the failure of the postal service would be devastating to our economy. i see that you are nodding in agreement. it would pose a threat to the jobs of millions of americans. today you've heard the postmaster general describes a crisis. he says the postal service is on the brink of default. a year from now we will not be able to meet its payroll and carry out its operations yet this morning or this afternoon you come to us and tell us that the administration does not yet have a plan. you've proposed several of the reforms, the fundamental reforms that postmasters general has put forth as far as the separate retirement system and changing to the contribution system. you asked for word you say you want more time to study it, you asked for a 90 day delay in the 5.5 billion. you haven't mentioned your procession on the noeth layoff provisions that are in the union contracts other than to take a position in opposition to the repayment of the $55 billion of the csrl s system that our actuary has described. i just don't understand why the administration doesn't have a concrete plan to put before us today he given the dire straits that we are in the senator harper and all i have pulled out there for many months they are not perfect and they've been overtaken by the rapidly deteriorated in crisis that we face. why doesn't the administration have a plan before us today? >> there will be a plan as i testified that the white house will have that submitted with the deficit reduction package within the next few weeks, and the president will meet his promise to give that to the congress. i also just want to correct what the administration hasn't taken a position of the postal service proposal on the retirement system's so i'm not here in opposition to those. >> you're not supporting it either. >> all i did was to explain it will require further study but there is no formal administration position of opposition, so i want to be clear on that point. the other is something we are supporting and it's in the president's budget and is reflected in a number of the pieces of legislation is the overpayment, the surplus in the retirement of what we estimate to be the $6.9 billion the administration does support returning that the postal service. it would require legislation to do that, but we are supportive of that relief and i think that will go along way in terms of helping some of the challenge that i know you all are wrestling with the we want to help. >> but mr. berry, the 6.9 billion pales in comparison to the 55 billion that mr. levy described, and you said that you don't have the authority. i've gone back and forth on this. i wrote the provision of the 2006 act that gives the authority and section 802 c2 and it says the postal regulatory commission can hire an actuary that's what they did to take a look at it and it gives you complete authority to then change the formula. so, i just don't understand why the administration continues to say that it doesn't have the authorities. >> i am not an attorney, and i have to defer to my general counsel, my inspector general and board of actuaries in their reading of bill walsh and i know there is no disagreement in this what with respect, they advise me. i do not have the authority to determine fair and equitable as he testified. that authority rests with you and you alone, with the congress. i'm not here testifying against the report in fact we find a lot of value in the report and it might be a good basis for the committee, for the postal service and for us to have our act worries and staff work with you to determine what is fair and equitable, but the congress needs to said that in the law and that's where i'm stuck. >> mr. postmaster general, my time is expiring rapidly. but you did not mention the need for her reform and the workers' compensation program. this is an enormous expense that's supposed be a safety net for workers were temporarily out of work and yet the postal service as is pointed out is something like 2,000 individuals over age 70 who are receiving worker's comp. mr. postmaster general, those people are not coming back to work. >> i think it is in my written testimony, will double check that we need reform with workers' compensation. the proposals you put forth makes a tremendous amount of sense to us and we would like to have that included in the comprehensive legislation going forward. specs before. >> thanks for the information and according to the normal custom of calling on membersñóó right before the gavel in order of seniority and after the gavel in order of appearance if theyó are here we will call on the?ó senator's a cocotte, orrin,óó clyburn, brown, mccaskill.óóó senator akaka is not here,óóó senator moran is not here so weó will go to senator begichóó petraeus genex before mr. chairman. let me if ióóóó can follow-i can and regards to mr berry to follow-up on that i understand the 6.9 billion, you don't question that. you want to give it to the post office sooner rather than later. we all agree on that. the 50 billion give or take, do you agree on that number? i am to stand you've got the process convoluted between the sides so do you agree on the number? >> it would take -- we would need to get the actuaries on all of the parties in a room together. >> but you said you had asked where eagles do the work. >> i appreciate your message that we are following the law because that is what has driven our interpretation is applying the standard of the law. the law has us do this on an annual basis and not look forward in terms of the issues that you heard mr. levy discuss on a fair and equitable. >> the work that your editorials did, did they indicate any overage payment, any payment above 1 million, million, 40 billion, 50 billion, any number? >> we would agree there are many ways to accomplish the goal of a fair and equitable -- >> that's not the question i asked you. can you provide the study that your editorials did in regards to this issue? >> absolutely. can you provide also i know we got a letter from you about your legal interpretation kind of from the council to you to then us but i would like the legal analysis that was given to you. >> absolutely. >> we will get the act were real documentation which will show how they did their analysis on this question of the money, not the process on do they believe or not. we are clear on that? >> yes. >> if i could because i don't -- i am not trying to avoid your question is when you look into the future yet to make certain assumptions on inflation rates and mentality rates and on the difference between genders and all these other things that need to be accounted by actuarial and that's where in other words -- >> by understand that part as a former mayor i have to revamp several retirement programs, the whole system defined for all of it so i want to make sure understand you have a basis of assumptions and i will differ from his assumptions and everybody's assumptions. i want to see if there is a number and how you got there. we can argue over the inflation rates and return on investment and all that stuff. >> knowing of the importance of this and both with senator collins and the chairman and the whole committee and appreciating the criticality of this issue i can pledge to you our actuaries stand ready to be here to help inform your judgment on what is fair and equitable. >> in all of my years dealing with this issue from a small perspective still in the hundreds of millions of dollars it took many years to resolve these issues between the unions and the individuals as well as the retirees because there's no group representing them and the list goes on and on and so i'm very familiar with how this works i just want to see your assumptions. were you about to say something in regards to this also? >> the 50 to 55 billion relates entirely to past payments. it has no actuarial assumptions. it's the 68 billion for the future that as actuarial assumptions involved. >> the 6.9, no one disagrees with that. you're going to pay at some point if we give authorization? what i'm interested in is the 50 billion. the 50 billion number in 03 you determine of past behavior. >> i wasn't here. islamic there was a determination by the congress that there was an overpayment 73 billion if you direct us to pay and we pay it back. in 06 you did the same with military service credit, 28 billion-dollar credit and was a determination of the congress that would be fair and equitable to have that paid by the treasury, not the postal service. it is reasonable congress might decide in this circumstance that a fair and equitable solution would require a new determination of that number and if it determines we will quickly implement a. >> in regard to eliminating saturday service as you know we are concerned about this in a variety of reasons the world component but also as a small-business person but it will impact a small-business owner who really depends on as much as possible they are not corporate, they don't have male runners to a package of their stuff and should it over to the post office the owner has to do it and they have to go do it and the small business been on the delivery as well as making sure they get their mail coming in for the supplies. how do you respond to that? >> that small business owner, i'm talking small, 1500 employees >> as we have looked at what will be the best day if any to eliminate the delivery saturday is it generally the volume is about ten to 15% lower on saturday and the rest of the week we will keep post offices open on saturday so people will have access to our 30,000 plus post offices. >> shipping packages and so forth. >> and we would be able to provide that service. now we will not be running what we call outgoing mail that might set a would go out on monday but they would have the access to the services. >> i have questions i will submit for the record and go from there. >> thank you, senator begich. previously as somebody mentioned the 3 billion-dollar figures of savings annually for eliminating the saturday delivery is that your number also? >> that is our number, yes. >> next, senator pryor. >> let me start with the federal employee health benefit program i am curious about the numbers that you think you can save a else tell the committee once again about how much you think can save. >> we've been frustrated to resolve this retiree health benefit payment going forward and truthfully like i said in my opening statement any other company would have been bankrupt so what we've come is gone back and taken a different look and what we did is we sat down and thought rather than arguing about whether or not we can get the money back from them we will present a different approach and that approach was how he eliminates the need for the prepayment by changing the cost and the health benefit program savitt lagat with any other company would do and this is the way that it breaks down. number one we think with 1 million people in that plan we can pull the costs down. our experts told us between eight to 10%. i will write a check this year for $7.2 billion for health care without refunding money and it's almost 13 billion. so you pull the cost down eight to 10%. second thing is medicare. we are one of the largest contributors to medicare in this country we do not require people to use medicare and we have about an 80% usage for medicare and about 75% for bea. we knew that the current retirees in the future retirees using medicare will pull those numbers down jerry to the tune of around $20 billion over the course of time. the third part of the proposal is changing the way that we provide health benefits to the current retiree is what we would do is not take anything away from the current retiree is what we would freeze them at a certain level and increase, we would increase the money going to them to pay the retiree health benefits based on the cost for the plan so we would have very good control. the fourth thing would be for people like me. capped payments going forward so when i retire i will not have the same percentage that you see the federal government, 72%. it might be 60, 55, the way we work through this we've been able to completely eliminate the need for the refunding. it's about $46 billion at the same time, the overall cost. >> has understand your proposal, you would actually lead? >> that's our proposal. >> you know what impact that would have on the rest? >> i would have to believe that optimistic. >> in terms of the dollar impact would not be significant. islamic what about on medicare? tell him again about the impact you think he would have on medicare. >> we think that right now we will spend and add about $1.1 billion of the medicare fund this year. we spent about 24 billion. we know who increased medicare and it's our feeling we pay into medicare now we should have full benefits of it. >> let me ask about workers' compensation i think that's an important issue that sometimes gets overlooked and we have some ideas on the worker's comp reform. >> we are in agreement with what is being proposed by senator collins and we also like to explore what a lot of the states do we are proud of the fact of the last ten years we've improved the safety rate and we are the number one voluntary protection plan as far as we have more facilities certified and the accident rates have gone down from the problem is the costs continue to go up so we need some way to control the costs. senator collins is a very helpful and we would like to be able to take a wide look just like we've been looking at the health care how does the private sector do it that is what we would like to do. >> why mtv, one bit of warning you have to remember when you're doing the workers' comp reform people, state and federal government should do from time to time remember the goal of the workers' comp is to compensate the workers and sometimes in an effort to find a lot of savings the workers can get left out. >> improve the accident rates and do the right thing that reduces the accidents and then go on a worker's comp. >> it sounds like you've had a fair amount of success in reducing your accident rates. >> we've done a good job, a lot of programs and we are proud of that fact and i think it to the cut from an employee's standpoint when you have a person come to work every day he we look at how to find savings and cut our spending and% term mccaskill part of this is to make sure that every single sacred cows that everything >> everything is on the table. >> including executive stuff as well as facilities and vehicles? >> we have a proposal that we are going to be implementing reductions in health care contributions for the executives. we would be at the federal rate in three years, 10% a year and that is one of the recommendations made where we >> the relocation expenses for employees, have you taken care of that? >> yes, sir. estimates before mr. chairman. >> thank you, senator pryor. senator carper? and then senator coburn. >> you have a meeting at 3:30, d want to go ahead? >> no, no, go ahead. >> please, go ahead. it's been a call is the operative word. >> we put back to the restrictive business model. i sit here and think about we're talking about the editorial changes of the $55 billion over 40 years how does it take 40 years to figure out $55 billion off in terms of what was compensated? the absolute stupidity of congress and what we've done is totally amazing to me. >> the other thing i've heard and i've had this discussion with every postmaster general since i've been in congress is the revenue estimates. the revenue estimates we have for 2020 are absolutely in exaggeration that means 401st class pieces of mail nine years from now will go to every household in this country i don't believe it. i don't believe that its half of that so unless you are going to double the rate on the first class mail the revenue estimates are totally bogus and every of revenue estimate that i've heard over the last 12 years has been bogus coming from the postal service so we're looking at the numbers of 39 billion pieces of mail first-class mail i would bet you $1,000 right now mr. postmaster that it won't be half of that nine years from now. >> the technological change is coming and unless we anticipate we are going to be six years from now doing the same thing >> the third point i would raise is standard mail and partial service is important to the business and i know that you are worried about the impact of pricing on the business but the first class mail is going away and unless the business model adapt to that it doesn't matter what we do senator collins or senator carper's bills it's going to be a short-term fix that is going to be short-lived. and so i would caution us to think challenge the assumptions that are being made like mr. o'hare, challenge the assumptions being made and when we think we figured it out then go to war three measurements again before we cut to make sure we are not like we were in 2006 and i will remind my colleagues in 2006i predicted we would be back here. i actually voted against postal reform bill because we did not anticipate. we did not fix what we knew and as a matter of fact you always said we did at the time so do we sit five years later not having fixed the problem because we didn't measure three times and then cut. i'm not blaming anybody for that. it's because the assumption change because the scenario we laid out were too rosy. we fixed a lot of things and if things would have been worse had we not done at now we find ourselves here again. just as you said taking the economy out of the equation, first-class mail is going to go away anyway regardless of the recession. the technological changes. so i would caution us i think that we are going to come together with a great bipartisan agreement on how we offer the things that are needed. this isn't a partisan issue in front of us but i think we certainly need to think way down the road and we certainly need to provide the postal service with the effective means of running a business that allows them to make changes based on dynamic changes that they are going to experience in their business and if we don't do that, we will not have fixed the problem and with that high yield and will submit questions for the record. >> thank you, senator coburn. senator carper? islamic it is the lack of certainty and predictability, a great deal of uncertainty. a couple of years ago when chrysler and gm were going to go out of business people stopped buying cars and the first question i have mr. postmaster general was given the uncertainty and is the post office are going to be around another year when our three or four months from now what kind of impact do you think that lack of certainty and predictability is having on your business and the devotee to book more business? >> i think that uncertainty has a tremendous impact just this weekend i got an e-mail from my chief marketing officer and he was asking about a couple customers who were worried about doing business with us in the small package area and i told them i said i will call the company's and reassure them myself that we will be okay. we have to get stability in the systems and we've got to address these issues long term to senator colburn's point and i agree 100% this cannot be a short-term fix. we have to not only look at revenue through 2020 we have to look at the revenue beyond that and make sure from the postal service standpoint we resolve this issue now to give the postal service the flexibility to manage going out in the future. >> i would say to the colleagues what we need here is not the dealing with the symptoms of the problem. what we need to do is solve the problem. as didier as the situation as i certainly believe it is not a hopeless situation. this is a prob