“Hearing with the Commissioners of the Postal Regulatory Commission”

1[House Hearing, 119 Congress]2[From the U.S. Government Publishing Office]34                   HEARING WITH THE COMMISSIONERS OF5                    THE POSTAL REGULATORY COMMISSION6=======================================================================78                                HEARING910                               BEFORE THE1112                       SUBCOMMITTEE ON GOVERNMENT13                                OPERATIONS1415                                 OF THE1617                       COMMITTEE ON OVERSIGHT AND18                            GOVERNMENT REFORM1920                     U.S. HOUSE OF REPRESENTATIVES2122                    ONE HUNDRED NINETEENTH CONGRESS2324                             SECOND SESSION2526                               __________2728                              JUNE 4, 20262930                               __________3132                           Serial No. 119-653334                               __________3536Printed for the use of the Committee on Oversight and Government Reform3738[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3940    Available on: govinfo.gov, oversight.house.gov or docs.house.gov4142                               __________4344                       U.S. GOVERNMENT PUBLISHING OFFICE4563-892 PDF                    WASHINGTON : 202646=======================================================================4748              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM4950                    JAMES COMER, Kentucky, Chairman5152Jim Jordan, Ohio                     Robert Garcia, California, Ranking53Mike Turner, Ohio                        Minority Member54Paul Gosar, Arizona                  Eleanor Holmes Norton, District of55Virginia Foxx, North Carolina            Columbia56Glenn Grothman, Wisconsin            Stephen F. Lynch, Massachusetts57Michael Cloud, Texas                 Raja Krishnamoorthi, Illinois58Gary Palmer, Alabama                 Ro Khanna, California59Clay Higgins, Louisiana              Kweisi Mfume, Maryland60Pete Sessions, Texas                 Shontel Brown, Ohio61Andy Biggs, Arizona                  Melanie Stansbury, New Mexico62Nancy Mace, South Carolina           Maxwell Frost, Florida63Pat Fallon, Texas                    Summer Lee, Pennsylvania64Byron Donalds, Florida               Greg Casar, Texas65Scott Perry, Pennsylvania            Jasmine Crockett, Texas66William Timmons, South Carolina      Emily Randall, Washington67Tim Burchett, Tennessee              Suhas Subramanyam, Virginia68Lauren Boebert, Colorado             Yassamin Ansari, Arizona69Anna Paulina Luna, Florida           Wesley Bell, Missouri70Nick Langworthy, New York            Lateefah Simon, California71Eric Burlison, Missouri              Dave Min, California72Elijah Crane, Arizona                Ayanna Pressley, Massachusetts73Brian Jack, Georgia                  Rashida Tlaib, Michigan74John McGuire, Virginia75Brandon Gill, Texas76Richard McCormick, Georgia7778                                 ------7980                       Mark Marin, Staff Director81                   James Rust, Deputy Staff Director82                     Ryan Giachetti, Chief Counsel83           Jennifer Kamara, Director of Strategic Initiatives84                     Luke Moll, Research Assistant85                      Bill Womack, Senior Advisor86         Mallory Cogar, Director of Operations and Chief Clerk8788                      Contact Number: 202-225-50748990                Robert Edmonson, Minority Staff Director91                      Contact Number: 202-225-505192                                 ------9394                 Subcommittee on Government Operations9596                     Pete Sessions, Texas, Chairman9798Virginia Foxx, North Carolina        Kweisi Mfume, Maryland, Ranking99Gary Palmer, Alabama                     Member100Tim Burchett, Tennessee              Eleanor Holmes Norton, District of101Brian Jack, Georgia                      Columbia102Brandon Gill, Texas                  Maxwell Frost, Florida103                                     Emily Randall, Washington104105                        C  O  N  T  E  N  T  S106107                              ----------108109                           OPENING STATEMENTS110111                                                                   Page112113Hon. Pete Sessions, U.S. Representative, Chairman................     1114115Hon. Kweisi Mfume, U.S. Representative, Ranking Member...........     3116117                               WITNESSES118119Hon. Robert Taub, Vice Chairman, Postal Regulatory Commission120Oral Statement...................................................     5121122Hon. Ann Fisher, Commissioner, Postal Regulatory Commission123Oral Statement...................................................    10124125Hon. Thomas Day, Commissioner, Postal Regulatory Commission126Oral Statement...................................................    12127128Hon. Ashley Poling, Commissioner, Postal Regulatory Commission129Oral Statement...................................................    13130131Written opening statements and bios are available on the U.S.132  House of Representatives Document Repository at:133  docs.house.gov.134135                           INDEX OF DOCUMENTS136137  * Article, Brookings, ``When Slower Mail Becomes a Health138  Risk''; submitted by Rep. Mfume.139140  * Statement from ANM; submitted by Rep. Mfume.141142  * Statement from EPatel; submitted by Rep. Mfume.143144  * Statement from Keep-US-Posted; submitted by Rep. Mfume.145146  * Statement from NNA; submitted by Rep. Mfume.147148  * Statement from NPMHU; submitted by Rep. Mfume.149150  * Statement from EMA; submitted by Rep. Sessions.151152The documents listed above are available at: docs.house.gov.153154                   HEARING WITH THE COMMISSIONERS OF155                    THE POSTAL REGULATORY COMMISSION156157                              ----------158159                         THURSDAY, JUNE 4, 2026160161                     U.S. House of Representatives162163              Committee on Oversight and Government Reform164165                 Subcommittee on Government Operations166167                                                   Washington, D.C.168169    The subcommittee met, pursuant to notice, at 10:04 a.m., in170room 2154, Rayburn House Office Building, Hon. Pete Sessions171[Chairman of the Subcommittee] presiding.172    Present: Representatives Sessions, Foxx, Palmer, Burchett,173Jack, Gill, Mfume, Norton, Frost, and Randall.174    Also present: Bell, Walkinshaw, and Budzinski.175    Mr. Sessions. Good morning. The Subcommittee on Government176Operations will come to order, and I would like to welcome177everyone with some explanation.178    I had cataract surgery last week and find myself in bright179lights. So, I am going to make my ophthalmologist happy, and180she tells, me too, by avoiding further damage to my eyes. So, I181probably will end up getting a call from Bono asking me to quit182trying to impersonate him, but I would ask some bit of leverage183on myself to at least be able to read what I am doing.184    So, without objection, I may declare a recess at any time185as Chair.186    I recognize myself for the purpose of making an opening187statement, and good morning to each of you who have taken time188to be at this important hearing.189190          OPENING STATEMENT OF CHAIRMAN PETE SESSIONS191192                   REPRESENTATIVE FROM TEXAS193194    First of all, I would like to welcome everybody to today's195hearing with the Postal Regulatory Commission. It is the latest196installation of the Subcommittee's ongoing effort to oversee197the troubled landscape of the United States Postal Service. The198PRC--Postal Regulatory Commission--is a key stakeholder in the199postal universe and has been at the center of core issues:200service performance, revised service standards, and, of course,201postal rates. And each of these Members that are here today202will be given not only a chance to articulate their thoughts203and ideas, but we want to welcome them because they are the204effort between, as part of the regulatory oversight, to make205sure that we get their side of the story. Yet the Commissioners206of the PRC have not testified before this Committee since 2018.207We felt like it was time, so I thought it was high time not208only for this visit, but also the update at these times, which209continue to be changing, and what has been a recurring event210the Postal Service finds itself, self-identified and by others,211at a time of crisis.212    In March, the Postmaster General testified before this213Subcommittee that the Postal Service would run out of cash in214about 12 months, meaning that it would be impossible to215maintain anything close to the level of service that not only216Congress, but that the American people and customers would217expect. Since that time, he has suspended employer218contributions to the Federal Employee Retirement System (FERS)219and placed restrictions on non-essential spending. I am not220aware of an official estimate of how much these additional time221measures have bought the Postal Service, but I am given the222understanding it might be several years.223    Regardless, the Postal Service needs our attention. It224needs the attention of not only Congress but, of course, the225Postal Regulatory Commission and others who are in this space226who provide added service, benefit, and opportunity to the227Postal Service, to customers, and certainly as payers into the228system. So, it just does not make sense that we would simply229ignore these issues that need to come forth, but rather talk230about them because I, too, am concerned about postal workers.231I, too, am concerned about us treating not only workers fairly,232but making sure that their future is secure. And I, too, care233very much about our Postmaster General, who I think has the234right attitude about his service to the United States of235America and in service to the Postal Service.236    I will once again take the opening opportunity to commend237former Postmaster Louis DeJoy for doing his best to come up238with an enduring solution to the Postal Service's problems. He239had lots of ideas, he had lots of things that he put into240place, but I also see how the Delivering for America plan did241not provide the results that he had hoped that it would. So, we242are not just back at the table, we are back to where we have to243work with each other. Similarly, I commend the current244Postmaster General, my friend, Mr. Steiner, for taking on this245important task. I am not sure how many people would have246accepted the call from President Trump to do this. He willingly247did and is taking this issue on with his team forthrightly.248    During our March meeting, Postmaster General Steiner told249this Subcommittee he needs congressional action to increase the250Postal Service's borrowing authority, and just two days ago, he251presented the Committee with a number of additional legislative252requests. There is no reason to assume additional borrowed253funds infused into this unintended business model would be254anything more than throwing good money after bad results. So,255that is part of why we are here today: to get closer on our256collaboration not only with the United States Postal Service257and its great employees, but also with the Postmaster General.258We also have the U.S. Senate that has a number of ideas about259this, and we will include their ideas in.260    So, to be clear, this is not a shot at my friend, the261Postmaster General. He himself has said Congress and the262American people need to decide what they want, and I think this263want, while it is the big issue of the day, we need to be clear264that we need to get closer on a lot of the activities that add265up to that ``want,'' and that is the day-to-day running, the266decisions that are made, and also the obligations under law and267necessary to support the American workers that are called268postal workers, and the systems that they are, too, a part of.269    So, it is not just a matter of what a customer wants. It is270not just a matter of what we want as Members of Congress. It is271called working together. If we want the status quo, or at least272what would be described as the good parts of status quo from273some people's perspective, we are going to have to pay for it274one way or another. We are going to have to understand these275are different times. But I would say that since its conception,276the Postal Service has provided numerous societal benefit,277laborers that work increasingly to the benefit of customers,278and we need to make sure we more clearly understand those279requirements and expectations. So, it must deliver everywhere,280not all the time, but darn near close to it. So, regardless of281how remote or the resources that it takes, we need to focus on282the goal at hand, and that is closer understanding what we are283trying to aid and be a part of.284    So, what we are going to do here today is to take feedback.285We are going to take feedback not only from the Postal286Regulatory Commission, but we are going to hear from Members of287Congress. I would say to you, and I think it is no surprise to288Mr. Mfume, almost every single Member of Congress has an289opinion about the Postal Service also, and I am sure the Postal290Service has lots of opinions that they cannot always express,291but that is what today is about, to hear from the Postal292Regulatory Commission, and I am delighted that they are here.293    At this time, I would yield to the distinguished Member294from Maryland, my friend, the Subcommittee Ranking Member, Mr.295Mfume. The gentleman is recognized.296297        OPENING STATEMENT OF RANKING MEMBER KWEISI MFUME298299                  REPRESENTATIVE FROM MARYLAND300301    Mr. Mfume. Thank you very much, Mr. Chairman. Good morning,302everyone. I want to thank Chairman Sessions for calling this303hearing on what we all agree is a very important topic. This is304the fourth, in case you did not know, in a series of305Subcommittee hearings on the Postal Service, this time with the306Postal Regulatory Commission, as we can see. And we are at a307very critical juncture for the Postal Service, which, as most308of us know, is facing an estimated $9 billion net loss, a309nearly 50-percent decline in mail volume since 2006, and is at310risk--serious risk--of running out of cash in the near future.311    The Postal Service powers communities by providing312universal, reliable, and efficient mail services across all 50313states and territories. That is not anything new. That is what314the Service has been doing since it was created. Mail delivery,315as we can all agree, is a public service and it is a public316service to all Americans, and it relies on the Postal Service's317regulatory oversight bodies and Congress to find a way to work318together to ensure its survival.319    The independent Postal Regulatory Commission, also known as320PRC, regulates, as all of you know who are here to testify321today, the mail monopoly of the Postal Service. The PRC322regulates and establishes regulations and procedures on setting323postal rates, and analyzes the Postal Service's finances,324service performance, and compliance with the Universal Service325Obligation. In addition to that, the PRC has the authority to326hear public appeals of post office closures and receives and327investigates public complaints alleging that the Postal Service328may or may not be violating its statutory and regulatory329requirements. The PRC currently has, as we know, and excuse of330redundancy here, four Commissioners with critical expertise in331the functions of the Postal Service and is a critical component332of the postal system, which ensures that rates are fair and333maintains a transparent, accountable, universal mail system. As334the Postal Service faces and comes to grips with its own335future, that Service must continue to cut costs and to find336ways to creatively increase revenue.337    When Congress passed its last major reform bill to support338the Postal Service, then Postmaster General DeJoy spent $40339billion on capital investments, reduced performance targets,340weakened the service in underserved areas, and any solution341that Congress is willing to undertake must include more342safeguards to hold this and any future Postmaster General and343the Board of Governors to the public by making sure that they344are accountable in various ways. So, I am particularly345interested in discussing potential guardrails that strengthen346the role of the PRC, and while I am encouraged by the347Postmaster General's efforts to prioritize service performance348as he leads the Postal Service during this difficult time, I349think even more has to be done.350    So, I look forward to the discussion on how we can all work351together to put the Postal Service back on, as they say, the352right track. I yield back, Mr. Chairman.353    Mr. Sessions. Mr. Mfume, thank you very much. So that this354Subcommittee understands, the gentleman from Maryland and I are355very, not only very good personal friends, we try and operate356this Subcommittee based upon the ability to work together, to357talk with each other about even difficult subjects. And while358he is given the authority and responsibility, as am I, to hold359our own opinion, we try and work together. And I want to360publicly thank the gentlemen, not only for this attribute that361he has ability to do it, but to also let him know that I will362continue that as we move forward in this process that seemingly363has a lot of work to go. So, thank you very much, Mr. Mfume.364    Without objection, Representatives Walkinshaw of Virginia,365Budzinski of Illinois, Lynch of Massachusetts, and Bell of366Missouri are waived onto this Subcommittee for the purpose of367questioning the witnesses at today's Subcommittee hearing.368    I am very pleased today to welcome our witnesses who are369before us today. Robert Taub is the Vice Chairman of the Postal370Regulatory Commission, formerly sitting in the Chairman's seat371for over six years, and totaling over 40 years of public372service experience. I first met Robert a couple hundred years373ago when I sat on the Postal Subcommittee of Government Reform374at the time that we had a Postal Subcommittee, and, Robert, I375am delighted that you are here today.376    Ann Fisher: Ann Fisher has been a Commissioner at the377Postal Regulatory Commission since 2019. She has served in the378Federal Government for 32 years, to include holding a number of379positions in the U.S. Senate and the United States Postal380Service. During her Senate tenure, she was the lead Republican381aide overseeing passage of the 2006 Postal Accountability and382Enhancement Act.383    Thomas Day: The gentleman has been a Commissioner at the384Postal Regulatory Commission since 2023. He also has served 45385years in the Federal Government, to include 35 years at the386Postal Service where he held a number of senior executive387positions.388    Ashley Poling: Ashley Poling has been a Commissioner at the389Postal Regulatory Commission since 2019. Prior to her service390on the Commission, she held a number of senior roles to serve391the U.S. Senate and the American people.392    So, I want to say thank you to each of you for joining us393today. It was important for me, as I told Mr. Mfume, as I had394discussions with you yesterday to prepare us for today. I felt395like that your insight, your opportunity to express your views396and beliefs are very important, and it is my hope today that397each of you will be able to not only complete the sentence that398you start at the end of 5 minutes, but will make sure those399points are well made, and I have a slow gavel, as Mr. Mfume400knows.401    So, I would now ask each of our witness to please stand up.402Pursuant to Committee Rule 9(g), the witnesses will rise and403raise their right hand and answer or affirm as I ask them.404    Do you solemnly swear or affirm that the testimony that you405are about to give is the truth, the whole truth, and nothing406but the truth, so help you God?407    Mr. Taub. I do.408    Ms. Fisher. I do.409    Mr. Day. I do.410    Ms. Poling. I do.411    Mr. Sessions. Let the record show that the witnesses have412answered in the affirmative. Thank you very much. You may now413take a seat. We are delighted that you are here, and we414appreciate you being here today.415    I would like to remind the witnesses that in order for us416to maintain proper opportunity for each of our Members to come417and participate, that we are going to ask that you try and make418sure that your time here is succinct and well done. But with419that said, we have the clock that you are aware of, the green420light, yellow light, red light. As we get to the red light,421please think about closing your statements that you would have.422    So, we are delighted that you are here, and I now would go423to our witnesses and, Mr. Chairman, will allow you to come424first. The gentleman is recognized.425426                 STATEMENT OF HON. ROBERT TAUB427428          VICE CHAIRMAN, POSTAL REGULATORY COMMISSION429430    Mr. Taub. Chairman Sessions, Ranking Member Mfume, and431Members of the Subcommittee, thank you for convening this432hearing on the state of the Postal Service and the critical433role the Postal Regulatory Commission plays in providing434transparency and accountability for the American people. The435President designated me Chairman of the Commission for more436than six years, from December 2014 until January 2021. For the437past two years, I was elected Vice Chairman of the Agency by my438fellow Commissioners who join me here today. We have a vacancy439in the Chairman position, so pursuant to law, the Vice Chairman440acts as Chairman. As current Agency head, my remarks this441morning reflect the full Commission testimony.442    In some ways, not much has changed since my last testimony443before this Committee more than nine years ago in February4442017. If anything, the situation has gotten worse. Almost three445months ago, the Postmaster General testified here and presented446a dismal fiscal forecast. He stated that they would run out of447cash and stop delivering mail just under nine months from now.448He also presented three doors from which Congress could choose449a solution: two doors leading to continued dismal results and450the quickened demise of the Postal Service, such as stopping451mail delivery, severely reducing service, closing post offices,452and raising prices. And one he referred to as the Goldilocks453choice, which he championed would be just right, solving all454the problems. The proposal includes increasing its borrowing455cap from $15 billion to $30 billion, among other options, such456as reallocating retiree liabilities, diversifying retirement457funds, and modifying current actuarial assumptions to reduce458pension payments.459    Our written testimony dives deeper into the many reasons460why the Postal Service is in the situation it is in today and461highlights how the Commission has repeatedly raised concerns462over the past few years. While the Commission broadly agrees463with the Postmaster General on some of the causes, some of the464Postal Service's explanations give us pause. Its proposed465solutions should also be viewed cautiously. However, we agree466with the Postmaster General on the most important solution:467only by first specifically defining what America needs of its468Postal Service and what that costs, will Congress then truly469know how best to fix the fundamental funding structure while470preserving appropriate service and delivery standards,471specifically defining the public service mission. That is, the472Universal Service Obligation, or USO for short, of this vital473government institution should be job one.474    Before further discussing this important issue of the USO,475some words of caution about the Postmaster General's suggested476approach in his testimony of just granting the Service more477freedom to operate like a truly independent entity and ridding478it of any regulatory or statutory requirements, then hoping479that will make everything better. That approach, combined with480the Goldilocks choice, can generally be described as `give us481more money with less oversight.' The Postal Service is not an482independent private business. It is a government establishment483with extensive special legal privileges, including two484statutory monopolies valued at nearly $6 billion over letter485delivery and mailbox access that no other private sector486company is allowed to maintain. This is why Congress487established specific and limited statutory and regulatory488guardrails, and has relied on the Commission for the past 56489years to protect American consumers and businesses from490potential monopolistic abuse, such as predatory pricing, poor491service, and unfair competition by this government492establishment operating in commercial markets.493    The Commission also cautions against endorsing the Postal494Service's plan to move full steam ahead with what, in essence,495is the Delivering for America plan--DFA--a plan that promised496break-even operations by 2023 and a cumulative ten year net497income of $200 million. In fact, now in year six of the ten498year DFA plan, the Postal Service has incurred $31 billion in499losses and is on the path to losing even more in the remaining500four years of its implementation. It is a plan that promised to501streamline and save the Postal Service $28 to $40 billion by5022030 as initially estimated. Yet, implementation of the plan503has slowed mail delivery across the United States, particularly504in rural areas, which, to a greater extent, rely on affordable505and reliable mail delivery. Further, the mounting financial506losses continue, the situation the Commission warned about on507several prior occasions.508    Congress has enacted significant financial relief in recent509years, including $10 billion in COVID relief, $3 billion for510electric vehicles, and approximately $57 billion in balance511sheet relief under the 2022 law. Without these extraordinary512measures, Postal finances would be even worse. The 2022 law513also required Medicare enrollment for Postal retirees, which514was estimated to generate longer-term cost savings of $2-and-a-515half billion over the 2021-2031 period.516    In addition, in 2021, the Commission provided the Postal517Service with additional rate authority above inflation for its518monopoly products, such as letters. There are no limits on519rates for their competitive parcel and packaged products. This520additional pricing authority helped offset costs related to521inflation as well as two sources of costs that the Postal522Service argues are outside of its control. The Commission523agreed, and we created additional rate authorities targeted at524offsetting those specific costs of mail density and retirement525obligations. Since the effective date of the Commission's new526rules in 2021, the Postal Service has used all this authority527to raise rates by 45 percent for most classes. Rate authority,528due to inflation granted during that time, totals 23 percent,529which means the Commission provided additional revenue-raising530authority to the Postal Service of 22 percent.531    Looking at the first-class stamp price, the Postal Service532accelerated the rate in just five years from 55 cents to 82533cents effective next month, a 49-percent increase. Now more534money is being requested with no fundamental solution in sight.535The Commission is doubtful that just $15 billion more is going536to solve the problem: extend the date of the ultimate crisis,537yes, but prevent it, no.538    Understanding the situation and working to address it, the539Commission, building on its record of trying to identify540creative pathways forward, undertook a major action in April541that fundamentally alters the Postal Service's pronouncements542that it could be out of cash in less than a year. The543Commission provided the Postal Service with a total of544potentially $15 billion or more in relief through 2030 to help545avert a cash crisis in the near term by issuing a waiver of our546regulations requiring minimum retirement payments. I will say547that again so it is very clear how circumstances have changed548since the Postmaster General's testimony in March. The549Commission provided the Postal Service a total of potentially550$15 billion or more in relief through 2030 and averted a cash551crisis in the near term by issuing a waiver of its regulations552requiring minimum retirement payments.553    The Commission's action offers some breathing room and554extends the time before the Postal Service's reported555insolvency and the stated crisis of stopping mail delivery to556at least another several years, provided the Postal Service557makes judicious decisions about its expenditures starting now.558To be clear, this is not a panacea nor a permanent or long-term559fix to the Postal Service's problems, but it does allow560Congress an opportunity to enact thoughtful and fundamental561change as opposed to choices of desperation. There are several562areas where we disagree with the Postal Service on how it got563into the position it is in now or how it will get out of it.564However, I would like to focus on the areas where we agree with565the Postal Service and the singular action the Commission566believes is critical that Congress enact.567    Define the Universal Service Obligation. Clearly defining568the USO means describing what the country needs from our Postal569Service and setting up a system to fully pay for it. We fully570agree with the Postmaster General on this point, as he571testified: ``Just tell us what you want us to do and how to pay572for it, and we will do it.'' It really is just that simple. As573the Government Accountability Office testified to you that same574day, the existing Postal Service operating model is575unsustainable. The Commission strongly agrees, and we have576urged action in this regard since 2008. This position has been577echoed in recent years by the GAO, the Postal Inspector578General, President Trump's Task Force on the Postal System led579by the Secretary of the Treasury, among others, which is that580the United States needs to clearly define the public service581mission for this wholly government, not private, establishment.582In other words, what is the Universal Service Obligation?583    Defining the USO involves answering tough questions, but in584doing so it also, and perhaps more importantly, forms the basis585for the infrastructure and financial arrangements needed to586ensure our fellow Americans receive the postal services they587need. Those tough questions may include how many days of588delivery each week are needed in 2026 and beyond? What are589acceptable delivery service times across the nation? Does the590Postal Service need to offer fewer or more products and591services? Should delivery service and access be the same across592the Nation?593    The Commission has extensive experience evaluating the USO.594In the 2006 postal law, Congress directed the Commission to595produce a comprehensive report on universal service, and it596identified seven specific attributes that comprise the USO. I597think it is important to name them. One, geographic scope; two,598range of products; three, access to services and facilities;599four, delivery frequency; five, affordable and uniform pricing;600six, service quality; and seven, an enforcement mechanism. The601first four of these attributes--geography, products, access,602and delivery frequency--directly impact the costs incurred by603the Postal Service. The fifth attribute--pricing--directly604impacts the revenue of the Postal Service, and the sixth605attribute addresses service performance. To date, however,606other than mandating six day-a-week delivery, Congress has not607specifically defined the other features of the USO. Once the608Postal Service's duties under the USO are defined, the costs609for providing them can be assigned, and a viable financial610structure can be established to support the level of universal611service required. Only by defining the USO clearly can we begin612to design a system that will fund the services required. It is613our Nation's mission statement for the Postal Service, and it614needs to be clear.615    The law requires the Commission to annually estimate the616USO costs, and we currently estimate that the total cost of the617USO is more than $6.6 billion. Unlike many other countries, the618USO within the United States is largely undefined and instead619is comprised of a broad set of policy statements with only a620few legislative prescriptions. In the absence of a clear621definition of the USO, particularly given the current financial622challenges, each of us, including the Postal Service, will have623different views of what services and operations it must provide624to fulfill the USO, and all our views will have different price625tags.626    As part of the financial pressure of generating sufficient627funds to remain solvent, make capital investments, and pay628retiree costs, the Postal Service must fund this $6.6 billion629annual and growing cost for its Universal Service Obligations.630Given the Commission's substantial work on the USO, we would631welcome the opportunity to collaborate with this Committee on632designing a viable solution with a possible legislative633approach detailed in the written testimony.634    We appear before this Committee today fully aware of the635difficulties that lie ahead. I believe the Commission has a636clear understanding of the serious and numerous financial637challenges that face America's postal system. As you all know638well, the mail stream of today has been diminished by639electronic means of communication that replace mail, that640replace stamps, and thus, they replace the revenues necessary641to operate our key mail delivery system. Some may even suggest642that the time of the Postal Service has passed, but the fact is643for all the challenges the Postal Service of the 21st century644faces, it still retains an integral place as a key cog in how645American businesses conduct their affairs and how Americans all646across this land communicate.647    The U.S. postal and delivery sector represents a nearly $2648trillion-a-year industry with almost eight million jobs, making649it vital to our economy. However, the Postal Service is in a650serious financial crisis, operating under an unsustainable651model, and the Commission, along with the GAO, the IG,652President Trump's Treasury Task Force on the Postal System, and653the Postal Service itself, have all pointed the way forward:654define the USO. Again, as the Postmaster General testified here655in March, ``Just tell us what you want us to do and how to pay656for it, and we will do it.''657    Mr. Sessions. Mr. Chairman, thank you very much.658    Mr. Taub. Thank you, Mr. Chairman.659    Mr. Sessions. As I suggested to you yesterday and660reiterated this morning, I think your presentation was661necessary, balanced, and contained certainly a challenge for662this Subcommittee, Members of Congress, and certainly the663American people. Thank you very much.664    Mr. Taub. Thank you, Mr. Chairman.665    Mr. Sessions. Ms. Fisher?666667                  STATEMENT OF HON. ANN FISHER668669           COMMISSIONER, POSTAL REGULATORY COMMISSION670671    Ms. Fisher. Good morning, and thank you, Chairman Sessions672and Ranking Member Mfume, for holding this hearing.673    The Postal Service faces an incredibly tough mandate. It674must operate like a business by funding itself through its own675revenues, yet it must serve the public as a universal service676provider, delivering to every single address regardless of677profitability, all while under persistent financial distress. I678fully support the comments of my longtime colleague, Vice679Chairman Taub. At its core, the question before this Committee680is whether the current rate system and broader statutory681framework give the Postal Service a realistic path to long-term682solvency while preserving universal service.683    With the 2006 enactment of the Postal Accountability and684Enhancement Act, Congress directed the Commission to establish685a rate-making system designed to achieve a set of interlocking686objectives laid out in the law. Particularly relevant to the687discussion on postal finances is Objective 5: to ensure688adequate revenues, including retained earnings to maintain689financial stability. True financial stability requires a system690that can lawfully generate the reserves and retained earnings691needed to invest in vehicles, facilities, and modern692infrastructure. Without long-term viability, the universal693service mandate cannot be sustained. If Objective 5 were the694only objective the Commission had to consider, rates would need695to rise about 50 percent to add $10 billion in net income and a696$1 billion buffer, likely triggering a roughly 30-percent697volume decline and accelerating customer loss.698    Fortunately, that is not the way the rate system is699designed. Objective 5 must be balanced with seven other700objectives that call for, among other things, maximizing701incentives for operational efficiency, cost reduction, and702maintaining predictable, stable rates and high-quality service703standards. The Commission cannot simply allow the Postal704Service to price its way out of structural deficit without705seriously eroding the very mail volumes that still fund the706universal service.707    Members of Congress routinely hear from their constituents708about service problems. High-quality, reliable service is the709expectation, but that carries an undeniable multibillion-dollar710cost. In postal economics, cost efficiency trades off with711service quality. Leaner networks cut costs, but high, reliable712service demands significant operating premiums. High-quality713service is not just management. It requires costly operational714buffers: extra staff, overtime, and added transport. For a cash715constrained Postal Service, every gain in service scores has a716direct price tag. About 70 percent of postal costs are labor.717This past fiscal year, overtime jumped by five million hours,718even as total hours fell by 12 million and headcount by 15,000,719yet higher benefits, more career conversions, and volatile720overtime still drove compensation costs up.721    In 2020, the Commission modified the rate-making system and722granted the Postal Service additional flexibility to raise723market-dominant rates above inflation to help address724structural deficits. We had to strike a very careful balancing725act, allowing prices high enough to cover the actual costs of726processing and delivery, but not so high that they accelerate727volume declines and drive customers out of the mail altogether.728Those tools have helped stabilize revenue, but they cannot729overcome the combination of declining mail volume, rising730structural costs, and balance sheet obligations. The Postal731Service was designed to be self-funded, but has not reported an732annual profit in roughly the last decade. Over just the last733three years, cumulative net losses total about $25 billion,734underscoring that the current trajectory is not self-735correcting.736    Given this backdrop, the Commission has had to make737difficult decisions. Vice Chairman Taub noted the waiver we738recently granted the Postal Service allowing for emergency739liquidity relief. The Postal Service is also seeking740congressional assistance in the form of an increased debt limit741and annual appropriation to fund universal service and other742items, all of which deserve fair consideration. I hope that743issuance of the waiver, though, will provide Congress with time744to decide what the Nation needs from the Postal Service and how745best to finance that mandate. From a regulatory perspective,746short-term liquidity fixes are not a substitute for a747sustainable, long-term funding model for universal service.748    On a personal note, I want to thank Chairman Sessions for749his recent visit to South Dakota. Having spent much of my life750there, I have observed firsthand how the slowdown in rural and751remote mail delivery can affect daily routines. The concern is752not only slower delivery times, but also reduced access. Last753year, the Postal Service closed 14 postal counters in Sioux754Falls, Hy-Vee, and Lewis drugstores, leaving two full-service755post offices to serve the state's largest city. A local756newspaper quoted a Postal Service representative as saying,757``The 14 closures better enabled the Postal Service to fulfill758its commitment to serve our communities with efficient and759reliable access to retail services.'' It seems to me the760opposite is happening because for many residents, access has761become more limited.762    At the same time, the broader delivery landscape is763evolving. In my own experience, I am extremely well served in764the packaged delivery area. I often receive prompt, same-day765door delivery on countless items from private carriers. By766contrast, Postal Service packages are delivered to a cluster767box a quarter mile from my home, which can be difficult to768access during winter conditions in South Dakota. In some769instances, alternative shipping options through local retailers770are sometimes less expensive and a shorter drive than my post771office, and my mother, who lives even further away, receives772necessary medication via a private carrier. My point is that773while delivery options and consumer expectations continue to774evolve, rural and remote communities still rely on the Postal775Service for affordable delivery of mail and packages. This776presents both a challenge and an opportunity to evaluate the777current needs of Postal Service stakeholders.778    I encourage Congress to consider this evolving landscape779when determining how best to ensure a responsive and viable780Postal Service into the future. Thank you.781    Mr. Sessions. Ms. Fisher, thank you very much. The782gentlemen, Thomas Day, and Mr. Day, you are recognized.783784                  STATEMENT OF HON. THOMAS DAY785786           COMMISSIONER, POSTAL REGULATORY COMMISSION787788    Mr. Day. Good morning, Chairman Sessions, Ranking Member789Mfume, and Members of the Subcommittee. Thank you for calling790this hearing to discuss the current situation confronting the791Postal Service. I look forward to the opportunity to discuss792the critical role of the Postal Regulatory Commission, as well793as what I believe it could do to assist in securing a794sustainable future.795    I have been professionally associated with the Postal796Service for 42 years. Following nine years in the U.S. Army, I797began my postal career in 1984, and in 35 years in the Postal798Service, I served at all levels of management, from Frontline799Supervisor to Senior Executive Vice Presidents. I also worked800all aspects of operations and virtually most, if not all, of801the supporting functions as well.802    I am in full agreement with the factual background that803Vice Chairman Taub's testimony provided, the summary of804performance and the path forward to achieving resolution and805improvement. I would like to emphasize a few points, however. I806fully agree we must define the scope of the Universal Service807Obligation. It is important to understand this complex task808will likely take some time to be completed. In the meantime,809there are other critical steps that can be taken to improve the810Postal Service to reduce cost, improve service, and ensure a811safe and secure work environment for its employees. Under812current postal leadership, there is a clear effort to improve813service and reduce cost. More than just an effort, real results814are being achieved. That said, continued use of the network815created for Delivering for America Plan--DFA--cannot achieve an816optimal solution.817    As indicated in the advisory opinion of the PRC back in818January 2025, the DFA plan is fundamentally flawed. The flaws819in the DFA limit what realistically can be achieved. To be820clear, under current effort, improvement will take place. It821simply will not be the best that could be achieved. I could go822into a lengthy academic discussion explaining the deterministic823models that the Postal Service utilized as opposed to the824stochastic models that they should have utilized. What it825ultimately comes down to is variation: variation throughout the826network.827    No two places are the same. At each of the regional828processing distribution centers--the RPDCs--there is a unique829community to be served. The density of population varies, the830types of roadways and traffic vary, and even the types and831amount of mail vary. Despite this variation, the Postal Service832decided to implement a single, uniform format for RPDCs, a833seemingly arbitrary 50-mile radius. Beyond 50 miles, most mail834goes to the regional transportation optimization--the RTO--835network. Most RTO offices have a single truck each day to both836pick up mail from the previous day and to drop off the mail for837delivery that day. An example used during our advisory hearing838was Miami, Florida. When you look at the Miami-Florida RPDC839location, if you go 15 miles to the east, you are in the840Atlantic Ocean. Go 15 miles west, you are in the Everglades.841Just one example of how a uniform 50-mile radius is objectively842and fundamentally flawed.843    Only four of the RPDCs, of the 50 or so that are out there,844are in new locations. The overwhelming majority of the RPDCs845and the hundreds of the local processing centers--the LPCs--846were all placed in the existing network. The DFA network simply847modified transportation routes between existing facilities and848processing operations within those existing facilities.849Properly modeling and designing an optimal network does not850require an overwhelming investment. Modeling, design, and851implementation of an optimal network should improve service,852reduce cost, and provide employees with a more stable work853environment.854    The PRC was clear in its advisory opinion. More than a year855later, the facts and data are clear. We were correct in what we856stated last year. It is almost certainly a better solution for857the Postal Service to step back from DFA and properly design858and implement an optimized network within the physical network859that already exists. It will take some time to study and860approve the implement of a revision to USO. As that effort is861underway, properly designing and implementing a revised postal862network is critical. This is of value for the immediate future,863but it also will create a framework for future updates as864change will continue to take place throughout the postal865industry. Proper network design and updates will be needed for866the foreseeable future.867    Thank you again for the opportunity to testify before this868Subcommittee. I hope my testimony is informative, and I look869forward to any questions you may have.870    Mr. Sessions. Thank you for your service to the U.S.871Government and the people of the United States. Thank you very872much.873    Ms. Poling, you are now recognized.874875                STATEMENT OF HON. ASHLEY POLING876877           COMMISSIONER, POSTAL REGULATORY COMMISSION878879    Ms. Poling. Thank you. Chairman Sessions, Ranking Member880Mfume, and distinguished Subcommittee Members, thank you for881taking the time to hear from the Commission on this critically882important issue: the future of the United States Postal Service883and the role of the Postal Regulatory Commission. First, I884would like to echo the statement of the Vice Chairman and state885for the record that I appreciate his strong and steady886leadership during these rapidly changing times in the postal887community.888    The situation facing the Postal Service is a five-alarm889fire. Volume of traditional mail continues to decline, a result890of both ongoing electronic diversion and an acceleration due in891part to the Postal Service's aggressive pricing strategy. And892at the same time, service quality continues to suffer as the893leadership of the Postal Service has decided to slow service894standards for several mail products over the last five years,895including twice for the flagship first-class mail product,896while also lowering its service performance targets. What this897means is simple: the American people are paying more while898fewer mail pieces are being delivered in the expected899timeframe.900    As declining mail volumes and an increasing number of901delivery points continue to put financial pressure on the902Postal Service, the incentive to underperform service903expectations can be expected to increase. It is likely time for904Congress to consider authorizing additional oversight to ensure905the Postal Service meets its statutory obligations to the906American people, especially if those obligations are spelled907out in an explicit Universal Service Obligation. With that in908mind, I would like to focus the remainder of my remarks, not on909what aspects of the Postal Service's broken business model910Congress should address, but on why addressing the911sustainability of the Postal Service is so critically912important, even in a world dominated by electronic913communication.914    Especially for the nearly 66 million rural Americans, the915Postal Service continues to fill an important role, not just as916a communication channel, but as a lifeline for rural residents917ordering pharmaceuticals and other necessary medical items, and918an economic engine for local small businesses reaching their919customers. And every year, there are numerous stories of letter920carriers saving the lives of elderly residents throughout the921country, simply by showing up at their doors every day and922noticing that they have not collected their mail.923    I started my career in postal issues working for several924Senators from states with large rural populations, including925Montana, North Dakota, and Michigan. I saw firsthand the impact926of missed daily mail deliveries and how a post office can serve927as the beating heart of a rural community. And in many areas of928this country, the Postal Service is the most visible, daily929interaction that people have with their Federal Government. In930this way alone, it continues to bind the Nation together, and931it is important to remember that the Postal Service is, first932and foremost, a basic and fundamental service provided to the933people by the Government of the United States.934    As Congress works to clearly define the scope of the USO,935it is important to acknowledge that the Postal Service has a936number of resources that can be utilized for the benefit of the937American people: a nationwide delivery network serving every938community, from New York City to Nome, Alaska; a physical939presence in almost every community in the country, with over94030,000 post offices and almost 163,000 delivery vehicles making941daily rounds to every address; and a large workforce of highly942trusted, dedicated public servants. Each of these assets could943be leveraged to provide value-added services to the American944people.945    Although the Postal Service Reform Act of 2022 granted the946Postal Service additional authority to provide new products and947services to Federal, state, local, and tribal governments, a948recent Office of Inspector General report notes that the Postal949Service has barely begun to scratch the surface on these new950revenue opportunities. So, a critical question for Congress as951it approaches the issue of universal service is not only where952and when it wants the Postal Service to deliver to the American953public, but also what it wants them to deliver. There is hope954for the future, but congressional intervention to address the955root causes of the Postal Service's problems is a prerequisite956to meaningful reform.957    So, what do you do when a fire threatens to rage out of958control? It is my belief that now is the time for everyone to959grab a bucket and work together to secure the future of the960Postal Service that provides high-quality universal service to961all parts of our country, and the Commission stands ready to962assist in any way we can to help preserve this 250-year-old963national treasure. Thank you again for convening this very964important hearing.965    Mr. Sessions. I want to thank you also for your service to966the American people and to thank each of you for being here967today. We will now move to the Members' opportunity to engage968you, and we will move first to the distinguished gentleman, Mr.969Burchett from Tennessee. The gentleman is recognized.970    Mr. Burchett. Thank you, Chairman Bono. It is always a971pleasure being with you.972    [Laughter.]973    Mr. Burchett. I was on a radio station one time in my974youth, and I could not pick the music because I would have just975picked all country and western, but they kept playing this976dadgum U2 stuff. And I said I remembered I was sitting on a977corner in Belfast, and this guy was saying, ``Yes, mate, I am978about ready to get out of the music business.'' I said, ``No,979Bono, you need to stick with it,'' and literally weeks later,980people came up to me and said, ``Did you really know Bono,''981and I go, ``No, no.'' Anyway, gullible folks.982    Anyway, thank you all so much. I am a big fan of the Post983Office. You know, back before my congressional career, I was a984prolific eBayer. I had over a thousand sales, and I agree with985what one of you all said about the postman coming to people's986houses. They are really a lifeline for seniors, and sometimes987it is the only contact they have with the folks out there. And988I have had my share of tussles with your all's higher-ups989because of some management decisions, but that is not with you990all, but anyway, this is for all you all. What are the market-991dominant products offered by the United States Postal Service?992    Mr. Taub. Congressman, those are the overwhelming majority993of letter, flats, periodicals, newspaper/magazines. So, when994you think of your first-class letters and cards, that is the995market-dominant product. The result is based in statute, which996is the idea that if the Postal Service either has a statutory997monopoly over that, for example, letters no one else can998deliver, or there is an economic test in law, but the Post999Service has market dominance at a level that they can raise1000prices substantially, either degrade service, without the1001significant risk of losing business----1002    Mr. Burchett. Right.1003    Mr. Taub [continuing]. That is the statutory test--it is1004regulated as market dominant. If it is not, it is competitive1005where they have immense flexibility to price, like parcels.1006    Mr. Burchett. What you said there, does every category of1007Marketing Mail make money, including the flats?1008    Mr. Taub. Flats is one of the areas, Marketing Mail flats,1009where they are losing money, but the rest of Marketing Mail is1010actually contributing quite a bit to the overhead.1011    Mr. Burchett. Okay. Now, given that those are unprofitable,1012would you all recommend the Postal Service phaseout or restrict1013some of those products?1014    Mr. Taub. What we have done in the rate system that we have1015designed is to require the Postal Service to increase those1016rates to better cost coverage as well as look at reducing the1017costs. There is, in fact, in the 2022 law a requirement that1018the Postal Service study this to get to that issue. We have1019looked at it. Unfortunately, it is a perennial problem that we1020have been concerned about for quite a long time.1021    Mr. Burchett. And what percentage of the Postal employees1022fall under the collective bargaining agreements compared to1023possibly the non-Postal Federal employees?1024    Mr. Taub. Certainly, the large bulk of their workforce--I1025do not have the percentage offhand we can get to you--are1026collectively bargained employees. Those are the clerks; the1027carriers, rural and city; and the mail handlers. That is the1028bulk of the Postal Service workforce.1029    Mr. Burchett. Now, does the high percentage of union folks1030give the Postal Service more or less flexibility to adjust1031postal functions?1032    Mr. Taub. The collective bargaining requirements have been1033embedded in the statutes since the Postal Service was created,1034so that does create a mandated process that would be different1035than other Federal employees where they are not under1036collective bargaining restrictions and mandates.1037    Mr. Burchett. And this may have to go under what you said1038you were going to get for me. What percentage of the Postal1039Service operating costs go to labor, and how can the Federal1040Government decrease that amount?1041    Mr. Taub. Generally speaking, historically, the Postal1042Service, roughly 70 percent of the costs are for labor. It is a1043very, you know, handicraft-focused business, but generally, it1044has been about 70 percent of the total cost of the Postal1045Service are for labor. While revenue has been increasing over,1046say, the last decade, the expenditures have been going up more1047than that. Just in the last five years, their costs have been1048going up ten percent. A variety of factors, but if you have got104970 percent of that bogie as employee costs, that is going to be1050obviously driving expenditures.1051    Mr. Burchett. Now, I know that Chairman Sessions served1052with him or grew up with him, but wasn't Benjamin Franklin the1053first Postmaster General?1054    Mr. Taub. Indeed, yes, 1775.1055    Mr. Burchett. And it is in the Constitution. The Post1056Office is in the Constitution.1057    Mr. Burchett. Article I----1058    Mr. Sessions. We made sure it got in there.1059    [Laughter.]1060    Mr. Burchett. You are not recognized, Mr. Chairman.1061    [Laughter.]1062    Mr. Taub. Article I, Section 8, Clause 7, yes.1063    Mr. Burchett. Okay. One last question. I have got 71064seconds. What action can the Postal Service take right now to1065extend the timeline before running out of money, and does1066Congress have to intervene?1067    Mr. Taub. We provided a waiver of a regulation that1068required payments into the retirement. If the Governors of the1069Postal Service choose to activate that waiver, which means1070notifying the Secretary of Treasury, that frees up $2.4 billion1071this year. We did it with a time limit until 2030. That is1072potentially $15 billion of breathing room in the near term, but1073it does not solve the problem by any means, but gives us some1074room.1075    Mr. Burchett. All right. Thank you, Mr. Chairman. Just for1076the record, I am a fan of the Post Office, obviously, and the1077people that work there. I am maybe not a fan of some of their1078management in the past, but I would hope that we could work1079together on both sides of the aisle to help alleviate some of1080these problems because the Post Office is a godsend for a lot1081of people. My rural folks in my area get their medicine and1082things like that, and when it is delayed, their medicine is1083delayed and that hurts me. So, thank you, Mr. Chairman. Thank1084you all.1085    Mr. Sessions. I want to thank the gentleman. I think that1086the witnesses who are here, as well as others, know that Mr.1087Burchett attends each of our hearings, has a view that I think1088is very important, and I want to personally thank you for being1089involved. I think I have told this to the young Congressman,1090and he has agreed: we are all part of the problem, not just1091each of us individually or as a group. Each of us are going to1092be a part of that solution. I told him that I appreciate him1093staying at the table to make sure we get closer to that, so,1094sir, I want to thank you very much.1095    The gentlewoman, Ms. Norton, is recognized.1096    Ms. Norton. Thank you. I want to begin by thanking Postal1097Service employees for their dedication and hard work.1098    In 2020, the Postal Regulatory Commission granted the1099Postal Service the power to raise mail rates above the rate of1100inflation. Over the past six years, the Postal Service has1101repeatedly exercised that power to impose higher costs on1102American consumers. Since July 2021, first-class mail rates1103were increased by 42 percent with an additional five percent1104increase scheduled next month. At the same time, delivery1105standards have gotten worse. First-class mail now takes three1106to five days to deliver, whereas previously, it took two to1107three days. President Trump's reckless actions and misguided1108policies have resulted in sharply higher gas, grocery, and1109other prices, and Americans are paying more in postage for1110worse service. This is simply not acceptable. Millions of1111people across the country rely on the Postal Service to be an1112effective, affordable way to pay their bills, file their taxes,1113and run their businesses. Higher prices means shutting out many1114Americans from full participation in our society.1115    Vice President Twark [sic], as the Postal Service1116Commission reviews and approves postal rate changes for the1117Postal Service, to what extent are you weighing the1118deterioration of service?1119    Mr. Taub. Congresswoman, we take that very seriously, and1120we are deeply concerned about that. As you referenced, about1121five years ago, the Commission modified, as is a requirement1122under the law, the price cap system for these market-dominant1123products where the Postal Service has captive customers, those1124that you were talking to, you know, who have no other1125alternatives than the mail. That had been locked at CPI. There1126are nine somewhat conflicting objectives in law that the1127Commission must balance, and those include things like rate1128predictability, stability. It includes the financial stability1129of the Postal Service and a variety of others.1130    We looked at that system and found it was not meeting those1131objectives, so we provided the Postal Service, as you1132indicated, some additional rate authorities above inflation to1133capture costs that are outside of their control. They made1134clear they were going to be judicious in their use. They have1135been maximalist in that use, and as you indicated, we are1136seeing degraded service during that time. So, in essence, folks1137are paying more for worse service, and hearing those concerns,1138we started a review earlier on this system. One of the changes1139that we actually promulgated in January was limiting the Postal1140Service, again, on this market-dominant side, competitive1141products that could change daily to once a year. They were, in1142many cases, doing twice-a-year increases, which really are1143attacks on the American businesses and consumers throughout1144this United States by a government agency twice a year, and we1145limited that to a once a year, but we did not change the1146maximum ability to go above inflation, nor the other many1147flexibilities that the Postal Service has for pricing.1148    Ms. Norton. Commissioner Day, the Universal Service1149Obligation guarantees that all Americans, regardless of1150location, can access public services at uniform rates. What1151steps will be required to preserve the Universal Service1152Obligation for future generations?1153    Mr. Day. This is part of what the Vice Chair had already1154said. As we look at the USO, we are going to have to clearly1155define that. It is an open issue. At this point, the Postal1156Service has been able to redefine, as you have already just1157said, to go from overnight/two-/three-day to a two-day to five-1158day service and even change the service measurement system. The1159reality is we are going to have to work our way through that. I1160do not have a definitive answer at this point in time. It has1161to be done in conjunction with all aspects of the Universal1162Service Obligation.1163    Ms. Norton. Thank you. Commissioner Poling, aside from1164raising mail rates, what other options are available to the1165Postal Service for generating additional revenue?1166    Ms. Poling. Thank you so much. I just want to make sure I1167had the question correct. You said aside from raising mail1168rates, what other forms of revenue raising are available to the1169Postal Service? Is that correct?1170    Ms. Norton. Yes.1171    Ms. Poling. Okay. I will just go ahead there. I was just1172going to say, yes, so I think the Postal Service, one of the1173things I talked about in my testimony is I think they have a1174tremendous ability to go forward and pursue these additional1175revenues. The Office of Inspector General, I think, did a1176fantastic report, kind of seizing on in the 2022 law. You know,1177it has been expanded in terms of working with state, local, and1178tribal governments in terms of doing these added revenues, so I1179think that is something the Postal Service should really be1180pursuing. I would also say I think there is untapped potential1181looking in younger generations as well. I think we need to look1182at Gen Z. We need to look at Millennials. We need to look at1183what is it, sort of, that people want from their Postal1184Service, and ultimately, that is why we need to define this1185Universal Service Obligation.1186    Ms. Norton. Thank you. As I told Postmaster General Steiner1187when he testified before the Subcommittee in March, postal1188services must be accessible, reliable, and affordable. Raising1189prices and lowering delivery standards will not save the Postal1190Service from its current financial predicament, and I look1191forward to working with each of you on a more sustainable,1192long-term solution, and I yield back.1193    Mr. Sessions. I thank the gentlewoman and also want to1194thank her for being at each and every one of these hearings1195about the Postal Service, and I appreciate her service to the1196country also.1197    We now move to the distinguished gentlewoman, the Chairman1198of the Rules Committee, the gentlewoman from North Carolina,1199Ms. Foxx.1200    Ms. Foxx. Thank you. As many people know, I use the Post1201Office a lot for all kinds of things, especially personal1202issues, and so do my constituents. We want the Postal Service1203to ensure business functions are done, people receive medicine,1204pay bills, stay connected with their loved ones. However,1205during the last several years, the Postal Service's financial1206problems have not abated. Even though Congress provide one-time1207relief in 2022, the Postal Service continued down its1208unsustainable path of huge annual losses. With no end to the1209losses in sight, it is increasingly clear the Postal Service1210has lost its way. Rather than a disciplined, efficient1211operation, the Postal Service resembles a bloated Federal jobs1212program that delivers higher postage rates, delays, and1213deteriorating service. The Postal Service must return to its1214core mission of providing reliable, affordable, universal mail1215service.1216    Vice Chairman Taub, I am concerned that the Postal Service1217is spending money duplicating functions that the private sector1218can provide better and at lower costs, such as package labeling1219technology and IT solutions. Does the Commission evaluate1220whether the Postal Service is duplicating capabilities that1221private companies have already invested in and developed?1222    Mr. Taub. We do not have that direct authority in the law,1223but I will say the law requires--and we, I mentioned, modify1224the rate system. There is a requirement of law called work1225sharing, and it really is based on this idea of a vibrant1226public-private partnership where, if the private sector can do1227it for less cost than the Postal Service, it makes total sense1228to have the private sector doing that.1229    Ms. Foxx. Well, does the law allow you to seek more1230transparency from the Postal Service on how existing commercial1231technologies can improve service and reduce cost? I would1232assume it does.1233    Mr. Taub. You know, there is the separation between the1234regulator/operator, and so some of what you are describing are1235operational decisions by the Postal Service to invest, whether1236it is new technology or invest in a whole middle-mile network,1237which the current plan is doing, with promises that that is1238going to be more efficient. And so, for example, we opened a1239docket early on when the signs were clear that this plan that I1240think we all hoped would provide the results was not. And so,1241indeed, Dr. Foxx, you were right on that is part and parcel of1242why the Commission needs to exist, is that providing1243transparency to the American public that, otherwise, I would1244suggest we may not even have an opportunity to truly get at.1245    Ms. Foxx. So, what problems arise when the Postal Service1246invests in technologies that can disrupt private-sector1247solutions, especially when those companies' products are1248regulated by the Postal Service itself?1249    Mr. Taub. Yes, deeply because, you know, just go down the1250list. Not only that is then adding and saddling the Postal1251Service and the rate payers with more costs that otherwise1252could be inflected by leveraging the public-private1253partnerships, but it is affecting the private sector of the1254United States, a government establishment and commercial1255marketplace. We do have authority, based on the 2006 law, to1256police through complaint where the Postal Service is using its1257regulatory authority to unfairly compete with the private1258sector. And so, those are areas that we have had a chance to1259police, but we have not actually adjudicated many of those1260complaints, but that is a deep concern and we do have authority1261over that.1262    Ms. Foxx. So, the Postal Service keeps raising rates on1263mailers well above inflation, which is unsustainable.1264Businesses in my district must make tough decisions, such as1265laying off staff, and newspapers and magazines must cut print1266days, which results in less local news and information reaching1267constituents. Everyone involved pays more for a worse product.1268What remedies do you believe should be implemented?1269    Mr. Taub. We have an open docket right now that is ongoing1270looking at that market-dominant rate system and whether there1271should be changes, including those additional rate authorities1272above inflation that I mentioned we provide to the Postal1273Service. I would note Postmaster General testified and has1274continued to allude to, in that pending docket, the Postal1275Service has filed their perspective as to how we should modify1276that. And their recommendation is that we should get rid of any1277price cap limitations on the Postal Service, just trust the1278Postal Service to raise rates as they deem appropriate, and in1279the alternative, if we do not do that, their petition suggests1280that we grant them upwards of 23 percent one-time authority to1281do that.1282    That is pending before us. It is an ongoing docket. Like,1283everything we do at the Commission, it is in the light of day1284where we get notice and comment. Administrative Procedures Act,1285any party, including the Postal Service, they do not like our1286final decision, can take us to the D.C. Circuit. And I would1287suggest, a little different than the Postal Service itself,1288which is exempt from the Administrative Procedure Act, we are1289there to really represent the public interest, and so we are1290looking at that issue right now.1291    Ms. Foxx. I thank all our witnesses, I thank the Chairman,1292and I will be submitting some questions after the hearing.1293Thank you.1294    Mr. Sessions. Chairman Foxx, thank you very much. We will1295look forward to getting those questions, and of course each of1296the witnesses will be expected to respond back to those, as I1297know that they will. Thank you very much for your constant1298feedback to me. Since the day I took over this job, Virginia1299Foxx has made sure that she is a regular visitor with me on1300these issues. Thank you very much. The gentlewoman yields back1301her time.1302    The gentleman from Florida, Mr. Frost, you are recognized.1303    Mr. Frost. Thank you so much, Mr. Chairman. I want to start1304by talking about the Regional Transportation Optimization1305plan--the RTO--that might impact 72 percent of all post1306offices. At a previous Subcommittee hearing, I was able to ask1307the Postmaster General about the RTO plan directly, and now I1308just want to hear from you all. Commissioner Poling, does the1309PRC believe that the RTO plan will achieve its projected cost1310savings and improve the financial health of the Postal Service?1311    Ms. Poling. Thank you, Congressman Frost. The Postal1312Regulatory Commission issued an advisory opinion in January13132025, and in that advisory opinion, we actually did find that1314the changes the Postal Service was making would1315disproportionately harm rural America. RTO was among the things1316that we were looking at, right, when we made that1317determination. Unfortunately, and the thing is I think we are1318all here wanting to make sure the Postal Service is better,1319wanting to improve it. I do not think it brings any of us any1320joy that some of our findings were right in that advisory1321opinion, but as things have been borne out to date, yes, I1322think the RTO is something that has proven to be very1323challenged. And, you know, again, in the advisory opinion1324process, the Postal Service has the ability to look at our1325recommendations, but they do not have to follow them because it1326is advisory in nature.1327    Mr. Frost. How might the RTO or similar restructuring1328activities negatively affect mail delivery times?1329    Ms. Poling. I think that is a really good question. I think1330we have seen, obviously, service standards change and be1331degraded drastically, particularly over the last five years.1332Two times service standards have already gone down, so I worry1333a lot about what does a local citizen know about their delivery1334times. We actually did make a recommendation in our advisory1335opinion that said maybe you should put something--to the Postal1336Service--put something maybe on these blue boxes saying how1337much longer it is going to take, right, when we are adding in1338these extra days of delivery. To date, that has not been taken1339into account.1340    Again, I think the biggest thing we have to think about is1341what is it that citizens expect from their mail, what do they1342need from their mail, and, frankly, they need to be given a lot1343more transparency from the Postal Service. They need to1344understand how long it is going to take something to be1345delivered, and right now I worry about that disconnect between1346maybe what the Postal Service is saying with service standards1347and these changes that have been made, and then the actual1348experience that customers are having on the ground.1349    Mr. Frost. A hundred percent, and, you know, part of the1350reason I ask is I am concerned about time-sensitive mail,1351specifically, you know, of course, bills and paying for things,1352but also, we have elections coming up, and so mail-in ballots1353and different things like that. And so, I am just concerned1354about the RTO plan and its impact on elections, and working1355people and how they use the Postal Service. I also want to1356spend a few minutes talking about the importance of having an1357independent United States Postal Service and a knowledgeable1358PRC. Vice Chairman, can you speak a little bit about your1359qualifications and experience that you feel prepared you for1360this role?1361    Mr. Taub. Sure thing. The Chairman had mentioned he has had1362the honor and privilege and joy of working on postal issues for1363nearly three decades when he came to Congress and was assigned1364to the Postal Service Subcommittee on this Committee at the1365time. I happened to be its staff director, and so I have been1366on this journey of trying to help ensure that this important,1367vital service to America is delivered.1368    The statute in 2006 when it was modified to create the1369Postal Regulatory Commission did add qualifications in statute1370for Postal Regulatory Commissioners and includes experience in1371things like public administration, accounting, economics, law.1372And so, like a lot of the three and four letter independent1373regulatory agencies in town, the idea is we have a multi-headed1374agency that brings differing perspectives. And so, I think, you1375know, that is, in many ways, the strength, and it is an honor1376working with my colleagues here today. I know we were all1377appreciative, the Chairman, for Public Service Recognition Week1378a few weeks ago, came to visit the good, hard-working folks at1379the Commission who do that work.1380    Mr. Frost. Yes. Thank you. I mean, it is clear that you all1381care about the financial health of the USPS, and the qualities1382you all possess are also important qualities for nominees to1383the Postal Service Board of Governors as well. I am very1384concerned about the President seeming to nominate people to the1385Board that have his best interests in mind and not the best1386interest of the USPS, like his most recent nominee, Anthony1387Lomangino, who is also one of his top donors. He is a co-1388founder who put millions of dollars into a super PAC to help1389get the President reelected.1390    Look, I think it is important that we fill vacancies on the1391Postal Service Board of Governors with Senate-confirmed1392appointees that meet the qualifications and experiences to help1393serve the needs of the people, not the President. The Postal1394Service is not a business opportunity, and independent1395government boards must remain independent. Thank you, and I1396yield back.1397    Mr. Sessions. Thank you very much. The gentleman yields1398back his time, and I also want to thank the gentleman from1399Florida. He attends each of our hearings, stays up on these1400issues, and I believe brings a balanced comment to people on1401this issue, and I want to thank the gentleman.1402    We now move to the distinguished gentleman, former Chairman1403of Policy Committee for the Republican Conference, the1404gentleman, Mr. Palmer.1405    Mr. Palmer. Thank you, Mr. Chairman. The Postal Service1406carries roughly $101 billion in unfunded retirement benefits.1407You are spending about $10 billion a year trying to meet those1408obligations. It is a huge hit on your annual Fiscal Year1409budget, and back in April you had to suspend contributions out1410of concern that you would run out of cash. I just wonder from1411each of you, how much thought you have given to the1412recommendations from the Inspector General about diversifying1413your retirement investments into other assets beyond Treasury1414securities? Again, Mr. Taub?1415    Mr. Taub. Congressman, one of those things, all of the1416above. All of those ideas are worthy to be considered by1417Congress. We would simply suggest before Congress jumps into1418those decisions, we first focus on what is the public service1419mission that America needs from its Postal Service, defining1420its Universal Service Obligation.1421    Mr. Palmer. Well, if you are going bankrupt, which you are1422headed in that direction, if you were a private company with an1423over a hundred-billion-dollar unfunded liability, you got to1424start thinking about this differently.1425    Mr. Taub. Exactly. That goes to the heart of defining the1426mission, but, Congressman, you are right on. There is on that1427balance sheet, enormous debt to the American taxpayer for the1428retirement obligations that they have not paid for over a1429decade. The Commission added additional rate authority for1430those market-dominant products that if they chose to do it,1431they could finally start making some payments, which they did1432do. We stepped in earlier this year at their request to look at1433that and waive that requirement. But you are right, it is on1434the books, but they have been, in essence, not paying that, in1435some ways I would say, in essence, unilaterally.1436    Mr. Palmer. No, no, no. We are not going to let people who1437have spent their career delivering the mail lose any of their1438retirement benefits.1439    Mr. Taub. Right.1440    Mr. Palmer. But at the same time, you cannot let the1441obligations for the retirement benefits bankrupt the entire1442operation. So, do you think we are at a point where Congress1443needs to consider amending Federal law to allow the Postal1444Service to diversify its retirement investments because1445everyone that has looked at this believes that this would1446significantly reduce the burden.1447    Mr. Taub. Yes. Again, trying to help the Postal Service,1448that has been looked at. I think it is a reasonable suggestion.1449Obviously, the Secretary of the Treasury would have some1450equities here that would need to be at the table, but from our1451perspective, while it is outside the direct lane of the1452Commission, definitely all of the above, things that can help1453with it. But on the retiree, the action I was mentioning gives1454all of us as policymakers and Congress a little bit more1455breathing room as opposed to reaching for choices of1456desperation right now.1457    Mr. Palmer. Yes. Well, the fact that you had to suspend the1458employer contributions----1459    Mr. Taub. Yes.1460    Mr. Palmer [continuing]. Is indicative of how dire the1461situation is, and, Mr. Chairman, I think maybe we ought to try1462to look at this in a bipartisan manner to give the Postal1463Service the ability to diversify its investments. Everyone who1464has looked at this agrees, unless some of the other1465Commissioners disagree, and I have not heard from them, that1466this would largely mitigate the problem. My other question, and1467anyone can respond to this, is what other cost-saving measures1468is the Postal Service considering?1469    Mr. Taub. The Postal Service, as you mentioned, not only1470unilaterally separate from our actions, suspended the $2001471million every two weeks for their current FERS employees, the1472Postmaster General just recently issued a directive where they1473were not going to hire new positions. They would still1474backfill, and limited expenditures on certain things like1475travel and all of that. So, Postmaster General has announced,1476certainly, the FERS withdrawal gives them quite a bit of money1477and the payment, but they are undertaking, right now, efforts1478to conserve cash, which again, changes that being broke at the1479end of the year to a little more breathing room, but it is not1480a permanent fix.1481    Mr. Palmer. Well, I thought I saw some smiles and nods from1482the other witnesses. I do appreciate your response to my1483questions, my concerns about this, and I think there are some1484opportunities here for us to work together on this issue that1485could really help the Postal Service. Mr. Chairman, they are1486spending $10 billion a year just on the unfunded part of the1487retirement obligations. I appreciate the witnesses being here,1488and I yield back.1489    Mr. Sessions. I want to thank the gentleman, Mr. Palmer,1490not only for his comments and insight, but this is part of that1491huge issue that each of our Postal Regulatory Commissioners1492have spoken of today, something that has been important for the1493Postmaster General, that the dialogs between our staffs, the1494dialogs between each of us, and that is why it was referred to1495as a five-alarm fire this morning that we do need to pay1496attention to. It is not one subject. It is a big subject, and1497it is the purpose of these hearings, Chairman Palmer, is to do1498exactly as you suggest, and that is to get into the intimate1499details of the piece-parts about how we are going to pay for1500this because it is a big system, and there is a lot at risk.1501And I appreciate the distinguished gentlemen for taking time to1502be here today.1503    I, next, would like to go to the gentlewoman, Ms. Randall,1504to be recognized at this time. The gentlewoman is recognized.1505    Ms. Randall. Thank you, Mr. Chairman. Like so many rural1506communities across the country, the Postal Service is crucial1507to folks in my district. Tribal members, veterans, military1508families, aging neighbors across Washington's 6th rely on the1509Postal Service to deliver lifesaving medications, to pay bills,1510to stay connected to their communities, especially in a place1511where reliable internet is hard to come by. One of my1512constituents recently wrote to my office after experiencing1513multiple serious delays in just the span of one month. A1514certified check sent from Carlsborg to her credit union was1515expected to arrive in a few days. It took weeks. A priority1516mail check sent from Sequim also took roughly two weeks to1517arrive, and a bill mailed to her waste and recycling provider1518still has not arrived more than two weeks later.1519    It is not just frustrating. For a household trying to1520deposit a tax refund, pay bills, and manage daily life through1521a mail system, they need it to be reliable. And in a universal1522vote-by-mail state like Washington, those same delays raise1523concerns, especially when our democracy and free and fair1524elections are under attack. If people cannot trust a check or a1525bill will arrive on time, they are going to ask the same1526questions about their ballots, and no one should have less1527reliable mail service because they live in a rural community,1528on tribal land, or at the end of a long delivery route.1529Universal service has got to mean universal service, and right1530now the numbers that Congress gets are too broad to show what1531people in individual neighborhoods and on routes are actually1532experiencing.1533    National average does not tell us whether ballots are1534moving on time in Kitsap County where thousands of military1535families rely on dependable mail service. It does not show us1536whether mail is reaching communities in Forks and Quileute at1537the edges of the Olympic Peninsula. We need to know how the1538mail is performing community by community, particularly when we1539depend on it for our ballot delivery. That means looking at the1540three-digit ZIP code data and service performance across every1541congressional district.1542    Commissioner Poling, in a universal vote-by-mail state like1543Washington, how should Congress be thinking about Postal1544Service performance as part of election access and voter1545confidence?1546    Ms. Poling. Thank you, Congresswoman Randall. I appreciate1547the question, and it is certainly very timely. Service1548performance, and I also just wanted to say, I really appreciate1549what you said about the rural nature of your district and what1550you deal with. Working for the states of North Dakota and1551Montana, I really got to see it many times when I was out there1552and could really appreciate the lifeline that the Postal1553Service is, so I really do understand, and I appreciate1554everything you said there.1555    I would say this. So, the Postal Regulatory Commission,1556through our Annual Compliance Determination process, we do1557measure the service performance of election mail, so that will1558come out, of course, a little bit later. I wish it were a1559little bit more in time, but the nature of our process measures1560the prior fiscal year, but I will say this. I think something1561that is very encouraging about election mail historically is1562that service performance for these ballots is historically so1563much higher, right, than even any other kind of mail. And I1564think that is because the Postal Service, they do something1565called extraordinary measures during elections, I think, where1566they really are paying attention to that.1567    If I could, I think the greater service performance issue1568that we are dealing with is a little bit of what you--I mean,1569this is absolutely a part of it, kind of under the umbrella, if1570you will. But what you talked about with this disconnect1571between, I think, maybe what the Postal Service, these changes1572they have made with service performance over the years--the1573degradation of service standards, lowering them--and then the1574actual customer experience, that is where I think we really1575need to figure out what it is, right, that the American people1576need from their Postal Service. And we also need more reliable1577information and transparency about what is going on.1578    Unfortunately, I cannot get into a lot of details, but the1579Commission is currently looking at service performance through1580a Service Performance Measurement docket, which really is1581getting at that idea, right, between what is that disconnect1582between what is happening on the ground and maybe what the1583Postal Service is saying. So, I think all of these things need1584to be really carefully looked at by Congress, and I do echo1585what the Vice Chairman said very strongly that this Universal1586Service Obligation is something I think that needs to be1587tackled.1588    Ms. Randall. Absolutely. Thank you, and I think,1589understanding, you know, having more access to the data that1590will allow us to see how those performance standards break down1591community by community will be----1592    Ms. Poling. Yes.1593    Ms. Randall [continuing]. Really helpful for us in the work1594that we are doing on behalf of our constituents.1595    Ms. Poling. I absolutely agree.1596    Ms. Randall. But we will continue to track the results and1597stay in close contact because mail is a lifeline for folks in1598communities like mine and all across the country.1599    Ms. Poling. Thank you.1600    Mr. Sessions. The gentlewoman yields back her time. Thank1601you very much. The gentleman from Texas, Mr. Gill, you are1602recognized.1603    Mr. Gill. Sure. Thank you, Mr. Chairman. Thanks for holding1604this hearing and doing a great job leading this Subcommittee,1605and allowing us to get some meaningful work done, and thank you1606to the witnesses for taking the time to be here. Mr. Taub, I1607have got a couple questions for you.1608    Mr. Taub. Yes, sir.1609    Mr. Gill. Do you know how much the U.S. Postal Service lost1610in Fiscal Year 2025?1611    Mr. Taub. About $9 billion.1612    Mr. Gill. Nine billion, and roughly how much did it lose in1613the last three years?1614    Mr. Taub. The last three years, you are looking at roughly1615$20-something billion, again, to go off the top of my head. We1616know they have lost $31 billion in the five years since they1617have undertaken this DFA plan.1618    Mr. Gill. Thirty-one billion in five years, and despite1619massive financial relief in the wake of COVID and the Postal1620Service Relief Reform Act of 2022, we are still seeing massive1621budgetary holes. Is that correct?1622    Mr. Taub. That is correct.1623    Mr. Gill. Got it, and how much do you expect the Postal1624Service to lose over the next several years? Do you have an1625estimate that you could sort of pull us through?1626    Mr. Taub. I do not have a good estimate, but I would feel1627very comfortable assuring you it is going to be considerable.1628    Mr. Gill. Yep, and your testimony alludes to the fact that1629the USPS believed the Delivering for America Plan would lead to1630the Postal Service breaking even by 2023. Is that correct?1631    Mr. Taub. That was the initial estimated plan, in addition1632to a promise of $28 to $40 billion of self-help by 2030.1633    Mr. Gill. Can you help us understand why that did not1634happen?1635    Mr. Taub. Well, certainly it would seem to suggest a flaw1636in the plan. The Postal Service certainly points to a variety1637of factors, which are true: inflation, circumstances change.1638But at some point after year after year after year, when it1639seems that the initially estimated predicate of building out a1640middle-mile network to save $28 to $40 billion is not1641occurring, it just raises the question, is it time to reassess1642if this is the right path we are on.1643    Mr. Gill. And what about some of the underlying assumptions1644on mail volume and package growth pricing? Can you walk us1645through some of those, and what you expected and what turned1646out to be the case?1647    Mr. Taub. Well, again, Postal Regulatory Commission is not1648the operator. We are a regulator and a try to provide1649transparency, and so the DFA plan as the operator's plan, you1650know, move forward and continues to this day. But it was, as1651you alluded to, predicated on the idea of building out a1652middle-mile network to capture what was expected to be1653significant growth in the competitive parcel package market,1654and with each passing year, we see that market actually1655becoming much more competitive. In fact, the volume that the1656Postal Service is getting from this is dropping off, and1657although revenue is significant in that area for the Postal1658Service, in no way can it make up for the large amount of1659contribution to the overhead costs that the market-dominant1660products--letter mail, periodicals, magazines--those type of1661Marketing Mail, those are the ones contributing to the1662overhead. So, the whole predicate of the plan, while I think1663all of us had hope that it would play out, does not seem to be1664where things have gotten us or going.1665    Mr. Gill. And can you help me understand how employee count1666and mail volume have trended over the past few years? Do you1667know how many employees did the USPS have in 2010?1668    Mr. Taub. In 2010, I do not have that number offhand,1669Congressman.1670    Mr. Gill. Okay. It is about 671,000 employees. Do you know1671what it was in 2025?1672    Mr. Taub. I believe in roughly the same neighborhood.1673    Mr. Gill. So, about 624,000 employees, so a reduction of167445,000 roughly.1675    Mr. Taub. Yes.1676    Mr. Gill. Do you know how mail volume trended during that1677period?1678    Mr. Taub. Overall, mail volume continued its unrelenting1679decline.1680    Mr. Gill. Yep, declined by about 36 percent during the1681period. Do you think that the difference between the decline in1682mail volume and the decline in employee count had something to1683do perhaps with the decline in profitability?1684    Mr. Taub. Oh, certainly. You know, one of the measures that1685the Postal Service has used since 1963 is what they call total1686factor productivity to measure the efficiency of the Postal1687Service. The last several years have seen the worst in a five1688year period, and, in fact, you know, two of the worst since it1689was being measured. The second of the three was in 1979. And1690so, if you have got volume going out, and you have got your1691inputs, shall we say to handle that, not going down as quickly,1692the math just does not work.1693    Mr. Gill. Right, and what do you think is sort of the1694obvious policy response to that from the Post Office1695standpoint?1696    Mr. Taub. Well, certainly when you see, while revenue has1697gone up, expenses going up faster, got to be a focus on where1698can things be saved. And yet, as I said, this DFA, immense1699amount of capital investments, and for the foreseeable future,1700they are looking to continue those at, you know, questionable1701levels of sustainability, $4 to $5 billion going forward in the1702future.1703    Mr. Gill. Yes, sir. My time is up, so I will yield back to1704the Chairman. Thank you.1705    Mr. Sessions. Mr. Gill, I want to thank you for taking time1706of not only attending each of our hearings, but coming with1707contributions that I consider enormous and successful, and1708thank you very much.1709    Mr. Bell, we have waived you on for the purpose of1710questioning, and now the gentleman is recognized.1711    Mr. Bell. Thank you, Mr. Chairman. I want to take a moment1712to talk about something my constituents have been raising with1713me since I came into Congress. Their mail is not showing up1714when they need it, whether it is prescriptions, tax returns,1715bills, or letters from their loved ones. People in St. Louis do1716not know where their mail is or when it is coming. Last year,1717the USPS Inspector General's Office conducted an audit of seven1718delivery facilities across our region. They found delayed mail1719at every single one. My constituents did not need an audit to1720tell them that. They have known it for years, but now it is1721documented, it is on the record, and there is no excuse for it1722not to be fixed. That is why I introduced the St. Louis Up to1723PAR Act to address accountability for documented systemic1724failures like these. My constituents in St. Louis are not1725following postal policy debates in Washington. They are just1726trying to get their mail. So, today I want to hear from the1727Commission about what it can actually do when the Inspector1728General identifies problems like these.1729    Ms. Poling, is it fair to say that the Commission's1730oversight authority is primarily focused on national1731performance metrics rather than operational conditions at1732individual facilities?1733    Ms. Poling. I would say that is fair.1734    Mr. Bell. And when the Inspector General documents failures1735at specific facilities the way they did in St. Louis, what role1736does the Postal Regulatory Commission play in making sure these1737findings lead to real changes on the ground?1738    Ms. Poling. That is a great question. I would say1739currently, we do not have a specific role when it comes to1740that, those exact changes on the ground. Where we do have a1741role is, and we are actually the only ones that do, is in the1742advisory opinion process. So, when the Postal Service decides1743to make a nationwide or substantially nationwide change in1744service, they have to come before the Commission. It is1745advisory as it sounds, but that is where we have our team of1746technical, legal, economic experts really dig into how these1747changes are going to affect the entire country. And that does1748flow down, right, to St. Louis and how it would affect you all,1749but I think that is somewhere that could stand to be1750strengthened, frankly, that part of the process. I think it1751would be very helpful--again, my own personal opinion--for the1752Commission to have more oversight when it comes to that1753process.1754    Mr. Bell. And that gap is exactly why we introduced this Up1755to PAR Act----1756    Ms. Poling. Yes.1757    Mr. Bell [continuing]. To require USPS to report directly1758to Congress on whether the fixes they promised are actually1759happening on the ground because you cannot fix what you do not1760measure.1761    Ms. Poling. Right.1762    Mr. Bell. That is all I have, Mr. Chairman. I yield back.1763    Ms. Poling. Thank you.1764    Mr. Sessions. Thank you very much. The gentleman yields1765back his time. So that the gentleman, Mr. Bell, is aware, there1766have been many discussions, not only that Members have had with1767me on a bipartisan basis, but also internal--I have had them1768somewhat with Mr. Mfume--about the need and the desire to look1769at specifically St. Louis, not only from a perspective of a1770regional, center part of the country, but how it feeds many1771other people. It is a huge hub for the Postal Service and comes1772into interaction with days that it takes to receive mail back1773and forth. So, I want you to know that Mr. Mfume and I will1774update you on the plans for what would be a visit by myself and1775our staff, including Mr. Mfume, if he were to be able to break1776free.1777    Mr. Bell. Mr. Chair, if I may also say this has been a1778bipartisan effort, even amongst our congressional district, and1779so I appreciate your remarks and----1780    Mr. Sessions. Well, Mr. Bell, thank you. In fact, Mr. Mfume1781and I insist on making sure that it is something not just1782bipartisan, but also players in the arena be able to talk to1783each other, whether it be Postal Service or other people who1784are engaged in that area also. So, Mr. Mfume has told me that1785you would be here, your needs, and we will get back to you, and1786I want to thank the gentleman for being here.1787    Mr. Bell. Thank you, Mr. Chair.1788    Mr. Sessions. Yes, sir. The gentlemen yields back that1789time. The gentleman, now Mr. Jack, is recognized.1790    Mr. Jack. Thank you very much, Mr. Chairman, and I would1791like to start with actually a very positive story related to1792your leadership. You held a hearing with Postmaster General a1793few months ago, and at that hearing, you provided me an1794opportunity to share with him a challenge that I was1795experiencing in my district. There was a post office in my home1796county that burned down three years ago, and it had suffered1797delay after delay, setback after setback. And because of that1798hearing and because of the Postmaster General's leadership, and1799also that of Kayla Dufresne who works for him, they swiftly1800reacted, and this past Monday, I was able to reopen that post1801office to the delight of many in my community. And to Mr.1802Mfume, if I could share with you, it turns out that the city1803councilman in Tyrone, Georgia, actually grew up in Baltimore,1804is a big fan of you. So, you also made me look good, for which1805I am grateful.1806    But if I could start with Vice Chairman Taub, just to1807follow a little bit on the line of questioning from Mr. Gill.1808In a vacuum, do Postal Service's products turn a profit?1809    Mr. Taub. They certainly are marked up in a way to cover1810their costs and contribute to the overhead of the Postal1811Service. There are a few products that are underwater.1812Marketing Mail flats are one of them, and a couple others that1813are the entire class of periodicals/magazines have been a1814perennial problem for 20 years in terms of covering their1815costs, and then there is an Alaska by-mail, that the last few1816years, those costs have risen. Except for those three, on the1817market-dominant side, while the volume continues to go down,1818they are contributing to the overhead. And, of course, on1819competitive products, while not the same level of volume or1820kicking to the overhead, they are not only covering the cost,1821but contributing too. It is just while that is the good news on1822the revenue side, the expenditure side of the equation is going1823up faster.1824    Mr. Jack. I know you have spoken about it at length today,1825but talk through a few of the expenditures that in recent years1826have really exploded in costs to the Postal Service, and help1827us identify what those are.1828    Mr. Taub. Certainly, when you look at the Postal Service1829and their cost structure, and this has been generally the case1830for decades, is about roughly 70 percent are for labor, and it1831is just the nature of the operation and how it works. And1832certainly, a lot of this plan the Post Service has been on is1833about trying to achieve savings in the transportation area.1834While they have achieved some, they certainly are not what they1835predicted or hoped, but when you are looking at, you know,1836racking and stacking, ``Hey, where are the areas we need to1837look at from expenditures,'' certainly labor, logically, is1838going to be the largest cost structure that drives the cost of1839the Postal Service.1840    Mr. Jack. I am curious, have you looked into other1841countries, and I am curious, are other countries experiencing1842similar difficulties with their own Postal Service systems?1843    Mr. Taub. Definitely. It is the, you know, nature of the1844world we live in now, which is just the unrelenting decline1845throughout the world of folks mailing letters less and packages1846growing more. I would say, however, Congressman, that most1847other countries have gone through the hard exercise of defining1848the regulation and licensing contract in statute what they1849expect of their national postal administration that must be1850done for the American public. In our case, we need to do that,1851but for their citizens, and a lot of that is much more narrow1852and defined. And so, right now we have a situation where,1853except for six--day, it is more, hey, bind the Nation together,1854you know, and left to the Postal Service to self-define that.1855And that, I think, has created some of the challenges for us as1856a Nation and the concerns we hear at the Commission and that1857have been expressed today about service.1858    Mr. Jack. If no action is taken, describe the state of the1859Postal Service two years from now, five years from now.1860    Mr. Taub. Yes. I think at the very end of the Commission's1861testimony that I provided is an article from almost exactly 151862years ago by Bloomberg Business Week with an old mail truck1863crunched on the front that says, ``End of the Mail as We Know1864It.'' End of 2011, they are broke. The numbers have gotten1865worse, and so, you know, there is, at some point, something has1866got to give. These bills that I have talked about that have not1867been paid for retiree benefits, in 2022 law recalculated the1868retiree health benefit payments, but it kicks in again in 2031.1869That will be $31 billion. So, the question is, can they do what1870they have been doing for the last 15 years and just not pay it1871and figure that Office of Personnel Management (OPM) and1872Treasury will pay those bills when they come due, or at some1873point, is, you know, the bill going to be coming due? But you1874add on those obligations on top of the requirement of $6.61875billion a year and growing of meeting the Universal Service1876Obligation mission.1877    So, our concern is, unless we do the hard work of defining1878the mission and figuring out what that costs, the public1879service mission for this government entity, and then figuring1880out a funding structure, we are going to be here in two, five,1881ten years. You know, somebody who is doing this job--in my1882case, the Postmaster General--in 15 years will be attaching an1883article like Bloomberg News, and, you know, it is like a1884baggage carousel coming around.1885    Mr. Jack. Well, thank you for your testimony, and to all1886the Commissioners, thank you for your testimony. I yield back.1887    Mr. Sessions. The gentlemen yields back his time. Mr. Jack,1888I want to thank you also for taking time to have this be1889important to you and your constituents and certainly this1890Subcommittee. Thank you very much.1891    Now, it looks like that we would go to the distinguishing1892Ranking Member for his time. The gentleman is recognized.1893    Mr. Mfume. Thank you very much. Mr. Chairman, it has been a1894good hearing. I want to, again, be redundant and thank all of1895the witnesses who have come here and shared their time and1896their thoughts and their energy. And I want to thank Members on1897both sides of the aisle who have been coming and going because1898of congressional schedules today, but found it important enough1899to be here to participate to some degree.1900    There is a lot to pick through. I mean, there really,1901really is, and I am going to try to do this without any kind of1902metrics or order, just based on what I have been hearing and1903what I know the challenges are both for this Committee, for the1904U.S. Congress, and for the Post Office that we love and must1905find a way to keep. And Mr. Taub, you began this by saying1906clearly that Post Office is not a private business, and that1907one of the things or several of the things we have got to1908protect against are monopolistic abuse, predatory pricing, and1909that you are very doubtful, as I am with you, that this $151910billion will solve the crisis once and for all. I think that is1911poppycock. That is just not going to happen.1912    So, I want to come back to that, but I would also want to1913point out and to thank the others for going on record with some1914profound thoughts and assessments about what we can do and what1915we ought to do. And one of the things that continues to come up1916is the need for a definitive service obligation, a Universal1917Service Obligation: one set of rules, one set of practices, one1918set of standards that no matter where we are, we can all adhere1919to. And the construction of that is really where I am finding1920most of my appeal about all of this. If we do not do that, then1921we have just not done anything. I mean, we have just kicked the1922ball down the road. So, I am going to come back to that, but I1923do want to thank several of you for providing----1924    Ms. Fisher, that is who I want to thank. Thank you for1925laying out some of the challenges that sometimes we do not1926always think about: this whole notion of vehicles, and1927facilities and facility upkeep, and compensation costs, and1928volume declines, and cumulative net losses, not the least of1929which Mr. Taub referenced when he talked about the retiree1930benefits which are going to kick in. Those things really ought1931to frighten all of us to know that if we are very, very1932serious, we cannot do anything unless we address all of the1933things that are in front of us. And it may in some instances be1934so large and voluminous that many Members of the Congress will1935defer to this Committee and say, ``Well, that is your job.''1936Yes, it is the Committee's job, but it is also the job of the1937full Congress once we are able to construct and put forward,1938with input on both sides of the aisle, a Universal Service1939Obligation that is functional. It has got to be adopted and1940passed. I want to thank you for that, Ms. Fisher.1941    Ms. Poling, thank you for switching things around also, and1942to point out, while we have these challenges, that there are1943some built-in advantages that we ought to recognize, to the1944extent that they might be able to help us, and that is the1945network of physical vehicles, the significant fleet, the highly1946trained workforce, the fact that we are in every community in1947the United States with a presence. And off the top of my head,1948I do not know how you sew all of those things together, except1949that if we are looking at them as interconnecting possibilities1950and interconnecting assets that, in the construction of this1951Universal Service Obligation, we ought to take those into1952considerations.1953    Now, let me just say one thing about the challenge, and I1954appreciate the Chair giving me some extra time here.1955Commissioner Poling, businesses across the Baltimore area that1956I represent, including newspapers and small mailers and others,1957are paying more for worse services. That has been talked about1958over and over again today. In Fiscal Year 2019, a single piece1959of first-class mail was delivered within three days 80 percent1960of the time. Last year, under the five-day standard--not the1961three-day, but the five-day standard--on-time delivery had1962fallen to 73 percent. So, that is a significant decline in1963service for a significantly higher price, and all of us in the1964Greater Baltimore Area are feeling that disparity as they are1965in other areas, as it has been talked about today, and feeling1966it in different ways, not the least of which is the fact that1967in three weeks throughout the State of Maryland, we have got1968voting that will be occurring, a great deal of that by way of1969the United States Postal Service and mail-in ballots. Now, this1970is not for you, but just maybe the Postmaster is listening1971today. We would like to at least call your attention, sir, to1972the fact that Maryland, like other states, really are concerned1973about ballots and ballots arriving on time and other things.1974    So, here is what I want to do. Mr. Taub, I want to end up1975with you where I started. I have got a question because I was1976really perplexed when I heard the President talking about the1977idea of floating the Postal Service into the Department of1978Commerce as if that was going to heal many of the things that1979you have already pointed out are challenges, and that the1980Postmaster General called for significant changes in how PRC1981regulates the Postal Service. In fact, former Commissioner1982DeJoy went further by saying that the Commission, all of you,1983are an unnecessary Agency. That is his own opinion. Many of us1984disagree with that. But again, if we are to get to where we1985want to get to, which is a definitive, well-defined,1986structural, legal Universal Service Obligation that we all play1987by, one set of rules, some of those things have to be taken in1988consideration.1989    I would ask you just quickly, Mr. Taub, is that an idea1990that continues to resonate, and are Commissioners being forced1991to sort of consider that?1992    Mr. Taub. In terms of the idea of the Department of1993Commerce or just the----1994    Mr. Mfume. The Department of Commerce. Taking the Post1995Office and putting it there.1996    Mr. Taub. I am unaware of efforts there in that regard, but1997I would say to your other point, I think it is always important1998to level set and remind folks why we exist. Congress created1999the Commission in 1970 when it got out of business of setting2000postal rates, and recognized they were not going to turn over2001rate-setting authority to the Postal Service as a government2002Agency with the authorities we had. 2006, last major change to2003the statutes, Congress gave the Postal Service more flexibility2004to price products, introduce products, compete in the2005marketplace. They did not then say, ``You know what? Trust the2006Postal Service. They will do it.'' That is where we turn into2007the Regulatory Commission.2008    So, I think that is part and parcel of that seventh feature2009of those seven features of universal service, an enforcement2010mechanism. We do everything in the light of day, transparent,2011accountable to the public. We hear from everyone and weigh what2012is in the statute required of us, and as long as Congress still2013feels that is important, I think we have to do it. But I would2014suggest, I think it is also vitally important, unless and until2015someday when the Postal Service is not wielding government2016powers with special legal privileges. And I am not suggesting2017that should be they, but until then, they are government agency2018operating in commercial marketplace, and I think that is why 562019years ago, Congress chose to create the Commission.2020    Mr. Mfume. And that is why now, if we do nothing else, we2021have got to construct some real Universal Service Obligations2022so that we know what the path is in front of us. And I raise2023that because my hope is, as Chairman Sessions has pointed out2024several times here, we find a way in this Committee to work2025together. We do not always do it at the highest speed, but we2026always end up where we want to go. And this situation really2027cries out for smart ideas, which I hope all of you will2028consider forwarding to us, and an understanding that this is2029where it really starts, so that formulation of ideas assists2030all Members of this Committee.2031    I know Chairman Sessions and I both realize the work that2032you do. We also realize the challenges, having gone through so2033many of these hearings, as some of you know, but if we do not2034do anything here, then the question becomes, why are we here?2035So, I am hoping that this really starts to level set, gives us2036the opportunity, working together, to come up with an idea of2037the things that should go into that construction of the2038Universal Service Obligation.2039    And then, Mr. Chairman, I just want to commit and2040rededicate myself to working with you on this. You know, we2041have just had so many hearings, but we are determined to find a2042way to make it work, and I would yield back. Thank you, sir.2043    Mr. Sessions. The gentleman yields back his time. We also2044committed that we do a lot of things as we are trying to do2045about overpayments, misdirected payments, so we have got a full2046plate, yes, I know, and thank you for your friendship to get2047this done.2048    We now want to move to what, at this time, is two remaining2049Members that you have. Ms. Budzinski from Illinois, you are now2050recognized.2051    Ms. Budzinski. Thank you. Thank you very much, Chairman2052Sessions and Ranking Member Mfume, for allowing me to waive2053onto this hearing. I very much appreciate this opportunity.2054Second, I want to thank Vice Chair Taub and all the2055Commissioners for being here today. It is good to see you2056again.2057    The United States Postal Service is approaching a pivotal2058point in its long and storied history. In Fiscal Year 2025, the2059Postal Service lost over $9 billion and lost around $2 billion2060in Quarter two of Fiscal Year 2026. At the most recent Board of2061Governor's meeting, Postmaster General Steiner reiterated his2062calls for Congress to work with the USPS to find solutions to2063the financial issues they are facing. As the co-chair of the2064congressional Postal Service Caucus, I am committed to that2065mission as well.2066    Congress must be working with the Postal Service and2067stakeholders to protect USPS employees and ensure the Postal2068Service has a strong financial footing as we enter the 2030s2069and beyond. Additionally, any postal reform bill sanctioned by2070Congress must include provisions that protect and strengthen2071the role of the Postal Regulatory Commission. Contrary to what2072some at the Postal Service have said about the PRC, I believe2073they are a critical oversight body. In the coming months and2074years, as Congress moves forward with potential reform ideas, I2075want to emphasize the importance of an independent Postal2076Regulatory Commission and look to expand its oversight ability.2077    With all of that in mind, my first question is to Vice2078Chair Taub regarding the Regional Transportation Optimization2079plan. I was wondering if you could talk about why you think the2080Postal Service's analysis on the RTO was flawed, and what2081lessons can be drawn from future network restructuring2082initiatives that impact rural communities like the ones that I2083represent in downstate Illinois.2084    Mr. Taub. Sure. The Commission, under the law, it dates2085from the 1970s Act, and it was one of the few holdovers in the20862006 law that left it as an advisory opinion, but recognizing2087Postal Service as the operator. When they make changes that are2088generally affecting service nationwide, they have to come to us2089for advisory opinions. It is a full-blown Administrative2090Procedure Act proceeding. We sit en banc. It is on the record.2091The Postal Service came to us, as required under the law, in2092December 2024 and sought our opinion. We provided that in2093January and cautioned that this plan was, A, predicated on2094savings that we found were, at best, illusory and, frankly, we2095could not really verify; and second, deep concern that we were2096seeing what was going to be created was creating a tale of two2097Americas, shall we say. Rural America was going to see delayed2098service, slower service under this plan.2099    It gives me no joy to say that, unfortunately, more than a2100year in under that plan, which they ignored our advice, in2101fact, criticized us, that we did not know what we were talking2102about, that were just a burden, has come to fruition.2103    Ms. Budzinski. Right. Thank you. I have a couple more2104questions if you do not mind if we pause there. My second2105question is to you again, Vice Chair. As Congress looks at2106potential postal reform ideas, I am curious if there are any2107historical precedents in other sectors that you think could2108provide a blueprint to ensure the Postal Service is able to2109continue serving Americans for decades to come.2110    Mr. Taub. Yes. Congresswoman, the Commission's full2111testimony suggests a possible legislative approach that could2112be informative if Congress is trying to grapple with the issue2113of how do we define the Universal Service Obligation. The2114Federal Communications Commission under the 19962115Telecommunications Act was directed by Congress to define, by2116regulation in the light of day with notice and comment, and can2117be revised by regulation, the USO for the telecom space under2118guidelines and guidance and guardrails that Congress put in2119place. But Congress, you know, was not expecting to have to go2120through the hard work itself of trying to get 218 votes in the2121House of 51 or 60 in the Senate on all the detailed2122definitions, but look to the FCC to do that from a definitional2123standpoint.2124    Ms. Budzinski. Okay. I will be checking that out. Just one2125question, last. Can you discuss what went into the PRC's2126decision to grant USPS the temporary conditional waiver on2127amortization payments, and how do you think this changes the2128short-and medium-term financial outlook for the Postal Service?2129    Mr. Taub. It was not an easy decision for us because we2130provided the Postal Service additional rate authority to go2131above inflation on their market-dominant products, and if they2132chose to, it was an opportunity for the first time in over a2133decade to start paying the obligations for Civil Service2134Retirement System (CSRS) and FERS that otherwise they have been2135defaulting on. But we recognize the reality of what we are2136dealing with in which we are facing suddenly a cash crisis, as2137the Postal Service announced, and we stepped forward and2138provided a waiver for a few years that is $2.4 billion as of2139September 30 this year, and probably payments of about $32140billion or more. It in is the rate base. It has been collected2141from restricted cash to unrestricted to allow them to pay the2142bills. It is not a panacea or fix, but I think it provides2143Congress and all of us an opportunity, a little bit more2144breathing room to not reach for choices of desperation, but2145think this through in a little more constructive way.2146    Ms. Budzinski. Thank you very much, and I yield back.2147    Mr. Sessions. Thank you very much. The gentlewoman yields2148back his time. We have also waived on Mr. Walkinshaw, and we2149are delighted that he is here. The gentleman is recognized.2150    Mr. Walkinshaw. Thank you, Mr. Chairman. I appreciate,2151again, your willingness to allow me to waive on, and thank you2152all for being here. I apologize that I missed your opening2153statements, but I did read all of your statements, and it is2154clear that, you know, you have all put forward a range of2155ideas, as other stakeholders have, to address the financial2156challenges, the service failures. But in my view, if we are2157going to get to meaningful reform, especially if we are going2158to build the kind of support here that is necessary for2159meaningful reform, we got to have clear goals that prioritize2160both the long-term financial stability and the reliable service2161because we cannot have one without the other. And if we are2162going to set those goals and evaluate the tradeoffs, and there2163certainly will be tradeoffs, we have to have data showing how2164these proposals, savings they generate would affect the long-2165term finances and service performance of the Postal Service. It2166is also necessary to have that data so that we can all hold the2167Postal Service accountable.2168    And that is why, I think it was in March of this year when2169the Postmaster General was here, I asked him if he would be2170willing to provide this Committee with financial projections2171showing how proposed reforms, including the continued2172implementation perhaps of Delivering for America and the RTO2173initiative, would affect the Postal Service's finances and2174service performance. He committed, sitting right there, to2175providing--this is a direct quote--``multiple budgets2176demonstrating the tradeoffs among different proposals and their2177impact on five-year financial projections.'' Unfortunately,2178after a few months of asking, we got a two-page response, and I2179will just read one paragraph, Mr. Chairman.2180    It says, ``The Committee on Oversight and Government Reform2181recently asked for five-year financial projections in the form2182of multi-scenario analyses. While we do not do such financial2183projections in the ordinary course of business, we can provide2184general information that answers many of these questions.''2185They go on to provide some general information that largely2186rehashes documents that have been released publicly. They do2187not answer the question of five-year or even multiyear2188financial projections, which is frustrating to me. Since they2189did not find the time or the interest in providing that data2190that, in my view, I think are necessary to inform our reform2191efforts, let me just ask you all, and maybe you can help me a2192little bit.2193    Vice Chairman Taub, past PRC reports warned that DFA plan2194changes would slow service and disproportionately harm rural2195communities. Your testimony today that I read, I think, says2196essentially that those warnings were prescient. Unfortunately,2197in your view and the PRC's view, DFA has slowed service and2198disproportionately harmed rural communities, has not achieved2199the savings that it was predicted or projected to achieve at2200the time. And one of the reasons I am asking for some forward-2201looking financial projections from the Postal Service is2202because they have repeatedly failed to deliver on their2203promises to produce real savings through DFA and other efforts.2204    So, I just want to ask you, you know, do you share that2205concern? Am I wrong to think that an organization with the2206scope and scale and import of the United States Postal Service2207should not be able to, in the ordinary course of business,2208produce some kind of multiyear financial projections for this2209Committee or for anyone else?2210    Mr. Taub. Congressman, again, they are a government agency2211working on behalf of the American public, and they, it seems to2212me, should be doing that. And in fact, your suggestion and2213request was a hundred percent what the Comptroller General of2214the Government Accountability Office recommended to the Postal2215Service in a recent report they issued in December, and the2216Postal Service's response to the GAO was ain't doing it.2217    Mr. Walkinshaw. Yes. You know, we have, as you all have2218pointed out, some important work that we need to do here as2219Members of Congress on this issue, and I am asking the Postal2220Service to help us help you because I cannot and the Chairman,2221I do not think, can go to our colleagues and say we got to make2222some tough decisions here without being able to give them some2223idea that there is a path that is going to lead to a better2224situation if we are willing to make these tough decisions. I do2225not know why the Postal Service does not want to help us do2226that. Thank you, Mr. Chairman. I yield back.2227    Mr. Sessions. The gentleman yields back his time. I want to2228thank the gentleman for his insistence to be a part of this,2229waiving on and being a part of the answer. And ultimately, it2230is my hope that you will be a part of and certainly interested2231in making sure that whatever we do come up with, we will sell2232and it will meet the needs of the American people, and it will2233be something that we could be proud of.2234    I now would move to distinguished gentlemen, Mr. Mfume.2235    Mr. Mfume. Thank you, Mr. Chairman. I ask unanimous consent2236to enter into the record a statement from Elena Patel, co-2237director of the Urban-Brookings Tax Policy Center, regarding2238today's hearing.2239    Mr. Sessions. Without objection.2240    Mr. Mfume. I ask unanimous consent to enter into the record2241a statement from the President of the National Postal Mail2242Handlers Union regarding today's hearing.2243    Mr. Sessions. Without objection.2244    Mr. Mfume. I ask unanimous consent to enter into the record2245a statement from the National Newspaper Association regarding2246today's hearing.2247    Mr. Sessions. Without objection.2248    Mr. Mfume. And I ask unanimous consent to enter into the2249record a statement from former Representative Kevin Yoder,2250Executive Director of Keep Us Posted, regarding today's2251hearing.2252    Mr. Sessions. Without objection.2253    I also would enter to the record a data and informational2254letter from, what is called the EMA, which is the President,2255Marie Clark, the Envelope Manufacturers Association.2256    Without objection, these will all be entered into the2257record, and I thank you very much.2258    Mr. Sessions. I now will move to my time, and I want to2259thank everybody. I think that while this has been a highly2260successful collaboration, I think that you have seen, each of2261you have seen, and certainly anybody watching, of high2262interest, not just in this Subcommittee, but by Members of2263Congress. So, I would really like to engage all four of you,2264but I would like to start by saying that my attempts at this2265effort have been to recognize the larger body of people who are2266engaged in this, not just the Postal Service.2267    We have people who are engaged outside of that, tremendous2268commercial interest, tremendous interest of large companies in2269this country. And I have tended to believe that we need to work2270together, all of us, and that literally everybody, if we work2271together, could not only find achievement and success, but that2272would lead to a financial integrity that is more in line with2273the opportunity to extend each of these businesses--technology,2274trucking, timing--all of these things could come together, but2275then potentially the customer, the American citizen who wants,2276needs, and counts on, as we have heard today from Ms. Poling,2277and others, that I understand, Mr. Mfume understands, people2278who live back home.2279    I serve a mostly rural congressional district. I started2280when I came into Congress with a rural district. I2281intentionally went out with a rural letter carrier and2282intentionally saw how he did his work. I tried to do well2283enough to get back, but I had a very sore arm from trying to2284assist in that delivery. And so, it took me a while, but2285learned firsthand of the importance to the American people,2286especially in rural areas where someone might be home more2287often than not.2288    So, today I would like to say I am still at the point that2289I believe is correct, and that is United States Postal Service,2290with its young Postmaster General Steiner, and certainly Peter2291and Michael who represent the Postmaster General are here today2292and so is the industry. And I want to reiterate to each one of2293them that I do believe that we need to work with each other and2294in concert with each other. I happen to believe some of the2295conversation here about working together means that the Postal2296Service might not take these operations on directly by2297themself. The Postmaster General knows that. I have had direct2298conversations with him. I think that some of the ideas that the2299Postmaster General is attempting to accomplish can be made, but2300I will tell you that if we do not work together, if we do not2301see each other's, not just line of business, but import to the2302value-add solutions, we will be in trouble.2303    With that said, I would like to go to Ms. Fisher, if I can.2304Ms. Fisher, you spoke very clearly in some bit of depth that I2305appreciate about the loss of mail, about the loss of what we2306might call first-class stamps. I happen to believe that whether2307it might be magazines, I went to Southwestern University. I got2308used to seeing a Southwestern University catalog probably two2309or three times a year. It was important to my university. It2310was important to me to stay up. These things have gone away.2311First-class mail is dwindling. Do you see a world by which we2312could get back to increasing pieces of mail, envelopes that2313might come, the availability of technology that would aid and2314help all of this transformation to be effective and efficient?2315How do you see increasing parcels of mail?2316    Ms. Fisher. I think we can see a return to that, but first2317we have to see a lot better service and performance when it2318comes to the letter mail. My personal observation seems to be2319that the Postal Service, in chasing revenues because of their2320dramatic financial losses, has really focused on packages, and2321I do not know that they will ever be able to fully compete2322there. They can compete, but that space is just being inundated2323with more and more competitors, as I relate, even in South2324Dakota as I talked about. But in the meantime, it seems they2325pay less and less attention to everything that falls under the2326scope of the market-dominant products: the magazines, the2327letter mail, et cetera, newspapers. That still has a huge2328amount of people very reliant upon it, looking forward to it,2329and the reliability of the service is dramatically lacking.2330    So, yes, I do think that can be built back up. There is a2331tremendous amount of our economy that relies upon that, but we2332have to get the Postal Service in some sort of shape to where2333they can try to improve the service and the reliability2334overall, and focus more of their effort on what is happening on2335the market-dominant side and a little less perhaps on the2336competitive side.2337    Mr. Sessions. Does that mean that there would be some2338observations about what I would call rural delivery of these2339packages versus city or suburban large areas, middle areas,2340parts of the country? How might we look at what you are saying,2341or how should we look at to evaluate what the Postal Service is2342looking at for deliver these boxes?2343    Ms. Fisher. The Postal Service still has, in general, the2344least costly service available for the delivery of the2345packages, but there is an immense effort. I read an article the2346other day about how both Amazon and Walmart, who have made a2347concerted effort to buildup their space into rural remote2348areas, and they have also noticed that it is not just the2349people who have lived there, but as more and more people2350telework, they are moving into these rural or remote areas. So,2351Amazon and Walmart are in a race to try and best serve that2352community. You pay a price for it with your membership at each2353one, but you can get same day delivery. But from the Postal2354Service, if they could just improve, again, their reliability2355and perhaps their tracking capabilities, it would go far.2356    Mr. Sessions. Good. Mr. Day, I had an opportunity, as you2357have heard, to go to South Dakota. Part of the conversation in2358South Dakota was about problems of getting mail in South2359Dakota. A deeper view of that developed, to me, very rapidly,2360and that was, it was getting the mail to South Dakota was the2361delay. In this case, it happens to be a city where I used to2362live--St. Louis, Missouri--and it is in the center part of the2363country, and yet we hear a conversation, not just from Members2364of Congress, that are worried about that effort. They do not2365live in South Dakota. They live in St. Louis, and they are2366having problems in St. Louis.2367    I just want you to know that I would like to have you and2368the Commission to provide to me in writing anything about your2369observations about the system that the Post Office is using, if2370you have any insight into that. You might be aware from your2371great service about that service, about getting to St. Louis,2372about getting out of St. Louis, about producing things. Do you2373think you have any observations related to St. Louis or any2374other hub where there might be difficulties?2375    Mr. Day. Chairman, I could certainly comment on St. Louis.2376I have been to St. Louis Processing Center several times. It is2377been a while since I have been there. It is actually an2378interesting facility with an older section and a newer section2379where the floors are actually at different levels. So, I have2380been through it, but it is been a while since I have been2381there. It does come to that, though. It is the specifics of2382this network that has been created under DFA unique to each one2383of those facilities. Again, I said it during my testimony.2384    Mr. Sessions. You did.2385    Mr. Day. There are only four of all the RPDCs were actually2386built from the ground up, brand new, and actually, the very2387first one they did was quite a problem for the first couple of2388years, the one in Palmetto, Georgia. But that said, a place2389like St. Louis has been around for quite a while. It is not a2390new concept. I will say this. Back in the day, I remember when2391we were first looking at service, whether it was, and this is2392the old overnight/two-/three-day, there were some places--I2393happened to be working in Maine at the time--we had to get to2394Fort Kent every day, down from Fort Kent to Portland back up to2395Fort Kent. And that is quite a trip, and you are getting the2396mail late at night, and you got to turn it around quick and get2397it back up, and our service was not that good, just was not2398consistent. And what we eventually were able to do was change2399that, and we could tell the people of Fort Kent, yes, now the2400standard is not overnight, it is two-day, but we can give you2401some consistency. And so, distances/travel does play into it,2402but when you start moving mail from South Dakota to St. Louis,2403it is just a lot of time on the road.2404    Just as a quick thought, one of the things you might do,2405particularly on first-class individual piecemeal--the bill2406payment, the birthday card, the wedding invitation--is to put2407it through an initial process, just the initial process in2408South Dakota to keep your local mail in-state there, and then2409send the rest of the country's mail, wherever that is going, to2410St. Louis for processing. That gives you good, consistent2411service, hopefully, within South Dakota. So, there are2412different ways to do it, and you have got to find the right mix2413between cost effectiveness and your obligation to service, and2414I think there is no one of those that is the single right2415answer. What is the right blend? And I think it is in the name2416of the organization. It is the Postal Service. ``Service'' has2417always been the key.2418    And I will just close it with this. I have always found in2419my leadership time at the Postal Service--running districts,2420running plants--that when the Postal Service provides quality2421service with consistency, it also has the lowest cost. It is an2422efficient operation.2423    Mr. Sessions. I believe that is right. Ms. Poling, you have2424spoken very eloquently about rural customers' expectations and2425the things which are a piece-part to their satisfaction as well2426as, as Mr. Day just said, the effective operation of money.2427What conversation would you have with me about, a conversation2428of competition to that, what might be called last mile, or the2429competition angle with the Post Office and other competing2430factors, maybe Amazon maybe someone else, UPS could be, but2431that is competing in that market? Can you put us in that world2432of how that works and what those issues might be?2433    Ms. Poling. I will do my best. Thank you, Chairman. I guess2434I would start with, you know, I think the Postal Service, and,2435you know, obviously it is such a national treasure, and that is2436why we are here today having this conversation. We all care2437about it. We want to make sure it stays viable, hopefully for2438many, many more years. And I think, you know, again, getting2439back to this Universal Service Obligation, that is sort of why2440I think we need to start having these conversations.2441    What I worry a lot about is that in these rural areas,2442right, it is not always as profitable to deliver to them,2443right? And so, and unlike the Postal Service, private carriers2444have the option of deciding not to, right, not to deliver to2445those areas or to charge rural surcharges. The Postal Service2446has to be accessible and affordable to everyone. You know, this2447has been brought up several times today, so I will not belabor2448it, but in our advisory opinion, you know--the Vice Chairman2449said this, I thought, so well--you know, it is a tale of two2450Americas that could start happening, right, between sort of the2451rural folks who live far away, right, and then those who do2452not. Again, this is a service that is meant for everyone, that2453is supposed to be for everyone, that is absolutely supposed to2454be accessible and affordable, and I think we need to be doing2455everything we can right now to ensure that.2456    And I do worry a lot about what happens if we do not have2457those conversations about the Postal Service and about the2458broken business model that it has because, again, I worry about2459the impact that this will have on rural America where it is2460costly to deliver to those areas. And these folks, you know, it2461is their lifeline and it is something that they really rely on,2462so I think all of those conversations need to be had. I will2463say this, too: I think there is tremendous opportunity to be2464had with the private sector as well. I think there have been a2465lot of great relationships that have been created, right, with2466Amazon, with others. And I think all of those things--nothing2467should be off the table, I think, as we go forward and have2468these discussions.2469    Mr. Sessions. Thank you very much. Mr. Chairman--Vice2470Chairman, but Mr. Chairman today to me--there have been lots of2471conversations that you and I have had about the Post Office2472having to compete, but in that competition, also doing things2473that they had utilized other people in the marketplace--2474technology, trucking, and all sorts of other services within2475this larger operation--that now, seemingly, the Post Office is2476finding a way to bring that internally, whether it is2477technology or whether it is other things that they do. Do you2478have insight into that because I have been skeptical. I am for2479the bigger group of people working together and providing a2480comfort technology, time, issuance of professionalism. Do you2481have any insight into that?2482    Mr. Taub. Public-private partnerships, for lack of a better2483term, have been really the success story of the U.S. Postal2484Service since it was created in 1970. I referenced earlier this2485idea of work sharing where, if the private sector can present2486the mail or prepare it or transport it in a way that saves the2487Postal Service that cost or put it further in the system, it is2488a win-win for the private sector and the Postal Service. In2489fact, in the early years after the 1970 Act, the Postal Service2490was pushing back on it and then embraced it, and of course it2491was an era of increasing volume, but was a success story. In24922006, Congress recognized that, and there is an uncodified part2493of PAEA--the Postal Accountability Enhancement Act--that, in2494fact, directed the Postal Service through a sense of Congress2495that public-private partnership are critical, whether it is in2496the transportation space, and leveraging that.2497    I was concerned, seeing the evolution over the last few2498years with the Dodd-Frank Act, before the new Postmaster2499General took over, of this concerted effort to bring more of2500that in-house and do it there, and it seemed to be upending a2501success story. It is heartening to see recently the Postal2502Service just signed a negotiated service agreement with DHL,2503which is owned by Deutsche Post, which is a privatized post by2504the way, but an opportunity to open up that last mile that2505really has been such a strength. And so, I think, 110 percent2506with you, Mr. Chairman, with the thought of your question,2507which is we really need to be looking at leveraging the success2508of that public-private partnership, and recognizing at the end2509of the day, the Postal Service has a mission to do from the2510public service mission. Why else does it exist?2511    And if we make sure that is being done, if there are ways2512that then we can leverage what are good, efficient ideas in the2513private sector, it seems to me that is a path forward as2514opposed to just bringing it all in-house, particularly if we2515are doing it in a way that is not going to sustain what we as a2516Nation need from the Postal Service.2517    Mr. Sessions. And perhaps more importantly, technology2518keeps on moving.2519    Mr. Taub. Yes.2520    Mr. Sessions. And there are lots of people that have2521technology at their fingertips and that is their specialty.2522    Today, we have had an opportunity to hear from you, and the2523four of you, I want to thank for your service, not just to the2524Postal Regulatory Commission but, really, to the process. And I2525think both Mr. Mfume and I recognize that we want to keep2526working with the people like you, like the Postal Service, and2527other groups, on getting this right. I really would say to you2528that I said to you, and you know this, what are the tough2529decisions that the Postal Service has had to make? What are the2530really hard questions that they have had to face down, and you2531gave me a good answer.2532    I want you to know that these are the things that are aimed2533right at Congress right now. What really hard decisions are we2534willing to, not just ask the questions, but the decisions we2535are going to make, and perhaps the one that each of you have2536put back right at Mr. Mfume and I, or at least myself, what is2537that standard going to be? What is the plan? What is the2538service going to look like? These questions need to be answered2539before you answer the others. So, we hear you, we appreciate2540you, and I want you to know that I think that not just Mr.2541Mfume, but our Subcommittee and other Members heard today that2542if we fail to answer these questions, we will fail to do our2543job, which the American people have put us to. I want to thank2544each of you.2545    Mr. Mfume, do you wish to have any time for a closing2546remark?2547    Mr. Mfume. No, but thank you. I just want to thank our2548guests, the witnesses, and do not make this your last time2549here. We are open to any communications that you may have to2550help guide us on this path. Thank you, sir.2551    Mr. Sessions. Yes, thank you. Mr. Mfume and I are going to2552come down here as soon as we finish this hearing and come down2553and shake your hand thank you for being here and get your2554picture.2555    With that said, without objection, all Members have five2556legislative days within which to submit material and additional2557written questions for the witnesses that then will be forwarded2558directly to the Commission.2559    If there is no further business, without objection, the2560Subcommittee stands adjourned.2561    [Whereupon, at 12:30 p.m., the Subcommittee was adjourned.]25622563                            [all]