Transcripts For CSPAN3 Politics Public Policy Today 2015032

CSPAN3 Politics Public Policy Today March 27, 2015

They were lean, i would certainly give the u. S. Postal service pretty good grades for that. They have undertaken an enormous effort to become smaller and more lean. Smart, efficient, the Postal Service is embarking down that road. The third is they are entrepreneurial and they are diversified, which the u. S. Postal service is not. They are saying those are the three key essential ingredients to survive in todays world as a Postal Service. I think one of the keys to staying out of trouble, if we do begin to enter the area of diversification, is to enable, not to compete, with commerce. We certainly have many ways to do that. As far as who would do this, i agree and understand that we have a traditional workforce that has been narrowly focused on mail and parcels in the past, but the Postal Service has the longest tradition of all the federal departments and probably within the world of creating effective partnerships with the private sector. First of all, were the long poll in the tent in the postal industry. Trilliondollar industry. We have had a long tradition of discounts to achieve the lowest combine. Ed cost for delivery of services. Competition with the other carriers has been very effective where we use their air transport and they use our last Mile Delivery. Its been a long rich history of combining with the private sector to expand into areas where the expertise lies. But theres value, as i said, in a common infrastructure, particularly in industries that are being severely disrupted. The supply chain and the Banking Industry are two examples. We need to be there. We cant leave with everybody else. There wont be those essential services that are left behind and abandoned and cannot go digital. There needs to be some infrastructure left for the American People and for commerce. Im old enough to remember the days of watergate. If you remember the key saying was follow the money. If you want to know how a postal system that is owned and operated by the a government under a monopoly is going to function, you have to ask yourself to what are the incentives . If you follow the incentives, youll understand how it will behave. If you look at the private sector, the incentives are to maximize your gains and minimize your costs. Those incentives do not exist in a bureaucracy. To translate those into human terms, we might say the incentives are to maximize pleasure and minimize pain. If you just look at the way the postal system today functions, visavis congress it is not trying to maximize pleasure, but its doing everything it can to minimize its pain. So consequently, how it will function is going to determine result is and it is what you would expect to see of an enterprise that truly can exist within a competitive environment. I think its time. Thank you. I think this is a complicated issue. I think its time to open it up to the audience. The thing i learned about running an organization, even though its a non for profit, we need a revenue. And the limits on revenue seems to be the heart of the problem. We talk about businesses i dont know any business that restricts its price increases to how they to some other criteria other than what the market would bear. If the market needs lower prices, they lower the prices. If they need higher prices, they raise the price. I think one of the big problems with the new Regulatory Regime is congress has limited them to external inflation as the limit on how much you can raise total revenue. At the same time, it has mandated above inflation costs to the system. Until you fix that, theres absolutely no way you can get 50 new banks or products, youre still not going to be allowed to raise the revenue and the system is going to fail. Can you comment on that . You hit on a key point, referencing a system that by law mandates that its market dominant products, which is where you have the captive customers needs to be regulated under a cpi system. The law did say after ten years, the commission needs to look at the full ten years of experience and assess improvements, changes, how that might operate. The idea was on the competitive side, the competitive marketplace would be that limit. If you go back to 2006 when this law was being finalized after 12 years of effort and a lot of if was focused on the prices, the products, the flexibility for the Postal Service, there was an issue that got bubbled up toward the back end, which was this idea of prefunding future Retiree Health benefits. [inaudible]. Yeah. A huge liability that future rate payers were going to get hit with. At the time the decision was made, look, this makes sense for the Postal Service to start prefunding that. What came out of the legislation and that was signed into law actually locked into place for ten years specified payments of upwards of 5 billion or more per year for ten years. After the ten years, it was reamortized. Back in 2006 if we all go back to then and certainly from the Postal Service perspective, they were at their peaks of revenue, volume and the Postal Service, at that time, their general focus was, look, this is going to be tough for ten years, but we can make the payments. None of us would have predicted that the next year our nation went into a Great Recession that rivalled the depths of the Great Depression and mail volume and revenue, and i think you hit upon the key point, while Good Intention because it was locked into statute to undo it, create scoring issues and it became a recipe for insolvency. And theres equally significant issues in revenues not just in the inflation cap, but from the deeply discounted rates that nonletter mail receives. That periodicals, its mainly advertising. Its all the mailers you get. And that is an increasing share of the volume. And the congress has mandated deeply discounted rates and they have done this in a way the congress operates. It doesnt have to be described. But if you need it, we have one of americas premier political scientists here to explain it. And thats not a subsidy, thats a cost. And its under universal service obligation. If we are going to have a hybrid form of a system, which is that provides delivery that competes with private companies, then we also have to introduce more competition into the other side of the market. And the first way to do that is to get rid of those two things. Get rid of all of them and let other people let other Companies Compete for that business at a market rate. I think gene may want to Say Something about this. Not specifically about that. But lets talking about the dilemma you pose. The dilemma you posed was how you make things work when you limit your income it can make on the basis of an external factor versus what congress does in order to tell it what it has to do. Youve got at play here, youll never be able to satisfy successfully resolve the Postal Service dilemma, you have to play here a different ideological perspective. If you were to ask rand paul what he would expect the Postal Service to like and contrast with what Bernie Sanders would say, it would be like night and day. The thing is the congress has never said if this is what we want to have, there needs to be a way by which it gets funded. Now we can all talk about raising everybodys rates, but heres the important thing to keep in mind. You may compel people, but today with electronic communication, you dont have to mail. So if you end up doing things that makes it apparent to a business that the prices youre charging no longer facilitate the ability to use, they will take their business elsewhere. But you still have to mandate. How do you fund the mandate in the absence of sufficient revenue if the revenue has an opportunity now to leave . I guess what i would like to point out is that what robert said is very important. The moment of passage is important to remember. Enormous, robust expanding business that was approaching a cliff, where i think legislators felt that mail was expanding, but there would be a time in which it would totally evaporate. There would be no Postal Service in the future. All of which turned out to be quite wrong. But the cpi cap was intended as a surrogate for Market Forces because robert pointed out those well. Absent those, federal bureaucracies, any bureaucracy absent Market Forces, so it was hoped that if there was enough pressure applied that that would be policed and take care of itself. And it was an expanding market. Cpi caps anywhere tend to work in an expanding market. They dont work well where the market is stable and they are a disaster where the market is declining, which is exactly what occurred. The other great pressure was prefunding. Pay 5. 5 billion a year. The Postal Service in its history had never made 5 billion. We make or lose 1 billion. We never made a single payment. We borrowed to make every single payment. We borrowed against a bill that we didnt have that would some day arrive. That was an odd one. It was in the hands of opm. Opm had a couple things going on there. One, they were desperate for money to manage what had been a fairly poorly managed pension fund for all of the government. Second, there were competence problems. They had just tried to collect our pension amount. To pre fund. Earlier than that. They missed a 171 billion debt by 71 billion. Thats pretty bad. They missed the math problem by more than a third. Through congressional determination and a lot can be said for it we have now put aside 330 billion. We are the most attractive takeover target in the corporate world today. But we have paid dearly for that. I think theres a question back there, sir. Yes, good morning, thanks for the panel. Any name is john bird with the Business Coalition for fair competition. And were very interested in knowing what kind of remedies would be offered to take a look at the evolving market conditions, the current financial challenges. Financial challenges. And then the second part to the question would be this management thats ongoing, where is that mispronounced to the extent that you can kind of weave each of the panelists remarks about that, i would appreciate it. Anybody want to pick this up . In terms of mismanagement, ill leave that to somebody else. But to your earlier point, rob may have put his finger on it. The time of having a hybrid system, one that is supposed to act like a business and one that is not supposed to act like a business may be well past us. It may be time to start saying, if there are certain core service which we know the nation needs and we want to restrict who can provide them, they ought to be organized separately and distinctly from those services that we would like this other element of the business sberps to undertake to be able to operate competitively within the marketplace. That would mean youd have to restructure Competitive Services under a Corporate Structure that would require it to have the same sorts of sets of books and constraints that would apply to anybody in the private sector was the whole issue is immediately ruled out. Anybody else have a comment . I want to say in the defense of the Postal Service here that i dont think its really an issue of mismanagement. Its an issue of responding. That the problem with any anybody and this applies to market dominant private companies as well as this unusual hybrid is that the need to figure out how to be more efficient and in particular how to innovate, what kind of investments should you be making and what kind of investment should you be pulling back on . Those incentives are absent. And consequently, they become less efficient, less innovative and their cost relative to the product decline. And we see, you know, the bls has qualified that. Thats what productivity captures. And thats not because they have bad managers. I dont think they have any worse the quality of the managers there is any worse than the average for the private sector. I think that the way they are forced to operate is different. And it has predictable economic consequences. I think if you think about what the postal infrastructure is about, its instructive to your question. They provide universal service to all of america, even places that are not profitable. They do so at the lowest possible costs so that we energize commerce, we dont destroy commerce. We are conflict free with regard to picking winners and losers. Now hold that thought. In europe they attempted all this. Something very curious happened. There were no serious takers. They said would anybody else like to do these three things . No serious takers. So is there some value in having someone just focused on energizing commerce with no conflict of interest and who is charging as little as they possibly can to survive . I think so. I think thats the very definition of a national infrastructure. It did work in sweden. Sweden is the case. Sweden has the most competitive open system, and its worked quite well in sweden. But i would not claim that sweden that the problems facing a small homogeneous society and one facing ours are the same. It would be different and more complicated, but they went to full privatization. The last question to the lady up here. My name is elaine middleman. Im an attorney. I got involved in postal issues when the post office by my house was closed, even though it was very profitable, by tysons corner. So im in favor of post offices. So i appreciate your point of view. I dont understand because its like you want to start from scratch and pretend none of this exists, which maybe in the Perfect World would be great, but thats not where were at. One thing that troubled me in this pre funding the reporters always talk about the post office is always bleeding billions of dollars. They dont understand the concept of operating revenue, operating income. This 5 billion requirement makes it look like that its a dysfunctional business, when in fact as you pointed out, the last Mile Delivery is vital to the economy. Many people rely on the post office. I look at everybody and they are standing there. They have a reason to be there. They have a paper someone wants to help. Its an important part of our infrastructure. Robert, do you want to take that . I think a key point what everyone thinks of the pre funding requirement we have to deal with the fact that its the law of the land. And hence because of that, they are not meeting certain obligations that are required by law to meet and more importantly has real world application. I went through and saw the good news, the operating income isnt good news, but the reality is with those requirements and the law as it is, the liquidity is just not available there. Then you get into scoring issues. So thats a challenge for congress to sort through. At the end of the day, its like everything, its going to need 218 votes in the house and a 51 or 61 in the senate and a president ial signature. But until any of that happens, it is what it is. It has the effect of the Postal Service where they are at and as a result of a variety of these factors, we know they have cut 16 billion in costs since the law took effect. I think were going to have to close this now because weve come to the end of our time. Thank you very much for. Opening up this issue to us and we hope that congress is listening. [ applause ] on wednesday the annual congressional dinner at the marriott marquee in washington d. C. Texas representative Joaquin Castro and his brother julian deliver adjoint keynote address. In addition, comedian and actor assif served as the guest for the dinner. This is an 1 hour and 25 minutes. Ladies and gentlemen, please turn your attentions to the large screens for a funny video. Thank you. This man cries more than me and im a freaking wreck most days. Well, get over it. Just what i need. Huge mistake by House Republicans for electing the loser Kevin Mccarthy as majority leader. Are you trying to lose . Is this from the house. Im not saying you are a terrible person. But id rather have lunch with nancy pelosi than you. Boehner is number one on my list of people id like to punch in the face. Looked like hes been trying to stuff a flux capacitor in to his dlorian for the past couple of years. Why would somebody say that. Kevin mccarthy really needs to work on the whole its okay if i say it one more time . Nance employeesy pelosi looks like a tub of orange sherbert right now on cspan. Was it too close to john boehner . Looks like an angry oompa loompa. I assume he bribes his constituents with the chocolate and gob stoppers, whatever the hell that means. Nancy find a new job as bedpan cleaner or store clerk. You suck as a senator. Im not a senator. Kevin mccarthy really needs to work on that whole talking thing. What are they talking about . Yo boehner. You face wont break and your dog wont die if you smile. Ladies and gentlemen, tonights dinner chair, frank thorpe the fifth. First of thank you for the help putting together the video. I just tweeted link to it. So if you want to watch it again and again and again feel free to share it. We all have a really big job. We have the privilege of representing the American People while we work to hold their elected representatives on capitol hill accountable. None of that would be possible without the tireless efforts of staff in the house and senate galleries. [ applause ] yeah lets give them a round of applause. Yeah. They act as the liaisons between congressional offices and the capitol hill possess corps andand the press corps and without them we would be lost. [ applause ] and on the senate side, the director ellen lawrence, aaron yanteman jason bottello and mike moxly. Thanks guys. Now we turn to this. The first is the david bloom award. Before there were live views and smart phones. David bloom helped to invaent first of its kind. Mobile support traveling through combat zones. Bloom passed away suddenly while reporting in iraq but his leg

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