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Oversight hearings on the U.S. Postal Service--1994 : hearings before the Committee on Post Office and Civil Service, House of Representatives, One Hundred Third Congress, first session, April 14, 19, 26; May 17, 24; June 8, 1994 PDF

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Preview Oversight hearings on the U.S. Postal Service--1994 : hearings before the Committee on Post Office and Civil Service, House of Representatives, One Hundred Third Congress, first session, April 14, 19, 26; May 17, 24; June 8, 1994

t OVERSIGHT HEARINGS ON THE U.S. POSTAL SERVICE-1994 / 4. P 84/10: 103-40 Iversight Hearings of the U.S. Post... HEARINGS BEFORETHE COMMITTEE ON POST OFFICE AND CIVIL SERVICE HOUSE OF REPRESENTATIVES ONE HUNDRED THIRD CONGRESS FIRST SESSION APRIL 14, 19, 26; MAY 17, 24; JUNE 8, 1994 Serial No. 103-40 Printed for the use ofthe Committee on Post Office and Civil Service JAN 2 6 1995 OVERSIGHT HEARINGS ON THE U.S. POSTAL SERVICB^1994 HEARINGS BEFORETHE COMMITTEE ON POST OFFICE AND CIVIL SERVICE HOUSE OF REPRESENTATIVES ONE HUNDRED THIRD CONGRESS FIRST SESSION APRIL 14, 19, 26; MAY 17, 24; JUNE 8, 1994 Serial No. 103-40 Printed for the use ofthe Committee on Post Office and Civil Service U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 1994 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-046086-7 COMMITTEE ON POST OFFICE AND CIVIL SERVICE WILLIAML. CLAY,Missouri,Chairman PATRICLVSCHROEDER,Colorado JOHNT. MYERS,Indiana FRANKMcCLOSKEY,Indiana BENJAMINA. OILMAN,NewYork GARYL.ACKERMAN,NewYork DONYOUNG,Alaska THOMASC. SAWYER,Ohio DANBURTON, Indiana PAULE. KANJORSKI, Pennsylvania CONSTANCEA. MORELLA,Maryland ELEANORHOLMES NORTON,Districtof THOMASJ. RIDGE,Pennsylvania Columbia THOMASE. PETRI,Wisconsin BARBARA-ROSE COLLINS, Michigan SHERWOODL. BOEHLERT,NewYork LESLIE L. BYRNE,Virginia (Vacancy) MELVINL.WATT,NorthCaroUna ALBERTRUSSELLWYNN,Maryland GREGLAUGHLIN,Texas SANFORDD. BISHOP,Jr.,Georgia SHERRODBROWN,Ohio ALCEE L. HASTINGS,Florida GailE. Weiss,StaffDirector RobertE. Lockhart,GeneralCounsel DorisMoore-Glenn,DeputyStaffDirector JosephA.Fisher,MinorityStaffDirector (II) CONTENTS April 14, 1994 Page HearingheldinWashington,DC,April 14, 1994 1 Statementof: Runyon, Marvin, Postmaster General ofthe United States, accompanied byJoe Caraveo, ChiefOperatingOfficerand ExecutiveVicePresident, U.S. PostalService; andMikeRiley,ChiefFinancialOfficerandSenior VicePresident,U.S.PostalService 9 Preparedstatements,letters,supplementalmaterials,etcetera: Ackerman, Hon. Gary L., a Representative in Congress from the State ofNewYork,preparedstatementof 8 B3TTie, Hon. Leslie L., a Representative in Congress from the State of Virginia,preparedstatementof 167 Clay, Hon. William L., a Representative in Congress from the State ofMissouri,preparedstatementof 2 Colhns, Hon. Barbara-Rose, aRepresentativeinCongressfromthe State ofMichigan,preparedstatementof 9 McCloskey, Hon. Frank, a Representative in Congress from the State ofIndiana 4 Morella, Hon. ConstanceA., aRepresentativeinCongressfromtheState ofMaryland,preparedstatementof 6 Runyon,Marvin,PostmasterGeneraloftheUnitedStates: Preparedstatementof 15 ResponsetowrittenquestionssubmittedbyHon.WilliamL.Clay ..... 78 ResponsetowrittenquestionssubmittedbyHon.ThomasC.Sawyer 97 ResponsetowrittenquestionssubmittedbyHon.FrankMcCloskey... 106 ResponsetowrittenquestionssubmittedbyHon.LeslieL.Byrne 110 ResponsetovmttenquestionssubmittedbyHon.JohnT.Myers 119 Response to written questions submitted by Hon. Benjamin A. Gil- man 125 Response to written questions submitted by Hon. Constance A. Morella 139 Sawyer, Hon. Thomas C, a Representative in Congress from the State ofOhio 3 April 19, 1994 HearingheldinWashington,DC,April 19, 1994 173 Statementof: DelPohto, Gene,executivedirector.AdvertisingMail MarketingAssocia- tion; accompanied by Stephen Bair, chairman, Postal Committee of theAssociationofAmericanPublishers,andDavidTodd, counsel.Mail OrderAssociationofAmerica 216 Silbergeld, Mark, president. Alliance ofNonprofit Mailers; accompanied by Brian Himimell, assistant director, Alliance of Nonprofit Mailers; Lee Cassidy, executive director. Nonprofit Mailers Federation; Barcy Fox,vicepresidentforinstitutionaladvancement,St. LouisUniversity; Carolyn Enigh, economic counsel. Nonprofit Mailers Federation; and TondaRush,presidentandCEO,NationalNewspaperAssociation 175 Williamson, Robert, executive director. National Association of Presort Mailers; accompanied by Ralph Seiffe, vice president and treasurer. NationalAssociationofPresortMailers,andArthurSackler,managing director.MailersCouncil 202 (III) IV Page Preparedstatements,letters,supplementalmaterials,etcetera: AmericanBusinessPress,preparedstatementof 277 Bair, Stephen, chairman, Postal Committee ofthe Association ofAmer- icanPubUshers,preparedstatementof 267 Cassidy, Lee, executive director. Nonprofit Mailers Federation, prepared statementof 189 Collins, Hon. Barbara-Rose, aRepresentativeinCongressfromtheState ofMichigan,preparedstatementof 173 DelPolito,Gene,executivedirector.AdvertisingMailMarketingAssocia- tion,preparedstatementof 220 Fox, Barcy, vice president for institutional advancement, St. Louis Uni- versity,preparedstatementof 190 NewspaperAssociationofAmerica,preparedstatementof 286 Rush, Tonda, president and CEO, National NewspaperAssociation, pre- paredstatementof 199 Sackler,Arthur,managingdirector, Mailers Council, prepared statement of 209 Sawyer, Hon. Thomas C, a Representative in Congress from the State ofOhio,preparedstatementof 216 Silbergeld, Mark, president, AUiance of Nonprofit Mailers, prepared statementof 177 Todd, David,counsel.MailOrderAssociationofAmerica, preparedstate- mentof 271 Williamson, Robert, executive director. National Association of Presort Mailers,preparedstatementof 204 April 26, 1994 HearingheldinWashington,DC,April26, 1994 291 Statementof: Holmes,Geoffrey,seniorvicepresident/technology.TimeWarnerInc 292 McCormick, ChristopherJ.,vice presidentofadvertisinganddirectmar- keting, L.L. Bean Inc., on behalfofthe Direct MarketingAssociation; andTimothyMay,generalcounsel,ParcelShippersAssociation 327 Weil, John D., president and CEO, American Envelope Company, on behalfofthe EnvelopeManufactvu-ersAssociation ofAmerica; and Mi- chaelF.Cavanagh,president,CavanaghAssociates 306 Preparedstatements,letters,supplementalmaterials,etcetera: Cavanagh, Michael F., president, Cavanagh Associates, prepared state- mentof 318 Collins, Hon. Barbara-Rose, aRepresentativeinCongressfromtheState ofMichigan 291 Daly,JohnJay,president,DalyCommunications 345 Hefner,Marg,privatecitizen 346 Holmes, Geoffi-ey, senior vice presidentytechnology. Time Warner Inc., preparedstatementof 296 May, Timothy, general counsel. Parcel Shippers Association, prepared statementof 337 McCormick, ChristopherJ.,vice presidentofadvertisingand directmar- keting, L.L. Bean Inc., on behalfofthe Direct MarketingAssociation, preparedstatementof 330 Watt, Hon. Melvin L., a Representative in Congress from the State of NorthCarolina,preparedstatementof Weil, John D., president and CEO, American Envelope Company, on behalfoftheEnvelopeManufacturersAssociationofAmerica,prepared statementof 310 May 17, 1994 HearingheldinWashington,DC,May 17, 1994 347 Statementof: Brown,WilliamR.,Jr.,president.NationalRuralLetterCarriersAssocia- tion;WilliamQuinn,nationalpresident.NationalPostalMailHandlers Union; Michelle Readinger, Postal Police, Fraternal Order of Police, NationalLaborCouncilandPostalPoliceUnion;andJamesM. McGee, president. National AUiance ofPostal and Federal Employees, accom- paniedbyCharlesEnsign,nationalvice-president 373 V Page Statementof—Continued Games, David, president. National Association of Postmasters of the United States, accompanied by Teena Cregan, director, government relations; Armando Olvera, president, the National League of Post- masters, accompanied by Ed Bowley, legislative consultant; and Vince Palladino,president,NationalAssociationofPostalSupervisors,accom- paniedbyBobMcLean,legislativeassistant 398 Sombrotto,VincentR., president.NationalAssociationofLetterCarriers, AFL CIO, accompanied by John Gould, legislative assistant and WU- UamBurrus,executivevice-president,AmericanPostalWorkersUnion, AFLCIO,accompaniedbyLloydBronstein,legislativedirector 350 Preparedstatements,letters,supplementalmaterials,etcetera: Brown,WilliamR.,Jr.,presidentNationalRuralLetterCarriersAssocia- tion,preparedstatementof 375 Bums,JamesA., president. PostalManagersofAmerica, prepared state- mentof 419 Burrus, WilUam, executive vice-president, American Postal Workers Union,AFLCIO,preparedstatementof 356 Games, David, president. National Association of Postmasters of the UnitedStates,preparedstatementof 401 Hefner,Marg,privatecitizen,preparedstatementof 428 McGee, James M., president. National Alliance of Postal and Federal Employees,preparedstatementof 392 Olvera, Armando, president, the National league of Postmasters, pre- paredstatementof 408 Palladino, Vince, president. National Association ofPostal Supervisors, preparedstatementof 412 Quinn, William, national president. National Postal Mail Handlers Union,preparedstatementof 379 Readinger, Michelle, Postal Police, Fraternal Order of Police National LaborCouncilandPostalPoliceUnion,preparedstatementof 382 Sawyer, Hon. Thomas C, a Representative in Congress from the State ofOhio,preparedstatementof 348 Sombrotto,VincentR.,president,NationalAssociationofLetterCarriers, AFLCIO,preparedstatementof 352 Young,Hon. Don,aRepresentativeinCongressfromtheStateofAlaska, preparedstatementof 350 May 24, 1994 HearingheldinWashington,DC,May24, 1994 429 Statementof: Gleiman, Edward J., Chairman, Postal Rate Commission; accompanied byW.H."Trey"LeBlancIII,ViceChairman;GeorgeW.Haley,Commis- sioner; H. Edward Quick, Jr., Commissioner; and Wayne A. Schley, Commissioner 447 Motley, Michael E., associate director, Government Business Operations PreparIesdsusetsa,tGemeennetrsa,llAecttceorusn,tsiunpgplOfefmiecne,taalccmoatmeprainailesd,ebtycJeatemreas: T.Campbell . 431 Clay, Hon. William L., a Representative in Congress from the State ofMissouri: Preparedstatementof 430 ResponsetowrittenquestionssubmittedtothePostalRateCommis- sion 466 CoUins, Hon. Barbara-Rose, aRepresentativeinCongressfromtheState ofMichigan,preparedstatementof 483 Gleiman, EdwardJ.,Chairman,PostalRateCommission,preparedstate- mentof 451 LeBlanc, W.H. "Trey", III, Vice Chairman, Postal Rate Commission, pre- paredstatementof 459 Morella, Hon. ConstanceA.,aRepresentativeinCongressfromtheState of Maryland, response to written questions submitted to the Postal RateCommission 472 Motley, Michael E.,AssociateDirector, GovernmentBusiness Operations Issues,GeneralAccountingOffice,preparedstatementof 434 VI Prepared statements, letters, supplemental materials, et cetera—Continued Page Myers, Hon. John T., a Representative in Congress from the State of Pennsylvania, response to written questions submitted to the Postal RateCommission 482 Sawyer, Hon. Thomas C, a Representative in Congress from the State ofOhio,preparedstatementof 430 June 8, 1994 HearingheldinWashington,DC,June8, 1994 485 Statementof: Winters, Sam, ChairmanoftheBoardofGovernors, U.S. Postal Service, accompanied by Governor Susan Alvarado; Governor Legree Daniels; GovernorEinarDyhrkopp;GovernorNormaPace;andGovernorRobert Setrakian 488 Preparedstatements,letters,supplementalmaterials,etcetera: Clay, Hon. William L., a Representative in Congress from the State of Missouri, response to written questions submitted to the Postal RateCommission 502 Myers, Hon. John T., a Representative in Congress from the State of Pennsylvania,responsetowrittenquestionssubmittedtoSamWinters 508 Winters, Sam, Chairmanofthe Board ofGovernors, U.S. Postal Service, preparedstatementof 494 OVERSIGHT HEARING ON THE U.S. POSTAL SERVICE THURSDAY, APRIL 14, 1994 House ofRepresentatives, Committee on Post Officeand Civil Service, Washington, DC. The committee met, pursuant to call, at 9 a.m. in room 311, Can- non House Office Building, Hon. William L. Clay (chairman ofthe committee) presiding. Members present: Representatives Clay, McCloskey, Ackerman, Sawyer, Norton, Byrne, Wynn, Bishop, Hastings, Myers, Oilman, Morella, Ridge, Petri, and Boehlert. Mr. Clay. Good morning. Today the Committee on Post Office and Civil Service begins a series ofsix hearings on its oversight of the Postal Service. The major focus of these hearings will be the future ofthe U.S. Postal Service. The committee is concerned about the Service's future. USPS is a hard-copy delivery service which serves every business and household in America. We hope to hear today from the Postmaster General about his plans for remaining competitive and financially viable in the next century as electronic data increasingly replaces hard copy information. We hope to learn what new services the mailing public will demand and how these demands will be ad- dressed. At future hearings, we will hear from the mailers, the postal unions, management groups, the Postal Rate Commission, the General Accounting Office, the Governors ofthe Postal Service, and groups that have conducted studies on the future ofthe mail. The Postal Service has requested a 10.3-percent postage rate in- crease to carry it for the next 2 years. But most reports indicate that present financial goals are not being met by the Service. For fiscal year 1994, the organization is expected to lose $1,344 billion. Through April 1, 1994, however, losses are $544 million greater than anticipated and, overall, 1994 loses are approaching $2 bil- lion. Mail volume is up, but work hours are up more. Overtime hours are higher than theywere lastyear. There are nowmore em- ployees than when downsizing began 2 years ago. Postal productiv- ity and service performances in the first quarter ofthe fiscal year, even before the terrible winter weather, are down. So, the commit- tee wants to learn how the Postal Service will correct these condi- tions. [The prepared statementofHon. William L. Clayfollows:] (1) PreparedStatementofHon.WilliamL.Clay,ARepresentativeinCongress FromtheStateofMissouri Goodmorning. TodaytheCommitteeonPostofficeandCivil Servicebeginsa se- ries ofsixhearings on itsoversight ofthe Postal Service. The majorfocus ofthese hearingswillbethefutureoftheUnitedStatesPostalService. ThecommitteeisconcernedabouttheService'sfuture.USPSisahard-copydeliv- eryservicewhichserveseverybusinessandhouseholdinAmerica.Wehopetohear today from the PostmasterGeneral his plans forremaining competitive and finan- cially viable in the next century as electronic data increasingly replaces hard-copy information. We hope to learn what new services mailers will demand and how these demands will be addressed. At another time we will hear from the mailers, the postal unions and management groups, the Postal Rate Commission, the Gen- eral Accounting Office, the Governors ofthe Postal Service, and groups that have conductedstudiesonthefutureofthemail. The Postal Servicehas requested a 10.3-percentpostage rate increasetocarryit for the next 2 years. Most reports indicate that financial goals are not being met by the Postal Service. For fiscal year 1994, the organization is expected to lose $1,344billion.ThroughApril 1, 1994,however,lossesare$544milliongreaterthan anticipated, and overall 1994 losses are approaching $2 billion. Msiil volume is up, but workhours are up more. Overtime hours are higher than they were last year. There are more employees now than when downsizing began 2 years ago. Postal productivity and service performance in the first quarter ofthe fiscal year, before theterriblewinterweather,aredown.ThecommitteewantstolearnhowthePostal Servicewillcorrecttheseconditions. Mr. Clay. Are there any other opening statements? Mr. Sawyer? Mr. Sawyer. Thankyou, Mr. Chairman. It's a pleasure to participate in this hearing with Postmaster General Runyon. I want to thankyou forhavingthese hearings. The work ofthe Postal Service is really remarkable. It is one of the largest and most complex enterprises ever devised in human- kind. The notion that it connects virtually every household in America with virtually every other household in America and points abroad on a dailybasis is a remarkable undertaking that we too often, I think, takeforgranted. Having said all that, these hearings represent an opportunity to look at ways to make that service better, and as a result we some- times concentrate on those things that provoke concern. So, while we do that, I think it's important to recognize the extraordinary characterofthe enterprisethat the Postal Service represents. Having said that, I do remain concerned about the lingering ef- fects ofrestructuring on the Postal Service. The subcommittee that I chair, which hasjurisdiction over some elements ofpostal person- nel, continues to receive reports from across the country expressing concern about inadequate staffinglevels, untrained personnel being moved into high levels ofresponsibility, and the continuingreliance on overtime. These are the kinds of issues that can diminish the kind ofimprovement in morale that I know that you've been seek- ing. Equally important, I think perhaps the most difficult undertak- ing that we face in trying to deal with an enterprise as large as the one that you're charged with the responsibility for running is to move the culture of an enormous number of people, a culture that has been in place, evolving slowly, over 200 years. So, while highest ranking officials may be engaged in the kind of work to achieve the sort ofcooperative management style that you have ex- emplified, why that culture has not changed as rapidly in many local communities is ofgreat concern. It doesn't seem tobe filtering down to all ofthe individuals who are responsible for ensuring that

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