Other industries have experienced that trauma and has gone double in spades. Because it is a Governmental agency, the Postal Service pays lip service to employees' interest while working to undermine the most important employee interest of all, job security and health benefits.

Just want to add at this time, if I may, and that is the OBRA; talking now about the Congress of the United States and the administration. Everybody talks, especially now, about the balanced budget amendment and how everybody has to make equal sacrifices. We trudge the floors with the Postal Service, with the Postmaster General, who gave us even a bronze shoe, and I forgot to bring it this morning. The bronze shoe symbolized the fact that we trudge the halls of Congress together to get the Postal Service off budget.

I have always wondered whether the next shoe would fall. It fell at the contract negotiations, and it is falling now, and it has also fallen, if I may say so, most respectfully, from both the Congress and this present administration. You have the OBRA. We have been taken off budget, but we are still a cash cow.

And I think Miss Pace addressed the same thing, so we agree on a few things. Somewhere around $9.1 billion has been taken out of the Postal Service, taken from ratepayers, taken from workers, and this is called sharing the burden equally. It is for those reasons, rather than anything else, that rates have been where they were, despite the fact we continue to be the cheapest in the entire world. Far away. Canada is next with some 34 cents. I still maintain we should have been 30 cents.

In addition, I will repeat again, we wish to cooperate to improve service, notwithstanding other people's meddling. I had a letter yesterday from a Senator. It is going to be in the record, and I am going to respond very respectfully, as to why the American Postal Workers Union is not involved in the employee involvement quality of worklife program.

That does not mean that we don't cooperate. We have got labormanagement committees at every level of the Postal Service. We work within the framework of our contract. And I will advise the good Senator that we are a free trade union in the United States of America, and our members have a right to make their choices. Their choices are cooperation, but don't ask us to fight alternate delivery while the Postal Service contracts out and devises methods of alternate mail processing.

If the Board of Governors and Postmaster General Runyon are fighting to prevent privatization, as they say they are, then they have a powerful ally in the American Postal Workers Union. If we are to be taken for granted, though, and set up, then I have to advise everybody, most respectfully, postal workers, particularly our members, are not buffalo. We will not follow over the cliff blindly the U.S. Postal Service as we see a road to privatization. That is about what I have to say, and I appreciate the fact that you are going to let me put this in a more organized form in writing, because we did not have the opportunity to do so. We were good soldiers and we complied with the original letter that says stick to the rate process and so on.

Mr. HAYES. You may rest assured that whatever your final draft of a statement is, it will be made a part of the record.

Mr. BILLER. Thank you very much.

[The prepared statement of Moe Biller follows:]

PREPARED Statement of MOE BILLER, PRESIDENT, American Postal WORKERS

UNION

Mr. Chairman and members of the committee: I am Moe Biller, President of the American Postal Workers Union, AFL-CIO (“APWU”). Since 1971, the APWU has been the collective bargaining representative of all employees in the U.S. Postal Service in the clerk, maintenance, motor vehicle and special delivery crafts. The APWU has also participated in the proceedings before the Postal Rate Commission for more than 10 years. On behalf of our 356,000 members, I appreciate the opportunity to comment on the report by the Joint Task Force on Postal Ratemaking.

On June 1, 1992, the Joint Task Force on Postal Ratemaking issued its report: "Postal Ratemaking in a Time of Change." Because the solution proposed by the Joint Task Force to go to a fixed 4-year rate cycle, with a "mini" case at the middle of the cycle-does not address the problems that led to the Task Force's creation, the APWU cannot support the Task Force's recommendations.

What kinds of problems prompted the need for a re-examination of the process? Two come to mind at once. First is the Rate Commission's insistence on a 29-cent first-class rate in the last case. Second is the persistent subsidy of the presort industry, which was created by an overgenerous discount and then subsidized in the following cases. Now the discounts are even justified by a desire not to disrupt this industry that misguided rate decisions created!

There is nothing in the proposed changes that would prevent these sort of bad economic judgments. Instead, the proposal only guarantees that the public can expect these bad economic judgments to occur on a rigid schedule, instead of whenever postal management thinks a rate case is needed.

A key basis for the recommendations appear to be feed to the public smaller, but more frequent, increases in postal costs. My suspicion is that this will result in a faster escalation of stamp prices than might otherwise occur. While being able to make plans based on knowing future rate increases may sound attractive to business now with more frequent interjection of the PRC's bad economic judgments and continued USPS management weakness, the inevitable result-higher overall rates is not a good deal. In particular, the "mini" case, with its limited agenda, is a way to obscure these bad judgments from congressional and public scrutiny. The Postal Service is spending increasing billions of dollars on new technologies. The Postal Service is becoming more capital intensive. If the rate payers are to get a reasonable benefit from this huge expenditure, the machines purchases must be fully utilized. This will a never happen when the rates are set to encourage presorting, by paying mailers more to presort than the presorting saves the Postal Service. The Joint Task Force's plan offers no improvement over the present system for setting and changing discounts in rate categories. The problem here is to get the economics right, which means correcting years of bad precedent created by bad economic judgments. The persistent failure of the ratemaking process to set rates that encourage mailers to prepare their mail to allow the Postal Service to get an adequate return on its investment in this machinery is not addressed it the Joint Task Force's proposal at all. This is a critical failing of the process.

The problem of poor management investment choices, coupled with Rate Commission poor economic decisionmaking, which leads to spending huge amounts of money on machines that are nowhere near fully utilized, is perhaps the most pressing problem facing the Postal Service. Going to a 4-year rate cycle does not in any way address this mammoth problem.

I am also troubled by the recommendations related to volume discounts. The mission of the Postal Service calls for providing universal service at a uniform price. The USPS and the PRC have been persuaded by large mailers to provide the overly generous discounts now available for certain categories of mail. To go further and permit the Postal Service to negotiate rates with individual mailers is unthinkable. The concerns of big business mailers already dominate the delivery and rate structure, but at least now the Postal Service and the Rate Commission have to make those deals open to public scrutiny and comment. The Postal Service should not be given authority, even within set bands, to negotiate special rate deals with individual mailers.

Finally, the overwhelming impression I have of the solution proposed by the Joint Task Force to the Postal Ratemaking problem is that lawyers should love it. In a time of declining employment in the Postal Service, it seems to me to be a postal lawyers and Rate Commission full employment project. With rate cases like clockwork every 2 years, and the appeals to the courts that seem inevitably to follow, the Rate Commission will always have something to do and the lawyers in the Postal Service serving all the big mailers and competitors of the Postal Service will begin the new case before the old one is final. Increasing litigation by institutional interests is not going to help the Postal Service provide the service the United States wants and deserves at the most appropriate price.

The Joint Task Force's recommendation for a fixed 4-year rate cycle should be rejected.

This concludes my prepared statement. I am happy to answer any questions the committee may have at this time.

Mr. HAYES. Before opening up for questioning, I would like to acknowledge the presence of Congresswoman Oakar and ask her if she has a statement.

Ms. OAKAR. Thank you, Mr. Chairman. I thank my colleagues for allowing me to make a brief statement.

First of all, I want to pay tribute to you, Mr. Chairman. I have not had the pleasure of serving under your leadership in this subcommittee. I am not a member of the subcommittee, but you are so proworker. You are legendary, and you have made a lasting legacy on this body, and I want to thank you for that.

In addition, I want to pay tribute to Moe Biller, president of the Postal Workers, and Bill Burrus. Of course, Moe was conceived in Cleveland, OH, he has told me, and Bill, of course, is from Cleveland; and the other great panelists. I don't know of any union where you could ask for more fine representatives.

I notice on the agenda you have Frank Conners, the National Association of Letter Carriers, and Bill Brown, president of the National Rural Letter Carriers Association. Another fine president.

You know, I just wanted to say, Mr. Chairman, if we listened, the Board of Governors and the Postmaster, would listen to these gentlemen, we would not have any problems. We would just not have any problems. And everything that Moe has said, I am sure his colleagues, who will be coming on board, would agree. And I have always been impressed with this union totally and how well he has served.

I want to thank you for coming before the House today. I am not on the subcommittee, so I am going to be leaving, but I wanted to pay tribute to all the panelists, and I know this hearing is extremely important because, as Moe said, we do have the greatest Postal Service in the world. We ought not to be tampering with it, and if we would let the workers have a say-so in how it is run, we wouldn't have these problems.

So thank you, Mr. Chairman, and thank my colleagues.
[The prepared statement of Hon. Mary Rose Oakar follows:]

PREPARED STATEMENT OF HON. MARY ROSE Oakar, a RepreSENTATIVE IN CONGRESS
FROM THE State of OHIO

Chairman Clay, I would like to thank you for calling these continuing postal oversight hearings. I appreciate your efforts to ensure that the U.S. Postal Service continues to work for all Americans in the most efficient and effective manner. I am a tremendous fan of the thousands of men and women who are the U.S. Postal Service, one of the best bargains available in the Free World, and in terms of the enormous task they one of the best run operations. There are improvements to be made

but persistent efforts to privatize the Postal Service must rejected. I appreciate your leadership in this regard, Mr. Chairman.

The Postal Service must the change with the times and will inevitably experience growing pains. Certainly, we need to take a closer look at some of the procurement practices of the Postal Service to ensure that full and fair consideration be given to the promotion of American business and American jobs. I know that some changes will grow out of these discussions, and I look forward to a full review of all the statements submitted at these proceedings. I look forward to hearing from all of the witnesses gathered here today.

Mr. Chairman, I would like to take a moment to offer special recognition to a personal friend of 16 years, a long time friend of this committee, and one of today's witnesses, Mr. Rubin Handelman, president of the National Association of Postal Supervisors. Regrettably, Rubin has recently announced that he will soon retire after almost 50 years of exemplary public service and 16 years in various leadership roles within the National Association of Postal Supervisors. Fortunately, Mr. Handelman will continue to serve on the Board of NAPS for at least 2 more years. However, I know that his guidance and good counsel to the members of this committee will be missed. Rubin Handelman is a shining example of public service at its best. I wish him well in all his future endeavors.

Again thank you, Chairman Clay, for your continuing efforts to improve the Postal Service. I look forward to working with you to address the concerns raised at these hearings in support of the efforts of the men and woman who are the U.S. Postal Service.

Mr. HAYES. Let me just inform you that this is a full committee hearing and you are an intricate part of it, so you don't have to run out because of that. But if you have something else, I will understand it.

MS. OAKAR. When I didn't see Bill Clay here

Mr. HAYES. You are welcome to stay with us.
MS. OAKAR. Thank you.

Mr. HAYES. I have two questions I want to raise, and I want to be very brief in the interest of time.

Mr. Biller, have the rumors of layoffs affected the morale?

Mr. BILLER. Absolutely. The phone has been ringing off the hook ever since Miss Pace made the statement; ever since she attempted to correct it. Because even the correction talks about 30,000, 35,000 jobs being lost, people being put on the street, people being added onto the unemployment rolls at a time when work is being contracted out.

And, again, this massive investment in capital is really being underutilized, and it is a disgrace because there is enough mail to carry this.

Now, volume being down, obviously, is a fact of life, and it is always down in a recession, if you want to call this a recession. Because, quite frankly, if it was not for social security, unemployment insurance, and 25 million Americans receiving food stamps, I believe 1930 would look like a picnic compared to what is going on today. All we hear is the economy is coming around; it is coming around. This is 1992 revisited when we said prosperity was around the corner.

So there is great concern. There is great trauma on the part of our members, and I know that the phones of Members of Congress have been ringing off the hook, too, I have been told.

Mr. HAYES. In the past 2 months, transitional employees have entered the postal workforce. What has been the relationship be tween your employees, or your union members, and the transitional workforce; part-time people?

Mr. BILLER. Well, they are bargaining, the union people. We did resolve whatever the arbitrator left to us without going back to arbitration. There are about 1,500 presently and they are talking about 20,000-25,000 without health benefits, particularly at a time when everybody is talking about national health care.

So I am not sure. My own views are, at the present time, that is also a disservice to the present workforce.

Mr. HAYES. Do you think the Postal Rate Commission's agenda is to preserve universal service and uniform rates?

Mr. BILLER. I am not at all convinced. Really not. Because while no decisions have been made in the area that I discussed, they have alluded to discounts with different types-volume discounts with large mailers and so on. So I am not certain.

I know that, as you know, they invested probably a billion some odd dollars in 1971 and 1972 on a bulk mail system to keep the parcel post operating, and it has been down to 5 percent. So it is an amazing thing from a business point of view to throw billions in and to, ultimately, lose business. There is no reason why we can't compete.

But the other thing, again, is that in some areas, we kind of have our hands tied behind our back, and I think there has to be some more flexibility. But what I see the present task force doing is actually taking away flexibility from the Postal Service.

There is no quick fix, as you know. As we are told, there are no free lunches. We know that now.

Mr. HAYES. Mr. Horton?

Mr. HORTON. Thank you, Mr. Chairman, I want to join with you and Mrs. Oakar and the other members of the committee in welcoming Moe Biller and his staff.

I have the highest regard for Mr. Biller personally and for his union. I don't know anyone that works harder or gives better leadership than Mr. Biller does to his Postal workers. It is one of the largest unions in the country, and it is difficult to find that kind of leadership. But I am very respectful of what he does, as I have been to many of the national conventions where his folks have been there, and I know they have the highest regard for him.

I think it is very important for us to listen to what he has to say. As he knows, and as the members of the committee know, I have been very much concerned about this matter of contracting out. I have said we are never going to pass any law that says we are not going to have the statutes to protect the Postal Service, but what we are going to find is a gradual eating away of that, and that is what contracting out is. It is pure and simple another way of turning the Postal Service over to the private sector. It is not an outright move to do it, but it is a piecemeal effort, and, mark my words, one of these days you will wake up and find out it is not there anymore.

I think the warning Mr. Biller has brought here in his testimony, particularly about this business of contracting out and other expenditures being wasted, is one we should look at very carefully. As a matter of fact, I am going to suggest to the committee that what we do is ask the Postal Service to give us an accounting in writing of the contracts that they have out now so that we will have a pretty good picture as to what is out there and how much is