Please raise your right hand.
+ Do you swear or affirm that the testimony you are about to
+give is the truth, the whole truth, and nothing but the truth,
+so help you God?
+ [Witnesses are sworn.]
+ Chairwoman Maloney. Let the record show that the witnesses
+answered in the affirmative. Thank you.
+ And without objection, your written statements will be made
+part of the record. And with that, Chairman Bloom, you are now
+recognized for your testimony.
+
+STATEMENT OF RON BLOOM, CHAIRMAN, UNITED STATES POSTAL SERVICE
+ BOARD OF GOVERNORS
+
+ Mr. Bloom. Chairwoman Maloney, Ranking Member Comer, and
+members of the committee, thank you for inviting me to appear
+before you today.
+ My name is Ron Bloom and I am honored to chair the Board of
+Governors of the United States Postal Service. This is not my
+first involvement in public service.
+ I served in the Obama Administration, first, as a member of
+the Auto Task Force helping to lead the restructuring of GM and
+Chrysler, and later on the White House staff.
+ In my 40-plus-year career, I have held leadership roles in
+both labor unions and financial institutions, specializing in
+restructuring and revitalizing large complex organizations.
+ In addition to the Postmaster General, I am joined on the
+board by five other Governors, each of whom brings significant
+relevant experience to our task.
+ My involvement with the Postal Service began a decade ago
+as an advisor to its largest union, the National Association of
+Letter Carriers. That experience, along with my work on the
+board, has only deepened my appreciation for the extraordinary
+dedication of the more than 645,000 women and men of the United
+States Postal Service.
+ Throughout this pandemic, Postal Service employees
+performed with distinction. This was most evident during last
+November's election, as they delivered 4.6 billion pieces of
+election and political mail and ensured that 99.89 percent of
+mail ballots were sent back to election officials within our
+guidance to voters.
+ Our peak season began immediately thereafter, and while the
+Postal Service delivered 1.1 billion packages over the
+holidays, we fell far short of our service targets. With COVID
+sidelining thousands of our employees, many Americans,
+including your constituents, experienced significant delays in
+the delivery of mail and packages.
+ This level of service is acceptable to no one at the Postal
+Service, and we are working to urgently address this challenge.
+But as we improve service, and we are and we will, we must face
+some hard truths.
+ As presently constituted, the Postal Service's ability to
+serve its twin mandate, to bind the Nation together and remain
+financially self-sufficient, is profoundly threatened.
+ For too long the Postal Service has been burdened with
+unsustainable liabilities and its own failure to adapt to the
+changing needs of its customers. As we look ahead, if we
+continue on our current path we are projected to lose $160
+billion over the next 10 years.
+ But for the Postal Service to succeed in the long term, we
+can't just throw money at the problem. We must address the
+systemic issues plaguing its outdated model.
+ For these reasons, the Postmaster General and postal
+management have been working with the Board of Governors on a
+comprehensive plan to invest in and revitalize the Postal
+Service.
+ This plan is still being finalized, so I am not in a
+position to reveal any specifics today. But I can tell you that
+its focus is on ensuring that the Postal Service is able to
+perform its essential public service mission and meet our
+universal service obligation in a reliable and affordable
+manner to 160 million American--161 million American households
+six and seven days each week.
+ This plan will require tough choices. As I mentioned
+earlier, I have significant experience in revitalizing and
+restructuring large complex enterprises, including the
+integrated steel industry, GM and Chrysler, and dozens in
+between.
+ Now, and if I have learned one thing it is that the single
+largest impediment to achieving a successful outcome is that
+stakeholders will support the abstract need for change, but
+will seek to avoid any change that impacts their particular
+interest.
+ Successful restructuring simply cannot work that way. We
+must be ready--we must all be ready to do our part. Congress
+has a vital role to play.
+ Our plan will ask you to give the Postal Service relief
+from its current requirement to prefund its retiree health
+benefits, and that we be allowed to fully integrate our retiree
+health plans with Medicare.
+ These changes will save us more than $40 billion, or 25
+percent of the hole we are trying to fill. We will also be
+asking the Biden administration to calculate our obligation to
+the CSRS pension plan using modern actuarial principles, which
+will save an additional $12 billion.
+ Today, the Postal Service stands at a crossroad facing
+enormous challenges and significant opportunities. What happens
+next is up to us.
+ We can continue to ignore these challenges and demand that
+nothing changes while this great organization slowly dies, or
+we can come together and do something really important for the
+United States Postal Service and the people we serve. Thank
+you.
+ Chairwoman Maloney. Thank you.
+ Postmaster General DeJoy, you are now recognized for your
+testimony.
+
+ STATEMENT OF LOUIS DEJOY, POSTMASTER GENERAL, UNITED STATES
+ POSTAL SERVICE
+
+ Mr. DeJoy. Good morning, Chairwoman Maloney, Ranking Member
+Comber, and members of the committee.
+ I want to applaud the subject of the hearing, legislative
+proposals to place the Postal Service on a more sustainable
+path while addressing performance. You have put your finger on
+the precise combination of success factors that the Postal
+Service leadership and I have been focused on for the past
+eight months--building a financially sustainable organization
+that fulfills our responsibility to the American people and to
+our employees, and that enables excellent reliable service that
+meets the expectations of our customers.
+ There is difficult work that is ahead of us to fix the
+systemic problems that have plagued the Postal Service. But I
+am confident that together these problems can be solved and I
+see a bright future ahead for the Postal Service and the public
+we serve if we have the collective courage to act.
+ A tangible reflection of our optimism for the long term
+viability of the Postal Service is our award yesterday of a
+production contract for the next-generation delivery vehicles.
+ Let me say at the outset that we must acknowledge that
+during this peak season we fell far short of meeting our
+service targets. Too many Americans were left waiting for weeks
+for important deliveries of mail and packages. This is
+unacceptable and I apologize to those customers who felt the
+impact of our delays.
+ All of us at the Postal Service from our board, to our
+leadership team, to our union association leadership, to every
+employee strive to do better in our service to the American
+people, and we will do better.
+ That said, the fundamental challenges that the Postal
+Service confronted in 2020 made the urgent change that we need
+to pursue even more evident.
+ The years of financial stress, under investment,
+unachievable service standards, and lack of operational
+precision have resulted in a system that does not have adequate
+resiliency to adjust and adapt to changing circumstances.
+ I am proud of the dedication of our employees who work
+tirelessly to meet our public service mission during the most
+trying of circumstances.
+ While our performance during the election was tremendous,
+the service performance issues that we otherwise experienced
+during much of the year demonstrate why we must make
+fundamental changes to provide our customers with the service
+they expect and deserve.
+ We need to frankly confront the problems we face, be candid
+and realistic about the magnitude of the solutions we require,
+and embrace the few crucial elements of legislative help we
+need from Congress.
+ Above all, my message is that the status quo is acceptable
+to no one because the solutions are within reach if we can
+agree to work together. Our dire financial trajectory,
+operational and network misalignment to mail trends, outdated
+pricing, infrastructure underinvestment, inadequate people
+engagement, and an insufficient growth strategy all demand
+immediate action.
+ We have a detailed plan for such action, which we will
+finalize soon, and with your help we can restore a Postal
+Service to the American people that they truly deserve.
+ To confront these urgent issues, our team has been working
+on a 10-year strategy that will reinforce the Postal Service's
+obvious strengths and address our obvious weaknesses.
+ The key commitments of this plan will include, one, a
+commitment to six and seven day week delivery service to every
+address in the Nation, not just because it is the law but
+because it is the key ingredient to our future success; two, a
+commitment to stabilizing and strengthening our work force,
+especially for our associates who are not yet in a career
+position.
+ We want every postal employee to have tools, training, and
+supportive environment necessary to enjoy a long-term career
+with us. And three, a commitment to investing in our network
+infrastructure, including vehicles, technology, and package
+sortation equipment.
+ We demonstrated this commitment with our award yesterday
+and look forward to working with Congress to determine if our
+electric vehicle goals can be accelerated.
+ In the weeks ahead, I look forward to sharing more
+information and engaging in discussions about this strategy
+with public policymakers, our unions, and management
+associations, our employees, our stakeholders, and with the
+American people.
+ To be self-sufficient, we also need targeted legislation. I
+thank you for your leadership and renewed interest in
+addressing our unfair and unaffordable employee retirement
+health benefit costs. That will give us a fighting chance when
+combined with other elements of our plan for financial
+sustainability.
+ Importantly, these funding changes can be made while
+sustaining and improving these value benefits to our employees.
+Our board and I, our management team, our union associations,
+and association leadership look forward to working with you and
+the administration to revitalize the Postal Service.
+ Thank you.
+ Chairwoman Maloney. Thank you.
+ Inspector General Whitcomb, you are now recognized for your
+testimony.
+
+ STATEMENT OF TAMMY WHITCOMB, INSPECTOR GENERAL, UNITED STATES
+ POSTAL SERVICE
+
+ Ms. Whitcomb. Thank you.
+ Good morning, Chairwoman Maloney, Ranking Member Comer, and
+members of the committee. Thank you for inviting me here today
+to discuss the Postal Service's recent service issues as they
+relate to potential reform efforts.
+ The mission of the OIG is to ensure the efficiency,
+accountability, and integrity of our Nation's Postal Service
+through independent oversight under the authority of the
+Inspector General Act of 1978.
+ We take our mission very seriously. The ability of the
+Postal Service to meet its service standards is always
+important, especially during the current pandemic when
+Americans are relying so heavily on it to deliver critical
+items like checks, medicines, packages, and ballots.
+ Even before the pandemic, the processing network was not
+operating at optimal efficiency. The Postal Service's drive to
+push mail through its network to meet its service goals
+actually led to costly inefficiencies due to lack of
+coordination and integration between the mail processing,
+transportation, and delivery operations.
+ Additionally, it routinely used the transportation networks
+and high levels of overtime to mitigate delays, causing late
+and extra trips and further increasing costs. When the pandemic
+hit, it brought a perfect storm of postal challenges, declines
+in mail volume and revenue, a surge in parcel volume which
+offset the revenue loss from mail but required costly
+operational shifts, and reduced employee availability due to
+illness and quarantine.
+ In the beginning of the pandemic, the Postal Service was
+able to modify operations to generally mitigate the impact and
+meet its obligation of universal service.
+ However, starting in early summer, the Postal Service
+introduced various operational and organizational changes. When
+deployed on top of employee absences due to COVID-19, these
+changes negatively impacted quality and timeliness of mail
+delivery. Some areas were hit harder than others.
+ The pandemic impacted the Postal Service in other ways. The
+2020 primaries and general election saw record numbers of
+people voting by mail. In addition to our planned election mail
+readiness work, we devoted significant resources to monitoring
+how mail-in ballots were processed.
+ In the weeks leading up to November 3, we sent 500 OIG
+employees to over 2,000 postal facilities nationwide. Our
+fieldwork is now complete and, generally, the Postal Service
+effectively prioritized and delivered ballots during the
+election season.
+ We will soon release our work on service performance during
+the general election and the subsequent runoffs.
+ After the election and throughout the peak holiday mailing
+season, service performance was severely challenged. While
+there are signs of improvement, concerns about service
+performance remain. We are currently focused on broad service
+issues as well as specific areas where concerns have been
+raised.
+ In response to a request from members of this committee and
+others, we are looking at service performance in a number of
+low-performing districts including Atlanta, Georgia,
+Charleston, South Carolina, and Detroit, Michigan.
+ In addition, we are evaluating recent embargoes where the
+Postal Service stopped accepting mail at certain overwhelmed
+facilities. We are currently finalizing a project specifically
+focused on the Cleveland, Ohio, plant, where commercial drivers
+experienced excessive wait times.
+ Finally, we are studying the development of service
+performance targets and measurements and looking broadly at
+reasons why they are challenging for the Postal Service to
+meet.
+ Any discussion about service must be put in the context of
+the Postal Service's difficult financial condition. The
+combination of declining first class mail volume and revenue,
+an ever growing number of delivery points, and large
+retirement-related payments has resulted in the Postal Service
+reporting a net loss annually for almost 15 years.
+ While there are no easy answers, there are potential
+reforms that can help move toward financial solvency. Our work
+supports various measures that could reduce the unfunded
+retirement liabilities including Medicare integration,
+alternative assessment strategies, and addressing the
+prefunding requirement.
+ We also identified a more equitable way to distribute the
+responsibility for CSRS-covered postal employees whose career
+spanned both the Post Office department and the Postal Service.
+ Another way to address the financial problems is exploring
+opportunities for new revenue. The Postal Service has
+historically played an important role in supporting and
+expanding the country's infrastructure, from building roads to
+developing the zip code system to providing nonpostal
+government services.
+ We believe there are opportunities to provide additional
+services that align with this historical role. For example, it
+could partner with internet providers to improve broadband
+connectivity, utilize its vast network to improve access to
+government services, or provide nonbank financial services.
+ By leveraging its extensive reach, the Postal Service can
+both increase revenue and provide valuable services to the
+American public.
+ Thank you for the opportunity to discuss our work. I am
+happy to answer any questions.
+ Chairwoman Maloney. Thank you.
+ And, Mr. Dimondstein, you are now recognized for your
+testimony.
+
+ STATEMENT OF MARK DIMONDSTEIN, PRESIDENT, AMERICAN POSTAL
+ WORKERS UNION, AFL-CIO
+
+ Mr. Dimondstein. Thank you, Madam Chairwoman Maloney,
+Ranking Member Comer, and committee members. I welcome this
+opportunity to testify.
+ I am the president of the American Postal Workers Union,
+representing 200,000 of the 630,000 postal workers who proudly
+accept, process, sort, transport, and deliver mail to 161
+million addresses a day.
+ Over the years, we have worked closely with the other three
+postal unions, all equally dedicated to the postal mission of
+providing universal service at affordable rates, and working
+with Congress to build consensus on legislation.
+ The pandemic has underscored the vital role of the Postal
+Service enshrined in the Constitution and overwhelmingly
+supported by the public. Our mission to bind the Nation
+together is carried out by moving critical information,
+necessary goods, lifesaving medicine, and on a nonpartisan
+basis, providing voters access to the ballot box.
+ Like other front line workers, postal workers have been
+nothing short of courageous in these dangerous and stressful
+times. The last year has brought a new appreciation for the
+Postal Service and also exposed the need to address its long-
+term stability.
+ The system is suffering under the strains of the pandemic,
+decades of understaffing and under investment, and, at times,
+misguided policies. Service has fallen to unprecedented and
+unacceptable lows.
+ This committee, we believe, can help right the ship, and we
+propose the following legislative pillars.
+ First, repeal the unprecedented and draconian 2006 mandate
+to prefund retiree health benefits decades in advance. This
+mandate accounts for over 84 percent of reported postal losses
+since the passage of the Postal Accountability Enhancement Act.
+ We were encouraged by the strong bipartisan support for
+prefunding repeal in the last Congress and look forward to its
+swift passage.
+ Second, the $45 billion currently in the postal Retiree
+Health Benefit Fund is invested solely in low yield Treasury
+bonds and is being far outpaced by rising medical costs.
+ The Postal Service is forced to make up the difference of
+billions in lost growth and revenue. We suggest a minimum of 50
+percent invested in well proven TSP life funds with strong
+oversight.
+ Third, and only as a companion to the first two pillars,
+integrate on a prospective basis future postal retirees into
+the Medicare system, thereby reducing the Postal Service's cost
+and, in many cases, the employees' cost.
+ It will have to be carefully designed as a postal plan
+under the Federal employee health benefit umbrella to ensure
+that the health benefits retirees have earned through their
+dedicated service are not sacrificed, and appropriate
+exceptions need to be crafted.
+ These proposals have all earned to one degree or another
+bipartisan support in the past and should form the foundation
+of new legislation. There is also no question that your
+oversight and legislative efforts are needed to address the
+current chaos of mail delays.
+ The goal should be to improve the service, not reduce the
+standards. In fact, we support a restoration of the July 2012
+service standards. And this is certainly no time to shutter or
+further consolidate mail processing facilities and undermine
+the network.
+ The law requires the people deserve and postal workers are
+committed to providing the, quote, ``prompt, reliable, and
+efficient services under the Postal Reorganization Act.''
+ Furthermore, our experience of the last year calls for
+bolder action as well, in our view. The bipartisan Board of
+Governors called for $25 billion In emergency COVID relief last
+spring. This body twice passed such a provision.
+ The December relief package included $10 billion as a down
+payment. Emerging COVID legislation should include the
+additional $15 billion to help stabilize the Postal Service
+during this crisis.
+ We also urge Congress to pass an additional $25 billion of
+what is called a modernization grant, also requested on a
+bipartisan and unanimous basis by the Postal Board of
+Governors.
+ This proposal was passed by the House in the last Congress
+as part of H.R. 2. This order would allow the Postal Service to
+upgrade its fleet and facilities, and expand and enhance Postal
+Services.
+ Postal Service is a national treasure and trusted
+cornerstone of our country. The American Postal Workers Union
+looks forward to working with this committee on a nonpartisan
+and bipartisan basis to ensure the long-term sustainability of
+the people's Postal Service.
+ And I welcome any questions. Thank you, Madam Chairperson.
+ Chairwoman Maloney. Thank you.
+ Mr. Quadracci, you are now recognized for your testimony.
+
+ STATEMENT OF JOEL QUADRACCI, CHAIRMAN, PRESIDENT, AND CHIEF
+ EXECUTIVE OFFICER, QUAD/GRAPHICS
+
+ Mr. Quadracci. Good morning, Madam Chairwoman, Ranking
+Member Comer, and distinguished members of the committee. Thank
+you for your leadership in pursuing bipartisan postal reform
+legislation and for holding this hearing.
+ If ever the country needed a reminder of just how important
+USPS is to our way of life, we got it in 2020. We all relied on
+the Postal Service to deliver groceries, medications, online
+purchases, and other basic goods, which have sustained the
+economy throughout the pandemic.
+ We are grateful to the postal workers bravely serving on
+the front lines, and now is the time to support those workers
+by enacting meaningful postal reform legislation, and we are so
+pleased to support the chairwoman's discussion draft.
+ I have the good fortune to lead an outstanding company in a
+critical industry. At Quad each year, over 8 billion pieces of
+mail originates from one of our plants. This accounts for just
+over 12 percent of the overall marketing mail in the country.
+It means that our industry and the USPS are intrinsically
+linked.
+ I am also here on behalf of the Coalition for a 21st
+Century Postal Service. With mailers and shippers of every kind
+in members of our supply chain, C-21 represents a broad cross-
+section of an industry that in 2019, in partnership with the
+USPS, generated $1.6 trillion in sales and employed 7.3 million
+workers.
+ Given the accommodation of service and pricing
+circumstances over the past year, our coalition and the
+industry as a whole are alarmed and question the continued
+ability of the Postal Service to provide affordable universal
+service.
+ We firmly believe that raising prices and/or reducing
+service will only exacerbate the problem of retaining volume.
+The Postal Service stands on the precipice of another step down
+in its volumes and revenues.
+ The combination of crushing mail rate increases authorized
+by the PRC and the recent chaos in delivery has shaken the
+confidence of the industry in the postal system.
+ Postage is now more than 60 percent of the cost of mailing
+a piece, and with the PRC proposed rate increases that number
+will jump to nearly 70 percent or more, disproportionately
+impacting mail decisions every day.
+ Quad turns 50 this year, and while many aspects of being a
+printer have changed, one remains the same. Serving our
+customers is paramount. The same holds true for the USPS.
+ Mailing in the digital world requires that all aspects of
+the effort work together, as now more than ever we live in a
+real-time world and service delays hurt. USPS is a vital
+partner serving the American public, and missing delivery and
+in-home dates reduces or even eliminates the value of the
+catalog from our favorite store, the greeting card from
+Grandma, your hometown newspaper, the magazine you have been
+waiting for, and we all know how frustrated we get when our e-
+commerce deliveries are delayed.
+ Missed deadlines erode the confidence in the mail and the
+volume declines. The chairwoman's discussion draft is an
+important step forward that our coalition supports
+wholeheartedly.
+ But we believe more is necessary. First, the unsustainable
+rate increases authorized by the PRC, which will equal three or
+four times inflation, must be avoided. We recommend that the
+committee direct the PRC to conduct a second time-limited
+review in order to recalculate rates based on the events of
+2020, the impact of the bill and other postal developments,
+none of which are considered in this initial review.
+ Second, if at least some of the USPS retirement assets were
+invested in instruments outside of government, the expected
+high-yield returns would net the USPS billions of dollars. The
+thrift savings plan in which most Federal retirements funds are
+safely invested is one of those options.
+ Third, the time has come to codify the mandate for delivery
+six days per week and combine it with a directive that the
+postal network remain an integrated whole. We also want to
+bring your attention to overcharges imposed on the Postal
+Service for the Civil Service Retirement System, which total
+anywhere from $50 billion to $111 billion. They should be
+returned to the USPS.
+ The Postal Service is at a tipping point. The impacts of
+COVID are exacerbating its financial situation. Maintaining its
+self-funded status is critical to the American public.
+ If business mailers, which generate 90 percent of USPS
+revenue, are priced over the mail, taxpayers will be forced to
+pay the costs. The USPS can have its deficit closed, remain
+self-funded, and a valuable partner by enacting the common
+sense reforms proposed in the chairwoman's bill, along with the
+additional reforms I have laid out for you.
+ But we must act now. Thank you.
+ Chairwoman Maloney. Thank you, and, Mr. Quadracci, you are
+breaking up a little bit. We are going to have the staff
+contact you and try to correct it for the questioning period.
+ Mr. Quadracci. Thank you. My apologies.
+ Chairwoman Maloney. OK. Thank you.
+ And, Dr. Kosar, you are now recognized for your testimony.
+Dr. Kosar?
+
+STATEMENT OF KEVIN KOSAR, RESIDENT SCHOLAR, AMERICAN ENTERPRISE
+ INSTITUTE
+
+ Mr. Kosar. Thank you, Chairperson Maloney. Am I coming
+through clearly?
+ Chairwoman Maloney. You are breaking up a little bit, too.
+ Mr. Kosar. Oh. All right. I will do my best.
+ Chairperson Maloney, Ranking Member Comer, thank you for
+inviting me to testify, and thank you for devoting your
+valuable time and energy to this critical issue.
+ As many of you know, I have been studying the Postal
+Service a long time. I was a nonpartisan analyst at the
+congressional Research Service from 2003 to 2014, and I worked
+with this committee a lot over that period.
+ In subsequent years, I have continued to work on Postal
+Service challenges. I thank you for having me back to the
+committee. This is very, very important stuff.
+ With time limited and so much for the committee to discuss,
+I am going to limit my comments to the issue of the Postal
+Service's troubled business model.
+ As last year demonstrated, the USPS is an essential public
+service. Americans trapped at home relied on it to deliver both
+parcels and absentee ballots, and this is to say nothing of the
+billions and billions of other pieces of mail the Postal
+Service delivered, everything from catalogs to jury summons to
+prescription drugs.
+ Americans think quite highly of the agency. In the middle
+of 2020, Gallup found the Postal Service was the Nation's most
+popular Federal agency, and this is not surprising.
+ A big reason the public likes the Postal Service is the
+model. It is a self-funding government agency. This model means
+that the public pays no taxes to support the Postal Service,
+and everyone in America receives mail free of charge.
+ Now, the Postal Service's self-funding model worked pretty
+well from 1970 to around 2007 because mail volume grew every
+year. But in 2007, then Postmaster General John Potter came to
+Congress and said, ``Our business model is broken.''
+ He noted that the Postal Service's revenues were not going
+to increase enough to cover the agency's growing operating
+costs. What PMG Potter could not have known was that the very
+next year mail volume would plunge with the onset of the Great
+Recession, and since 2008, mail volume declined almost 40
+percent.
+ Last year in 2020, the Postal Service's revenues were $73
+billion, which is actually a little less than the agency's
+revenues were in 2008. But last year, it is operating for $5
+billion higher than they were in 2008.
+ And I should note those figures exclude the cost related to
+the Retiree Health Benefits Fund prefunding. If we threw those
+RHBF costs in the losses would be worse.
+ In 2020, the Postal Service lost $4.4 billion dollars. If
+you put in the retiree health benefits costs, it would be more
+than $9 billion.
+ So, a critical question I hope Congress grapples with is
+what reforms are needed so that the agency's costs and revenues
+can be made to better align? Or put more bluntly, how can we
+make the Postal Service's self-funding model work in the 21st
+century?
+ Speaking to the revenue side, the Postal Service was set up
+in Congress to do paper mail. This main line of business is
+atrophying and there is little reason to believe that paper
+mail volumes are going to start growing again.
+ So, you might ask, what about parcels? There, the picture
+is unclear. Postal Service's parcel revenues have tripled since
+2010. It is far from clear if parcel revenues will continue to
+increase. Once COVID-19 passes, presumably some Americans will
+shift some of their purchases from online to going back in
+person to stores.
+ I should also mention the Postal Service regularly warns in
+its financial statements that most of the parcels it delivers
+come from a few big companies and those companies are building
+out their own delivery networks, which creates the alarming
+possibility of parcel volume and revenue decreasing for the
+Postal Service.
+ This is a really tough situation and I think Congress needs
+from the Postal Service an estimate of what revenues likely are
+going to be over the next five years.
+ And then Congress should probably have the Postal
+Regulatory Commission, the Inspector General, and mailing and
+shipping companies all get together and look these figures over
+and provide feedback to Congress.
+ Then there is the cost side. Last year, the Postal
+Service's costs actually went up to an all-time high and only
+about $700 million of that has been attributed to COVID-19. As
+my testimony notes, the Postal Service had some success in cost
+control over the last 10 years. But it is an uphill battle.
+ As former PMG Potter alluded to, there are natural upward
+pressures on the Postal Service's costs. The delivery network
+is ever expanding. More Americans make for more delivery
+points. And collective bargaining also produces upward
+pressures on costs. Healthcare costs for postal workers at all
+Americans tend to trend upward, et cetera.
+ So, I think Congress should consider a variety of means to
+empower and encourage the Postal Service to better control its
+costs so they can be better aligned with revenues.
+ With that I will conclude my remarks, and I would be happy
+to respond to any of your questions. Thank you.
+ Chairwoman Maloney. Thank you. I understand we are having
+some connection problems. So, we are going to take a very brief
+break for five minutes to see if we can get them corrected.
+ Some of our witnesses are breaking up and the delivery
+really from members in this room is breaking up, too. So, we
+will be very brief. Five minutes of brief recess to try to
+correct this.
+ [Recess.]
+ Chairwoman Maloney. Thank you. I think we have improved it
+so we can communicate better. Thank you, and the chair now
+recognizes herself for five minutes for questions.
+ I would like to ask about one of the critical provisions in
+our draft bill, the integration of postal retirees into
+Medicare and get our witnesses' view.
+ Postmaster General, why don't we start with you? Right now,
+postal employees pay into the Medicare program. Is that
+correct?
+ Mr. DeJoy. Yes, ma'am.
+ Chairwoman Maloney. My understanding is that they have
+already paid in about $35 billion since 1983. Is that correct?
+ Mr. DeJoy. That is correct.
+ Chairwoman Maloney. But not all retirees are enrolled.
+Based on our information, about 73 percent of retirees are
+enrolled but the other 27 percent are not. Is that correct?
+ Mr. DeJoy. That is correct.
+ Chairwoman Maloney. The provision in our draft bill would
+require current employees to enroll in Medicare when they reach
+65 and retirees who are already over 65 would be able--would be
+given a three-month period to enroll with no penalty.
+ Postmaster DeJoy, do you support Medicare integration?
+ Mr. DeJoy. Yes, Madam Chair. We support that Medicare
+integration as you described it.
+ Chairwoman Maloney. Thank you. Not only will Medicare
+integration reduce copays and other medical costs for retirees,
+but the Congressional Budget Office reports that it will save
+the Postal Service nearly $10 billion over 10 years.
+ Is that correct, Mr. DeJoy?
+ Mr. DeJoy. I believe it is a little more than that, ma'am.
+The Medicare integration projections that we have are at least
+$30 billion over 10 years.
+ Chairwoman Maloney. Thirty billion?
+ Mr. DeJoy. Mm-hmm.
+ Chairwoman Maloney. Well, we need to get the right number.
+So, we will work with you on that. Thank you.
+ Let me go down the list of the witnesses. Mr. Bloom, you
+are the chair of the Postal Service Board of Governors. Do you
+support Medicare integration?
+ Mr. Bloom. Yes, Madam Chair. We do.
+ Chairwoman Maloney. Mr. Dimondstein, as the representative
+of postal workers, APWU also supports Medicare integration. Is
+that correct?
+ Mr. Dimondstein. Madam Chair, we certainly do as part of a
+comprehensive package. So yes, we do. We think it would be good
+for workers, good for the Postal Service, and good for the
+future.
+ But it has to be crafted carefully and we are happy to work
+with you and the committee on that. But yes, we are in support
+as part of comprehensive postal reform and the pillars I
+testified about.
+ Chairwoman Maloney. Thank you.
+ Mr. Quadracci, as an industry stakeholder, do you support
+Medicare integration?
+ Mr. Quadracci. We absolutely do. It is common sense and it
+should be done.
+ Chairwoman Maloney. And, Ms. Whitcomb, as inspector
+general, I know you don't typically take positions on policy
+proposals. But would you agree that this would significantly
+help the Postal Service's financial picture long term?
+ Ms. Whitcomb. Yes. Our work supports the fact that this
+would be very beneficial to the Postal Service's financial
+situation.
+ Chairwoman Maloney. Dr. Kosar, would you agree that
+Medicare integration would help the Postal Service's financial
+picture?
+ Mr. Kosar. It is not something I have looked at closely,
+but I get the impression it will. One thing where I could use
+some more clarity is whether in the course of doing it, it
+creates any sort of negative spillovers upon the financial
+health of Medicare itself or on the Federal Employees Health
+Benefits Program.
+ Chairwoman Maloney. Thank you.
+ This is important because the Government Accountability
+Office reports that without reforms like Medicare integration,
+the Postal Service Retiree Health Benefit Fund could become
+insolvent by 2030, and it appears that we have widespread
+support for this provision among the Postal Service, the
+workers, the industry, and stakeholders.
+ I believe we should go forward with this provision when we
+introduce this bill and mark it up at our business meeting, and
+I hope there is significant bipartisan support for it.
+ I now yield to the distinguished gentleman from Kentucky,
+Mr. Comer, is recognized for his questioning.
+ Mr. Comer. Thank you, Madam Chair.
+ Postmaster DeJoy, you have seen the provisions in the draft
+bill, mainly, the Medicare integration and prefunding ones. If
+we pass just that, just that part, does that put the Postal
+Service back in good financial state over the long term?
+ Mr. DeJoy. No, it does not, sir. We look at this bill, the
+components of this bill for Medicare integration and
+elimination of the prefunding benefit about totaling somewhere
+between $40 billion and $50 billion, and we are projecting $160
+billion loss over the same period the next 10 years.
+ So, in our plan, it is a part of our solution and it is
+necessary, and we have experienced, you know, unfair treatment
+in this. But it doesn't solve the problem.
+ Mr. Comer. Do all the provisions in the bill do anything to
+address your changing business environment, namely, the
+decrease in mail and increase in packages?
+ Mr. DeJoy. No. No. Those are--but these--there are self-
+help plans that we have, you know, moving forward, that will
+help address that, and in fact, our strategy, when released,
+will--combined with this legislation should bring us to nearly
+break even. It is a break even plan over the next 10 years.
+ Mr. Comer. So, you believe that your plan will be enough to
+provide the structural reform necessary to fix the Postal
+Service?
+ Mr. DeJoy. I think absent this legislation that the chair
+proposes there is no path to totally eliminating our loss. But
+in combination with this and other action--other good
+strategies for the American people and for the Postal Service,
+we see a path forward to sustainability and good service.
+ Mr. Comer. What happened the last time you tried to
+implement some reforms?
+ Mr. DeJoy. Well, you know, I think the word ``reforms'' is
+exaggerated and what I am--what I am accredited with doing is
+also, you know, not accurate.
+ But a simple thing that I did engage in was setting--you
+know, we had an organization with a COO and seven, eight area
+vice presidents and an OIG report that said our trucks weren't
+running on time and we were running extra trips, and it was
+substantially costly and deteriorating service.
+ And I asked them to go--to make--you know, put a plan
+together to do what I felt was a pretty simple task in most
+other places. After about three weeks, they came back with a
+plan that guided to run--you know, run transportation on time
+and it really had, you know, a negative impact on service for
+about two or three weeks when we began to recover.
+ It should have been something that we were--would be able
+to resolve within a couple of days. But it took us longer but,
+in fact, recover prior to--you know, prior to within about a
+month we had gotten back.
+ All the other things on closing boxes--collection boxes,
+reducing overtime never happened, from my standpoint. Those
+were internal--it may have been through a meeting where they
+briefed me on something, but I was there for three weeks. It
+was an--it was an operations team that did it.
+ In fact, overtime since I have been there is through the
+roof, much more than it has ever been, you know, in the Postal
+Service.
+ Mr. Comer. Right. Well, I appreciate the reform efforts and
+look forward to looking more into your reform and working with
+you.
+ Mr. DeJoy. If I can just add, the plan that we are talking
+about now has been eight months of work with an extensive part
+of management team, with dedicated long-term postal employees,
+with very, very sensitive--great sensitivity to their service,
+their historical service to the American people.
+ This is a balanced plan when it comes forward. Together
+with the chair's legislation, we should be able to, you know,
+have a sustainable Postal Service.
+ Mr. Comer. Right. Look forward to that.
+ My next question is for Chairman Bloom. Do you support
+Postmaster DeJoy's plan?
+ Mr. Bloom. The plan hasn't been finalized. But the Board of
+Governors has been involved with the Postmaster General as the
+plan has been developed. Yes.
+ Mr. Comer. Well, Madam Chair, I will conclude with that. It
+is important to note that Chairman Bloom is working closely
+with Postmaster DeJoy. Chairman Bloom is a Democrat, former
+Obama Administration person, and I think that that is what it
+is going to take to reform the Postal Service.
+ Real reforms, tough decisions. And it is going to have to
+be done in a bipartisan way, and I look forward, Madam Chair,
+to working with you to see that that happens.
+ So, I yield back the balance of my time.
+ Chairwoman Maloney. Thank you.
+ The gentlewoman from the District of Columbia, Ms. Norton,
+is recognized for five minutes.
+ Ms. Norton. Thank you very much, Madam Chair.
+ And I really appreciate this hearing because we have been
+talking about the prefunding mandate ever since I have been a
+Member of Congress, and perhaps we can do something about it
+now, Mr. DeJoy.
+ Only this agency requires full prefunding of health care
+for future retirees. Only the Postal Service, and this
+prefunding has to be in advance for 75 years. That is a lot of
+money, particularly for an agency which is succumbing to new
+technology. Employees even many years away from retirement, we
+are required to prefund it--to prefund.
+ Now, the idea was, of course, responsible to ensure the
+availability of future health benefits for retirees.
+ Postal--Postmaster DeJoy, how much money is currently saved
+in the Retiree Health Benefits Fund?
+ Mr. DeJoy. I think the original combination of the postal
+contributions and the transition is somewhere around $40
+billion to $45 billion.
+ Ms. Norton. Consider that amount of numbers. If other
+Federal agencies were required to prefund the cost of retirees'
+health care coverage.
+ Or let me ask you, do you know of any other agency required
+to prefund in this way or is the Postal Service alone?
+ Mr. DeJoy. I am not an expert on any other agency. But from
+the standpoint of the comparisons that I received, no, I don't
+think I know of any that does.
+ Ms. Norton. Well, let me ask Mr. Quadracci about private
+sector firms. Are they required to prefund the cost of retiree
+health coverage--health care coverage?
+ Mr. Quadracci. I don't know anybody who does and I think,
+in fact, if we had to, I am not sure my business would be here
+today.
+ Ms. Norton. I understand that.
+ And finally, the Federal Government understood it couldn't
+keep refunding and so in 2006 the Postal Service or since that
+time has simply refused to prefund $35 billion, I think,
+outstanding.
+ And I think it is fair to say that there is no expectation
+that this money will be repaid. In fact, the Congressional
+Budget Office, when I cite an authoritative reference, does not
+even score any longer the elimination of the prefunding mandate
+because it does not believe that these unpaid funds will ever
+be repaid.
+ Chairman Bloom, does the board support eliminating the
+prefunding mandate?
+ Mr. Bloom. We do, Congresswoman.
+ Ms. Norton. President Dimondstein, your statement
+supporting Chairman DeFazio's bipartisan legislation to
+eliminate prefunding mandate that was included in this
+discussion draft, as you stated, this legislation is a
+necessary step to solving the disastrous prefunding mandate
+that is dragging down the Postal Service.
+ Do you stand by that statement here today?
+ Mr. Dimondstein. Absolutely. It is unfair. It is draconian.
+It is unprecedented, and it really has choked the Postal
+Service from needed investment and moneys over the years. So,
+we absolutely stand by a repeal of the unfair prefunding
+mandate.
+ Ms. Norton. Finally, how would eliminating the prefunding
+mandate help your members?
+ Mr. Dimondstein. The eliminating of the prefunding mandate
+would--No. 1, it would take a lot of financial pressure off of
+the Postal Service, and anytime there is undue and unnecessary
+financial pressure we cannot carry out our mission as
+effectively as postal workers believe in and are dedicated to.
+ And so it would, certainly, enable the workers to provide
+better benefits and it would certainly enable the workers,
+going forward, to be more secure in their jobs, to be more
+secure in their mission.
+ And I don't know any postal worker that doesn't think that
+it is the right thing to do away with this prefunding mandate.
+It will make our jobs easier and it would improve the service
+to the people of this country, and that is what we are about.
+ Ms. Norton. Madam Chair, I think it is unanimous from all
+parties that prefunding should be eliminated. I certainly hope
+we do so in this Congress.
+ Thank you very much, and I yield back.
+ Chairwoman Maloney. The gentleman from Georgia, Mr. Hice,
+is now recognized for five minutes.
+ Mr. Hice. Thank you, Madam Chairwoman.
+ Chairman Bloom, let me begin with you, and I don't want you
+to take offense at this first question. It is just a matter of
+fact that the ranking member brought it up.
+ But which political party do you affiliate with?
+ Mr. Bloom. I am a registered Democrat.
+ Mr. Hice. OK. So, from that perspective, let me just ask
+you, last year did you believe that Postmaster DeJoy was trying
+to sway the election against your party's nominee?
+ Mr. Bloom. No.
+ Mr. Hice. So, do you believe that or did you believe that
+he was somehow removing the blue boxes for the purpose of
+preventing people from mailing in ballots?
+ Mr. Bloom. No.
+ Mr. Hice. Did you believe that he was trying to remove the
+mail sorting machines for the purpose of slowing down election
+mail?
+ Mr. Bloom. No.
+ Mr. Hice. OK, thank you.
+ Let me go--Inspector General, let me ask you along the
+similar line of thought. Did your office, the Inspector
+General's Office, find any sign whatsoever, any evidence of a
+plan by Postmaster General DeJoy to hinder vote by mail?
+ Ms. Whitcomb. No, we did not.
+ Mr. Hice. All right. Did the Postal Service perform--well,
+let me ask you this. Did you look into how well they performed
+when it came to delivering election mail?
+ Ms. Whitcomb. Yes. We have wrapped up that work. Our work
+has not--a report has not yet been released, but generally
+found that that the Postal Service prioritized ballots
+effectively during the election.
+ Mr. Hice. OK. Well, then let me go to the Postmaster
+General himself. How was the performance in delivering election
+mail?
+ Mr. DeJoy. Very proud of the performance of the 640,000 men
+and women of the Postal Service, and they--we did the usual
+thing that we do every election, performed extraordinary
+measures.
+ We delivered 99.7 percent--we have a report out that is on
+our website--99.7 percent of ballots within two days. Some
+very, very, extremely high numbers. I have it written down
+someplace here.
+ But everything was in the 99 percent. Ballots to election--
+from voters to election boards were 1.7 days, the average time
+across 135 million ballots.
+ Mr. Hice. Well, and I know that is specific to election
+mail. We have issues with first class and other types of mail.
+But you can't improve a great deal on those kind of statistics
+when it comes to election mail.
+ So, let me come back to you again, Chairman Bloom. Just
+again, in your opinion, where the attacks last year against
+Postmaster General DeJoy warranted?
+ Mr. Bloom. Congressman, I would say that they weren't. I
+will say, in my humble opinion, that the politicization of the
+Postal Service was a bipartisan affair. But on your question, I
+think those particular attacks were not fair.
+ Mr. Hice. OK. Well, thank you for your honest answers. And
+quite frankly, it is with that spirit that I believe the
+potential of bipartisan solutions is within reach.
+ We have got to get away from the attacks and allegations
+that are unfounded, and I am pleased to hear that you, as a
+admitted Democrat, understand that the allegations against Mr.
+DeJoy were unwarranted, and I appreciate that.
+ And so it is my hopes, Madam Chairwoman, that we will be
+able to proceed in getting some genuine solutions as we move
+forward here, and the allegations that came forth from many in
+this committee, that he was attempting to alter, co-op, the
+elections. If those were true allegations, he miserably failed.
+ There was a record-setting 135 million mail-in ballots with
+almost perfect delivery with those. And so I am hopeful that
+with this information cleared, we will be able to move forward
+in a bipartisan manner.
+ I thank the Madam Chair, and I yield back.
+ Chairwoman Maloney. Thank you for your bipartisan comments.
+ And now to the gentleman from Massachusetts, Mr. Lynch, is
+recognized for five minutes.
+ Mr. Lynch. Thank you very much, Madam Chair.
+ Let me followup on the gentleman from Georgia's questions
+then. To the two previous witnesses, would you say with the
+near--excuse me, let me quote the gentleman from Georgia--the
+almost perfect delivery of ballots in the previous election,
+given that fact, would you say that it was unconscionable that
+someone would dispute and vote to undo the results of that
+almost perfect delivery of ballots in the previous election?
+ To either of the two previous witnesses. Let me--let me
+just recount the facts. The gentleman from Georgia voted to
+undo the elections in two separate states, and so he has just
+spent about five minutes reminding us, in his own words, that
+the delivery of ballots was almost perfect by the United States
+Postal Service in that election that he voted to undo.
+ So, I am asking you whether you--the evidence that you have
+supports that.
+ Anytime now. OK. Reclaiming my time. I didn't think so.
+ Postmaster General, I am indeed very happy to see you here
+today and I am very pleased that in your testimony you have
+agreed that the onerous burden on the Post Office to prefund
+their retiree benefits by 75 years in advance should be
+corrected, should be eliminated, and also that you support the
+integration of Medicare, which, depending on whose estimate,
+yours or Chairwoman Maloney's, it is going to save about $10
+billion for the Post Office over the next 10 years. I am glad
+we are in agreement on that.
+ Let me ask you, there was a story in the Washington Post
+that--and I need to be careful about this--it talked about your
+yet to be released strategic plan and the change in the
+delivery frequency of first class mail and that it may be
+reduced from the existing one to two days or 1.7 days, I think
+you quoted, to three to five days.
+ Is that something that you are anticipating or that might
+be part of your strategic plan?
+ Mr. DeJoy. As Chairman Bloom said, we are not finalized. We
+are getting very close to finalized, and we have taken eight
+months to do a diagnostic on just about every aspect of our
+operation to identify what the significant ails in our
+performance and cost are.
+ And we have put together a comprehensive balanced solution
+that moves forward in service--of service standards, which have
+not been met for the last eight or nine years, and which, as
+the OIG has stated, drive significant cost and lack of process
+to do Herculean efforts to meet some of the--some of the
+considerations we have.
+ Now, I have----
+ Mr. Lynch. Let me just--let me reclaim my time, and I
+appreciate your answer. I do.
+ Let me just say we, on this committee, have confronted this
+issue before about reducing delivery standards. You know, we
+are a little bit concerned right now with the numbers we have
+from December, the Christmas rush, where I think 38 percent--
+only 38 percent of the local first class delivery was on time,
+and that is down from 91 percent in the previous year.
+ So, let me--let me just say this.
+ Mr. DeJoy. I would just say--I would say that is not
+accurate information.
+ Mr. Lynch. Well, that is the information we have from the
+Post Office. So, that is all I got to work with.
+ All I got to say is this. If the business plan for the Post
+Office is to deliver an inferior product, and we are in
+competition with FedEx and UPS and Amazon, that spells trouble.
+That leads me to believe that we would be going into a downward
+spiral.
+ The solution can't be to not deliver the mail or to deliver
+it three to five days. You know, instead of next day delivery,
+when we can get around to it delivery. That won't work. Just
+like, you know, going to five days did not work because that is
+not what the customer wanted.
+ You know, the customer wants seven days delivery, not five
+days, and thankfully, my colleagues on the other side of the
+aisle finally agreed with that and dropped their proposal.
+ So, for what it is worth, that is my sense of it. I thank
+you again for your willingness to attend the committee and I
+yield back the balance of my time.
+ Chairwoman Maloney. Thank you.
+ The gentlewoman from North Carolina, Ms. Foxx, is
+recognized for five minutes.
+ Ms. Foxx. Thank you, Madam Chair, for holding this hearing.
+ All of us are affected by the Post Office. All of us use
+the Post Office. All of us want the Post Office to be
+efficient. I want the Post Office to be self-funded as it was
+planned to be many, many years ago. I use the Post Office a
+lot. The local folks in my area are great and I enjoy talking
+with them.
+ And I want to thank our witnesses for being here today. Mr.
+Dimondstein, I have a question of you. My understanding is you
+represent 200,000 of the 600,000, postal union workers. I want
+to ask you how your union and the others are going to help
+assure the success of the Postal Service operational reform
+efforts that the Board of Governors and the Postmaster General
+have jointly designed.
+ And I don't want you to mention more money. What are you
+all going to do better than you have done before? Because you
+have a real self-interest in this issue.
+ Mr. Dimondstein. Well, better than we have done before. I
+think the postal workers do a great job and I think the postal
+workers--and we have seen that in a pandemic, underscored in
+these stressful and dangerous times.
+ The postal workers themselves and the unions that represent
+them actually have done a lot to try to deal with the staffing
+issues, to try to deal with the overtime issues, and, in fact,
+have addressed questions of pay rates and benefits in a way
+before my time, I should say. But----
+ Ms. Foxx. But my understanding is that benefits are
+climbing as mail volume is decreasing----
+ Mr. Dimondstein. Well----
+ Ms. Foxx [continuing]. Even though there may be a very
+slight decline in employees. So, the number of employees is not
+going down commensurate with the mail volume going down. But
+your benefits are going up.
+ Mr. Dimondstein. Our benefits--look, we--obviously, the
+union believes that all workers should have decent living wages
+and good benefits. The unions have given up a lot of wages and
+including some of our benefits structure over time.
+ Ms. Foxx. Name an example, one specific example.
+ Mr. Dimondstein. OK. In 2011, the Postal Board of Governors
+chair testified before Congress that the American Postal
+Workers Union gave up $4 billion of wages and benefits in that
+one contract for the life of the contract, and that keeps
+giving, going forward.
+ We have increased the contribution, unfortunately, from our
+point of view, but the contribution that workers pay for their
+health care premiums have tremendously increased to the
+detriment of the worker, all for----
+ Ms. Foxx. But, Mr. Dimondstein----
+ Mr. Dimondstein. That is an example.
+ Ms. Foxx [continuing]. Don't most people in the private
+sector pay some on their health care benefits? I think most
+people in the private sector do pay for their health care
+benefits.
+ Mr. Dimondstein. But I am--again, I don't want to argue. I
+am sure you are aware that postal workers paid 28 percent of
+their premiums for a family health plan. That is over $6,000 a
+year that the postal worker pays out of their pocket. It is
+over----
+ Ms. Foxx. OK. What--do you want the Post Office to be self-
+funded? Do you want to be self-funded, self-sufficient, and not
+have to keep coming back to Congress to ask for money?
+ Mr. Dimondstein. I don't know anytime outside of the COVID,
+in my history as the president and a union activist before
+that--I know of none--no time outside of the COVID emergency
+relief that taxpayer dollars since the--since it changed under
+the law in 1970 that taxpayer dollars have been used to going
+to the Postal Service nor has the Post Office, as far as I
+know, come before this body seeking money. I am not sure where
+all this bailout idea comes from when it is the opposite.
+ Ms. Foxx. OK. Should the Postal Service give incentives for
+the retirement of older employees and hire new employees?
+ Mr. Dimondstein. That is a decision that management makes.
+If you are if you are asking about early outs, Congresswoman,
+while there has been history at times----
+ Ms. Foxx. Just yes or no. Just yes or no.
+ Mr. Dimondstein. The question is--that is a Postal Service
+decision. Yes.
+ Ms. Foxx. OK. Thank you.
+ Mr. Dimondstein. Sure.
+ Ms. Foxx. OK. IG Whitcomb, I have a question. According to
+CBO, the Medicare trust fund will run out of money as early as
+2023. Integrating postal retirees will expedite the collapse of
+the Medicare program. What happens to postal retirees then?
+ Ms. Whitcomb. That is--if the Medicare trust fund runs out
+of money, is that what you are asking?
+ Ms. Foxx. Yes, and the employees are put into Medicare as
+opposed to their own health care fund.
+ Ms. Whitcomb. Yes. I am sure that is a bigger challenge
+than the postal employees. But it is not work that we have done
+at this point.
+ Ms. Foxx. But that is the--they want to get into the
+Medicare plan, knowing that it is going to run into trouble
+before your own medical plan is going to run into trouble. So,
+what does that say about the approach to this?
+ Ms. Whitcomb. Again, that is something that is a bigger
+challenge than the Postal Service and not one that our work
+addresses or that I am prepared to address. But we can get back
+to you if you are interested in us doing some work in that
+area.
+ Chairwoman Maloney. The gentlewoman's time has expired.
+ Ms. Foxx. Thank you. Madam Chair, one more quick question.
+Not a question. I have some material I would like to enter into
+the record with----
+ Chairwoman Maloney. Without objection.
+ Chairwoman Maloney. Thank you.
+ Ms. Foxx. Thank you.
+ Chairwoman Maloney. The gentleman from Tennessee, Mr.
+Cooper, is recognized for five minutes.
+ Mr. Cooper. Thank you, Madam Chair.
+ Many of our colleagues have mentioned the goal of self-
+funding for the Post Office, and it is a worthy goal.
+ But, Mr. DeJoy, it is not a goal that you pursued in your
+private sector companies, right, self-funding of health
+benefits over 75 years? That would have been disastrous for
+your company, right?
+ Mr. DeJoy. Well, we had self-funding plans, but they were
+not advanced the way--you know, actuarially for the rest of
+everybody's life. So no, we would not have had that.
+ Mr. Cooper. And no other Federal agency has this
+requirement?
+ Mr. DeJoy. Not that--not that I am aware of, sir.
+ Mr. Cooper. So here, we are putting a burden on the Post
+Office that is extraordinary and, perhaps, fatal and this
+Congress is, hopefully, going to lighten that burden.
+ But this self-funding requirement, I think, has more
+implications. I think it would be better if we all agreed that
+we need to minimize the subsidies because the cost of
+delivering mail in Alaska is, clearly, higher than in a more
+urbanized state, right?
+ Mr. DeJoy. It costs more to get to Alaska and that is a
+different question than----
+ Mr. Cooper. But Alaska is a part of the United States, just
+as rural citizens are part of the United States, and it costs
+more to deliver the mail the last mile to those people.
+ Mr. DeJoy. It does, but there is a process.
+ Mr. Cooper. It is a largely unacknowledged cost because the
+price of the stamp is the same everywhere.
+ Mr. DeJoy. But that is the intent of universal service,
+sir.
+ Mr. Cooper. But that implies a hidden subsidy and a hidden
+tax within each stamp because some people pay more, some
+people--everybody pays the same.
+ Mr. DeJoy. It implies a cost for the service as designed by
+the Congress. It is a service. You have--it is not a tax. You
+have a choice not to mail something.
+ Mr. Cooper. Well, most people rely on communication, and
+the private competition that you face is much more flexible at
+varying their rates. The Post Office has a flat fee pretty much
+for everybody, even though the costs vary widely.
+ Mr. DeJoy. That is, again, the design of the system. I
+think the problem is we have not been able to address that
+pricing over--for 14 years until just recently. That has been
+most of the damage that has been done to the organization.
+ Mr. Cooper. But puts the Post Office at a systematic
+disadvantage, right? Because of the design of the program. It
+is flat rate postage, and it goes anywhere--Alaska, Hawaii, the
+territories. Same price.
+ Mr. DeJoy. Well, we talk about market-dominant mail
+products, which we--that is what you are speaking about now,
+which we really don't have other, you know, competition in that
+area other than digital communications and our failure to
+evolve over the last 10 years.
+ So, I don't really--I really don't understand what you are
+getting at.
+ Mr. Cooper. Would FedEx, Amazon, UPS be doing as well if
+they didn't rely on the Post Office so heavily for last mile
+coverage?
+ Mr. DeJoy. FedEx, that is a competitive product, which we
+need to get better at doing. We have operational--we have not
+evolved.
+ Mr. Cooper. But they rely heavily on our last mile coverage
+because we are the only people who provide that.
+ Mr. DeJoy. That is not really true. Right. FedEx actually
+doesn't do--their last mile delivery with us has been
+significantly reduced over the last year.
+ Mr. Cooper. But they still rely on the Post Office to
+deliver and you have actually been making money on the increase
+in package deliveries that have been sent the Post Office
+direction, right?
+ Mr. DeJoy. Package volume has been up significantly.
+ Mr. Cooper. And that has been a silver lining in the cloud.
+ Mr. DeJoy. Well, the cost coverage on competitive package
+volume is different than the cost coverage on mail, as the
+pricing is designed. And it is important--it is important that
+we recognize the difference in what it is you are identifying
+here, package delivery versus mail delivery, going to every
+address versus going to where we can price competitively,
+because that is a big part of the problem that we are
+attempting to solve with our new plan.
+ Mr. Cooper. I think Mr. Dimondstein mentioned that $45
+billion that has been saved up for health benefits for
+employees. Now it is only invested in low-yield Treasury bonds.
+ It would be interesting if that money had been invested in
+the stock of Amazon, FedEx, and UPS. Would the employees be
+doing a whole lot better today than they are now with the low-
+yield Treasury bonds?
+ Mr. DeJoy. Yes, sir.
+ Mr. Cooper. How much better?
+ Mr. DeJoy. Bazillions of dollars.
+ Mr. Cooper. Bazillions of dollars. So, again----
+ Mr. DeJoy. We are all familiar with the investment strategy
+of Federal Government's and Social Security investment
+strategy, as it is--that has been long debated is you give up
+risk, you know, for a price. I mean, that is a whole another
+discussion that you all have had for years.
+ Mr. Cooper. Finally, Mr. DeJoy, you are a political
+appointee, a holdover. No one knows how much longer you are----
+ Mr. DeJoy. That is incorrect. I am not a political
+appointee. I was selected by a bipartisan Board of Governors,
+and I would really appreciate if you would get that straight.
+ Mr. Cooper. Well, how much longer are you planning to stay?
+ Mr. DeJoy. A long time. Get used to me.
+ Mr. Cooper. As long as the board approves your staying?
+ Mr. DeJoy. That is the--as far as my commitment to see our
+plan through, I am here until I can see it tangibly produced
+the results we intended to. I believe the board is committed to
+that----
+ Mr. Cooper. But that is not determined by you. It is
+determined by the board.
+ Mr. DeJoy. Well, it could be determined by--I could resign,
+right?
+ Chairwoman Maloney. The gentleman's time has expired. The
+gentleman's time has----
+ Mr. DeJoy. I could get tired of it. I have other things I
+can do.
+ Chairwoman Maloney. The gentleman's time has expired.
+ Mr. Jordan from Ohio is recognized for five minutes.
+ Mr. Jordan. Thank you, Madam Chair.
+ Mr. DeJoy, did you have any protesters at your house last
+night?
+ Mr. DeJoy. Not last night.
+ Mr. Jordan. President Biden called for you to resign, Mr.
+DeJoy?
+ Mr. DeJoy. No, the president has not called for me to
+resign.
+ Mr. Jordan. Any member of your board called for you to
+resign?
+ Mr. DeJoy. No, sir.
+ Mr. Jordan. None of the Democrat and Republicans on the
+board haven't called--any of the Democrats called for it?
+ Mr. DeJoy. We have--you know, it is hard to tell in our
+board meetings because we all very much act in a bipartisan
+manner focused on postal issues. But there are two gentlemen
+that--you know, the chair identified that he is a registered
+Democrat and I think there is another gentleman on the board.
+ Mr. Jordan. Mr. Bloom is a Democrat, right? He supports
+you.
+ Mr. DeJoy. Yes, he is a Democrat. Yes.
+ Mr. Jordan. Has the chair--the chair of this committee, has
+she called for you to resign this Congress?
+ Mr. DeJoy. She has not.
+ Mr. Jordan. She called for you to be suspended last
+Congress. I don't think she has called for you to resign in
+this Congress, has she?
+ Mr. DeJoy. We have had good conversations on a variety of--
+--
+ Mr. Jordan. Yes. And I know where Mr. Connolly's at and
+some of the Democrats. But, I mean, last time you were here you
+had protesters banging on pots and pans outside your house. You
+had 90 some people calling for you to resign. You were the
+worst guy on the planet last time you were here. I just want to
+know what has changed.
+ Mr. DeJoy. Maybe--that is not for me to answer.
+ Mr. Jordan. I mean, they were so ticked last time, Mr.
+DeJoy, they passed a bill--they called us in on a Saturday in
+August to pass a bill, and then they had a hearing on the bill
+they passed two days later. Do you remember that?
+ Mr. DeJoy. So, it was an unfortunate set of circumstances
+for me, for my family, for the postal employees, for the postal
+board. None of it was based in any type of fact. It was
+sensationalization.
+ But we are through--I am through that. The board is through
+that. We are just trying to get our plan--get this legislation
+passed and get on with the improvements we need----
+ Mr. Jordan. They passed a bill on Saturday, August 22, a
+bill they know had no chance of becoming law, a bill that was
+not even taken up in the Senate. Then they had a hearing on the
+bill they already passed two days later. Normally, you do it
+the other way around.
+ Normally, you actually have a committee get together, look
+at the legislation, debate it, discuss it, have witnesses, get
+expert testimony, all that stuff. And then you maybe pass it
+out of committee and go to the floor and do it.
+ They called us in special to pass a bill on a Saturday, and
+then had a hearing on Monday and all that weekend they had
+protesters at your house, disrupting your family and, frankly,
+your neighbors as well.
+ And now you are telling me you got no one on the Board of
+Governors asking you to resign, no protesters at your house.
+The president hasn't asked you to resign, the chairwoman hasn't
+asked you to resign, and I want to know what has happened.
+ What is different between February 24, 2021, and August 24,
+2020? What happened in those six months? What could--what could
+explain the Democrats' difference in attitude?
+ Mr. DeJoy. Mr. Congressman, I don't want to participate
+in----
+ Mr. Jordan. What do you mean you don't want to--I am asking
+you a question----
+ Mr. DeJoy. I believe--I believe there is----
+ Mr. Jordan. Can you hazard a guess as what might have
+happened between August 24, 2020, when they passed a bill----
+ Mr. DeJoy. I am--I am hoping----
+ Mr. Jordan [continuing]. And then had a hearing on it? What
+may have happened between August 24th, 2020, and February 24th,
+2021? What could have happened in the interim there that would
+change the attitude of Democrats?
+ Mr. DeJoy. One of two things. Either everyone is anxious to
+hear our new strategic plan or we had an election. One of the--
+--
+ Mr. Jordan. I am sure that is it. I am sure that is it.
+ [Laughter.]
+ Mr. Jordan. Still waiting for an answer. I did this to you
+when you were here last time, Mr. DeJoy. I asked you, you know,
+to comment on something. You wouldn't do it then either.
+ What happened between August and February? What important
+event happened?
+ Mr. DeJoy. We had an election.
+ Mr. Jordan. We had an election. It was all a charade. You
+don't have to take my word for it. The Wall Street Journal
+called it a giant conspiracy theory. Called us back in.
+ It was all to--it was all part of the predicate for laying
+the groundwork for the mail-in balloting and all the chaos and
+confusion the Democrats wanted, and the laws that I think they
+passed in so many states, frankly, in an unconstitutional
+fashion, it was all about politics.
+ It was all about the election. Do you agree with that, Mr.
+DeJoy?
+ Mr. DeJoy. It was a very sensitive time for the Nation and
+there was a lot of activity----
+ Mr. Jordan. They accused you of things--that they said you
+were--you were restricting overtime. False. They told you, oh,
+you were taking the collection boxes, doing something that had
+never been done before, even though it had been done by every
+previous Postmaster General.
+ Twelve thousand of them had been moved by the Obama
+Administration Postmaster General. But, oh, somehow you were
+the worst. Again, all under the guise of creating this crazy
+chaos that they wanted around the election relative to mail-in
+balloting and you were the guy they used to launch it all, to
+start it all in the summer, when everyone was calling saying
+all kinds of--you were--I mean, you were--like I said, they had
+you as the worst guy on the planet back then. And now
+everything, oh, it seems to be so much better now.
+ Chairwoman Maloney. The gentleman's time has expired.
+ Mr. Jordan. Thank you, Madam Chair.
+ Chairwoman Maloney. The gentleman from Virginia, Mr.
+Connolly, is now recognized for five minutes.
+ Mr. Connolly. Thank you, Madam Chairwoman. And all the
+gaslighting that we just heard does not change facts. Mr.
+Dimondstein, please move the mic close to your mouth. Thank
+you.
+ Am I--am I making this up, as Mr. Jordan apparently would
+have you believe? That the president of the United States last
+summer, Donald J. Trump, publicly said voting by mail would
+lead to massive fraud. Did he say that or is that--am I
+imagining that, Mr. Dimondstein?
+ Mr. Dimondstein. I don't think you are imagining it. What I
+recall him saying at one point is he was going to make sure
+that the Postal Service got no financial COVID emergency relief
+because then they would be able to more effectively deliver
+value----
+ Mr. Connolly. Thank you. But the point is, it was Donald
+Trump, the Republican nominee, who was planting the idea, aided
+and abetted by disruptive changes proposed by a new Postmaster
+General and a compliant Board of Governors, that actually
+eroded public confidence in the ability to vote by mail. That
+wasn't a Democratic narrative. That was a Republican narrative
+by the president of the United States and his enablers.
+ And oh, by the way, inconvenient fact. Mr. Hice would have
+you believe that it was partisans on this committee, and he
+quoted a number of Democrats--by the way, admitted Democrats.
+For the record, I am an admitted Democrat and damn proud of it.
+ I didn't vote to overturn an election and I will not be
+lectured by people who did about partisanship. The facts are
+stubborn things. It wasn't--the idea that it was complete
+fiction, that the changes proposed by Mr.--in fact, implemented
+by Mr. DeJoy with a compliant board, led by, now, Chairman--Mr.
+Bloom, who has admitted he went along with them.
+ It was a Federal judge who found it politically motivated,
+not a Democratic critic. I refer you to a Reuters story last
+September. U.S. District Judge Stanley Bastian in Yakima,
+Washington, upheld a challenge by 14 states and enjoined the
+Postmaster General to stop what he was doing, and said the
+states have demonstrated that the defendants are involved--the
+defendants being listed DeJoy and company--they are involved in
+a politically motivated attack on the efficiency of the Postal
+Service.
+ That is not some partisan Democrat. That is a Federal
+judge, and that wasn't the only ruling that provided the
+injunction to stop the deliberate disruption of the Postal
+Service that was contributing to erosion of confidence in the
+ability of people to vote by mail.
+ That wasn't a Democratic plot, and all of the gaslighting
+we are listening to here doesn't change the facts.
+ Mr. Bloom, you have admitted that--in fact, you supported
+and do support the changes that Mr. DeJoy undertook that were
+widely criticized not just by Democrats but by actual American
+people who received the mail or didn't, by businesses, by
+stakeholders, by the media. That didn't just originate in this
+room.
+ Somehow, people were bothered by it because one of the most
+sacred institutions in America that still works during the
+pandemic, warts at all, was actually being threatened in the
+public mind by these changes and that the reason was political.
+We didn't make that up. A Federal judge confirmed it.
+ Mr. Bloom, you agreed with those changes. You agreed to
+hire Mr. DeJoy because you found him qualified. You had--you
+were--according to one of your colleagues, you were all tickled
+pink with the performance of the Postmaster General in the
+height of the controversy during a pandemic. Are you still
+tickled pink with his performance?
+ Mr. Bloom. The board supports the Postmaster General.
+ Mr. Connolly. Do you--your colleague said 100 percent of
+the board were tickled pink and had complete support. Was he
+speaking for you that you were tickled pink? Just wanted to get
+it in the record that you are tickled pink.
+ Mr. Bloom. I am generally not tickled--I am generally not
+tickled pink by things. But as I said, the Board of Governors
+believes the Postmaster General, in very difficult
+circumstances, is doing a good job and we have been involved
+with the development of the plan that we think will make the
+Postal Service much stronger and much better over time.
+ Mr. Connolly. I appreciate your candor. I am running out of
+time. Respectfully, I disagree, and I hope President Biden
+disagrees as well and that we take action to replace the Board
+of Governors with people who care about the Postal Service and
+are going to be committed to their job of oversight and
+accountability.
+ I yield back.
+ Mr. Comer. Madam Chair, point of order.
+ Chairwoman Maloney. The gentleman is recognized for a point
+of order.
+ Mr. Comer. I just wanted to state for the record Mr.
+Connolly pointed over about voting to object in the election. I
+have never--ranking member, I have never voted to object to a
+Presidential election. But I will tell you who has. Nancy
+Pelosi in 2004. So, I just wanted to state that for the record.
+ I yield back.
+ Chairwoman Maloney. The gentleman yields back.
+ Mr. Connolly. Madam Chairwoman, I would--if I may, I
+appreciate the distinguished gentleman's comment. I did not
+name anybody who voted to overturn the election. Certainly did
+not mean to include Mr. Comer if he didn't do it.
+ Chairwoman Maloney. The gentleman yields back.
+ The gentleman from Wisconsin, Mr. Grothman, is recognized
+for five minutes.
+ Mr. Grothman. Thank you. First of all, I would like to
+just, in general, thank you for getting out the contracts with
+regard to the new delivery vehicles. I think you did a great
+job in selecting new vehicles and I am sure that they are going
+to be a great asset to the Postal Service.
+ Mr. DeJoy. Thank you, sir.
+ Mr. Grothman. Next, I have kind of a technical question
+here, and I guess it could be either one of you. I know a lot
+goes--you know, a lot of--there is a lot of controversy about
+this prefunding the pension plan, and I have talked to people
+back in my district who are very emotional about it.
+ But they don't know how it works. So, I figure between the
+two of you folks up here today, you should know how it works.
+ If we have three different individuals, and they began this
+prefunding in the first decade here, 2006 or 2----
+ Mr. DeJoy. Can you speak--I can't hear you.
+ Mr. Grothman. OK. I believe they began the prefunding in
+around 2006, 2005, around then?
+ Mr. DeJoy. Yes, sir.
+ Mr. Grothman. OK. If I have three different employees, one
+employee began working at the Postal Service in 1975 and ended
+in 2005. So, he entirely worked before the new mandate came in.
+ We got another employee who began work in 2000. He is going
+to retire in 2030. So, he kind of straddles the period before
+the prefunding and the brief period after. We have got another
+employee who starts working in 2010 and winds up retiring in
+2040. So, his entire tenure is part of the prefunding.
+ When we calculate the prefunding, how is it calculated,
+first of all, on the guy who retires before the prefunding
+begins? Is that pay as you go for his pension?
+ Mr. DeJoy. His--the fellow who retires before prefunding
+began, the cost of his retirement benefits would actuarially be
+calculated in being in our underlying costs. So--but he would
+not have the prefund.
+ There is two elements. There is the liability, the
+projected liability, and then there is the prefunding mandate
+of that projected liability.
+ Mr. Grothman. OK. But the guy who retires before the
+prefunding starts, do we operate, and the union president jump
+in here too, is that pay as you go then? Are they--is that----
+ Mr. DeJoy. No. If they retire--the prefunding aspect of it
+is--I believe the way tabulation works is we take all employees
+that are in Postal Service employ, whether they are there for
+three years or four years and they got another 30 years ahead
+of them, and we start calculating what their future retirement
+benefit would be and amortizing that over some period of time.
+ Mr. Grothman. Right. I understand. But so the person who
+already retired he hit--the way we pay for his pension or
+medical is unrelated to what happened in 2005, 2006, right?
+ Mr. DeJoy. If he retired before--you are right on that.
+Yes.
+ Mr. Grothman. Right. So, he goes--OK. And the person who
+starts after that, when we calculate that that is an entirely
+amortized thing and, you know, we calculate how much money we
+got to put in there so when he retires, we are ready to go,
+right? The guy in the middle, the guy who, say, starts working
+in 2000 and retires in 2020 or something, so that is a hybrid.
+ Mr. DeJoy. Yes.
+ Mr. Grothman. We prefund some but not all?
+ Mr. DeJoy. No, we would prefund--once the prefunding
+mandate came in, you would calculate what--whoever was on the
+rolls you would calculate what that liability was, and then
+that would be amortized in terms of part of the prefunding.
+ Mr. Grothman. So, do we--this is the question. So, do we
+try to catch up or not? Because if we have a postal employee
+who began working before the mandate but retires after the
+mandate, when he retires we still--then we still have some of
+that liability unfunded. Is that correct?
+ So, when he retires part of it should be the money we have
+set aside, which we haven't, but part of the money is set aside
+and part pay as you go. Is that the way it works?
+ Mr. DeJoy. Yes, well, the overall liability is calculated
+based on every everybody that is on the payroll, right, and
+retirees. That is the overall liability. That actuarially gets
+adjusted, you know, every year.
+ The prefunding portion was to--the prefunding portion was
+to advance--to put more money into the--into the fund for the
+future retirement benefit of everybody that is on the work
+force.
+ So, some may retire--may never get--they are not vested.
+They may never get to a retirement status with the Postal
+Service. Yet, we are prefunding their liability.
+ Mr. Grothman. OK. I guess I used up all my time. Too bad.
+No fun. Sounds like I confused him.
+ Chairwoman Maloney. Yes. The gentleman from Illinois, Mr.
+Krishnamoorthi, is recognized for five minutes.
+ Mr. Krishnamoorthi. Thank you. Good morning, Mr. DeJoy.
+ I just want to clear up a couple of things. As you said at
+your testimony at page nine, the USPS' performance in the
+election in delivering millions of mail-in ballots was quote,
+unquote, ``a great success story,'' correct?
+ Mr. DeJoy. Yes, sir.
+ Mr. Krishnamoorthi. And as you detail in your testimony,
+you provided, quote/unquote, ``secure and timely delivery'' of
+the ballots that were entrusted to you, right?
+ Mr. DeJoy. Yes, sir.
+ Mr. Krishnamoorthi. You did everything possible to prevent
+fraud in mail-in balloting, correct?
+ Mr. DeJoy. I don't know that we were in--we are in charge
+of fraud. I don't know what you are referring to.
+ Mr. Krishnamoorthi. You did everything to prevent fraud
+with regard to the mail-in ballots in your custody, correct?
+ Mr. DeJoy. Within our custody, we protected the security of
+the mail. Yes.
+ Mr. Krishnamoorthi. And you are not aware of any fraud with
+regard to the mail-in ballots that you delivered?
+ Mr. DeJoy. No.
+ Mr. Krishnamoorthi. Joe Biden won the election, right?
+ Mr. DeJoy. Yes, sir.
+ Mr. Krishnamoorthi. Let me turn you to a chart that the
+Washington Post produced on February 6. It talks about the
+delivery--the on-time performance of the delivery of two-day
+and three-to five-day first class mail and, basically, it
+charts what has occurred with regard to this on-time delivery
+from January 2020 through December 2020.
+ And at the top it, basically, says that on--in January
+2020, on-time delivery was, roughly, around 90 percent and on-
+time delivery for three-to-five-day mail was, roughly, 80
+percent. So, 90 percent for two-day delivery, 80 percent for
+three-to-five-day delivery of first class mail.
+ You took office around the end of July, around June 20,
+right?
+ Mr. DeJoy. Mm-hmm. June 15.
+ Mr. Krishnamoorthi. June 15. Fair enough. And after you
+took direction or leadership at USPS, what happened with regard
+to two-day delivery is it went from, roughly, the 90's all the
+way down to around 70 percent toward the end of the year, and
+with regard to three-to-five-day it went from, roughly, 80
+percent when you took charge of USPS down to approximately 40
+percent, and that is according to the data from the USPS.
+ So, sir, when you get to 40 percent, basically, what you
+are telling your customers is, you have a, roughly, four in 10
+chance that their three-to-five-day delivery standard is going
+to be met, and that is starting to sound like Vegas.
+ And the problem is that sending a letter through the USPS
+should not be a game of chance, and that is why my constituents
+are so outraged.
+ But let me talk to you about two-day mail for one second.
+According to the February 12 Washington Post, there is an
+article in there that says that you have quote, unquote,
+``discussed plans to eliminate two-day delivery for first class
+mail.'' You don't dispute that you are considering as part of
+your 10-year plan the elimination of the two-day delivery first
+class mail standard, are you?
+ Mr. DeJoy. We are evaluating all service standards.
+ Mr. Krishnamoorthi. Sir, will you commit to keeping two-day
+delivery of first class mail locally?
+ Mr. DeJoy. I will--there will be two-day mail class in our
+plan. Some percentage of that, where the reach is right now,
+may change.
+ Mr. Krishnamoorthi. So, you are--but what you are saying is
+that for local mail, first class----
+ Mr. DeJoy. You need to define local and I don't--second, I
+don't agree with any of your premise about my--are you trying
+to suggest----
+ Mr. Krishnamoorthi. You can take that up with the--you can
+take that up with the Washington Post, sir. Let me--let me
+direct you----
+ Mr. DeJoy. Well, it is unfortunate that that is where you
+get your information, because it is going to take more than
+that to fix the Postal Service.
+ Mr. Krishnamoorthi. Well, sir, The Washington Post sourced
+it from the USPS, so you can talk to your data source at the
+USPS, sir.
+ Mr. DeJoy. The Washington Post is like many members here.
+Really don't know what is going on within----
+ Mr. Krishnamoorthi. Let me turn your attention to another
+issue, sir, which is this. According to your own testimony, you
+said that the first step in your reorganization or your
+operational changes is we became more disciplined by running
+our trucks on time and on schedule, according to page 14 of
+your testimony.
+ The L.A. Times ran a story and investigation showing that
+trucks that ran on time left half empty and left mail at their
+processing facility.
+ So, Mr. Dimondstein, let me just ask you this. To the
+constituent who comes to me complaining that their medications
+haven't arrived on time, I shouldn't tell them that the trucks
+were on time, should I?
+ Mr. Dimondstein. Our position has always been that it is
+called----
+ Mr. Krishnamoorthi. Sir, just a yes or no question.
+ Chairwoman Maloney. The gentleman's time has expired.
+ Mr. Dimondstein. You should not have to----
+ Chairwoman Maloney. The gentleman may answer the question.
+ Mr. Dimondstein. I am sorry.
+ Mr. Krishnamoorthi. Go ahead.
+ Mr. Dimondstein. The question----
+ Mr. Krishnamoorthi. To the constituent who complains that
+their medications haven't arrived on time, I should not go to
+them and just say the trucks ran on time. Don't worry, the
+trucks ran on time.
+ Mr. Dimondstein. You are correct and we agree with you.
+ Mr. Krishnamoorthi. Thank you. I yield back.
+ Chairwoman Maloney. The gentleman from Texas, Mr. Cloud, is
+recognized for five minutes.
+ Mr. Cloud. Thank you, witnesses, for being here today. Can
+you hear me? Thank you for being here today. Really appreciate
+the opportunity to address what is this important topic.
+ Certainly, the Postal Service has been on the high risk
+list, I think, since 2009, the previous Obama/Biden
+administration. So, it is time for we--for us to address it for
+sure.
+ I want to especially welcome back Postmaster DeJoy. It is
+great to have you back here in what hopefully is a more
+substantive conversation than the last time you were here. Last
+time it was, unfortunately, in such a hyper-politicized
+environment that it seemed impossible to really get anything
+done in the ways of conversation.
+ Now, Chairman Bloom, could you remind us as to how
+Postmaster DeJoy became the postmaster? Was this a political
+appointee? Was this a partisan standard? Could you--could you
+remind us of that, please?
+ Mr. Bloom. Sure. The end of last year, the then existing
+Postmaster General indicated that she intended to retire and
+the board embarked on a search process, a rather traditional
+search process. Hired an outside firm who specializes in
+search. We wound up identifying 200 people who were potentials.
+That list was then winnowed. There were--and a number of people
+interviewed, and finally the board came to a decision.
+ Mr. Cloud. And this is a partisan board? A bipartisan
+board?
+ Mr. Bloom. The board at the time and today has both
+Democrats and Republicans on it.
+ Mr. Cloud. And that vote was a partisan vote or how did
+that vote come down?
+ Mr. Bloom. The vote was unanimous.
+ Mr. Cloud. OK. That is what I recalled, and that was part
+because of your great logistics experience in the private
+sector. And it seemed to me that you came into the position and
+began to make some systemic changes.
+ I know one of the things that my colleague just mentioned
+was the fact that one of the things you looked at was that
+overtime costs were going up. Meanwhile, our bulk delivery was
+going down.
+ How much mail we were delivering was going down, and so you
+began to look at that as, hey, here is a way we can maybe save
+some money for the American taxpayer.
+ Maybe you didn't understand the political environment that
+we were in at the moment, but it seemed like that has been the
+case that the attempts have been to address some of the
+systemic issues.
+ The GOA, the Government--the GAO, I should say, put out a
+report in May 2020 that said that the United States Postal
+Service's current business model is not financially sustainable
+due to the declining mail volumes, increased compensation and
+benefits costs, and increased unfunded liabilities and debt.
+ We have known for a long time that the USPS is not in a
+sustainable business model, especially with the competitors we
+see and the changing dynamics of how we communicate and how we
+ship and do mail.
+ Does this bill address any of these issues?
+ Mr. DeJoy. Sir, in our plan, there are three to four
+different elements, segments of it, that bring us to
+sustainability and growth in serving the American people.
+ And this is an important part of it. This is about a third
+of--gets us a third of the way where we need to be in the plan
+that we have put together. So, it is very important to the
+future sustainability, which I believe we, with our design, we
+have a sustainable and viable Postal Service.
+ Mr. Cloud. OK. But that is in--that is in your report to be
+given to us in short order, right? That has not been presented
+yet?
+ Those proposals aren't in this bill?
+ Mr. DeJoy. They are not but, really, it is the only
+legislative ask where we are proceeding within our plan.
+ Mr. Cloud. OK.
+ Mr. DeJoy. So, if you want a viable Postal Service and can
+trust that we have a plan to move forward, this is--this is,
+you know, a good way to help.
+ Mr. Cloud. OK. Could you talk about some of the logistics?
+Do you believe that the rise in third-party logistics companies
+offers opportunities for the Postal Service to increase work
+sharing?
+ Mr. DeJoy. I am not a fan of evaluating work share. I think
+it is--in many ways it has done--it has enabled people to run
+around and network and it is part of the reason we have a
+hollowed out network, and a network is the biggest part of our
+problem.
+ But I do see third-party logistics companies, they have
+customers and customers need to get to the American people, and
+it is part of our long-term plan. We think we need to have a
+stronger marketing and product-oriented type of service that
+attracts all types of companies to put more--mail is becoming--
+you know, packages is mail.
+ We saw that during the pandemic a big--you know, our
+competitors stopped delivering to many different areas. We
+continued to deliver to 160 million addresses a day. We only
+deliver 35 percent of the packages to the American community
+right now.
+ I think we have an opportunity to grow that and serve the
+people, and having partnerships with commercial businesses and
+being fully integrated with them, as third-party organizations
+really know how to do, is a big--is a big opportunity for us.
+ Mr. Cloud. Thank you.
+ Chairwoman Maloney. The gentleman's time has expired.
+ The gentleman from Maryland, Mr. Raskin, is recognized for
+five minutes.
+ Mr. Raskin. Thank you very much, Madam Chair, and I want to
+first thank Mr. Connolly for his devastating refutation of the
+propaganda that we were treated to today.
+ But I want to talk about the future.
+ Chairman Bloom, do you and the board agree with Mr. DeJoy's
+contemplated elimination of first class mail currently
+delivered in two days?
+ Is this something that you and the board have discussed and
+do you think that this would improve the public's satisfaction
+with current delivery performance?
+ Mr. Bloom. Congressman, as I said earlier, the plan has not
+been finalized. But so I have to simply rely upon my broad
+statement, which is the plan--and you will obviously have a lot
+of opportunity to diligence it--but the plan is committed to
+revitalizing and strengthening and growing the Postal Service.
+ There will be elements of it, I suspect, that some don't
+like and there will be elements that others do. But I guess I
+would ask, Congressman, that when you evaluate it, you look at
+it in its totality, and ask whether in its totality it moves
+the Postal Service forward.
+ Mr. Raskin. Well, then, Mr. DeJoy, let me come to you.
+ In terms of the totality of this idea, which you seem to
+have some buy-in from Chairman Bloom about, what is the logic
+of eliminating first class service, which generally delivers
+the mail in, roughly, two days and moving instead to a three-
+to-five-day window? How will that improve the appeal and
+resiliency of the Post Office?
+ Mr. DeJoy. Well, the--we believe that the appeal of the
+Postal--this change--we feel that the Postal Service will
+survive these minor changes that we are making.
+ Not coming up with an operating model that can get out of
+losing $10 billion a year will--you know, somebody mentioned,
+you know, a debt--a future death spiral. I would suggest that
+we are on a death spiral. We cannot--even with this
+legislation, we cannot continue to lose money.
+ Now, local, what we are looking at with regard to--we are
+not--first class is still a very, very big part of our service
+to the American people and it is a very, very big part of our
+model.
+ We have--in order to meet first class standards----
+ Mr. Raskin. Let me--let me interrupt you there, sir,
+because--let me just pursue that for one second. Do you plan to
+prevent first class mail from being--reclaiming my time, Mr.
+DeJoy.
+ Mr. DeJoy. In order to meet first class standards, we have
+operated many, many different networks that cost us
+significantly and have not made performance.
+ Chairwoman Maloney. OK. The time belongs to----
+ Mr. Raskin. Do you plan to prevent first class mail from
+being shipped by airplane?
+ Mr. DeJoy. I am sorry?
+ Mr. Raskin. Do you plan to prevent first class mail from
+being shipped by airplane?
+ Mr. DeJoy. In our strategy, if we, in fact, get the relief
+that we need in terms of time, we will put more mail on the
+ground? And I will tell you that a big, big reason for our
+service performance failures this peak season had to do that
+our air carriers performed at 50 to 60 percent, and----
+ Mr. Raskin. Well, oh, so if you would just explain the
+philosophy behind this contemplated change. How does changing
+the standards to lengthen delivery times to double or triple
+delivery times successfully address service problems?
+ Mr. DeJoy. Well, you can't--you cannot--when you--do you
+want--you really--you want me to answer that? I will talk about
+mail, for instance.
+ Mr. Raskin. I do. I think America wants to know what you
+mean getting rid of first class delivery.
+ Mr. DeJoy. Well, we can talk about mail. We can talk about
+three days to get from New York to California. We can talk
+about that. We can't do that on a truck. And if you look at
+what happens, right, we have to--we take mail.
+ We process it in an originating plant. We load it on a
+truck. We take it to an air terminal. A terminal will handle,
+loads it on a plane. Then we fly it to some other location
+somewhere around the country to be sorted by somebody else,
+then to maybe get on another plane to fly to the other
+location, right, to go to a terminal handling charge station,
+to go load it on a truck to go to an area mail distribution
+center, to go to a destination plant, to go to a DDU to get
+delivered by a carrier, and we got three days to do that.
+ And that network--that network, sir, over the last year has
+been performing at about a 55 to 60 to 70 percent rate, right,
+and that is a big, big reason for a lot of our failure,
+especially through the Christmas holiday.
+ We have had packages, first class packages, not even in
+that--in that statistic being held up at air belt facilities
+across the country. It is not reliable. It has grown
+inconsistently reliable.
+ Mr. Raskin. One question that we have all heard from our
+constituents, it sounds like--it sounds like your solution to
+the problems you have identified is just surrender. You are,
+basically, saying because the mail has been late under your
+leadership, we are just going to change the standards and build
+it into the system that it will be late.
+ Mr. DeJoy. Sir, the standards have not been met--the three-
+to-five-day standards have been running at 80 percent for
+years. It is not reliable. You can--you could sit here and
+think that I am bringing all this damage to the Postal Service.
+ But as I said earlier, the place was operationally faulty
+because of lack of investment and lack of ability to move
+forward, which is what we are trying to do.
+ Chairwoman Maloney. The gentleman's time has expired. The
+gentleman's time has expired.
+ Mr. Raskin. With that, I would yield. Thank you.
+ Chairwoman Maloney. The gentleman from Ohio, Mr. Gibbs, is
+recognized for five minutes.
+ Mr. Gibbs. Thank you, Madam Chair.
+ First, I want to try to clear up a little discussion that
+happened to my friend from Ohio, Jim Jordan, being accused of
+gaslighting from my colleague from Virginia.
+ And, you know, I don't think it is the Post Office issue.
+They deliver the mail. When election boards were--in certain
+states were mailing out universal mail-out ballots with no
+verification, that wasn't your problem. That was the election
+board problem and to take this, as my gentleman--my colleague
+from Virginia did, took it out of context.
+ You know, you guys deliver the mail. You know, what the
+election boards put out, that is what they put out and you mail
+it--you deliver it. And so that was--I think that is just taken
+out of context and it is, really, playing politics.
+ Obviously, we are here at this hearing for the financial
+condition of the Postal Service and, you know, in my
+experience, there is generally two types of businesses:
+businesses that make things and businesses that provide
+services.
+ You know, if you make a--if you make a crappy product, you
+go out of business. You perform a crappy service, you go out of
+business.
+ And, unfortunately, what I have seen happen and I hear from
+my constituents and my own experience, the service is really
+bad. I am going to give just a couple of examples because I
+think it has actually gotten worse since the holiday period.
+ I just talked to my CPA yesterday. He mailed a 10'' by 12''
+envelope with the proper postage from Cleveland to Columbus
+mailed on January 5, 166 miles, approximately. It arrived
+yesterday.
+ I have a local county veterans service center that sent a
+five-figure check certified mail with return receipt, mailed on
+December 9 to Falls Church, Virginia. It was delivered on
+January 7.
+ On January 21, they did another package, another envelope,
+and it took them a month again. I have--a constituent reported
+a five-week delay to send an envelope five miles in my district
+from Navarre to Massillon.
+ These examples go on and on. My personal examples, you
+know, it is pretty embarrassing when you have to call up a
+local retailer, in this case it was J.C. Penney, because I
+received a J.C. Penney bill last week that was due on January
+25, and the next day I got the J.C. Penney bill that is due on
+February 25.
+ And so I, personally, I have lost all confidence in the
+postal system. I get mail that doesn't arrive. Last week, I
+signed up--earlier I signed up where you--they take the
+photographs, and last week I get the email I had to first class
+pieces of mail. One showed up. The other one hasn't showed up
+yet.
+ So, personally, I am doing everything I can to--I won't
+send payments through the mail anymore. That is how much
+confidence I have lost in the system.
+ And so, Mr. DeJoy, you have a huge challenge ahead of you
+because, you know, I am a baby boomer. I have confidence in the
+mail. I am not Generation Z or a Millennial. I had confidence
+and I have completely lost it.
+ Right now, personally, my goal is to be able to get to the
+point where I put my mailbox in the garbage can. So, that is
+how I feel about the service that has been--it has just been
+deplorable.
+ Medicaid--Medicare integration, I think I fully support
+that. I see in some of my background notes here a typical
+retiree from the Post Office service does not enter into
+Medicare because their monthly premium would be normally $148 a
+month and they are getting a better deal by not doing that, and
+I think that is, you know, unbelievable how that happened in
+the past.
+ I think, as far as I can tell, I know Postal Service
+workers are different than Federal employees. It is kind of
+like an arm of government, we want to say. I think they are the
+only ones that don't have to sign up into Medicare.
+ Mr. DeJoy and Bloom, I am curious, when you talk about the
+$160 billion loss over 10 years projected, obviously--we fixed
+Medicare integration and the prepayment and all that--are you
+also--what are you factoring in for volume?
+ Are you factoring losing more volume or do you think you
+are going to be able to get this ship reckoned up to the point
+where you will be able to compete with your two big competitors
+and, of course, the Amazons of the world? And, you know, we are
+seeing what is happening there. So, what do you think on the
+volume in that 10-year projection?
+ Mr. DeJoy. This is--the plan that we are putting forward
+does have a growth--does have a growth plan in it for--as I
+discussed, we tried to have a balanced plan of legislation,
+cost improvements, and revenue growth and we are preparing the
+organization.
+ Mr. Gibbs. So, you are that--are you basing that on
+increased volume or decreased volume?
+ Mr. DeJoy. Increased volume mostly in the package business
+and some mail--excuse me.
+ Mr. Gibbs. Well, I hope--I hope you are right. I guess I
+would just challenge a little bit because what I am seeing, you
+know, I bought some stuff through, like, Amazon. I get the
+stuff two days later. They tell me when it is coming. No
+shipping costs because----
+ Mr. DeJoy. A lot of it comes through us.
+ Mr. Gibbs. What is that?
+ Mr. DeJoy. A lot of it comes through us----
+ Mr. Gibbs. And that is why I am letting you make that
+point.
+ Mr. DeJoy [continuing]. Because it gets emptied to our
+delivery unit----
+ Chairwoman Maloney. The gentleman's time has expired. The
+gentleman may answer his question.
+ Mr. Gibbs. You can answer.
+ Mr. DeJoy. First of all, on your first point about this
+being, you know, about the service, I have to remind this
+committee that the Postal Service is living in a nation where
+the pandemic exists also, OK, and that has a significant impact
+on us.
+ But if product got--if mail and packages got to our
+delivery units, we deliver to 161 million addresses six days a
+week at over 90--over 96 percent of the time. That is through
+the--all those service things through--even through peak.
+ The problem was getting mail and packages through our--
+through our network. Significant air capacity was lost.
+Significant transportation capacity was lost.
+ Forty percent package volume over any peak plan that we
+had, right, which--a truckload of mail is 500,000 pieces. A
+truckload of packages is 5,000, right. It is significantly
+different.
+ And then we had a huge--and this is America. This is not
+Amazon in the network. This is American consumers. Nobody in
+our network volume took up more than two or three, four percent
+of the volume, right.
+ Then we had nonmachinables, which were 100 percent more.
+Big boxes that our workers have no machinery, nothing to deal
+with, right. This was the environment.
+ We had--we had a 650,000-person organization that hired
+200,000 people last year, right, and the numbers didn't go up.
+That was turnover, turnover because of the environment and the
+stress and historical lack of good tactical procedures with
+regard to our work force.
+ So, this is the culmination of what happened to your
+service, right, and this is--this is the plan that we are going
+to address and try and fix, going forward, and it does have
+growth in it. It has significant growth in it and we need the
+support for this bill.
+ Mr. Gibbs. I appreciate it. Thank you.
+ Chairwoman Maloney. Thank you. The gentleman's time has
+expired.
+ The gentleman from Maryland, Mr. Mfume, is recognized for
+five minutes.
+ Mr. Mfume?
+ Mr. Mfume. Yes, Madam Chair, thank you very much. Thanks
+for calling this hearing. Like you and so many other members of
+this committee, I am grateful that we are having an opportunity
+to put in place a process whereby the Postal Service would be
+in a position that guarantees its sustainability well into the
+future.
+ Last August, I sat with many of you on this committee and
+inquired about the changes implemented under the leadership of
+Mr. DeJoy and that of the Postal Service and Board of
+Governors.
+ Chairwoman Maloney. Mr. Mfume, can you center your mic or
+your computer so we can see your face? By law we have to show
+you during the questioning, and we can't see you right now.
+ Mr. Mfume. I did not know, Madam Chair, that you could not.
+My----
+ Chairwoman Maloney. OK. Yes. Fine now. Thanks.
+ Mr. Mfume. Sorry about that.
+ I questioned the relationship during that meeting between
+the accelerate--or about the accelerated removal of sorting
+machines and collection boxes, and the decreases in mail
+arrival times.
+ I also asked Mr. DeJoy and the chairman if they were aware
+that the expedited street to afternoon sortation program
+implemented in July had a
+ [inaudible] across the United States and was opposed by the
+National Association of Letter Carriers and opposed by postal
+workers across the board.
+ Now, the people on this committee and citizens across the
+country are free to ascribe whatever definition they choose to
+the response I got. But in my opinion, the response was empty
+words, and worse yet, empty words that continued to lead to
+empty mailboxes.
+ I appreciate the ranking member's previous line of
+questioning to the witnesses, but he asked each one of them if,
+in fact, they thought that Mr. DeJoy's intent was to slow down
+the delivery of mail prior to the election, and I would say to
+the gentleman and remind myself that unless one is a heart
+surgeon or a brain surgeon that it is almost impossible for a
+third-party witness to accurately determine what a person's
+intent is in their heart or in their brain.
+ But, Madam Chair, when we take that question and turn it
+around and ask instead about what was the effect, perhaps the
+better questions to the witnesses wouldn't have been did Mr. De
+Joy's actions have the effect of slowing down the mail. The
+disassembling of sorting machines, the removal of mailboxes
+from communities, and the denial of many overtime requests--did
+they have the effect of slowing down the mail, and I would dare
+venture to say that most, if not all, would say yes, that is
+the effect and that was the effect.
+ My office, like many of yours, receives a daily significant
+number of complaints from constituents who have gone days, some
+weeks, without receiving their mail and receiving it on time.
+ In Baltimore City, Baltimore County, and Howard County,
+Maryland, that has been the case now for months. It is very
+difficult, and I don't want this lost. I know we are talking
+about trying to find a way to create and craft new legislation.
+ But I don't want it lost on the fact that there are a lot
+of people who have suffered and had to pay extra money, late
+fees for bills that were not late but, rather, delivered late.
+And there were many of those who missed out on their medication
+schedules because their medications were not on time.
+ These delays have had harmful impacts on the lives of our
+constituents and, yet they continue to worsen. And so like my
+colleagues, I am grateful that the chairwoman has decided to
+hold this hearing because now we will have the opportunity to
+construct and review legislative proposals to place the Postal
+Service on a sustainable footing.
+ But let us not rewrite history. The good was what happened
+between then and now was that we had a free and fair election,
+in which we owe a debt of gratitude to postal workers all over
+this country who, against great odds, delivered the mail as
+essential workers on time. They delivered ballots on time.
+ The bad news is that we are still left with the effects of
+the cuts. Not the intent, the effects. So, the Postal Service's
+financial condition, as we all know, has deteriorated over the
+years due to a number of factors. We don't need to get into
+finger pointing.
+ I do believe that these proposed legislative opportunities
+can reinstate service standards and implement the kind of
+protections for postal workers if we can get away from casting
+aspersions in the very first hearing that has been set up to
+find a way out of this problem.
+ So on that, Mr.--Madam Chairman, I would yield back, Mr.
+DeJoy, thank you for coming back again. I would ask, though,
+before I yield back my time, can you tell us when your
+strategic plan will be revealed and will you commit here today,
+if it is the pleasure of the chair, to come back before this
+committee to explain it in detail and to receive the critique
+and the questions and, perhaps, the support even the members of
+this committee?
+ Mr. DeJoy. Sir, we--probably within the next two weeks we
+should be ready with our plans, and I am always happy to come
+before this committee and explain it.
+ Chairwoman Maloney. Thank you.
+ Mr. Mfume. Thank you, Madam Chair. I yield back
+ Chairwoman Maloney. The gentlewoman from Missouri, Ms.
+Bush, is recognized for five minutes.
+ [No response.]
+ Chairwoman Maloney. Ms. Bush, would you please unmute?
+ Ms. Bush. I am having some technical difficulties here. I
+am having some technical difficulties.
+ Chairwoman Maloney. We are going to--we are having some
+technical problems. We are going to go to the gentleman from
+Florida, Mr. Donalds. You are recognized for five minutes.
+ Mr. Donalds. Thank you--thank you, Madam Chair.
+ I am going to just--there has been a lot of speeches in
+this hearing so I am going to just get to questions.
+ Mr. Kosar, my number-one question is can you describe the
+legislative reforms that Congress can explore to assure that
+work force costs do not unnecessarily increase, going into the
+future?
+ Mr. Kosar. Sure. Thank you, sir, for asking.
+ You know, one thing is there was a bill that I very much
+like introduced by Representative Lynch which would address the
+Retiree Health Benefits Fund through a method that is a little
+different than what was being discussed today, and what it
+would do is take the approximately $42 billion in the Retiree
+Health Benefits Fund and authorize a portion of it, 25 to 33
+percent, to be invested in index funds the same way that
+Federal workers have a TSP which is able to be invested in
+index funds. And the result of that is rather than getting low
+yields from Treasuries in the RHBF, the money would grow
+faster.
+ And the Postal Service Inspector General did a study on
+that and it is the best strategy out there, as far as I can
+tell. I think my feeling is that the Postal Service in general
+needs operational freedom to figure out ways to drive down
+costs.
+ I know Congress likes to mandate every year that six-day
+paper mail delivery continue. They dropped this in the Annual
+Appropriations Act. But I don't know why that needs to be
+mandated. If the Postal Service and the public truly demand it,
+then why not remove the mandate and let the Postal Service
+adjust accordingly?
+ I think the Postal Service also needs to be empowered to or
+encouraged to solve the overtime issue. In 2019, the Postal
+Service use something like $5 billion--spent $5 billion in
+overtime.
+ Whether that means they need to hire more employees or
+temporary employees so that they are not having to have people
+run extra overtime costs, or through some other solution, I
+think that is worth exploring. And I have also noted that an
+idea kicked around for a very long time is collective
+bargaining.
+ Right now, when--the Postal Service bargains with its four
+unions, and if it can't come to agreement, it goes to
+mediation, and in the course of that the Postal Service's
+financial condition is not explicitly required to be
+considered.
+ And so putting it in a statute that it at least be a factor
+considered, not a determining factor for the results but at
+least considered explicitly, could possibly bend cost curves
+over the long term.
+ Mr. Donalds. Thank you, Mr. Kosar.
+ Ms. Whitcomb, my question for you is can you expand on your
+testimony and describe how big of an impact to the Postal
+Service's current financial crisis, the documented overreliance
+on overtime work, has been?
+ Ms. Whitcomb. Yes. We did that work and released it last
+summer, and found that there were significant increases from
+Fiscal Year 2014 to 2019 in overtime. I believe Mr. Kosar just
+mentioned that work as well.
+ Obviously, we were in a different time period. COVID had
+not been in consideration at that point. So, I think there is
+maybe some different considerations now. But overtime had grown
+considerably during that six-year period.
+ Mr. Donalds. Thank you so much.
+ Postmaster General Mr. DeJoy, I am going to give you the
+rest of my time to answer this one. Would you actually support
+shifting the divine benefit pension--the defined benefit
+pension to a defined contribution more in line with the private
+sector?
+ Mr. DeJoy. I didn't hear you, sir.
+ Mr. Donalds. Would you support shifting the defined benefit
+pension to a defined contribution more in line with the private
+sector?
+ Mr. DeJoy. No, I think the compensation and benefit plans
+that are in the Postal Service right now have been negotiated
+over a number of years and I am not prepared--that is not
+anything that we are looking at.
+ We respect the--we work with the union leadership and the
+plans as the way they are right now is not--not changing them.
+It is not part of our--you know, is not part of our strategy.
+ We think there are better ways. There are many, many, many
+ideas about what to do with the Postal Service. I will submit
+that we have spent eight months with a couple hundred
+leadership people in leadership at the Postal Service in
+defining what the best solution, holistic solution, was to
+serve the American people and we have come up with a plan that
+I will release soon, and messing around with employee benefit
+plans is not part of what--you know, what I am interested in
+right now.
+ Mr. Donalds. All right. Thank you.
+ Thank you, Madam Chair. I yield back.
+ Chairwoman Maloney. The gentleman yields back.
+ The gentlewoman from Michigan, Ms. Tlaib, is recognized for
+five minutes.
+ Ms. Tlaib. Thank you, Chairwoman. Thank you so much for
+this hearing. I truly appreciate it.
+ I would like to spend some time here addressing a serious
+concern that I have heard from my residents about ongoing
+service issues in my district.
+ So, Postmaster DeJoy, I want to bring your attention to the
+photo on the screen, and I will give the committee some time to
+post it.
+ [Photo is shown.]
+ Ms. Tlaib. So, Postmaster DeJoy, this is a delivery barcode
+sorter machine, correct?
+ Mr. DeJoy. Yes, ma'am.
+ Ms. Tlaib. OK, so thank you for that. And these machines
+can process, roughly, what, 35,000 pieces of mail per hour,
+correct?
+ Mr. DeJoy. I would--I don't know exactly. But let us
+assume--seems like you know, so I will accept that.
+ Ms. Tlaib. I appreciate that. So yesterday, just yesterday,
+I spoke to our local Detroit American Postal Workers Union
+president, Keith Combs, about the ongoing service issues in
+southeastern Michigan.
+ He made me aware that four delivery barcode sorter machines
+that were removed prior to the 2020 election have actually been
+reinstalled in the USPS facility in Detroit. So, I thank you
+for that.
+ However, which is very odd, these machines have actually
+sat idle for months, apparently, because the USPS' central
+region has not given the Detroit facility permission to use
+them. So, I find this really concerning since my residents are
+still experiencing significant delays or receiving their--in
+receiving their mail.
+ For example, I spoke with one elderly veteran recently, you
+know, one of the block club presidents in my community, who had
+not gotten any mail, was, I think, getting it once a week.
+ So, this is not an isolated incident, as you know, so I am
+just really interested, Mr. DeJoy, were you aware that the
+central region had not given the Detroit facility a directive
+to start using these machines?
+ Mr. DeJoy. I am not but--and as I can attest, communication
+within the organization is sometimes not accurate. So, I would
+have to check if that is----
+ Ms. Tlaib. That is a huge--I don't know, Postmaster. That
+is a huge miscommunication. I mean, do you commit to
+immediately begin working with the central region staff to get
+the Detroit facility the directive to use these four sorting
+machines that will get 35,000 pieces of mail sorted in an hour
+and go out the door.
+ Mr. DeJoy. Well, you are assuming your information--let me
+just be clear. You are assuming your information is accurate.
+What I am saying is that----
+ Ms. Tlaib. OK. So----
+ Mr. DeJoy [continuing]. You know, that that--I don't know.
+ Ms. Tlaib. OK. So, reclaiming my time. Is it good to see--
+it is good to see that you are at least consistent about
+targeting--you know, basically, addressing not knowing and
+having these issues and struggles within the agency.
+ So, we have four sorting machines in Detroit and somebody
+needs to get permission to use the machines. I mean, why bother
+putting them in there last year, reinstalling them in there if
+you are not going to be able to use them?
+ I mean, so do you agree that that is an issue?
+ Mr. DeJoy. So, I would have--no, I don't agree. I don't
+know what the issue is. There are 650,000 people, thousands of
+machines, 50,000 truckloads of that moving down in a day.
+ Ms. Tlaib. Postmaster DeJoy, I am asking you for a
+partnership here.
+ Mr. DeJoy. You are asking me about an area which has
+historically had significant delivery problems.
+ Ms. Tlaib. Mr. DeJoy, I am not giving you a narrative. I am
+telling you--DeJoy, I am reclaiming my time.
+ I am really sincere here. I am asking you for a
+partnership.
+ Mr. DeJoy. As am I.
+ Chairwoman Maloney. The gentlelady reclaims the time.
+ Ms. Tlaib. OK. I am telling you there is four machines that
+were used for taxpayer dollars installed in Detroit to help get
+mail out the door. They haven't given the green light to use
+them.
+ So, I need you to do your due diligence as the Postmaster
+General. We just heard from a Member of Congress asking you to
+go investigate, check it out, find out where the
+miscommunication is, and get these machines up and running. Do
+you want to at least commit that you will look into this?
+ Mr. DeJoy. I will--first of all, I want to--I would like
+to--we don't receive taxpayer dollars. But I will look into
+what the story is on this machine and my office will get back
+to you.
+ Ms. Tlaib. OK. Well, the machines are there. Somebody spent
+money on these machines, reinstalled them there, Mr. DeJoy. I
+am just asking you to do your job and find out why they haven't
+started using those machines.
+ You know, just acknowledge that the information I am giving
+you, at least in very good faith, that something is wrong when
+four machines are sitting idly by.
+ So, I would like to close by really looking to the future
+here and really wanting, again, to help you.
+ I want to ask President Dimondstein, given all these
+ongoing issues, what do you think needs to really truly happen
+you with UPS' service standards, going forward, to better serve
+the American people?
+ Mr. Dimondstein. Congresswoman, we--the union believes in
+the--in the law, of prompt, reliable and efficient services,
+and it breaks our heart. It frustrates the employees. It angers
+the employees, because we treat the mail as our own and we want
+to treat it as if it was coming to our family members and our
+friends, and you have heard many other things today.
+ So, going forward, legislation is a key part. Helping to
+provide the financial support by getting rid of this burden of
+prefunding by the Medicare integration and by the investment of
+some of the funds in the retiree plans.
+ But the Postal Service, they have taken a positive step on
+this. They need to deal with the chronic understaffing. They
+have agreed recently to hire about 11,000 more people around
+the country in mail processing. That will help.
+ They should look at expanding services such as financial
+services and charging stations for electric vehicles in front
+of Post Offices. There are all sorts of things that can be done
+that just make the Post Office that much more relevant in
+people's lives.
+ But there is no getting around it. This situation is
+deplorable with the mail, and you heard a Congressman here
+say--and it breaks our heart because I have friends saying, I
+have family members saying the same thing--how can I trust the
+Postal Service to get the work done and serve me as a person of
+this country.
+ Ms. Tlaib. Thank you. Thank you so much.
+ Mr. Dimondstein. But, going forward, Congress can really
+help. I urge you all to keep it tight. I know my time is up. I
+went on too long. I am sorry, Madame Chairman.
+ Chairwoman Maloney. The gentlewoman's time has expired.
+Thank you.
+ The gentleman from Louisiana, Mr. Higgins, is recognized
+for five minutes.
+ Ms. Tlaib. Chairwoman--Chairwoman, before you move on--if I
+may, Chairwoman, please
+ [inaudible].
+ Chairwoman Maloney. Without objection.
+ Mr. Higgins. Madam Chair, was I recognized?
+ Chairwoman Maloney. Yes, you were recognized.
+ Mr. Higgins. Thank you, Madam Chair, and thank you for
+holding this hearing and I thank both the
+ [inaudible]. I am sorry, Madam Chair. This is Congressman
+Higgins.
+ Chairwoman Maloney. We are having a communications problem.
+We can't hear you, Mr. Higgins. OK. OK.
+ Mr. Higgins. I am sorry, Madam Chair.
+ Chairwoman Maloney. OK.
+ Mr. Higgins. This is Congressman Higgins.
+ Chairwoman Maloney. OK. We are having a communications
+challenge.
+ Mr. Higgins. I see that we are having technical
+difficulties. I am unmuted. You will have to move on, Madam
+Chair.
+ Chairwoman Maloney. OK. Mr. Keller is now recognized for
+five minutes.
+ Mr. Keller. Thank you, Madam Chair.
+ Based on testimony in today's hearing, the Postal Service
+is in the process of finalizing its long-term business plan.
+ Mr. Higgins. Madam Chair, I am unmuted. OK. Good.
+ Chairwoman Maloney. Mr. Keller has now been recognized,
+unless he yields back to you.
+ Mr. Keller. Well, I will just continue to go and maybe we
+can figure out Mr. Higgins' problem.
+ Chairwoman Maloney. OK. He is going to--the time is his
+now. He was recognized. OK.
+ Mr. Keller. As I was saying, the Postal Service is in its
+process of finalizing its long-term business plan, some high-
+level summaries of which are included in today's testimony.
+ While I would like to take the promise of its release at
+face value, this committee has been waiting on a comprehensive
+long-term business reform plan for several years.
+ Mr. Bloom, when will this committee be in receipt of the
+plan? Mr. DeJoy can answer to help out. When will we have the
+plan?
+ Mr. DeJoy. We are--we are a couple of weeks away from the
+mission plan.
+ Mr. Keller. Can you give me a date? What day--what date
+will we have it? What is the date? I mean, if you are working
+on the plan----
+ Mr. DeJoy. In March. I will tell you in March. You will
+see----
+ Mr. Keller. By the end of March we will have the plan?
+ Mr. DeJoy. Yes, by the end of March. Yes.
+ Mr. Keller. OK.
+ I am struggling to understand why a hearing has been called
+on reforming the Postal Service and their long-term business
+plan has yet to be finalized. It is my expectation that a
+followup hearing will be conducted to fully examine this plan
+and its suggested reforms.
+ When I was in private industry, the first step we took
+toward fixing something that was broken was the first measure
+where we were as an organization and only then develop a
+strategy to improve. Bailouts or other unrestricted assistance
+for the Postal Service would be irresponsible and ineffective.
+ For the United States Postal Service, reform starts with
+the universal service obligation and overall mission to provide
+trusted, safe, and secure communications between our government
+and the American people, businesses and their customers, and
+the American people with each other.
+ I appreciate the hard work of our postal workers and letter
+carriers. They are the ones who get the job done every day, and
+any frustration with the lack of progress we have seen is
+directed at the organization's leadership.
+ Mr. DeJoy, you mentioned in your testimony that service
+performance cannot improve in an environment where costs are
+increasing, the network needs attention, customers expect more,
+and revenues are declining. It seems to me that as a 2018 White
+House Task Force recommended, we may need to more narrowly
+define what the universal service obligation requires.
+ In other words, we may want to better define the Postal
+Service's mission in order to move forward toward solvency.
+What are your thoughts on that?
+ Mr. DeJoy. Sir, I think our plan addresses the two
+fundamental things that are in legislation right now,
+continuing to deliver six days a week and be--get to be self-
+sustaining.
+ In that process, when we talk about narrowing the mission,
+I think we could--our plan sticks with the mission. It makes
+some adjustments to unachievable hurdles. It makes some
+adjustments for things that we are asked to do that that are
+extremely costly.
+ But still, at the end of the day, we are delivering--in
+this plan, we are delivering six days a week to every household
+in America and we are--we are growing our business by aligning
+to the new economy and positioning our organization to--you
+know, to fulfill its obligations.
+ We depend--our network depends on a series of, you know,
+transportation contractors that drive up our costs and have
+significant--have had significant impacts on our delivery
+schedule, and our operating plans are not integrated from our
+plans into our transportation.
+ There are billions of dollars in this network that we that
+we plan--in our own self-help plans that we try to achieve. It
+is not consequential, you know, to employees. It is not
+consequential to the American public. It is just better
+operational management of what we are doing.
+ Mr. Keller. And we will see that--we will see that in the
+plan?
+ Mr. DeJoy. Yes, you will.
+ Mr. Keller. And there is one thing I would like to clear
+up. We have a post-employment benefit plan for our--for our
+postal workers, which we need to keep the promise of and that
+is funding the retirement plan or the pensions.
+ And we do that as we go. That is currently funded, correct?
+ Mr. DeJoy. Yes, that is----
+ Mr. Keller. That is just a yes or no. It is currently
+funded?
+ Mr. DeJoy. Yes.
+ Mr. Keller. And we pay that as we go. We should do the same
+thing with the health care. It is not prefunding, and we need--
+we need to talk about this so we can keep the promise to the
+people that do the work every day. It is not prefunding. It is
+paying as you go.
+ In other words, they are earning that post-retirement
+benefit, and to think that just the money is going to appear
+the day they retire is irresponsible.
+ So, let us really have the honest discussion of if we have
+to catch up because we didn't make payments in the past, that
+is one thing. The other thing is we need to--we need to make
+sure we catch that up and that we pay as we go.
+ So, the terminology is very, very clear. As a private
+individual, when you have a retirement account and you expect
+to be able to afford things when you retire, you make the
+contributions over a series of years. The contribution plus the
+investment equals the necessary cash to fund that benefit.
+ So, it is not prefunding. It is paying as you go. And I
+realized I have run over but I wanted to make that important
+part, and that is how we need to do it.
+ Mr. DeJoy. But so we can have--we do have significant
+balances, much more than the Federal Government does, in all
+our retirement accounts, and the issue before us here right now
+is Medicare integration for our retirees.
+ We have $35 billion that we have paid in to Medicare and 27
+percent or 25 percent of retirees do not take advantage of it.
+And the prefunding that we do is based on a requirement by the
+Congress to have inputs in it for the actuarial calculations
+that will never--may never--people may never need those
+benefits they will not retire. So, I think--I think----
+ Mr. Keller. But if we don't make the contribution--excuse
+me.
+ Mr. DeJoy. I agree with you. I agree with you how you
+classified it. But I still think this is--that this is an
+unfair treatment of the Postal Service and it is something that
+needs to be corrected.
+ Mr. Keller. Well, I think in order to make sure we protect
+the benefits that the people are earning----
+ Mr. DeJoy. This is all about that.
+ Mr. Keller [continuing]. It would be responsible of us to
+make sure we call it pay as you go, not prefunding. Thank you.
+ Mr. Lynch. [Presiding.] The gentleman's time has expired.
+ The chair now recognizes the gentleman from Illinois, Mr.
+Davis, for five minutes.
+ Mr. Davis. Thank you, Mr. Chairman, and I also want to
+thank Chairwoman Maloney for calling this hearing. I am very
+pleased to know that everybody who have indicated or asked have
+indicated that they are in favor of getting rid of the
+prepayment of retiree benefits.
+ Matter of fact, I recall being on the committee when we
+passed that legislation, and I didn't like it then and but we
+voted it in and that is what was voted.
+ Mr. Postmaster, I am sure that you and--not you, some of
+the members of your staff have seen some of the news reports of
+the tremendous problems that we have had in the Chicagoland
+area.
+ Everything that has been mentioned, of course, have been
+our problems and our issues. In addition to the traditional
+Chicago climate, the weather in the winter time gets pretty
+bad.
+ The people have been screaming, crying, climbing up the
+wall, wanting to know when they are going to be able to get a
+delivery or wanting to know when there is going to be some
+relief.
+ I know we are talking primarily futuristically in terms of
+the future direction of the Postal Service. But could you tell
+me what is being done to bring some relief to the Chicagoland
+area right now?
+ Mr. DeJoy. So most of--a number of our urban areas have
+been hit hard for--a number, beginning with COVID and
+beginning--and also with the recent weather.
+ We have worked, you know, within--without--as volume has
+come down, because we were overwhelmed with volume up and
+through the second--up until almost the third week of January.
+We were still clearing out for the holiday season. We are
+beginning to see, you know, relief in that area and it is just
+really not--I mean, we are working hard, working plants
+overtime, adding people.
+ But the real relief is coming from the volume coming down
+and that enables us to use our capacity to get out and deliver.
+ In certain areas--I mentioned a statistic earlier--we, a
+650,000, 660,000-person organization with hiring 200,000 people
+and that moving the needle up. That means that is tremendous
+turnover within the ranks that we have had this year, and it
+magnifies itself in our urban areas. It really----
+ Mr. Davis. Let me ask you, are you hiring new carriers?
+ Mr. DeJoy. We have been hiring across the board. Yes, sir.
+Fifty thousand people just in the last two months of last year,
+200,000 over the year.
+ As President Dimondstein just said, we converted 10,000
+into December and I am very committed to working to stabilize
+the work force. I think that has been a real, real big issue
+for us with our noncareer turnover rate, trying to stabilize
+that and give long-term career opportunities for most of the--
+--
+ Mr. Davis. Let me ask you an operational question.
+ Mr. DeJoy. Mm-hmm.
+ Mr. Davis. How much authority or autonomy do local
+management teams have in budgeting and in making decisions
+relative to personnel needs?
+ Mr. DeJoy. Mm-hmm. So, we are doing a lot of work on the
+organization for a variety of reasons, and that was one of the
+big changes I made. We had a big area. We divided the country
+up into seven areas in all the different operations.
+ Every aspect of the organization were in those seven areas
+that reported up to one, you know, chief operating officer, and
+it was--the organization itself, not the people, the
+organizational strategy itself had too many broad functional
+aspects for individual teams to actually manage any kind of
+impact.
+ We have begun to flatten the organization, spread it out,
+have more functional lines from corporate headquarters right
+down to the--to the local Post Office and have really started
+to work on process. We needed a lot of process improvement.
+ When you don't have a lot of committed process, then you
+have a lot of people second guessing everything, which is what
+I think you are leading to. We are working very, very hard to
+clean that--to clean--make--bring a lot of clarity to everybody
+from, you know, a senior executive right down to a delivery
+unit, a mail carrier. I have good people on it. We are moving
+forward.
+ Thank you.
+ Mr. Davis. Thank you. Thank you very much, Mr. Chairman,
+and could I submit for the record two items, one, a audit
+report titled ``Mail Delivery and Customer Service Issues
+Select Chicago Stations,'' and a letter from seven Members of
+Congress who represent that area to the Postmaster General,
+inquiring about services and delivery?
+ Mr. Lynch. Without objection, so ordered.
+ Mr. Davis. I yield back. Thank you.
+ Mr. Lynch. The gentleman's time has expired. The gentleman
+from Louisiana, Mr. Higgins, is now recognized for five
+minutes.
+ Mr. Higgins. Thank you, Mr. Chairman. We had some technical
+difficulties earlier.
+ Mr. Lynch. I think those have been resolved. OK.
+ Mr. Higgins. Yes, sir. So, I can be heard at this time, Mr.
+Chairman?
+ Mr. Lynch. Yes, sir. Go right ahead.
+ Mr. Higgins. Thank you, my friend. I thank the Postmaster
+General DeJoy for appearing before us today to discuss the
+current status and challenges of the Post Office.
+ Additionally, I very much appreciate the letter you
+distributed to members of the committee on February 18,
+Postmaster DeJoy, and I will refer to that in a moment.
+ Let me say that I love the Post Office. I support the Post
+Office and employees. It is an indelible part of American
+history. It is arguable that we could--we could never have
+formed a solid republic, a representative republic of the many
+sovereign states, without a reliable Post Office. We might not
+have an America to discuss without a solid Post Office.
+ So, you know, my support for the Post Office is reflective
+of my love for country. And, yet, you know, we have to admit
+some serious challenges there. So, I would like to jump into
+that, Mr. DeJoy.
+ The COVID-19 pandemic placed burdens on every aspect of
+business across America. Would you concur that the combination
+of massive quantities of mail-in ballots for the election cycle
+occurring at the beginning of the holiday season and COVID
+protocols that the USPS had to deal with, like every other
+business across the United States, would you agree that that
+was, generally, the root cause for increased inefficiencies at
+the Post Office?
+ Mr. DeJoy. Sir, I believe that that just dramatically
+increased the consequence of a continuous erosion that was
+happening anyway, right. So I think----
+ Mr. Higgins. But it was in--it was in rough shape. We all
+know that. Listen, but this is not news. It should all get
+fixed now. My colleagues across the aisle, they have the White
+House, the House, and the Senate. So, we should get the Post
+Office fixed pretty quick.
+ But, historically, it has been an issue. When I was in high
+school, my history teacher drew a map of the United States and
+asked us all to name a city in the United States, and we did.
+And at the time, there was great debate of the price of a stamp
+going from 13 cents to 15 cents.
+ And once we all identified a city, he asked any one of us
+who could drive there for 15 cents--who could go and deliver a
+letter for 15 cents.
+ Of course, none of us could, and this is a lesson that has
+stuck with me, and that now a stamp is 55 cents. The point is
+that, of course, historically, the Post Office has always gone
+through struggles and now is no exception. We have to find a
+way past it.
+ And I am going to leave my remaining time to you,
+Postmaster DeJoy, to answer the following question. You will
+have about a minute and 45 seconds.
+ In your letter, you said we can improve and strengthen this
+institution for future generations, that much work needs to be
+done by all of us. But with your support, you said, I am
+confident in our plan and optimistic about our future.
+ Postmaster DeJoy, please tell America why they should be
+confident and optimistic in the future of the Post Office. I
+will leave you my remaining minute and 20 seconds.
+ Mr. DeJoy. Sir, what I have found at the, you know, Postal
+Service is 633,000 committed employees that believe in the
+mission and commit to the mission under relatively--sometimes
+extreme circumstances like as demonstrated during the COVID,
+during the pandemic, and also when you see when we have
+hurricanes or forest fires, they are usually the first part of
+getting back to normalcy when you see people come back into the
+communities.
+ The thing--the number-one fundamental reason I am an
+optimist in terms of the plan moving forward is you look at in
+all the pressure the organization has been under the last eight
+months.
+ We still--if we got mail and packages to delivery units,
+delivered to every household, over 98 percent of the time and
+that is--that is an advantage. That is a--that is the tool that
+we plan to use in our plan, you know, moving forward to get
+mail and packages to that--those delivery units in the most
+efficient manner, least cost manner, yet timely manner, and
+then use that delivery network to address the new economy as it
+moves forward to, you know, grow--you know, grow our business.
+This is about not----
+ Mr. Higgins. I thank the gentleman. I thank the gentleman
+for his dedication. My time has expired, and Mr. Chairman, I
+yield.
+ Mr. Lynch. The gentleman's time has expired. The gentleman
+yields.
+ The chair now recognizes the gentlewoman from California,
+Ms. Porter, for five minutes.
+ Ms. Porter. Thank you very much.
+ Mr. DeJoy, do you know how big the Postal Service's deficit
+is?
+ Mr. DeJoy. So, we lost $9.2 billion last year. Is that what
+you are asking? Or if you are asking about the $40 billion net
+equity?
+ Ms. Porter. Yes. Also the unfunded liabilities and debt.
+ Mr. DeJoy. I am sorry?
+ Ms. Porter. The unfunded liabilities and debt, please.
+ Mr. DeJoy. Total is about $80 billion right now.
+ Ms. Porter. OK. When was the last time the Postal Service
+recorded a net profit?
+ Mr. DeJoy. Seven years ago. Six or seven years ago, eight
+years ago.
+ Ms. Porter. I believe it was 2006. Mr. DeJoy, how much
+longer until the Postal Service runs out of cash?
+ Mr. DeJoy. We could run out of cash tomorrow if I pay our
+bills.
+ Ms. Porter. OK. And so at current levels, we can agree that
+2021, now, soon. So, my question for you is you developed--last
+time we talked, you made some changes to the Postal Service in
+the summer and the fall, and according to the USPS inspector
+general, the last time you made changes you did not do any
+analysis of if those changes would save money.
+ This is according to the USPS Inspector General. You are an
+executive and you did no analysis? Now, I have heard that you
+have a new strategic plan. But I am really concerned that this
+plan may neither be strategic nor a plan.
+ Have you figured out if this new plan would save money and
+improve performance?
+ Mr. DeJoy. First of all, I will--while I respected the
+Inspector General, I disagree with your--the premise of the
+conclusion that you have reached and if that was in the report,
+I disagree with that also.
+ But having said that, we have extensive studies over the
+last eight months to improve reliability, reliability of
+service and reduce costs and grow that----
+ Ms. Porter. Wonderful. Mr. DeJoy, will you provide those
+analyses to this committee?
+ Mr. DeJoy. When we announced that when we announce the
+plan, we will--we will produce a certain amount of information
+with regard to how we came about, you know, what our solutions
+are.
+ But the committee has its powers to request whatever it is
+that it needs and it will go through the process. And, you
+know, we are not--we are not embarrassed by the work we did. We
+are actually quite proud of it.
+ Ms. Porter. OK. So, we will look forward to requesting
+those analyses and those extensive studies you just referenced.
+Did you hire any consultants to help with these studies?
+ Mr. DeJoy. So, the organization has had embedded
+consultants for a long time, and to the extent that the
+management team use consultants to support----
+ Ms. Porter. Reclaiming my time.
+ Mr. DeJoy, are those consultants employed by the Postal
+Service or by outside organizations and hired on a contract?
+ Mr. DeJoy. I consider all consultants--when you say the
+word consultant, I am thinking they are outside organizations
+that are--that are hired by, you know, by the Postal Service.
+ Ms. Porter. Reclaiming my time.
+ Mr. DeJoy, who are those consultants?
+ Mr. DeJoy. We have hundreds of consultants, ma'am. I
+couldn't----
+ Ms. Porter. Would you please provide a list to the
+committee of the consultants that were involved in this
+strategic plan?
+ Mr. DeJoy. I can provide you whatever information we have.
+What I was about to tell you, if you will let me finish, was
+that most of this plan was designed by about 150 people within
+the organization.
+ It was a Postal-produced analysis, and to the extent that
+any of those groups had consultants working within the
+organization, they may or may not have used that. But this is a
+Postal leadership plan that was--you know, that was put
+together.
+ Ms. Porter. Thank you.
+ Mr. DeJoy, you have said you are committed to managing the
+U.S. Postal Service with excellence.
+ With that in mind, what are the aspects of the Postal
+Service today that you view as most critical, that you treasure
+the most, building a little bit on what my colleague from
+across the aisle, Mr. Higgins, just asked you?
+ You mentioned the employees. But what do you value about
+what the Post Office does? What are you not willing to change
+just to make a buck?
+ [Laughter.]
+ Mr. DeJoy. I think the, as I said earlier, one of the key
+attributes of the Postal Service that I think is very
+important, both from the standpoint of what it--what it does
+for the Nation and also for its viability, because this
+Congress, as previous Congresses, say it needs to remain self-
+sustaining. And until that law changes----
+ Ms. Porter. Mr. DeJoy--reclaiming my time.
+ Mr. DeJoy, what is it that the----
+ Mr. Lynch. The gentlelady----
+ Ms. Porter [continuing]. Post Office does that you
+treasure?
+ Mr. Lynch. The gentlelady's time has expired, and I think
+the gentleman has tried to answer the question.
+ Thank you very much. The chair now recognizes the gentleman
+from Texas, Mr. Sessions, for five minutes.
+ [No response.]
+ Mr. Lynch. Mr. Sessions, you might be muted. I am not sure.
+ Can't hear you. Are you there? OK.
+ Mr. Sessions. Chairman, is that better?
+ Mr. Lynch. I can hear you now. Yes.
+ We should give that gal a raise.
+ Voice. Hey, let us try this one.
+ Mr. Sessions. Tell him to--tell him to move on to another
+witness
+ Mr. Lynch. No. No. You are on. You are on. Go ahead.
+ Mr. Sessions. Oh, we are on now? OK.
+ Mr. Lynch. We didn't take out any time. Go ahead. Give
+minutes.
+ Mr. Sessions. Thank you, Chairman.
+ Chairman, thank you very much and I appreciate you and the
+chairwoman having this committee hearing today.
+ Mr. DeJoy, I would like to tell you how much I appreciate
+and respect you and your colleagues coming today to the hearing
+in Washington, up on the Hill. That is important for the
+American people to hear as well as Members of Congress.
+ I previously served on the last Postal Subcommittee back in
+1997, 1998, 1999, and 2000, whenever it was, and we recognized
+how important the Postal Service was--the employees, the
+service they provided to the country, and debated vigorously
+just as we are today, not just the usefulness but the use of
+and about the employees. We owe you a lot. You are out every
+day. Your men and women are in rain, sleet, snow, everything
+that the saying goes by. And I recognize that there are Members
+of Congress who are frustrated.
+ But I think that you and the entire team today, including
+those that are union members but still postal employees, have
+talked about as trying to get it together the best way you see
+fit to run the operation.
+ And I wish we would have given you more credit for that
+instead of trying to second guess you and trying to nitpick and
+micromanage you. But that is also our job.
+ What I would say to you, sir, is that I would like to have
+your answer when you come up with it about what the long-term
+view is to include outside-the-box thinking. Like I am a part
+of--in my background, I spent 16 years with AT&T, which is a
+telecommunications company here in this country, a very large
+one.
+ And we went through changes that were constant. Change is
+constant. But we had to look at it sometimes in a way of not
+just what our mission was but the right way to serve it, and I
+hope that you will look at all the things that you believe are
+necessary for sustaining the Post Office, sustaining their
+mission, but also looking at things that might be out of the
+box.
+ What would that mean? Well, that may mean something that we
+need to change in your mission statement, something that we
+need to give you the flexibility to run your business the way
+it will sustain it, the way you believe and the employees
+believe you can move forward to make it happen together.
+ I am from Waco, Texas, and have had a strong relationship
+with my postal carrier and the postal carriers at my home and
+at my business, and they are dedicated honest people who come
+to work every day.
+ We need to support them. But we also need to make sure that
+the long-term effort when we look at it 10 years from now, that
+we can offer the words sustaining with that, too. So, it is my
+hope you will use at least my time with you today to say thank
+you.
+ Thank you for your devotion. Thank you for your effort. And
+thank you for having each of your people who are there today
+work together. I look forward to that answer that comes and
+hopes--hope that you will give us some sort of thinking outside
+the box of ways that Congress needs to think about the way we
+think about you to sustain that.
+ And I yield back my time.
+ Mr. Lynch. The gentleman yields back.
+ The chair now recognizes the gentlewoman from Missouri, Ms.
+Bush, for five minutes.
+ [No response.]
+ Mr. Lynch. Thank God for staff, huh?
+ Ms. Bush. All right.
+ Mr. Lynch. There we go.
+ Ms. Bush. I can hear you now. OK. Perfect.
+ [Laughter.]
+ Mr. Lynch. Ms. Bush, you are up.
+ Ms. Bush. Technology, right? OK.
+ St. Louis and I thank you, Madam Chair, and--sorry, Madam
+Chairwoman. I am sorry. Mr. Chair. Sorry, Madam Chairwoman--for
+convening this important hearing.
+ St. Louis is home to more than 50 Post Offices and Postal
+Service--and the Postal Service employs more than 5,320 postal
+workers in my district. The United States Postal Service helps
+families and loved ones stay connected, provide jobs, delivers
+life-saving medicines, sustain small businesses, and gives
+people access to the ballot box.
+ Our community respects the USPS as a fundamental public
+service.
+ Chairman Bloom, by statute, the Postal Service's Board of
+Governors comprises 11 individuals, including nine people
+appointed by the president with the advice and consent of the
+Senate, and then the Postmaster General and the Deputy
+Postmaster General who are all appointed by the Board of
+Governors.
+ How many members does the board have today?
+ Mr. Bloom. The board has six external Governors and the
+Postmaster General.
+ Ms. Bush. OK. How long has the board lacked full
+membership?
+ Mr. Bloom. Oh, goodness. I believe we haven't been at full
+strength in quite a number of years. I will get back to you on
+the exact number, but I believe it is at least six or seven
+years since we had a full board.
+ Ms. Bush. OK. How have the Postal Service in general and
+the board specifically suffered from having incomplete
+membership on the Board of Governors?
+ Mr. Bloom. Well, Congresswoman, I guess what I would say is
+that Congress intended us to have a full board, and so I think
+an organization functions best when it has the full diversity
+of views that comes from a, you know, a full group.
+ Congress, in its wisdom, set up nine as the number. I think
+it is a good number. I sat on other boards with nine. I think
+it is a good--for external Governors I think it is a good
+number.
+ So, I think the board would always benefit from additional
+perspective.
+ Ms. Bush. Given that there are still three Governor
+positions unfilled and you are in your final year of service, I
+believe, Chairman Bloom, for President Biden, are you not?
+ Mr. Bloom. Actually--I am actually in my--I am actually in
+my holdover year, Congresswoman. Yes.
+ Ms. Bush. Your holdover year? OK.
+ OK. Thank you for clarifying.
+ Well, so President Biden has the chance to fill three open
+positions on the board. What--can I ask you, Chairman Bloom,
+what career field do the majority of Governors on the board
+come from?
+ Mr. Bloom. We have a diversity of backgrounds. Just
+thinking off the top of my head, there is one gentleman who has
+been involved in a large trucking company so has some relevant
+logistics experience. There is another gentleman who has been
+in finance, another business-oriented individual. There is a--
+one of the Governors has been involved as an airline pilot and
+a union leader.
+ Ms. Bush. OK.
+ Mr. Bloom. So, it is a diversity of backgrounds.
+ Ms. Bush. What is the average net worth of Governors on the
+board?
+ Mr. Bloom. I have no idea.
+ Ms. Bush. OK. How about any black, indigenous, or people of
+color on the board?
+ Mr. Bloom. The board is comprised today of six white males.
+ Ms. Bush. How many women serve on the board?
+ Mr. Bloom. It is six white males, Congresswoman.
+ Ms. Bush. Exactly. Again. We need women to the front.
+ So, currently, the board includes only white men.
+ Mr. Bloom. That is correct.
+ Ms. Bush. This grotesque lack of representation is a
+critical opportunity to diversity the board's ranks. An agency
+of over 640,000 employees that come from every walk of life and
+serve the entire American public should have representation at
+the top reflective of the broader American population.
+ More than 35 percent of postal workers are people of color
+while zero percent of Governors are. Meanwhile, the positions
+that are filled and are not--are not supposed to be represented
+by special interests include--actually include Wall Street
+bankers are fossil fuel lobbyists.
+ This question is for Postmaster General DeJoy. Do you see
+it as a problem that the Board of Governors of the United
+States Postal Service looks like a millionaire white boys club?
+ Mr. DeJoy. What I would say is that the Postal Service's
+not having a full board is not enabling it to reach its full
+breadth of impact and I welcome that, and I would say also
+there was a period where there were no board members on the
+Postal Service.
+ But that is not a problem with the Postal Service. That is
+a problem of whatever administration that is in power and the
+Senate at the time. The Postal Service would love to have a
+diverse board that reflects its population.
+ But this is not something that is within our--you know,
+within our power, and I would say that the period where
+whatever Postmaster General and leadership team was there at
+the time, which I think it was my predecessor, that had to be
+an unbearable time and a totally--it had a huge consequence on
+her ability to lead and the ability for the organization to
+move forward, and I feel very strongly about that and I think
+the quicker we get some new board members from the
+administration the less we can talk about this and move on to
+the plan and the real, real problems that we need to fix here.
+ So, I welcome your discussion on this and whatever you can
+do to advance this process, I certainly would appreciate it.
+ Ms. Bush. Thank you, Postmaster General.
+ I would like to reclaim my time.
+ Chairwoman Maloney. [Presiding.] The gentlewoman's time has
+expired.
+ Ms. Bush. OK.
+ Chairwoman Maloney. OK. The gentleman from Arizona, Mr.
+Biggs, is recognized for five minutes.
+ Mr. Biggs. Thank you, Chairwoman Maloney and Ranking Member
+Comer, for leading this hearing. I thank the witnesses for
+being here today and appreciate all my colleagues' work to find
+a fiscally responsible future for the Postal Service and I am
+looking forward to working with you on this effort.
+ But today, I want to discuss some of the 2020 events that
+affected the Postal Service's ability to deliver mail in a
+timely fashion. No, they don't have to do with COVID-19.
+ Last year, our Democratic colleagues turned a blind eye to
+nationwide mayhem, destruction, rioting, and looting conducted
+by Black Lives Matter and Antifa activists. Many businesses and
+government agencies, including the Postal Service, saw their
+entities burn and operations halted because of the persistent
+violent riots.
+ Frederic Rolando, president of the National Association of
+Letter Carriers, stated, quote, ``The postal property and
+vehicles have been ransacked during the recent wave of civil
+unrest and letter carriers have been assaulted and robbed on
+their routes. Their irresponsible actions harmed postal
+employees and the citizens we serve,'' closed quote.
+ Here are a few examples of how the Postal Service was
+impacted by these events. In Minneapolis, two Post Offices were
+burned and USPS vans were stolen and torched by rioting
+protestors. Also in Minneapolis, the USPS shut down mail
+delivery at seven Post Offices. The Kenosha Post Office in
+Wisconsin had to close indefinitely due to the violent riots.
+ In Chicago, at least six Post Offices were broken into and
+burglarized, affecting mail deliver operations, and in
+Lancaster, Pennsylvania, a Post Office was pelted with debris
+as riots erupted across that city.
+ To make matters worse, a member of this committee went on
+national television, ostensibly to discuss the USPS funding
+crisis, and called for continuing violence and unrest in the
+streets.
+ And as if it weren't enough, Postmaster DeJoy faced
+protests outside of his home in D.C. perpetrated by false
+narratives from my colleagues on this committee.
+ Given all this evidence, I think our Democrat colleagues
+owe an apology to Postmaster General DeJoy and all the
+hardworking Postal Service workers who were affected by the BLM
+and Antifa riots of 2020.
+ Mr. DeJoy, can you elaborate, please, on how the civil
+unrest from last year affected your agencies operations,
+including the financial impact from the destruction it
+suffered?
+ Mr. DeJoy. So, they are always, you know, consequential,
+disruptive, and costly both in terms of our assets and stress
+on our employees. Fortunately, in many of these cases, we have
+advance notice and we are able to get our people out, lock up
+our buildings. The real consequence comes to the people that
+live in those communities because they are the pride of the
+service, and whenever the areas open up again, it takes time to
+reopen our facilities and deal with any of the disruption.
+ So, these had impacts. They were specific to the individual
+locations that it occurred, and I would say our overall broader
+issues last year were more systemic nationally that created a
+real consequence. But those areas do impact those people that
+live in the communities and our workers that are in the
+communities.
+ Mr. Biggs. Thank you. And, Madam Chair, I ask unanimous
+consent to enter into the record reports documenting the
+violence against USPS, including the letter that I quoted from
+Mr. Alejandro from the National Association of Letter Carriers.
+ Chairwoman Maloney. Without objection.
+ Mr. Biggs. Thank you. An article from the StarTribune.com,
+entitled, ``Burned Post Offices Destroyed in Minneapolis.
+Unrest Leave a Void;'' of the Gateway Pundit from May 29,
+``U.S. Postal Service Vans Stolen and Torched by Rioting
+Minneapolis Protestors;'' one from Fox9.com: ``USPS Shuts Down
+Mail Delivery at Seven Post Offices in Twin Cities for
+Friday;'' one from Breitbart dated August 24, 2020: ``Kenosha's
+Main Post Office Closes Indefinitely Due to Violent Riots;''
+one from the Chicago Sun Times, June 5, 2020: ``Reward Offered
+for Details in Post Office Looting;'' one from RT.com.USA:
+``Antifa Lays Siege to Lancaster Police Precinct Following
+Latest Officer-Involved Shooting;'' and one dated August 17,
+2020 from Black Enterprise.com: ``Rep. Ayanna Pressley Calls
+for Unrest in the Streets Over the Failures of the Trump
+Administration;'' and one August 15, 2020 from WUSA-9:
+``Protestors Gather Outside of USPS Postmaster General's Home
+in D.C. Amid Voter Suppression Allegations.''
+ Chairwoman Maloney. Without objection.
+ Mr. Biggs. Thank you, Madam Chair.
+ Chairwoman Maloney. The gentlewoman from Florida, Ms.
+Wasserman Schultz, is recognized for five minutes.
+ Ms. Wasserman Schultz. Thank you, Madam Chair. I want to
+turn to another topic that is addressed by this legislation,
+and that is one of transparency. After the postmaster general
+implemented operational changes in mid-July of last year,
+service performance was substantially impacted. My district
+office was flooded with calls from constituents experiencing
+mail delays, and I received countless pictures of pallets of
+undelivered mail and idled sorting machines. In early
+September, I was urged to visit USPS facilities during a
+morning shift to investigate the reports that I was getting
+about the dysfunction going on inside. I provided USPS
+management ample notice and had employees willing to escort me
+through the facility, and yet I was denied entry. This was not
+isolated incident. I became aware that several other Members of
+Congress were also denied permission to make timely tours of
+postal facilities in their districts.
+ Mr. DeJoy, in the interest of transparency and enhancing
+public confidence in the Postal Service, will you commit to
+remedying this issue and permitting Members of Congress access
+to tour postal facilities upon request? And please do not say
+that at the time, the Hatch Act was justification for not
+allowing access. The Office of Special Counsel, which is the
+principal enforcement agency of the Hatch Act, has made it
+clear that the Hatch Act does not prohibit Federal employees
+from allowing Members of Congress to tour Federal facilities
+for an official purpose, which these tours were.
+ Mr. DeJoy. Ma'am, I will check with our legal counsel, and
+if there is a new position that they wish the Agency to take,
+personally, I have no issue where you go or what you see, but
+there are Agency rules and positions we take because we are an
+independent agency, and----
+ Ms. Wasserman Schultz. OK. Let me be specific. Reclaiming
+my time. I am talking about upon request, not told that we have
+to give 48 hours' notice, or two weeks' notice, or a week's
+notice. Even around an election, nothing should bar a Member of
+Congress being able to tour a postal facility for an official
+purpose. And we aren't around an election now, but no matter
+when we ask, there isn't any rule that I am aware of that would
+bar us from being able to tour a postal facility. Obviously,
+adequate notice is, you know, the morning of, the night before,
+the afternoon before. But would you agree to remedy
+unreasonable notice requirements so that Members of Congress
+can tour facilities, particularly because this entire hearing
+has been about the challenges that the Postal Service is having
+with delivering mail.
+ Mr. DeJoy. So, as I said, I mean, the position on whether
+the Hatch Act applies or not, I am not able to comment on it.
+With regard to having Members of Congress visit our plants, we
+will get back to you, but I don't have a particular objection
+to it. But if you really want to go look at where our problems
+are, I suggest you go to airports to look at backed-up mail.
+ Ms. Wasserman Schultz. OK. Reclaiming my time. I don't need
+any suggestions about where I go. I want to be able to inspect
+postal facilities, and I expect that you would ask your counsel
+to communicate with the Office of Special Counsel about the
+Hatch Act specifically and make sure that Members of Congress
+can tour facilities upon request. That is what I want an answer
+to, and that is what I want to do and other members to do as
+well. So, moving on, I look forward to getting an answer from
+you as soon as you can.
+ Mr. DeJoy. Mm-hmm.
+ Ms. Wasserman Schultz. The other thing I wanted to touch on
+is mail delays and service standards. Mr. DeJoy, when I decided
+to tour the local postal facilities, and I appreciate Ms. Tlaib
+bringing this up as well, many of the reports I received were
+about decommissioned sorting machines. And I understand that
+the reason for decommissioning some of the sorting machines was
+that letter volume was down while package volume skyrocketed.
+However, these machines, which can label and sort thousands of
+letters, bills, ballots each hour are a vital tool for our
+postal workers, especially during an election season and other
+busy times.
+ Now, I have asked you this question before and didn't get a
+clear answer, so I am going to try again. Will you commit to
+giving local plant managers the flexibility to reinstall
+sorting machines when mail volume is high?
+ Mr. DeJoy. No, I won't commit to that.
+ Ms. Wasserman Schultz. Why not?
+ Mr. DeJoy. Because there is a process that we go through
+within the organization that determines what----
+ Ms. Wasserman Schultz. OK. Reclaiming my time. I want to
+make sure I ask Mr. Diamondstein about this issue. There have
+been reports that USPS leadership are pursuing policies that
+are deliberately slowing down the mail by decreasing service
+standards. Are you concerned about making sure that there is
+the local ability of supervisors to be able to request to plug
+in sorting machines and also make sure that we can maintain
+current service speeds? And what has happened in the past when
+the USPS slowed down the mail by decreasing service speeds?
+ Mr. Diamondstein. Well, I think the best way I can answer
+that question is we are for the Postal Service having an
+operation where people get the prompt service they are promised
+under the law. And if that means local autonomy, then there
+should be enough local autonomy to do that and have that
+decisionmaking going. Obviously, the union doesn't get involved
+with the relationships between the managers, but there has to
+be an operation that is nimble enough and committed enough to
+make sure that that mail moves. And if it means local authority
+to do certain things, then that is what it should include.
+ Ms. Wasserman Schultz. Thank you. That is why the President
+needs to fill the Board so we can get a postmaster general who
+actually is committed to making sure that that happens. Thank
+you, Madam Chair. I yield back the balance of my time.
+ Chairwoman Maloney. Nancy Mace is now recognized for five
+minutes.
+ Mr. DeJoy. I would suggest that would not solve your
+problems.
+ Chairwoman Maloney. Nancy Mace?
+ [No response.]
+ Chairwoman Maloney. We will go to Yvette Herrell? Yvette
+Herrell?
+ Ms. Herrell. Thank you, Madam Chair, and thank you for
+hosting this committee meeting. It is very important. It is
+important to our constituents all over the country. And one of
+the things I heard here today that I do agree with is that the
+status quo is not acceptable. I will also yield part of my time
+at the end for a couple of answers from Chairman Bloom and from
+Mr. DeJoy. But right now, what I want to ask is, can you
+discuss and expand on the reforms you have made--this is to Mr.
+DeJoy--at the U.S. Postal Service? When you arrived in June
+2020, what did you see and how did you decide what to tackle
+first?
+ Mr. DeJoy. I am sorry. I didn't understand the question.
+ Ms. Herrell. Let me see if I can do it this way.
+ Mr. DeJoy. There you go.
+ Ms. Herrell. OK. Thank you. Can you discuss and expand on
+the reforms you have made at the U.S. Postal Service? When you
+arrived in June 2020, what did you see and how did you decide
+what to tackle first?
+ Mr. DeJoy. When I first arrived, I spent a lot of time with
+the leadership team, management team, doing inquiries.
+Actually, I started about 45 days before that doing that, so
+when I arrived onsite, I had spoken to most of the leadership
+team. I reviewed many, many internal audit reports and so
+forth. And we also have to remember when I came on, at that
+particular point in time, the Agency was forecasted to lose $22
+billion that year, up from about $7 or $8. We ended at $9, and
+run out of cash in September.
+ One of the top things that I looked at, and part of it was
+supported by OIG report, was our none of our trucks were
+running on time. It is the key to a network operation. I asked
+the management team, which included area vice presidents,
+operational vice presidents, and the COO, let's go look, which
+these were not new ideas. This was on the table already. Let's
+go look and actually make a move to try and have this work,
+reduce extra trips and run trucks on time. Why? Because we run
+50,000 truckloads a day and at 25 percent full, all right? So,
+it should have been something to be able to accomplish.
+ We went ahead and implemented that, and it crashed. We
+recovered in several weeks, and I learned from that and that is
+why I began the reorganization. A big part of that consequence
+was what led me to reorganize the organization, which we are in
+the process of doing right now. The rest of the rumors about
+machines, shutting down machines, cutting overtime, all that
+stuff is not accurate.
+ Ms. Herrell. OK. Thank you. And earlier today, I heard
+somebody on the committee say that the service standards have
+been damaged. In your opinion, under your watch, have these
+service standards been damaged, or, in your opinion, do you
+think there have been some improvements made, because I do
+appreciate that you are undertaking this entire process more in
+the light of running the entity like a business, which I think
+is a very smart thing to do. But I am curious about the comment
+that was made earlier about the service standards that were
+damaged.
+ Mr. DeJoy. Well, our performance against our service
+targets for the standards have deteriorated significantly. They
+have been on a path for the last seven or eight years of
+deterioration, and we are going to continue and will continue
+to do that unless we adopt a plan to not make the changes that
+we want to make. This was exacerbated by the peak season, the
+pandemic, and a significant breakdown in our transportation
+network, and due to extreme volume and increased physical size
+characteristics of the volume presented to us.
+ Ms. Herrell. Thank you. And my last question is to Chairman
+Bloom. Just I wanted to give you a chance to respond to
+partisan accusations that you were attempting to purposely slow
+mail in voting prior to the election. Can you elaborate on that
+for just a few seconds?
+ Mr. Bloom. Yes, sure. The Board of Governors was in full
+support of all of the extraordinary measures that were taken to
+try to fulfill our obligations to deliver election mail as
+promptly as we possibly could. That was a key commitment of the
+whole Postal Service, strongly supported by the Board.
+ Ms. Herrell. Thank you, Madam Chair. I will yield back. And
+for the record, I am tickled pink to be in this committee
+hearing today.
+ Chairwoman Maloney. OK. The gentleman from Vermont, Mr.
+Welch, is recognized for five minutes.
+ Mr. Welch. Thank you very much, Madam Chair. Mr. DeJoy,
+Vermont has a number of companies that depend on catalog sales,
+and they are really important companies in Vermont. And as you
+can appreciate, they are very concerned about the potential of
+increased costs of the catalogs, and my understanding is that
+under consideration now is about a seven percent increase this
+year, and over five years, 35 percent. Could you speak to that
+and what your analysis is about the impact that would have on
+those businesses? And what they tell me, just so you can
+respond specifically to them, is that with that kind of price
+increase, they will really have to reduce that marketing tool
+and probably go to digital. And, A, they don't want to do that,
+and B, obviously that might have an impact on revenue, that
+even though you are raising prices, the revenue will go down.
+ Mr. DeJoy. So, I have been speaking to many people in the
+industry about the recent, you know, PRC rule. This is our
+regulator. We had a 10-year test, right, with the legislation,
+and they took four years to evaluate it. And they came to the
+conclusion that, more or less, that the reduction in mail
+volume has had significant consequences to the Postal Service,
+you know, over the last 14 years. They didn't fix any of that,
+right, but that could have been somewhere between $25 and $50
+billion, you know, that would have helped the health.
+ Mr. Welch. Just to focus this, I am really concerned and
+they are concerned about price increases and the impact on
+their----
+ Mr. DeJoy. And they should be.
+ Mr. Welch. Yes.
+ Mr. DeJoy. They should be concerned about it because it is
+one of the tools and it is one of the levers we get to pull,
+right? And our regulator has established that we have a certain
+amount of pricing increases that we can do now based on a four-
+year analysis in costs. Now, as I told the industry, that is a
+lever. That is part of our plan: pricing. This legislation is
+part of our plan, and operational cost savings is part of our
+plan, and growth is part of our plan. To the extent that we
+don't get anything else done but this PRC ruling, then I am
+going to have to use it all to keep us in business. If we get
+cooperation and we get to move forward with the plan, we get
+this legislation, we are not out to profit. We are out to break
+even as your laws, as the congressional laws, mandate us to.
+That is all this is about. So, the sooner we can get moving on
+legislation, get moving on the operational improvements that we
+need to make, which may include some minor service adjustments,
+the less we will have to use price. The Board, myself, the
+management team, we want to be an economic, affordable user for
+everyone.
+ Mr. Welch. So, you know, I hear you acknowledging that a
+price increase would put pressure on these marketers and their
+marketing plans. You are mindful of that.
+ Mr. DeJoy. I am very, very mindful, sir, of, you know,
+delivering an affordable service. Now, I will also say that
+there are many, many users of the mail system to deliver mail
+and packages. Some may be in your constituents' situation, but
+a big part of our mail volume, they are our customers and we
+appreciate them, but over 60 percent of our business are
+commercial users, corporations that have a profit, that attempt
+to make profit. So certainly, no one likes price increases, but
+that does not mean that it leads to any further reduction in
+mail.
+ Mr. Welch. Thank you. In my last 45 seconds, can you tell
+us the bipartisan proposals that are under consideration that
+you support? I mean, there has been talk here by the chair and
+our ranking member----
+ Mr. DeJoy. Right.
+ Mr. Welch [continuing]. About some provisions they agree
+on.
+ Mr. DeJoy. Well, I think what the chair and the ranking
+member are speaking about is the Medicare integration that is
+in the bill and the elimination of the pre-funding. The rest of
+the bill has some reporting and stuff like that----
+ Mr. Welch. So, you do support that, those----
+ Mr. DeJoy. Yes, sir. Yes, sir, I support it. Our Board
+supports it. Our union leadership supports it. It has been an
+unfair situation for the Postal Service. It needs to be
+corrected.
+ Mr. Welch. Thank you, Mr. DeJoy.
+ Mr. DeJoy. Mm-hmm.
+ Mr. Welch. Madam Chair, I yield back. Thank you.
+ Chairwoman Maloney. The gentleman yields back, and I now
+recognize the gentleman from Kansas, Mr. LaTurner. You are not
+recognized for five minutes.
+ Mr. LaTurner. Thank you, Madam Chairwoman. I want to thank
+you for holding this hearing to help the committee and Congress
+focus on the challenges facing our Postal Service, which are
+many. In rural America, we understand the importance of postal
+mail to connecting our people and communities. In these
+unprecedented times, the United States Postal Service, which
+was already having financial issues, has been put under even
+further strain. Our founders recognized the importance of
+postal mail to uniting our country by including the
+establishment of post offices and postal roads in our
+Constitution.
+ The Post Office is vital to commerce across America. Any
+postal reform considered by Congress must guarantee continued
+and long-term access to mail delivery for rural areas like
+Kansas, while also being financially responsible. Every one of
+my constituents back home, including corporate constituents,
+like Hallmark Cards, will suffer if we don't get this right. We
+must enact meaningful reforms that will place the Postal
+Service on a long-term path to financial sustainability, while
+at the same time increasing efficiencies and improving
+services. It is my hope that in this hearing and subsequent
+hearings, we will focus on the United States Postal Service's
+challenges, both financial and operational, instead of focusing
+on politics.
+ Mr. DeJoy, how are you doing today, sir?
+ Mr. DeJoy. I am great. Thank you.
+ Mr. LaTurner. I wanted to ask, when you talk about your
+bold operational reform agenda, what aspects of this plan are
+you most worried about, that are most at risk to immediate
+resistance?
+ Mr. DeJoy. I think there are visions and aspirations for
+the Postal Service in terms of delivery that are just
+achievable, you know, with our current network. We talk about
+flying. We don't own planes, right, so we have, you know, a
+deteriorated transportation network. And so we spend a lot of
+money, a lot of inefficiency in trying to achieve these
+composite-type standards that are just not doable in the
+current environment. And then we get down to questioning if we
+are committed to six-and seven-day-a-week delivery, does it
+make a difference if it is an extra day, you know, to get a
+letter, because something has to change. We cannot keep doing
+the same thing. Last year, we did $80 billion worth of service
+to the American people and we charged $70, right?
+ So my goal, our goal here, is to potentially charge $72 and
+get another $2 or $3 out of the operational costs, which is
+very, very achievable, but we can't achieve it just doing
+everything we are continuing to do. So, I am worried about
+continued resistance to change, which everybody here seems
+concerned about and recognizes that there is an issue, but to
+get consensus to make a move when we have a plan--this is a
+well-thought-out balanced, robust plan--would be a real shame
+for everyone not to, you know, jump on it and support it.
+ Mr. LaTurner. Thank you. And a question for Mr. Quadracci
+on Zoom. Earlier you talked about the elements that you think
+need to be added to this bill. Can you elaborate on that,
+please?
+ Mr. Quadracci. Yes. I know we had some technical
+difficulties.
+ Mr. LaTurner. Yes.
+ Mr. Quadracci. But basically----
+ Mr. LaTurner. Thank you.
+ Mr. Quadracci [continuing]. There are four main items. It
+was to avoid, you know, triple and quadruple rate increases
+that the postmaster general just talked about, that the Postal
+Rate Commission has allowed for. You know, I will come back to
+that. But then six-day delivery, which has already been talked
+about, investing in higher retirement returns for the
+employees, which has already been talked about, and really
+return the overpayment to the Civil Service Retirement System.
+You know, this is stuff that was paid by the customer through
+postage. We are not asking for that back for the customer. We
+are asking it to be used for the Post Office's stability, and
+that is billions of dollars.
+ But back to, you know, the triple and quadruple rate
+increases, if I take you back to--this was personally very
+painful for me--it was the last year that the Post Office was
+allowed to increase by any rate it wanted before they were
+capped by CPI under the PAEA. And when that came out, it was
+anywhere from a 10 to 40 percent increase in rates that would
+kick in in 2008. Immediately, we saw our volume drop like a
+rock. The industry lost between 25 and 30 percent of its
+volume. A lot of people blame the Great Recession on that, but
+I will tell you as someone who is very close to his clients,
+that that is not true. It started before the wheels came off in
+the economy because of that big increase. Those catalogers that
+were just discussed and many others dropped mail like a rock.
+ Chairwoman Maloney. The gentleman's time has expired.
+ Mr. Quadracci. And once the economy came back----
+ Chairwoman Maloney. The gentleman's time has expired.
+ Mr. Quadracci. OK. Thank you.
+ Mr. LaTurner. Thank you, Madam Chairwoman.
+ Chairwoman Maloney. The gentleman from Georgia, Mr.
+Johnson, is recognized for five minutes.
+ Mr. Johnson. Thank you, Madam Chair. Mr. DeJoy, you have
+led a distinguished career in business, having served as the
+CEO of New Breed Logistics from 1983 to 2014. And thereafter,
+when that company was acquired by XPO Logistics, you served as
+the CEO of XPO Logistics' supply chain business. So, you have
+got a long and successful career in logistics. Isn't that
+correct, sir?
+ Mr. DeJoy. Yes. Yes, it is.
+ Mr. Johnson. And you brought that training with you when
+you accepted the position at the Postal Service, beginning your
+tenure in May 2022, correct?
+ Mr. DeJoy. June 2020, sir.
+ Mr. Johnson. I said 2022. That is what I meant, 2020, but
+you corrected me in terms of May. It was June, not May. But can
+you name for me, sir, one enterprise, governmental or private
+sector, that is required to fully pre-fund health benefits for
+its retirees and current employees?
+ Mr. DeJoy. I don't know of any. I don't know of any. I have
+heard of something someplace, but for the most part, it is non-
+existent.
+ Mr. Johnson. And this requirement has created a crushing
+blow for the Post Office's ability to maintain solvency on a
+year-to-year basis. Isn't that correct?
+ Mr. DeJoy. Yes, sir.
+ Mr. Johnson. And so when people talk about the Post Office
+not making money, and being insolvent, and needing to be
+replaced, that is just not true, is it?
+ Mr. DeJoy. Well, I don't think any of that is true, but we
+have financial problems. This----
+ Mr. Johnson. Well, I will tell you that the decline in
+first-class mail is one of those factors, isn't it?
+ Mr. DeJoy. Yes, sir. We lost over 45 billion pieces of mail
+a year 10 years ago.
+ Mr. Johnson. And is that any reason why you would want to
+create a situation where the first-class mail was not delivered
+within the current timeframe that is set for it to be delivered
+within, and you would want to stretch it out and deliver the
+first-class mail, let it be delivered at a slower pace than the
+pace that is set in stone for right now?
+ Mr. DeJoy. I mean, that is----
+ Mr. Johnson. Why would you want to cause first-class
+delivery to be degraded?
+ Mr. DeJoy. So, I think first-class delivery is degraded
+already because we don't make our service standards. We are not
+able to make our service standards. We have never made our
+service standards, and it is going to be increasingly----
+ Mr. Johnson. Well, you are----
+ Mr. DeJoy. It is going to be increasingly difficult to, in
+fact, you know, make them. If we were to try to proceed with a
+plan----
+ Mr. Johnson. But you are trying to change the service to
+allow for first-class mail to be delivered over a longer period
+than the guidelines currently call for.
+ Mr. DeJoy. You are guessing at what I am trying to do.
+ Mr. Johnson. Why would you do that?
+ Mr. DeJoy. We haven't released a plan yet.
+ Mr. Johnson. Well----
+ Mr. DeJoy. I will say that at the end of the day----
+ Mr. Johnson. Well, why would you want to do that?
+ Mr. DeJoy [continuing]. If we move forward with a plan,
+only about 30 percent of first-class mail would be impacted
+with any additional delays.
+ Mr. Johnson. Well, let me ask you this.
+ Mr. DeJoy. And it comes because we are not able to reach
+the markers.
+ Mr. Johnson. Let me ask you this question, sir. Let me ask
+you this question. During the middle of a pandemic and in a
+climate where there were going to be millions more ballots cast
+in an upcoming election----
+ Mr. DeJoy. Yes.
+ Mr. Johnson [continuing]. You decided to change the service
+delivery standards for the mail, and, as a result, the
+performance of the Post Office went into a steep decline. Why
+did you do that?
+ Mr. DeJoy. Well, are you talking about the past or are you
+talking about the future? You are confusing me.
+ Mr. Johnson. No, I am talking about this past summer----
+ Mr. DeJoy. Yes. So----
+ Mr. Johnson [continuing]. Right before the judge ordered
+you to replace those----
+ Mr. DeJoy. The intent of the changes that I made, you would
+think, would make the mail move on time. We were asked to put
+together a plan to have our trucks dispatch from the plants on
+time. We had significantly late vehicles, 50,000 a day, running
+around with 25 percent full. That is what I did. We failed at
+the execution. We fixed that----
+ Mr. Johnson. Well, the service standards went down.
+ Mr. DeJoy. And that was all done within----
+ Mr. Johnson. They were lowered as a result of your actions.
+ Chairwoman Maloney. The gentleman's time has expired. The
+gentleman may answer the question.
+ Mr. DeJoy. The transportation change that I made in July
+was remedied by the last week of August. It had no impact.
+After that, we ran extra trips. We ran late trips. We did
+everything we possibly could. The system was overwhelmed by
+package and mail volume, underwhelmed by the performance of our
+carrier networks, and also, quite frankly, our own operations
+within our plant facilities. We talked earlier about embargos.
+These were not embargoes. We had lines outside our plants
+because we couldn't fit anything else in our plants. That is
+not an embargo. That is being physically overwhelmed. However,
+had we gotten mail and packages to our delivery units, it got
+delivered 98 percent of the time within a day. So, nothing that
+has gone on over the last four months had anything to do with
+my asking the trucks to run on time in July.
+ Chairwoman Maloney. The gentleman's time has expired. The
+gentleman from Georgia, Mr. Clyde, is recognized for five
+minutes.
+ Mr. Clyde. Thank you, Madam Chair, for holding this
+important hearing and to our witnesses for their testimony. It
+is no secret that the election in my home state of Georgia was
+plagued with improprieties and irregularities. While I am not
+here to get into the specifics of those, nor am I looking to
+point fingers at the Postal Service, I am trying to understand
+some terminology used more than 10 times in the Postal
+Service's 2020 Post-Election Analysis Report, that being the
+term of ``extraordinary measures.'' This term was used
+throughout the report to highlight the Postal Service's success
+in having achieved the results that it did. Your report notes
+that some extraordinary measures deployed in the 2020 election
+had been deployed in previous years. I also want to make it
+known that some of the extraordinary measures deployed in 2020
+were court mandated, as was in the case of Georgia, and ballots
+processed under such measures were excluded from total counts.
+ As a businessman and a former Navy logistics officer, the
+term ``extraordinary measures,'' as it pertains to promoting
+metrics achieved and results delivered, leads me to think that
+you took steps above and beyond expectations. ``Extraordinary
+measures'' also generally requires the reshuffling of resources
+and labor away from other primary tasks and duties. But in the
+case of the Postal Service, those extraordinary measures taken
+were measures that helped you meet expectations and fulfill
+your missions, not to exceed them, nor did you put proper
+accounting processes in place.
+ My Democratic colleagues are encouraging states to expand
+mail-in ballots, and are pushing a bill, H.R. 1, that would
+restrict states' rights to determine the vote-by-mail
+eligibility of its residents. For an entity already flailing
+and saddled with billions of dollars in liability, I cannot
+imagine that said extraordinary measures are sustainable. So,
+to Mr. DeJoy, in a few sentences, how critical is it for
+Congress to take steps toward reforms that bolster efficiency
+to make these extraordinary measures, as they pertain to
+meeting minimum expectations, a relic of the past? What do we
+need?
+ Mr. DeJoy. I kind of got a little lost. What is the
+question, the specific----
+ Mr. Clyde. How critical is it for Congress to take steps
+toward reforms that bolster efficiency to make these
+extraordinary measures that we have been talking about, as they
+pertain to meeting minimum expectations, a relic of the past?
+ Mr. DeJoy. What was the last word?
+ Mr. Clyde. A relic of the past. Enunciation is really
+terrible here.
+ Mr. DeJoy. Yes, the last two words.
+ Mr. Clyde. A relic of the past.
+ Mr. DeJoy. A relic of the past.
+ Mr. Clyde. Yes. Thank you.
+ Mr. DeJoy. So, extraordinary measures have been a set of
+procedures that the Postal Service has done historically around
+mail-in ballots, and it really is quite, you know, something to
+see. We actually hunt inside plants for ballots to make sure it
+gets processed, often to the degradation of other type of
+services around election time. We are probably the most stable
+thing in the mail-in ballot process. We have 50 states and a
+number of districts that, you know, have electoral boards, and
+all their processes are different. And that is, you know, a big
+reason for some of the consequence of why we need to go through
+the extraordinary measures we do to get ballots out to the
+voters and back to the electoral boards. So, to the extent that
+anything can be done to streamline that, even a simple thing as
+a barcode in the first-class, you know, mailing of ballots,
+would be very, very helpful to the Postal Service.
+ But I would say to you, taking on that and going back to
+our plan in the future, there are extraordinary measures going
+on within the Postal Service everywhere. We have, you know,
+composite measures and metrics that we need to fulfill that are
+just not able to be filled.
+ Mr. Clyde. OK.
+ Mr. DeJoy. And it creates an operational process that, at
+the time, I found quite chaotic.
+ Mr. Clyde. OK. All right.
+ Mr. DeJoy. And of the things that, you know, this plan that
+we have----
+ Mr. Clyde. Thank you, Mr. DeJoy. I just have one more
+question for you----
+ Mr. DeJoy. Yes.
+ Mr. Clyde [continuing]. And I just have a few seconds left,
+on the topic of the Postal Service's role in upholding the
+sanctity of our elections. We know that a 2017 investigation by
+the Office of the Special Counsel found some Postal employees
+violated the Hatch Act. Can you please submit for the record
+answers to the following: one, detail of changes made to
+prevent violations during the 2020 election cycle, especially
+as it pertains to ballots processed under extraordinary
+measures; and two, is the Office of the Special Counsel
+currently investigating or planning to investigate possible
+violations of the Hatch Act that might have occurred last year.
+ Mr. DeJoy. Yes. I am not aware of any of that, nor am I
+aware of any violations that are even being, you know, talked
+about, but we will go back and, you know, look through the
+records.
+ Mr. DeJoy. I think there was a commitment by the 630,000
+men and women of the Postal Service to perform, you know, to
+within the letter of the law to move, you know, ballots
+through, and I don't think anything other than that happened.
+ Mr. Clyde. OK. Thank you very much. I yield back.
+ Chairwoman Maloney. The gentlelady from California, Ms.
+Speier, is recognized for five minutes.
+ Ms. Speier. Thank you, Madam Chair. Mr. DeJoy, the
+President provided an executive order upon becoming President
+that he wanted electric vehicles to be used to the greatest
+extent possible. A GSA analysis on the lifetime basis of EVs
+versus conventional vehicles found that they were about equal
+because of the lower cost of maintenance and the cost of gas,
+and as batteries become cheaper, they will probably actually
+decrease in price. So, my question is, you have just purchased
+a number of vehicles. My understanding is not one of them is an
+EV.
+ Mr. DeJoy. Well, that is not true. We announced the
+acquisition yesterday. As you know, our vehicles are 30 years
+old and catch on fire----
+ Ms. Speier. Yes. If you would just answer the question. How
+many EVs did you purchase?
+ Mr. DeJoy. We have in our plan a commitment to buy 10
+percent of----
+ Ms. Speier. Of the fleet? Well, why would it be 10 percent?
+Why not 90 percent?
+ Mr. DeJoy. Because we don't have the $3 or $4 extra billion
+in our plan right now that it would take to do it, but we are
+happy to talk with the Administration and with this Congress if
+they want to help us.
+ Ms. Speier. All right. Thank you.
+ Mr. DeJoy. But we did spend about $500 million on
+convertible.
+ Ms. Speier. Reclaiming my time. Reclaiming my time.
+ Mr. DeJoy. Every vehicle could be, you know, converted to
+electric. We have very well----
+ Ms. Speier. All right. I thank you, Mr. DeJoy. I would like
+to go on to another issue. In October 2020, CBS News reported
+that XPO Logistics landed a $5 million highway shipping
+contract with USPS, which was the first regular contract for a
+postal route that XPO Logistics had signed with the USPS in
+more than a year. An ongoing investigation by a crew in
+Washington revealed that USPS also awarded XPO Logistics
+another highway shipping contract of nearly $26,000 to run from
+November 2020 to 2022. You were, of course, formerly employed
+by XPO Logistics and had maintained an interest when you came
+on board as postmaster general. In October of last year, the
+Office of Government Ethics issued a certificate of divestiture
+to you showing that you had finally agreed to divest. Have you
+completely divested of XPO Logistics?
+ Mr. DeJoy. I have completely divested of XPO Logistics.
+ Ms. Speier. Have you transferred any of your interests to
+your adult children?
+ Mr. DeJoy. No.
+ Ms. Speier. Has the----
+ Mr. DeJoy. I have not transferred any of my XPO interest to
+my adult children. You said ``any of my interests.''
+ Ms. Speier. To your wife.
+ Mr. DeJoy. No.
+ Ms. Speier. To any of your family members?
+ Mr. DeJoy. So, you said any of my interests. I have lots of
+interests. If you are talking specifically about XPO, I haven't
+transferred that to anybody.
+ Ms. Speier. Do you have any interests associated with the
+Postal Service contracts that have been with the Postal Service
+in the past?
+ Mr. DeJoy. Ma'am, I have had a number of investigations
+with regard to my ethics. An OIG report came back without
+recommendation. I did it all right. I don't know where you are
+going with this, but there are no ethical violations in my time
+at the Postal Service, nor anywhere else in my career.
+ Ms. Speier. Well, evidently----
+ Mr. DeJoy. Evidently?
+ Ms. Speier [continuing]. The OIG did not review some of
+your accounts, and the name of the entity associated with those
+accounts is redacted. I am just curious, Ms. Whitcomb, if there
+has been an updated review of Mr. DeJoy's compliance with
+ethics requirements.
+ Mr. DeJoy. I comply with all ethics requirements. I did it
+immediately as I came into the organization.
+ Ms. Speier. No, I am asking this of Ms. Whitcomb. Is she on
+the line?
+ Ms. Whitcomb. Yes, I am here. Yes, since the issuance of
+that report, we completed our work and found that Mr. DeJoy
+followed guidance from Postal ethics staff and provided written
+recusal notifications, set up screening arrangements to avoid
+potential conflicts----
+ Ms. Speier. Thank you.
+ Ms. Whitcomb [continuing]. And divested appropriately.
+ Ms. Speier. Thank you. Let me end by asking you this, Mr.
+DeJoy. In my area, my constituents, I just got two yesterday.
+One got a letter that took 12 days from Dallas, Texas to San
+Francisco. I think people are willing to accept one day, but 12
+days presently is only going to become greater in the future.
+In the Bay Area, there are 100 non-carrier positions and 100
+letter carrier positions before the November election that were
+unfilled. The Bay Area cost is very high. You could get a job
+at the In-N-Out Burger drive-through for $18 an hour. My
+understanding is it is about $17 an hour as a starting salary
+for USPS. And so my question is, are you willing to look at a
+different rate of salaries for those who live in high-cost
+areas?
+ Chairwoman Maloney. The gentlewoman's time has expired. The
+gentleman may answer the question.
+ Mr. DeJoy. So, the union leadership and our H.R. team
+negotiate rates. But what I will tell you is that I am
+committed to improving on the pre-career status of some 200,000
+employees within our organization and have them really see a
+path to full-time employment, and I think that is really where
+we can improve on the retention and still stay competitive in
+the marketplace. And that is work I am very, very active in
+doing and recently converted 10,000 people in December, and
+that has not been done in many years here.
+ Ms. Speier. I yield back my time here.
+ Chairwoman Maloney. Thank you. The gentleman from Texas,
+Mr. Fallon, is recognized for five minutes.
+ Mr. Fallon. Thank you, Madam Chairwoman. The Federal
+Government and this institution, Congress, we are world-class
+experts at kicking the can down the road and also burying our
+heads in the sand. In short, we are terribly proficient at
+ignoring glaring, alarming, and potentially devastating
+problems, not just here, but in a myriad of ways. Solving the
+current dire financial status of the Postal Service should not
+be partisan. It seems it is because I have been watching this
+for several hours now, but it shouldn't be. We should take
+partisanship and throw it in the trash, particularly when we
+are looking at the realities of math.
+ Between 2007 and 2019, the Postal Service lost $79 billion,
+and in 2020, I believe that figure was $9.2 billion. Former
+Postmaster General Megan Brennan testified a couple years ago
+that in the absence of real legislative and regulatory reform,
+the Postal Service would be flat broke by about 2024. And what
+are some of the answers that are being proposed today by our
+friends on the other side of the aisle? Is it cutting costs? Is
+it reducing work force compensation? Is it limiting unfunded
+liabilities? Is it requiring the financial condition of the
+Postal Service to be considered during future collective
+bargaining? No. No, not one of those things. Medicare
+integration has been talked about a lot, and it looks as if, by
+estimates, it will save about $40 billion dollars over the next
+decade. But we are trying to close $160 billion gap, and
+taxpayers shouldn't be on the hook for that anyway. It is not
+as if Medicare is a shining example of financial safety and
+stability.
+ Mr. DeJoy, I have a very quick question for you. How many
+of the proposed reforms from the 2018 task force--I believe
+there may be, like, six major ones--have been implemented? Have
+there ever been any?
+ Mr. DeJoy. I can't hear you.
+ Mr. Fallon. I am sorry. Can you hear me?
+ Mr. DeJoy. Yes.
+ Mr. Fallon. How many of the proposed reforms from the 2018
+task force have been implemented?
+ Mr. DeJoy. So, if you haven't noticed, we have had kind of
+a restriction on implementing a lot of different processes. But
+the task force, I did study the task force, and there was some
+good directional elements of it, and there were some things
+that I would not sign on to. But some of those elements that we
+announced the plan, I will be, you know, happy to discuss it.
+And in that report, I mean, the White House report absolutely
+supported, you know, that it should remain a public entity, and
+that we needed to look at new ways of marketing our services,
+but recognized that there are cost and operational issues which
+our plan addresses.
+ Mr. Fallon. OK. Is it fair to say that that was
+constructive, though, as far as the task force? They had some
+ideas that were worth looking into?
+ Mr. DeJoy. As a public agency, we take all input.
+ Mr. Fallon. OK. And I apologize and thank you, and I think
+you are doing a great. I just am short on time. Mr.
+Diamondstein, I want to ask you a few questions, if I could.
+Your union currently has on its website a link to a 2021 union
+contract survey, and in it, you also tell your members, and I
+am going to quote here, ``Contract negotiations are most
+challenging with management always trying to chip away at our
+wages, rights, and benefits.'' And I would just have to share
+that I think demonizing the Americans that work at the Postal
+Service and in the Postal Service leadership doesn't do
+anything to solve the crisis that we are facing. It doesn't do
+anything to close that gap. So, you know, when we are looking
+at background material here, when we were reading through it--
+it was rather extensive, I was really alarmed by the $160
+billion in unfunded liabilities and debt; $50 billion unfunded
+liabilities for pension benefits, $60 billion in unfunded
+liabilities for worker compensation liabilities, and $19
+billion for compensation as well. It is glaringly obvious that
+this $160 billion chasm has to be closed, or at least narrowed,
+by limiting at least some somewhat the aforementioned unfunded
+benefits, or they are going have to be trimmed.
+ So, I just had three quick questions for you. Is your union
+willing to acknowledge that, and what is your union doing to
+help the Postal Service become profitable, obviously other than
+fighting management. And then last, do you oppose or support
+requiring the financial condition of the Postal Service to be
+taken into account during future collective bargaining? And I
+can ask those questions again.
+ Mr. Diamondstein. You expect me to remember those three
+questions.
+ Mr. Fallon. OK. Well, I will go first. Are you willing to
+acknowledge that this $160 billion chasm is large, it is
+glaring, and we are going to have to do something to trim that?
+ Mr. Diamondstein. OK. I appreciate that question because a
+lot has been thrown around today about the dire financial
+situation. But the reality is that a heck of a lot of this
+liability and debt is paper, and it was created. If the Postal
+Service is broke, we could say it is broke on purpose. And so,
+actually our pension plans are over funded. Our retiree
+healthcare funds are funded in a way that no other company or
+no other Federal agency does. There is a lot of money there. So
+to me, it doesn't get us to where we need to go by creating
+this picture that is really not the case.
+ Now that isn't diminishing that we feel there is some real
+challenges, so one of the questions you asked is what are we
+doing about it. We are huge advocates of expanded services.
+Expanded services bring in new revenue, such as in the
+financial service world, such as paycheck cashing, such as
+licensing, such as electric charging stations in front of many
+post offices. There are all sorts of things that we can do that
+we are willing to work with management on.
+ Now, your third question--I think I remembered them all--is
+the question of what have we done. The Postal workers have
+given up a lot. And I am glad you are reading our website, but
+you should go back to our 2010 collective bargaining agreement
+where we didn't get pay raises for two years at all, where we
+lowered the standards to the point that the Post Office
+unfortunately is having trouble hiring. We didn't want to go
+that way, all right? But we believe in good living wage jobs,
+good benefits, and the problem with the Postal Service is not
+that we have a collective bargaining process where if it ends
+up in interest arbitration, they can't take into account the
+financial----
+ Chairwoman Maloney. The gentleman's time has expired.
+ Mr. Diamondstein [continuing]. Post Office. We are model
+employers under the law, and we should remain that way. But I
+do take issue with this idea of the hundreds of billions of
+dollars that is thrown around when it is really not case, and
+Congress can fix it----
+ Chairwoman Maloney. The gentleman's time has expired.
+ Mr. Diamondstein [continuing]. With many of the ways we
+have talked about.
+ Chairwoman Maloney. The gentleman from Maryland, Mr.
+Sarbanes, is recognized for five minutes.
+ Mr. Sarbanes. Thank you, Madam Chair. Can you hear me OK?
+ Chairwoman Maloney. Yes, we can.
+ Mr. Sarbanes. OK. I appreciate the hearing, and I
+appreciate the good work on the bill that we have been
+discussing today. And thank you for your staff's efforts on
+that, and hopefully we can make some forward progress with it.
+ Postmaster General DeJoy, you, I think, conceded a couple
+of rounds back that there was some failure of execution in
+terms of the plan that you were implementing last spring and
+summer. I thank you for that acknowledgement. What the head
+scratcher for me was that you would barrel forward with your
+plan as the pandemic was ramping up. I just never understood. I
+mean, leave aside the pros and cons of the plan, and I have a
+lot of concerns about it, but why you wouldn't go into some
+kind of a pause mode at a time when the postal work force was
+going to be under incredible pressure, I have never completely
+understood.
+ But be that as it may, I want to, Mr. Diamondstein, talk to
+you for a moment. First of all, thank you for your
+representation of American Postal Workers Union. You have very
+strong members and leadership in the Baltimore area. I want to
+thank you for that because they have given us good insight on
+some of the challenges that the Postal Service is facing. One
+of the components of the bill that we are talking about in the
+discussion draft, in addition to the Medicare integration and
+eliminating the requirement to pre-fund retiree health
+benefits, has to do with service performance reporting. And it
+is the idea that there will be required targets for the Postal
+Service to meet in terms of performance and then reporting what
+goes with those targets, and that will reflect nationwide
+performance, area performance, district levels, et cetera, and
+form the basis of a plan that can go to PRC on addressing the
+failure to meet standards in the future.
+ My question for you is, can you speak to how that effort,
+and that focus, and that reporting regime relates to the Postal
+Workers Union and other union support for restoring 2012
+service standards, which I know is something that you all have
+spoken to. Talk to me a little bit about how you see those
+relating, and talk to me as well about your confidence and
+experience with the Postal Service management pulling the union
+into the conversation around how to meet those standards and
+address any gaps between the standards and actually what is
+happening in practice.
+ Mr. Diamondstein. Well, to take the second part first, my
+union has not been consulted as management sought input on
+their 10-year planning. It is not like we never have
+conversations here and there with our counterparts, but we
+never were consulted by the Board of Governors or by this
+Administration, and we think that is a real problem. We know
+what is going on in the workroom floor. We are all Postal
+workers ourselves and union leadership were in touch with our
+members, and we have a lot to offer.
+ In terms of the language of the bill, the draft discussion,
+we are glad that you are taking on the question of service
+standards. We think it should be stronger in our first read,
+and we have made no bones about it that we would like to see
+overnight delivery restored within our towns, one side of the
+street to the other, that that would be good for the business.
+It would be good for the customers. It would be good for the
+workers. It is a win-win-win, and that is what revised 2012
+standards would do. But we do appreciate the committee's
+efforts to try to address the service issues, which folks on
+both sides of the aisle are obviously very concerned about and
+Postal workers are deeply frustrated with.
+ Mr. Sarbanes. Well, thank you.
+ Mr. Diamondstein. I hope I have answered your question.
+ Mr. Sarbanes. No, I appreciate that, and I would just say
+there is no hope of achieving any service standards that meet
+the public's expectation if the work force, and the unions, and
+the people that are on the front lines aren't collaboratively
+involved in that conversation, whether it is, in this instance,
+with respect to our committee and how we discuss proposed
+legislation, or, just as importantly, with the management of
+the U.S. Postal Service.
+ Chairwoman Maloney. The gentleman's time has expired.
+ Mr. Sarbanes. So, thank you for your----
+ Chairwoman Maloney. The gentleman's time has expired. Ms.
+Kelly is now recognized for five minutes.
+ [No response.]
+ Chairwoman Maloney. Ms. Kelly of Illinois.
+ Ms. Kelly. Thank you, Madam Chair. The coronavirus pandemic
+has caused a great increase in the volume of packages that are
+moving through the postal system, increasing in some weeks by
+60 percent over the same period last year, as we have been
+discussing. According to press reports, over last year's peak
+holiday season, the surge in package volume essentially
+overwhelmed many postal processing facilities, with packages
+piling up so much that it became difficult for workers to move
+freely in order to do their jobs.
+ I am getting calls daily from my district, people crying,
+screaming into the phone, their mail drastically delayed by
+three to four weeks. The surge in package volume was
+undoubtedly a major factor. There have been reports that UPS
+and FedEx ``dumped packages'' that they could not deliver on
+time. Mr. Postmaster, what do you have to say about that?
+ Mr. DeJoy. Well, I agree with you that we have been
+overwhelmed by packages, as I said earlier in my testimony. The
+extent to which UPS and FedEx dumped, I don't know if that is
+the right word, but they are able to refuse package volume, and
+we chose not to. So, to the extent that they were not taking
+volume, we were the only outlet for the American people, and we
+got a whole bunch of it, and that resulted in what you were
+describing in your district all over the country. Those
+conditions existed.
+ Ms. Kelly. Yes, I just got a Christmas card last week. Why
+did the Postal Service seem so unprepared for the package
+surge?
+ Mr. DeJoy. Well, I am here eight months, and this has been
+going on for 10 years, right, the network, the erosion in the
+network, the imbalance in our operating schedules. But even if
+I was here for 10 years, we are in a pandemic, Congresswoman,
+and the 40-percent increase over peak volume for our
+organization was probably even too much to predict. I mean, I
+don't think FedEx and UPS like not taking volume, right,
+because they are profit oriented.
+ So, you know, we were overwhelmed with packages in the
+regular business, you know, before the pandemic, right? We had
+not outfitted any of our operations significantly enough with
+package sortation equipment, the right transportation
+methodology, the right plant-to-plant movements, significant
+issues in moving packages. So this----
+ Ms. Kelly. OK. Let me ask Mr. Diamondstein, what was the
+experience of workers during the surge, particularly with
+respect to coronavirus safety in postal facilities? And I am
+sorry I am not on camera. I am trying, but it just won't let me
+on.
+ Mr. Diamondstein. Well, first and foremost, it was
+obviously very stressful. Postal workers as frontline essential
+workers, like so many other frontline essential workers, are
+still dedicated to the mission, but we have had a lot of
+sickness. We have unfortunately had an unfortunate share of
+deaths and, of course, we have had a lot of people that weren't
+able to come to work because of the childcare issues, with
+schools, and all sorts of things. Now, in terms of the health
+and safety, I think that the parties, the union and management
+at the national level of the Post Office, really did quite a
+good job putting in a lot of protocols to make the workplace as
+safe as possible in a dangerous time.
+ It was a little shaky in the beginning because people were
+hit kind of unawares, but there has been plenty of PPE. There
+has been a lot of safety shields between the folks that staff
+the windows and the customers. There has been extra cleaning.
+There has been extra chemicals. There has been extra wash-up
+time. So, I think on that part, we did excel as both union and
+management. It doesn't mean it has always been applied evenly
+and equally throughout the country.
+ Ms. Kelly. Right.
+ Mr. Diamondstein. But there is certainly the vehicle there
+for folks to protect themselves. We also agree with
+management----
+ Ms. Kelly. I am running out of time.
+ Mr. Diamondstein. I am sorry.
+ Ms. Kelly. So, I just want to say to the postal workers,
+thank them for their service, but we need to take steps to make
+sure the Postal Service is on firm footing going forward----
+ Mr. Diamondstein. Absolutely.
+ Ms. Kelly [continuing]. Because it is a disgrace if you
+could just hear all the phone calls. Thank you. I yield back.
+ Mr. Diamondstein. Great.
+ Chairwoman Maloney. The gentlewoman from Michigan, Mrs.
+Lawrence, is recognized for five minutes.
+ Mrs. Lawrence. Thank you so much. Mr. Bloom, I am looking
+at the tenure of Board of Governors, and it seems like the
+longest one that has been in place is 2018, so the majority of
+all you have been serving almost entirely in the pandemic
+experience. Have any of you ever gone through an entire
+structure reorganization like what is being proposed or the
+service standards? Do you have any experience in that?
+ Mr. Bloom. Well, we are----
+ Mrs. Lawrence. Yes or no?
+ Mr. Bloom. I have had a lot of experience with
+restructuring, yes.
+ Mrs. Lawrence. As it impacts service standards? Where did
+you work before, sir?
+ Mr. Bloom. The experience I had was working for the Federal
+Government with the General Motors restructuring, working for
+the Steelworkers Union and the integrated steel industry and
+other----
+ Mrs. Lawrence. And they don't have service standards, sir,
+correct?
+ Mr. Bloom. No. No, that would not----
+ Mrs. Lawrence. Sir, my next question is to the postmaster
+general. Yes or no, do you recognize that during your tenure
+since you have been here, you have been compromised by COVID,
+holiday mail, and election mail, a record amount of election
+mail, during this period? Yes or no.
+ Mr. DeJoy. What do you mean by ``compromised?''
+ Mrs. Lawrence. You have been impacted, your ability to do
+your job.
+ Mr. DeJoy. Yes.
+ Mrs. Lawrence. Can you confirm that the staffing, as has
+been stated by the union representative, has been compromised
+or impacted by COVID? So, you don't have the 600,000 employees
+that you have on paper. They haven't been able to work, so you
+have been working with a reduced staff, correct?
+ Mr. DeJoy. Yes, in fact, we have had 200,000 new hires, and
+our population stayed the same. That is a tremendous amount of
+new entries into----
+ Mrs. Lawrence. Absolutely. It is because of their work
+environment, I am told. So, my question is to you, Mr. DeJoy.
+You recognize that the Postal Service is in a competitive
+market with UPS, FedEx, and other delivery companies, correct?
+ Mr. DeJoy. I do.
+ Mrs. Lawrence. So, as a customer, if you are going to
+reduce the standards----
+ Mr. DeJoy. Mm-hmm.
+ Mrs. Lawrence [continuing]. And raise the amount of mail,
+and you have another company sitting right beside you that will
+continue to have those standards, would that decrease the
+volume of people who would come to the Postal Service, because,
+as of now, it is affordable, and even in 2020, you were in the
+90's for service standards, but now you have reached one of the
+lowest ever. And I am not putting it all on you, sir. You are
+new to the job. You have been impacted by these. But why is
+there any common sense behind changing an organization in the
+middle of a pandemic? You haven't even stabilized your work
+force because there is a revolving door. There are so many
+things that you need to do. I appreciate you saying you are
+being bold, but that is just like me saying that I am going to
+restructure an organization in the middle of a pandemic when
+half my work force isn't there. I had an unprecedented amount
+of mail volume, and then I had this huge impact of COVID with
+parcels.
+ Let me tell you one of the challenges. In my district, you
+have NDC, which is a parcel processing plant, that did not know
+what was incoming mail and what was outgoing mail. The mail was
+literally gridlocked. That is a lack of management. You have to
+fix the management that you are responsible for before you
+start ripping everything apart. To me, and I have said this to
+you personally, I don't understand how you come in just ripping
+the organization apart during a pandemic when you haven't even
+come in to show your leadership of being able to run an
+efficient, accountable organization. It has changed. I called
+the postmaster about the gridlock of trucks sitting for 20
+hours to drop a load in Detroit. He told me I can't answer that
+question because ``I have no responsibility over processing.''
+I said, well, give me the person. They told me to go to Denver.
+I called Denver. They couldn't give me an answer right away.
+So, here we are with this disjointed organization. You haven't
+shown, and I am not saying you can't, but you haven't shown
+your leadership, and now you want to rip it apart.
+ Mr. DeJoy. Congresswoman, we have had good conversations
+before. I think this type of description of what is going on is
+not really accurate, ``rip it apart,'' or ``nobody knowing what
+is going on.'' I would suggest to you, if we look back over the
+past 10 years----
+ Mrs. Lawrence. It is factual. It is going on.
+ Mr. DeJoy. I am sorry?
+ Mrs. Lawrence. It is going on. You had a gridlock, and you
+know that----
+ Mr. DeJoy. OK.
+ Mrs. Lawrence [continuing]. Where no one knew----
+ Mr. DeJoy [continuing]. And where do we want to put that
+responsibility?
+ Mrs. Lawrence. Well, it ultimately rests in your hands,
+sir. You're the postmaster general.
+ Mr. DeJoy. OK. And we have a plan to fix that, but----
+ Chairwoman Maloney. The gentlewoman's time has expired.
+ Mr. DeJoy. But I would say to you that the problem is more
+than one-dimensional, right? With regard to the organization,
+that is one of the things that we are very much working
+aggressively on to have an organizational strategy that
+actually knows who is responsible for these things. I would
+suggest to you, before you may think people knew they were
+responsible, but if they did, when we ran trucks on time, they
+would have went with mail and they didn't. So, and we are also
+facing----
+ Mrs. Lawrence. Fix it.
+ Mr. DeJoy [continuing]. With regard to your service----
+ Mrs. Lawrence. Fix it.
+ Mr. DeJoy [continuing]. With regard to your service
+question----
+ Chairwoman Maloney. The gentlewoman's time has expired.
+ Mrs. Lawrence. Fix it.
+ Chairwoman Maloney. OK. The gentleman from California, Mr.
+DeSaulnier, is recognized for five minutes.
+ Mr. DeSaulnier. Thank you, Madam Chair. I want to thank you
+for having this hearing, and I also want to associate myself
+with the comments from my colleague from Louisiana some time
+ago about the historical importance of the Postal Service. All
+these years since before the founding, postal delivery has been
+important to this country and it has adapted, and clearly, we
+have a challenge now in this global economy.
+ I would like to say before specifically asking a couple
+questions of Mr. Diamondstein, as a former small business owner
+in a very low-margin business--the restaurant business in San
+Francisco Bay Area--this cultural thing that the private sector
+is always right, it drives me slightly to distraction. Having
+been from the private sector, but now having spent a lot of
+time on ride-alongs looking at government services about the
+local, state, and Federal level and ride-alongs with the Postal
+Service here in the East Bay of San Francisco Bay area, and a
+lot of discussions, including with the former postmaster
+general, the public sector can learn from the private sector.
+The private sector is not all-knowing, and we can see
+shortcomings from the private sector as well. You mentioned
+companies like Enron and WorldCom, and the recession, and
+housing crisis.
+ And then the issues of subsidies, I wish we had more
+accurate descriptions about how taxpayers subsidize the private
+sector and what we get, to be politically agnostic, were those
+returned to people. So, in this instance, again, as a former
+retailer, one of the great strengths of the Postal Service is
+the retail aspect of people liking their delivery person. The
+letter carriers are out there every day, again, having been on
+ride-alongs with postal workers. My success when I was in
+private sector was directly related always to my employees and
+the relationship I had in management, even though I often
+wasn't physically there, although it wasn't a large corporation
+like the current postmaster general's background. I think to
+destroy that branding in any way has been a great disservice to
+the American taxpayer. So, specifically, having these
+performance standards, and I look forward to this legislation
+and having a real discussion focused on performance standards,
+the background of instilling that and getting a reward from it,
+but still protecting a lot of the important assets,
+particularly the rank and file in the Postal Service.
+ So, Mr. Diamondstein, it is interesting to me, along the
+tone of my comments, is that 7,500 mid-managers don't have the
+ability to go to the Merit System Protection Board. So, could
+you tell me some of the challenges to that and some of the
+things we need to do to allow due process, but also to this
+very important group of people to make sure that their morale
+is good and they feel like they are being protected while we
+still demand high standards from them?
+ Mr. Diamondstein. Well, Congressman, we obviously don't
+represent the mid-managers that you are speaking of, but we
+have no opposition to people in the organization having the
+maximum due process that the law can provide, and the MSPB is
+certainly a route there. So, you know, we focus on our
+collective bargaining agreements and our rights within that,
+but we have not put up any up obstacles on that question.
+ Mr. DeSaulnier. And in terms of the people you do
+represent, the benefit for them to be able to access the due
+process that the Merit System allows them, could you give us a
+few comments about that, and understanding there is a balance
+here. Management and rank-and-file have a traditional
+relationship. We want it to be as healthy as we can, but we
+want a collective benefit to go to the taxpayer or the
+customer.
+ Mr. Diamondstein. OK. Well, again, just be careful about
+the taxpayer since it is not a taxpayer-funded entity, and I
+think that is important to keep in mind.
+ Mr. DeSaulnier. Right.
+ Mr. Diamondstein. In terms of our members, we have due
+process under a collective bargaining agreement, and within
+that, there are groups of employees or disabled veterans who
+also have access to MSPB under the law. So, we are satisfied
+from the point of the people that we represent that the due
+process rights are there. They work.
+ Mr. DeSaulnier. Yes, I appreciate the comment about
+taxpayer. I am sorry. I slipped into my former party
+affiliation from many years ago when I was registered as a
+Republican, so I appreciate that, but just a last comment. I
+really think the Congress would be well served if we had a
+better understanding of the relationship between subsidies and
+support, whether it is in the infrastructure and transportation
+system, and the benefit that we all get as Americans from that.
+So, thank you, Madam Chair. I yield back.
+ Chairwoman Maloney. The gentleman yields back. The
+gentleman from California, Vice Chair Gomez, is recognized for
+five minutes.
+ Mr. Gomez. Thank you so much, Chair Maloney. I really
+appreciate this hearing. I just want to start off by expressing
+my appreciation to the men and women of the U.S. Postal
+Service, the letter carriers, the postal workers, for just
+being out there every single day during this pandemic. I know
+the pandemic has had an impact not only when it comes to almost
+every aspect of American life, but also to the men and women
+who are still going to work every single day, delivering the
+mail, making sure that things try to get there on time. It
+hasn't been easy at all, and I know that they are deeply
+concerned about the decrease in performance. They are also
+deeply concerned about just the direction of the U.S. Postal
+Service across the board.
+ So, I am in complete support of making sure that we can
+provide as much financial support to the U.S. Postal Service as
+possible. Americans do see it, that it should not be run like a
+business, but as a public service, and I think that there is a
+reason why, because oftentimes a business just attempts to
+maximize profit, not necessarily how it caters to their
+clientele, just how do we maximize profit. And when you just
+try to maximize profit, it doesn't mean that you automatically
+get the best result.
+ I want to ask Mr. DeJoy about a couple of things. Coming
+from California, trying to have more electric vehicles on the
+road, and combatting climate change is a big deal. You
+mentioned 10 percent of the fleet would be electric. Real
+quick, just a few questions, and I am just trying to figure it
+out. You are replacing a lot of these old mail delivery trucks.
+What is the new miles per gallon for each new truck, especially
+since the old one was, I guess, 10 miles per gallon?
+ Mr. DeJoy. It is more. I don't recall off the top of my
+head what it is. You know, we have a year decide what the final
+complement is on the electric vehicle, and we are very much
+pursuing it, but we need to kick the project off.
+ Mr. Gomez. Listen, I am glad you are moving forward. I
+heard that you guys have been trying to find somebody to
+actually do this since 2015, so I am glad it is moving. But if
+you are replacing just inefficient vehicles, right, the
+American people want to know how you made that decision. Was it
+based on miles per gallon? Great. And then at the same time,
+what kind of tailpipe emission standards are they achieving?
+How much are they reducing in greenhouse gas emission? Just
+kind of figuring out, like, because that is a big deal if you
+are not going through more electric, right, by raw numbers,
+which we would know are cleaner.
+ You said also that you could convert these new trucks to
+electric if you got more resources. How much would it cost to
+convert a truck, and was that taken into the consideration when
+deciding just to purchase 90 percent fossil fuel vehicles?
+ Mr. DeJoy. First of all, the evaluation factor on what you
+were speaking as a total cost of ownership over a 10-, or 15-,
+or 20-year period when we did it, which includes everything,
+the cost per truck is a little misleading because it is really
+the cost of the electric infrastructure around the Nation that
+we would need to implement. And this is a procurement-sensitive
+statistic. I can't, you know, disclose in total, but it was
+significantly more.
+ Mr. Gomez. Reclaiming my time. I just want to be very
+clear. Congress is going to be supportive of trying to get
+electric vehicles in the Postal Service fleet, and we also
+understand that it is part infrastructure, and we can take that
+into consideration when we allocate resources. I think you
+should take a harder look on what kind of fleet you are going
+to be using, especially since the issues regarding the climate
+crisis are just growing. One last thing----
+ Mr. DeJoy. I was hoping for the invitation, sir.
+ Mr. Gomez. Yes. You said ``we are proud of what we have
+done.'' And I look at the Postal Service, and I must admit I am
+really disappointed in where it is at, and rightly or wrongly,
+and I think it is rightly, you are being stuck with just the
+deterioration of the public's confidence in it.
+ Chairwoman Maloney. The gentleman's time has expired.
+ Mr. Gomez. I hope that the Board of Governors takes steps
+to review it, but with that, I have to yield back since my time
+is up. Thank you so much.
+ Chairwoman Maloney. Thank you. The gentleman yields back.
+The gentlewoman from Massachusetts, Ms. Pressley, is recognized
+for five minutes.
+ Ms. Pressley. Thank you, Madam Chair. Thank you for
+convening today's hearing. The United States Postal Service is
+one of our Nation's greatest institutions. Its public servants
+are our greatest individuals on the front lines of this ongoing
+pandemic. In the Massachusetts 7th, which I represent, nearly
+3,000 postal workers across 38 facilities--shout out to NALC
+Local 34--they are risking their health to deliver everything
+from lifesaving medication to unemployment checks. It is
+critical we enact legislation to bring stability to USPS and
+the lives of all of its employees. But make no mistake, there
+is no legislative fix.
+ [Inaudible] of Postmaster General DeJoy and the current
+Board of Governors. They have caused the postal work force to
+suffer, they hey have caused delivery and critical services to
+be cut, and they have caused our communities great hurt. These
+actions are a clear dereliction of duty and service to the
+American people. They demand accountability, which is why I
+have repeatedly called for the removal of Mr. DeJoy and the
+entire Board of Governors, and the appointment of a new diverse
+board with the experience and skills needed to represent the
+public interest and to restore the public's faith and integrity
+of the USPS.
+ The USPS needs leadership that respects the fundamental
+role the Agency plays in our society, and Congress can leverage
+the resources, dedicated workers, and infrastructure of the
+Postal Service to meet the Agency's fiscal needs and to serve
+the broader American public. Postal banking presents a unique
+opportunity to simultaneously increase revenue for the U.S.
+Postal Service while advancing economic justice. An estimated
+one in four people in America are unbanked or underbanked,
+including 50 percent of black and Latinx communities, resulting
+in thousands of dollars in fees and resilience on predatory
+check cashing services and payday loans. This burden
+disproportionally falls on communities of color. Sixty-three
+percent of majority black census tracts do not have an active
+bank branch. These banking deserts, however, do have post
+offices. If post offices offered financial services, such as
+money transfers, bill payment, and check cashing, our Nation
+would take a significant step toward closing the racial wealth
+gap. Mr. Diamondstein, can you provide any details on the
+history of postal banking in our country?
+ Mr. Diamondstein. Well, for over 60 years--I can't remember
+the exact dates, Congresswoman--I think 1911 to 1967 or so,
+there was actually a savings bank in the Postal Service. The
+Postal Service now provides financial services, such as money
+orders, some types of check cashing, and I completely agree
+with your comments around postal banking. We would like to
+start with the basic thrust of improved, and enhanced, and
+expanded financial services as a step that may get us some day
+to a public option on postal banking. But the advantage of the
+steps is it is within the Postal Service itself. It will not
+take legislation to do those things. We think it would be great
+for the people, the social justice issues you raised, and we
+think it would be great for the Postal Service itself. And the
+postal workers that we represent are ready to rock and roll.
+ Ms. Pressley. Thank you, Mr. Diamondstein. And could you
+further unpack, elaborate as to why the USPS is uniquely
+positioned to provide banking services to those who are
+unbanked and underbanked? And also, could you just answer, is
+there support for postal banking among postal workers?
+ Mr. Diamondstein. Yes, there is definitely support amongst
+postal workers for postal banking, for expanded financial
+services. People see it as an important service and an
+important part of our future. Your first question,
+Congresswoman, please again?
+ Ms. Pressley. How is the USPS uniquely positioned to
+provide these services?
+ Mr. Diamondstein. Well, we are in all these neighborhoods
+where banks have pulled out. We are trusted. We are trained. We
+are accountable. We are dedicated. And 91 percent of the people
+of the country, through the entire political spectrum, support
+the Postal Service and trust postal workers. So, we are in a
+great position to provide these expanded services.
+ Ms. Pressley. Thank you. Thank you. And there are so many
+who are eligible for stimulus relief during the pandemic, but
+are unable to access those funds because they are unbanked. In
+a public report, the Office of the Inspector General concluded
+that, ``Financial services have been the single-beset new
+opportunity for post offices to earn additional revenue. For
+the Postal Service, this might translate into $8.9 billion per
+year.'' Ms. Whitcomb, how could providing financial services
+improve the financial footing of the USPS?
+ Ms. Whitcomb. Yes, the report that you cited, we issued a
+while back, and we did an analysis of the positioning of the
+Postal Service to provide financial services. And, as you
+stated, posts around the world are very active in the financial
+services industry. Many posts achieve significant financial
+benefits by providing financial services to the citizens in
+other countries. So, we are happy to discuss this----
+ Ms. Pressley. I am so sorry. I am running out of time.
+Reclaiming my time just for one minute----
+ Mr. Comer. Madam Chair, out of time, and we have votes on
+the floor.
+ Chairwoman Maloney. The gentlelady's time has expired.
+ Ms. Whitcomb. We can discuss it further with the committee
+staff.
+ Ms. Pressley. Thank you.
+ Chairwoman Maloney. OK. That concludes all of our witnesses
+today and questioning. But before I close, I ask unanimous
+consent to place in the record letters of support for reforms
+to the Post Office. Without objection.
+ Chairwoman Maloney. And before I close, I would like to
+offer Ranking Member Comer a chance to ask any wrap-up
+questions to the witnesses or to make any closing remarks.
+Ranking Member Comer, you are now recognized.
+ Mr. Comer. Well, thank you, Madam Chair, and I appreciate
+very much that you held this hearing, and I appreciate very
+much the ongoing conversations that we have to try to get to a
+real bipartisan postal bill that actually does reform. I want
+to say, Mr. DeJoy, you said earlier, your only request is for
+those included in the draft bill, but requests aren't the same
+as needs. And our side has sought to clarify that you have
+support of the Board and that Democrats' charges against you
+are baseless. It is clear, as Mr. Connolly said, that they want
+you gone.
+ So, your plan when it comes out might be fantastic, but
+however long you do end up staying, it is not going to be
+forever. So, we need policies that are going to address the
+aspects of the Postal Service's problems over and above those
+dealing with retiree benefits. And when I asked you what
+happened the last time you tried to make those operational
+changes, it wasn't to have you detail how those changes
+impacted service. It was to highlight how entrenched interests
+fought you tooth and nail at every turn, and the likelihood is
+that is what is going to happen in the future.
+ But I felt it was essential for us to discuss the obstacles
+facing the Postal Service and hear about some difficult
+decisions that we will have to make in Congress. With this
+information, we have a real opportunity for the Postal Service
+to enact meaningful change. It is often a mantra that we should
+start with the easy pickings. The temptation to do so in the
+case of postal reform is strong because of how much we hear
+from our constituents and stakeholders, nervous about any
+possible changes to how things have always been done. Fixing
+some accounting issues and doing things like switching the pot
+of money from which employee healthcare is funded will no doubt
+cleanup the books and create some short-term relief for the
+Postal Service, but they are not nearly enough, and everyone
+knows that. They will not solve the problems confronting the
+Post Office, and the American people are not going to see them
+as an improvement on the services they rely on.
+ As Mr. Bloom said in his written statement, ``If I have
+learned one thing, it is that the single largest impediment to
+achieving a successful outcome is that stakeholders will
+support the abstract need for change, but will seek to avoid
+changing anything that impacts their particular interests.''
+So, in other words, the chairman of the Board of Governors is
+saying that stakeholders know something is wrong, they know
+something needs to change, so they all say the right things
+about it. But when push comes to shove, they refused to
+consider any changes that will force them, in turn, to adapt or
+evolve in a way that ensures the Postal Service can survive and
+thrive.
+ We here on this committee should not limit ourselves to the
+easy pickings and leave the more difficult decisions to some
+later date. If we do, it will be too simple to pat ourselves on
+the back for finally enacting some postal legislation and
+ignore the opportunity to create real lasting change that will
+allow the Postal Service to serve the American people better. A
+postal bailout alone without any structural changes is not a
+real reform bill.
+ So, Mr. DeJoy, we look forward to your forthcoming plan. We
+appreciate the working relationship that you and Mr. Bloom and
+the entire Board have, and we appreciate the fact that the
+Board supports your forthcoming changes. So, Madam Chair, I
+look forward to working with you as we move forward to pass a
+real bipartisan postal bill that reforms the Post Office. I
+yield back.
+ Chairwoman Maloney. I thank the gentleman for his comments
+and his willingness to work together for real postal reform. I
+now recognize myself for five minutes.
+ First, I would like to express my appreciation to all the
+postal workers who have been on the frontlines of helping the
+American people during this time of COVID. I want to ask
+Postmaster General DeJoy about a bill that is on a slightly
+different topic which I will be introducing today, the Vote By
+Mail Tracking Act. This bill would require all ballots mailed
+in Federal elections to include a Postal Service bar code,
+allowing the ballot to be tracked by the Postal Service,
+election officials, and the voter. This bill would go a long
+way toward ensuring that ballots are sorted, processed, and
+delivered efficiently, and would provide more transparency and
+accountability to voting by mail. Mr. DeJoy, does the Postal
+Service support the use of barcodes to track all Federal ballot
+mail?
+ Mr. DeJoy. Yes, ma'am, we do.
+ Chairwoman Maloney. Thank you. Ensuring that ballots are
+delivered on time and giving election officials and the public
+additional transparency can only improve our elections.
+ And in closing, I want to thank everyone for a fruitful
+discussion today on this incredibly important topic. We have
+heard it many times throughout this hearing--it bears
+repeating--the Postal Service is one of our Nation's most vital
+and respected institutions. It deserves our full support.
+Sadly, its financial situation is far too unstable and requires
+that Congress act in a bipartisan manner to ensure that it can
+continue to serve the American population for years to come.
+The draft reform legislation that we discussed today will help
+the Postal Service accomplish that goal. Medicare integration
+will save the Postal Service at least $10 billion in the next
+10 years. Eliminating the unfair pre-funding mandate will take
+over $35 million off the Postal Service's debt sheet, and
+additional requirements to help the Postal Service meet its
+service performance targets will give the American people
+increased certainty that their Postal Service truly works for
+them in an efficient and effective manner.
+ I appreciate the contributions of my colleagues today on
+both sides of the aisle. I appreciate the testimony of Mr.
+DeJoy and all of our panelists, and I hope that we can continue
+to work together to introduce a bipartisan bill that can pass
+the House in the very near future and be sent to the Senate and
+hopefully pass there, and signed into law.
+ I yield back, and the meeting is adjourned. Thank you.
+ [Whereupon, at 3:15 p.m., the committee was adjourned.]
+
+ [all]
+