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TUESDAY, JUNE 9, 1992

Hearing held in Washington, DC, June 9, 1992.....

Statement of:

Emigh, Carolyn A., economic counsel, Nonprofit Mailers Federation; and

Mark Silbergeld, president, Alliance of Nonprofit Mailers....

May, Timothy J., general counsel, Parcel Shippers Association; Stephen

L. Bair, chairman, Postal Committee of the Association of American

Publishers; Arthur B. Sackler, managing director, Mailers Council;

Max Heath, vice president and executive editor, Landmark Community

Newspapers, and chairman, National Newspapers Association, accom-

panied by Bob Brinkman, National Newspapers Association

McSweeney, Michael, chairman, Direct Marketing Association, accompa-

nied by Richard Barton, senior vice president; and lan D. Volner,

general counsel, Advertising Mail Marketing Association..

Seiffe, Ralf, vice president and treasurer, National Association of Presort

Mailers.....

Prepared statements, letter, supplemental materials, et cetera:

Bair, Stephen L., chairman, Postal Committee of the Association of Amer-

ican Publishers, prepared statement of

Emigh, Carolyn A., economic counsel, Nonprofit Mailers Federation, pre-

pared statement of

Heath, Max, vice president and executive editor, Landmark Community

Newspapers, and chairman, National Newspapers Association:

Questions submitted by the Committee on Post Office and Civil Serv-

ice, with responses

thereto......

Prepared statement of ..

May, Timothy J., general counsel, Parcel Shippers Association:

Questions submitted by the Committee on Post Office and Civil Serv-

ice, with responses thereto............

Prepared statement of ..

McSweeney, Michael, chairman, Direct Marketing Association, prepared

statement of............

Norton, Hon. Eleanor Holmes, a Representative in Congress from the

District of Columbia, prepared statement of....

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THURSDAY, JUNE 11, 1992

Hearing held in Washington, DC, June 11, 1992 ....

Statement of:

Biller, Moe, president, American Postal Workers Union; accompanied by

William Burrus, executive vice president; Susan Catler, counsel; and

Joe Popkin, consultant

Brown, William R., president, National Rural Letter Carriers Association;

accompanied by Roger Moreland, national secretary-treasurer, NRLCA;

Scottie B. Hicks, vice president, NRLCA; and Ken Parmelee, vice presi-

dent of government affairs, NRLCA...

Conners, Frank, executive vice president, National Association of Letter

Carriers, accompanied by Jim Sauber and George Gould......

Handelman, Rubin, president, National Association of Postal Supervisors;

accompanied by Bob McLean, editor/legislative counsel, NAPS.

Valliere, Ted, director of government relations, National Association of

Postmasters of the United States..

Prepared statements, letter, supplemental materials, et cetera:
Biller, Moe, president, American Postal Workers Union, prepared state-

ment of

Brown, William R., president, National Rural Letter Carriers Association,

prepared statement of

Clay, Hon. William L., a Representative in Congress from the State of

Missouri, prepared statement of ....

Collins, Barbara-Rose, a Representative in Congress from the State of

Michigan, prepared statement of ..

Conners, Frank, executive vice president, National Association of Letter

Carriers, prepared statement of .

Draft Concepts of the Legislative Working Group.......

Handelman, Rubin, president, National Association of Postal Supervisors,

prepared statement of

Hayes, Hon. Charles A., a Representative in Congress from the State of

Illinois, prepared statement of..
McCloskey, Hon. Frank, a Representative in Congress from the State of

Indiana, prepared statement of .

McNulty, Hon. Michael R., a Representative in Congress from the State

of New York .......

Norton, Hon. Eleanor Holmes, a Representative in Congress from the

District of Columbia, prepared statement of....

Dakar, Hon. Mary Rose, a Representative in Congress from the State of

Ohio, prepared statement of...

Olivera, Armando, president, National League of Postmasters, prepared

statement of..

Valliere, Ted, director of government relations, National Association of

Postmasters of the United States, prepared statement of ....
Young, Hon. Don, a Representative in Congress from the State of Alaska,

prepared statement of

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Statement of:

Runyon, Hon. Marvin T. Runyon, Postmaster General and Chief Execu

tive Officer, U.S. Postal Service.....
Prepared statements, letter, supplemental materials, et cetera:
Ackerman, Hon. Gary L., a Representative in Congress from the State of

New York, prepared statement of..
Burton, Hon. Dan, a Representative in Congress from the State of Indi-

ana, prepared statement of...............
Clay, Hon. William L., a Representative in Congress from the State of

Missouri, prepared statement of.....
Hayes, Hon. Charles A., a Representative in Congress from the State of

Illinois, prepared statement of....
Kanjorski, Hon. Paul E., a Representative in Congress from the State of

Pennsylvania, prepared statement of .....
Myers, Hon. John T., a Representative in Congress from the State of

Indiana, prepared statement of .
Norton, Hon. Eleanor Holmes, a Representative in Congress from the

District of Columbia, prepared statement of ..............
Runyon, Hon. Marvin T. Runyon, Postmaster General and Chief Execu-
tive Officer, U.S. Postal Service:

Questions submitted by Hon. William L. Clay, with responses thereto.
Questions submitted by Hon. Benjamin A. Gilman, with responses

thereto......
Questions submitted by Hon. Charles A. Hayes, with responses there

to...
Questions submitted by Hon. Paul E. Kanjorski, with responses

thereto.......
Questions submitted by Hon. Frank McCloskey, with responses there-

to
Questions submitted by Hon. Constance A. Morella, with responses

thereto.......
Questions submitted by Hon. Eleanor Holmes Norton, with responses

thereto.......
Young, Hon. Don, a Representative in Congress from the State of Alaska,

prepared statement of

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OVERSIGHT HEARING ON THE U.S. POSTAL

SERVICE

TUESDAY, MAY 12, 1992

HOUSE OF REPRESENTATIVES,
COMMITTEE ON Post OFFICE AND CIVIL SERVICE,

Washington, DC. The committee met, pursuant to call, at 10:06 a.m., in room 311, Cannon House Office Building, Hon. William L. Clay (chairman of the committee) presiding.

Chairman CLAY. The committee will come to order.

Today we begin our general postal oversight hearings. These hearings will continue on June 2, 4, 9, and 11, as we hear from all those involved in postal issues. It is likely that we will schedule a hearing after Labor Day to hear from the new Postmaster General, Marvin Runyon.

Let me digress a moment to again extend my congratulations to Mr. Runyon. He has a challenging job before him, and I'm sure that I speak for all on this committee that we look forward to working with him for the success of the Postal Service.

Today's hearing begins with the General Accounting Office and concludes with the Governors Postal Rate Commission Task Force. It is a pleasure to welcome all of you to this hearing this morning. We are fortunate to have two exclusives at this hearing: GAO will issue its report on Postal Service automation, and the task force will give its first public report on its recommendations to improve the postal ratemaking process. These are both important issues facing this committee. The Postal Service, its employees, its customers, the Postal Rate Commission, and the American public.

Today we will hear of the poor financial condition of the Postal Service. Headquarters' budgets have been frozen. The Deputy Postmaster General has urged field managers to reduce costs. Postal volume is down, and without effective cost controls higher and higher rates will be needed, which of course will lead to lower and lower volumes. Successful automation will help control these costs.

Unfortunately, I have heard discussions about possible lay-offs because attrition in the Service has slowed dramatically and cannot reduce the workforce as rapidly as automation demands. I hope that the GAO report can help us and the new Postmaster General find an acceptable solution.

At our hearings last year, we had just completed a very lengthy rate proceeding. This task force is an outgrowth of that proceeding, and we hope that your testimony today will stimulate ideas and dialogs on improving the ratemaking system.

Before we begin,

Mr. Hayes, do you have an opening statement? Mr. HAYES. Mr. Chairman.

Thank you for holding these timely hearings. We are facing an important transitional period in the history of the Postal Service. Automation, as you have indicated, is displacing workers from traditional jobs. First- and third-class mail are below expectation, and revenues have fallen off the amounts needed to keep postal rates low.

I'm proud of our Postal Service and proud of the fact that our country has one of the lowest postal rates of any country in the world. The Japanese and Germans, to name two competitors, charge much more than the U.S. Postal Service for first-class mail. But I also have serious concerns about the future of our employees. With volume below expectations and rates climbing, there is much concern by employees about their future.

I have questions and comments for our witnesses which I will hold until we have heard their remarks. Thank you, Mr. Chairman.

Chairman CLAY. Thank you.

Our first witnesses today will be a panel from the General Accounting Office. Mr. Nye Stevens, Director of Government Business Operations Issues of the Accounting Office will be the lead witness.

Good morning, and, without objection, your entire statement will be introduced into the record at this point, and you may proceed as

you see fit.

STATEMENT OF NYE STEVENS, DIRECTOR, GOVERNMENT BUSI

NESS OPERATIONS ISSUES, GENERAL GOVERNMENT DIVISION, U.S. GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY: WILLIS ELMORE, ASSISTANT DIRECTOR, GOVERNMENT BUSINESS OPERATIONS ISSUES, GENERAL GOVERNMENT DIVISION; AND BARRY GRIFFITHS, SENIOR EVALUATOR Mr. STEVENS. Thank you, Mr. Chairman. With your permission, I will shorten my oral remarks. I'm accompanied today by Willis Elmore, who is on my right and who has directed our work at our Postal Service Audit Site for the past dozen years or so; and on my left is Barry Griffiths, who is responsible for one of the major reports that I would like to discuss today.

We believe that the Postal Service is operating in a fundamentally different and increasingly competitive communications marketplace from the one that existed when the Service was reorganized in 1970, and that leads us to two major issues that we would like to focus on today: first, the changes in the ratemaking process; and, second, efforts by the Postal Service to meet the challenge of competition by improving its productivity and controlling its costs through automation.

We agree with the task force members that you will hear from next that the Postal Service needs more flexibility in the ratemaking process, and we issued a report to the Congress last month discussing the major issues of postal ratemaking in a competitive environment. I would like to just touch on the major points in that report.

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