To the new communications and transportation capabilities that weve developed. Given the shifting culture and those expectations for speed and ontime delivery, im reluctant. You have to look at the economics of all of this and the trade offs and costs, but i hate to see the Postal Service give up one, two, three. Thank you. Mr. Miller. Mr. Chairman two things. One, as i recollect, the rational for this change in Service Standards was developed after i left. I dont know the details of it. I hesitate to answer because without having time to analyze the data. Second, there is a trade off obviously. You cant do all things for all people. You have to make some choices here. Service standards should be an input into the question of plant and logistical rationalization it seems to me. I just dont have i dont have my hands on the information necessary i understand. Everything else equal. I think theres something nice about having as you characterize, a one, two, three kind of standard. You would deviate that only for good reason. I dont know whether theres a good reason there or not. I just simply cannot say at this time. All right. Thank you. I think i mentioned earlier on saturday when i was home for a little bit, about 5 00 in the afternoon, our letter carrier came and delivered our mail on saturday. It turns out there were things in the mail that we very much wanted to receive. Its not always the case but it certainly was on that saturday. Part of the debate that surrounded postal reform these days is should we continue to have six Day Week Service accept when we have a holiday that mixes in like july fourth if its on a friday maybe or should we allow Postal Service at some point in time to go from six to five day service. When we passed legislation two years ago, we had 62 senators who voted for it. In that bill you may recall the Postal Service could eventually go from six to five day service if they chose to but you have to wait for at least two years after enactment of that legislation. Well, that legislation if it had been enacted, that means the Postal Service would have been free this year to go from six to five day service in 2014 and to do the same thing in terms of closing additional Mail Processing centers. In this year, 2014. The bill didnt get enacted. Now were grappling with the same issues. Weve taken different approach this year with respect to our legislation from six to five. For years i have sat here with our labor friends in the postal unions especially to the letter carriers and urges them to work with the Postal Service to find a way to continue the mail on saturday with a wage benefit Compensation Structure that makes Postal Service more competitive. It doesnt lose as much money. We were told a couple of years ago that going from six to five day awe week would save 3 billn a year going forward. Because of the changes in the wage benefit structure that have been negotiated between the Postal Service and letter carriers that thats not longer 3 billion savings its somewhere between 1 1 2, maybe 2 billion a year which makes it more they lose money but theres a trade off there maybe between service and Service Delivery and labor cost. Our legislation we took a different approach in the legislation. Our legislation said were not going to say the Postal Service for two years youre forbidden to go to a five day a week service. What we say with our legislation is look at a volume trigger. Postal Service Last Year delivered 158 billion pieces of mail give or take. What we put in is a volume trigger that says if that number drops below 140 pieces of mail, then the Postal Service would be free to go from six to five day a week delivery. It didnt have to. Maybe they will continue to find ways to use that internet, digital connection to make money. The reason why we decided to take this approach to use a volume trigger instead of somebody saying well you can go to five day a week service in two years is because we want to realign the inventives. We want to inventivize Postal Service employees to work harder to sell products. If you happen to be in a post office in a town or city or community but we want them to be inventivized them to sell harder and sell more. We want to inventivize the mailers whether they happen to be nonprofits or cotatalogs or magazines. We want to inventivize them to mail more. I just want you to react to the different approaches what we put in our bill two years ago on five day a week delivery where we said you cant do that for at least two years after enactment as opposed to some kind of volume trigger today and what you like about it or not. Please dr. Miller. Mr. Chairman as i said in my response to questions from the committee, i think the Postal Service made a mistake in trying to obtain permission or first stated it would accomplish this without congressional acquiescence but than tried to obtain permissioning to from six days to five day delivery. I think they should have asked for delivery flexibility. There are a lot of places in america where six day delivery makes it eminently good sense. Some places, seven day delivery makes good sense. Other places, five day delivery. Other places still two or three day delivery per week. The Postal Service needs to have that kind of flexibility. I think the Postal Service can provide what any reasonable person would say is universal service to some places in america at two or three days where the costs are just extraordinary of doing six days a week. The Postal Service did couple its proposal with provision that the post office would remain open on saturdays if someone were expecting an important bill or payment or box of medicine or Something Like that they do come to the post office and get it. I live on elane. I have to go half a mile everyday to pick up my mail at my mailbox. A lot of people go pick up their mail at the post office. I know a lot of people are very remote locations, et cetera. Especially in rural communities. More rural than mine but i think with some flexibility, the Postal Service could inconvenience a few people somewhat but save a lot of money, money that is something provided by other postal rate payers. For the most part, what were talking about in Postal Service revenue base is not money from the taxpayer but money from other postal patrons. They are paying for the losses that are ascribed to service that is just economically prohibited. All rite. Thank you very much for that insight. Mr. Crawford please. Just to add to those very thoughtful comments, jim, that i see it as a last resort. When i was on the transition team, the volume in 2008 was 203 billion pieces. 158 billion this year from Second Quarter results, it will be 151 billion pieces or so in 2014. That 240 were approaching some of the thresholds that are in the bill. What has struck me since i was here two years ago about and i learned this from the reform legislation that you and the doctor have introduced is the potential savings in retirement and Health Care Expenses which exceed even what i imagined when i had done earlier examinations. I think in light of really the large possibilities there that it may not be necessary to go to five day delivery. I think jim makes a good point about it depends on where you are and what makes sense and i do believe the Postal Service should have the flexibility. It should not be it would be better if it werent just led legislated. I review any reduction in service highly regrettable. Should only be taken as a last resort if we can show and i think the numbers show that there would be some savings as you say, 2, 3 billion a year. Thats not chicken feed but next to what were talking about in the health care and retirement expenses, it just may not be necessary. For a lot of people who deliver catalogs, i get my economist most weeks on saturday. That would be a loss to have to wait until monday or tuesday on a holiday week. So id like to see us keep six day delivery but have the flexibility to reduce if we need to. All right. Thank you very much. Mr. Bennett, please. Yeah. I think six day delivery is something thats kind of a foundation at the post office in that the people expect that. I think it i think that Customer Service would probably almost demand it in most cases. However, that said, i think this is i think we have to be careful to try to have a one size size fits all for all the various problems. As jim pointed out that sometimes there may be some areas where five day delivery is just fine. Some areas where seven day delivery is most important. At the end of the day, i think weve got to be very, very careful not to try to fix the try to have a one size fits all kind of solution to the various challenges. This is just about the financial issues, i think as Stephen Crawford said that there are other ways that youve included in the bill to address the major financial issues. So just to make that change for the purpose of financialses as big of a savings it would have im not sure thats the right thing. If you go back and think about the model i talked about earlier where youve got these various silos of cost. If you start driving cost out of one area you may end up driving cost up in some other areas. Ending saturday delivery while we have this trigger of 140 billion pieces of mail before you can actually drop saturday delivery. If you drop it, all of a sudden your pieces of mail start to fall further. So the savings impact could end up causing revenue losses in other areas that we havent thought about. So i think there needs to be careful analysis in that area to look at what the impact is across the enterprise. Thank you. Ms. Kennedy. I really support what my colleague said. I really dont need to repeat it only to say i think we need to project a poet aPostal Service working and is available for people to want to use. Any time i really reiterate strongly what Steve Crawford said any time you have a cut back in service in any way whether its delivery standards, whether its daily delivery, six days a week, i think its a black eye. I think it hurts us. We want people to feel that the Postal Service is excellent in every way. That the mail when they drop that letter in the mailbox when its picked up by their postal carrier that its going to get where they want it to go so its going to get there in a timely fashion and they can rely on the United StatesPostal Service. Thats the impath age we want t project and thats what we want to have happen. I would love to see us find other ways to keep our finances robust and maintain the Postal Service. Thank you. I just want to reflect on this for a moment. The legislation that was reported out of this committee a couple of months ago allows the Postal Service to consider whether or not to reduce service from six to five with a number of caveats, including post office had to be open on weekends. Po people have access to their mailboxes and that kind of thing. Certain items have to be delivered including pharmaceuticals, medication, that kind of thing. We didnt just use a straight trigger 140 billion 140 volume trigger to say when the mail volume drops below that you can go to five day week delivery. We didnt do that. We have a provision that says you cant do it before 2007 and effectively if even the Postal Service board of governors, i dont think its going to with the economy coming back. God willing about the effect of what we put in there the earliest we could go from six to five is in 2018. We will see how it works out. I think the challenge to the Postal Service is to figure out how to get more people to use this service. How do we make saturday delivery not losing 1. 8 billion a year but maybe it profitable. Thats the key. How do we do that . As we figure out how to get this digital intersection figured out and mr. Bennett, you get on this committee, i know you will help us do that. Thats the challenge for us. How do we take this Legacy Organization and make money on it and do so without encoaching in inappropriate ways in the private sector. Were still hoping the doctor will join us. Hes flying in from tulsa. You know that old gene pitney strong. 24 hours from tulsa. It doesnt take that long to get there but his flight has been delayed somewhat. Chris, do you have any updates for us . All right. I have some bad news for you. Thats the doctors flight has been apparently delayed further. Hes not going to be able to be here until 8 00 so well have dinner and you guys can get to know each other even better. No, i think we will wrap it up and he will knowing the doctor he will have plenty of questions for the record. If he hasnt had a chance to meet with you, my guess is he will want to do that. I would urge that you make time to do that. Hes a very thoughtful, creative person. He is saddled with not very good staff. No, hes blessed with good staff and so am i. They keep us out of trouble most of the time. A lot of times what i will do with a hearing if we have an opportunity were invited to make an Opening Statement and i thought you had very good ones. Sometimes when we have time i like to give our witnesses time to give a closing statement. Not five minutes but sort of reflect on what youve heard. What you said and what others have said. Some questions that were asked but if you would just take a moment and think about a closing statement just to take maybe a minute or so to do that. I will make a couple of comments and then we will call it a day. Ms. Kennedy. Would you like to lead off. Thank you so much mr. Chairman. Thank you for giving us the opportunity to be here today. Thank you for your very thoughtful questions. I think the challenges are there but i think there are great opportunities. The United StatesPostal Service is a tremendously vital asset for this nation and i look forward to having the opportunity to serve and if confirmed, i look forward to getting my serving with these magnificent gentlemen here to my right and having a great continuing conversation with you and with the doctor and the rest of the members of the committee. Thank you very much. David Michael Bennett from charlotte, north carolina. This is a really neat process. Thank you so much for the opportunity to be here. Confirmation hearings arent normally this much fun. Sometimes they can be down right pretty awful. Well ive had a good time. More of a comment on my personality than anything else but this is a real opportunity. I look forward to having a chance to tackle this. The problems that the Postal Service has and weve talked about it today and that weve talked about it in our lunch is that they are really challenging but they are the same kinds of problems that other businesses have faced for the last decade. Ibm transformed themselves. Cisco is having to transform themselves now. Company at t. Company after company had to transform theyve had to transform themselves. Theyve come out on the other side better than they were before. I think we have an opportunity to take this 200 plus year Old Organization and make it better than it was before. Do some things that are different. Maybe in a year we are not even talking about the number of pieces of mail that weve delivered, maybe were talking about the number of shoes or the number of other other items that have been faxed that weve had a chance to deliver. So the world is changing. We have an opportunity, i think, now, at this critical juncture, we have an opportunity to take the most unique organization in the world in terms of logistics and moving things around and make it something really special for the american people. I look forward to the opportunity. I hope i get the opportunity to serve on the board of governors and help make that happen. Thank you. I hope you will, too. Thank you. Dr. Crawford, not mr. Crawford. For the closing statement, i want to recognize dr. Crawford. I appreciate is that. I kept asking my staff is he a mister or doctor, finally they told me youre a doctor. I apologize. Dr. Crawford. I will take this opportunity to say, you know, i was here two years ago, almost to the day for my hearing the first time around. Sf 1789 it had actually passed in the senate. Since then my wife has said to me this classic question that weve all been asked, why do you want owe do thto do this . The board cant fix whats wrong with the Postal Service. Congress seems to be reluctant to act. To be perfectly frank, i had to do ask myself, does this make good sense . It has been so gratifying to come back this time because s 1486 has been reported out of the committee and i have i am just so impressed by the changes that it holds forth. I am hopeful enough that those or Something Like those will be enacted. That i find myself almost sharing Michael David bennetts enthusiasm and the fact that there are four of us together here now with such an interesting background, i have to confess that i too, its not like a cynical old professor and army officer but i too am enormously enthusiastic about this opportunity because of the legislation thats under way and because of the team thats here together so thank you for the opportunity. Youre welcome. Dr. Crawford, thank you for your willingness to take this on yet again. W