[Senate Hearing 114-605]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 114-605
 
       NOMINATIONS OF HON. ROBERT G. TAUB AND HON. MARK D. ACTON

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS


                             SECOND SESSION

                               __________

          NOMINATIONS OF ROBERT G. TAUB AND HON. MARK D. ACTON
           TO BE COMMISSIONERS, POSTAL REGULATORY COMMISSION

                               __________

                           NOVEMBER 15, 2016

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin Chairman
JOHN McCAIN, Arizona                 THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio                    CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming             HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire          CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     GARY C. PETERS, Michigan
BEN SASSE, Nebraska

                  Christopher R. Hixon, Staff Director
                Gabrielle D'Adamo Singer, Chief Counsel
            Jennifer L. Scheaffer, Professional Staff Member
     John D. Cuaderes, Director, Subcommittee on Regulatory Affairs
                         and Federal Management
      Tara M. Schonoff, Professional Staff Member, Subcommittee on
               Regulatory Affairs and Federal Management
              Gabrielle A. Batkin, Minority Staff Director
           John P. Kilvington, Minority Deputy Staff Director
       John A. Kane, Minority Senior Governmental Affairs Advisor
     Felicia A. Hawkins, Minority U.S. Postal Service Office of the
                       Inspector General Detailee
      Viola B. Stoval, Minority U.S. Postal Service Office of the
                       Inspector General Detailee
                     Laura W. Kilbride, Chief Clerk
                     
                     
                     
                     
                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Lankford.............................................     1
    Senator Carper...............................................     2
    Senator Heitkamp.............................................     9
    Senator Tester...............................................    11
    Senator Peters...............................................    14
Prepared statement:
    Senator Lankford.............................................    23
    Senator Carper...............................................    24

                               WITNESSES
                       Tuesday, November 15, 2016

Hon. Robert G. Taub to be a Commissioner, Postal Regulatory 
  Commission
    Testimony....................................................     4
    Prepared statement...........................................    28
    Biographical and financial information.......................    30
    Letter from the Office of Government Ethics..................    53
    Responses to pre-hearing questions...........................    56
Hon. Mark D. Acton to be a Commissioner, Postal Regulatory 
  Commission
    Testimony....................................................     5
    Prepared statement...........................................    75
    Biographical and financial information.......................    76
    Letter from the Office of Government Ethics..................    94
    Responses to pre-hearing questions...........................    96
Prepared Statement of Senator Schumer............................    26
Prepared Statement of Senator Gillibrand.........................    27


       NOMINATIONS OF HON. ROBERT G. TAUB AND HON. MARK D. ACTON

                       TUESDAY, NOVEMBER 15, 2016

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:33 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. James 
Lankford, presiding.
    Present: Senators Lankford, Carper, Tester, Heitkamp, and 
Peters.

             OPENING STATEMENT OF SENATOR LANKFORD

    Senator Lankford. Good afternoon, everyone. Let me call 
this hearing before the Senate Homeland Security and 
Governmental Affairs Committee to order today.
    We are considering today the nominations of Mr. Robert Taub 
and Mr. Mark Acton for Commissioners of the Postal Regulatory 
Commission (PRC). The Postal Regulatory Commission exercises 
statutory and comprehensive oversight of the U.S. Postal 
Service (USPS). Among its responsibilities are the mandates to 
prevent anticompetitive practices, to promote accountability 
and to adjudicate complaints, set postal rates, help oversee 
delivery service standards, and other things. It is a busy 
group. It is important that each Commissioner reflects the 
highest standard of public service.
    Robert Taub is a native of Gloversville, New York. He 
received a bachelor's degree and M.A. in political science from 
American University, where he graduated with honors. Mr. Taub 
has a distinguished career as a public servant, including work 
at the Government Accountability Office (GAO) , as chief of 
staff to former Representative John McHugh, and as an assistant 
to the Secretary of the Army. He is currently serving as the 
Acting Chairman of the Postal Regulatory Commission.
    Mark Acton is a native of Louisville, Kentucky. He earned 
his bachelor's degree from the University of Louisville and his 
MBA from the University of Maryland. I assume you are watching 
a little football lately as well.
    Mr. Acton. Indeed.
    Senator Lankford. Yes. Mr. Acton served at the Republican 
National Committee for more than two decades in a variety of 
positions, including as staff director for the counsel's office 
and government relations officer. Prior to his confirmation as 
Commissioner at the PRC, Mr. Acton was the Special Assistant to 
the Chairman.
    Committee staff had the opportunity to interview Mr. Taub 
and Mr. Acton regarding their work so far at the PRC. They have 
thoughtfully and competently answered each question to our 
satisfaction. Mr. Taub and Mr. Acton, to date, the Committee 
has found you to be qualified for the position you have been 
nominated, and I look forward to speaking with you more about 
this.
    When we go through this process and get a chance to open 
this up for questions and when you do your opening statements, 
I would hope both of you would introduce your family, and that 
will give a chance to tell a little bit about your story and 
what actually brought you here. You have both served very 
admirably already in these type of positions, and so this 
should be a very straightforward conversation about what we are 
doing in the days ahead to be able to help the Postal Service 
and the many great employees that serve there. So I look 
forward to this ongoing conversation.
    With that, I recognize Senator Carper for any opening 
statement you might make.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thank you. Thank you, Mr. Chairman. Again, 
to our witnesses, to our guests, their families, and one and 
all, we are happy to be with all of you. Thank you for joining 
us today. And, Senator Heitkamp, thank you for letting me warm 
your seat for a little while this afternoon.
    I have statements of support for Chairman Taub from 
Senators Gillibrand and Schumer that I would like, Mr. 
Chairman, to ask unanimous consent be added to the record, 
please.\1\
---------------------------------------------------------------------------
    \1\ The prepared statements from Senator Schumer and Senator 
Gillibrand appear in the Appendix beginning on page 26.
---------------------------------------------------------------------------
    Senator Lankford. Without objection.
    Senator Carper. I just want to thank you, Mr. Chairman, for 
scheduling today's hearing to consider what I believe a very 
important nominations to fill two Commissioner vacancies for 
the Postal Regulatory Commission. Both Mr. Taub and Mr. Acton's 
terms expired on October 14, 2016, while we were away, and they 
are now one month into a one-year holdover term granted to them 
under the law, so they must leave the Commission next October 
unless they are reconfirmed. It is imperative, in my view, then 
that we take swift action on these nominees before the end of 
this year due to the pending critical work on rates before the 
Commission.
    I should also note that if we do not take action on these 
two nominations, the PRC will eventually be left with only two 
Commissioners, and that would be unacceptable and create even 
more uncertainty for the Postal Service and its customers. It 
is bad enough that we have a Board of Governors that has just 
one slot filled out of, gosh, roughly 10, and we do not want to 
repeat the same mistake here with respect to the Postal 
Regulatory Commission.
    But we are considering Mr. Taub's and Mr. Acton's 
nominations at what is a very challenging time for the Postal 
Service. It is not a time, though, that is devoid of promise or 
potential, although to achieve that promise, that potential, we 
need strong leadership at the PRC if the Postal Service is 
going to successfully confront the challenges such as poor 
service performance issues and the persistent decline in First-
Class Mail volume.
    The future also offers the Postal Service a number of 
promising opportunities. Some of them we are familiar with, 
others not. But Congress and the PRC have important work to do 
to help the Postal Service take full commercial advantage of 
its unique delivery and logistics network. There is one entity 
in the country that goes to every mailbox in the country, 
residential, business, five or six times a week. Just one, and 
it is the U.S. Postal Service. And there is a huge burden in 
doing all that, but there is also great opportunity for that.
    The Postal Service operates at the center of a massive 
printing, delivery, and logistics industry that I am told adds 
up to about $1.4 trillion and employs nearly 8 million people. 
And even as First-Class Mail loses ground to other forms of 
communication, the future holds promise for the Postal Service 
in a number of other ways. Advertising mail is still a 
popular--and I am reminded every time I open up my mailbox at 
home in Delaware--still a popular and effective option for 
mailers. And e-commerce and package delivery are booming, 
making the Postal Service a vital partner for businesses large 
and small. Even the Postal Service's traditional competitors 
rely on it to carry items the last mile to rural communities 
around the country.
    Both Mr. Taub and Mr. Acton have been invaluable resources 
to the Congress as we work on postal reform legislation, and 
their confirmation will remove uncertainty about the future of 
regulatory action at the Postal Service. It will also allow 
Congress to continue its work on postal reform with a clear 
sense of who will be implementing the reform in the coming 
years.
    This is Chairman Taub's second nomination, I think, by 
President Obama, and he has served as the Acting Chairman of 
the PRC since December 2014. He was first nominated and 
confirmed in, I think, October 2011. Is that correct? And you 
have demonstrated, in my view, proven leadership skills to 
properly address issues and concerns facing the Postal Service 
and staying keenly aware of the delicate balance between 
congressional and postal industry needs.
    Mr. Acton has spent 14 years at the PRC. President Bush 
first nominated him as a Commissioner in 2005. He was confirmed 
by the Senate in 2006. His second nomination as a Commissioner 
was by President Obama, and he was confirmed a second time by 
the Senate in September 2011. As a Commissioner, Mr. Acton has 
shown a clear understanding of key postal issues, as well as a 
close familiarity with the concerns of Congress and postal 
stakeholders.
    As I stated at the beginning of my remarks, Mr. Chairman, 
the PRC has a tremendous amount of work ahead of them in the 
coming weeks and months, including a required 10-year review of 
the postal pricing system established in our 2006 postal reform 
law that Senator Collins and I co-authored. We need strong PRC 
Commissioners to properly address the issues I expect to be 
raised during the course of the review, which will determine 
the level of service the Postal Service will offer in the 
future, and the prices that will be charged for that service. I 
believe we need to ensure that there is a quorum of PRC 
Commissioners in place so that the rate review can happen and 
proceed uninterrupted over the course of the next year.
    I look forward to talking with Mr. Taub and Mr. Acton 
today--we have spoken any number of times before, but I want to 
talk today about what they think can be done to address some of 
the ongoing challenges facing the Postal Service and to hear 
about the skills, the knowledge, and the experience that they 
would bring to the PRC.
    Again, Mr. Chairman, thanks for letting me join you today, 
and to our witnesses for their willingness to serve, to your 
families for your willingness to share them, and at least one 
of your parents who is here to say thanks for raising this kid. 
He turned out well.
    Thank you.
    Senator Lankford. It is the custom of this Committee to 
swear in all witnesses before they appear, so if you would 
please stand, raise your right hand. Do you swear that the 
testimony that you are about to give before this Committee will 
be the truth, the whole truth, and nothing but the truth, so 
help you, God?
    Mr. Acton. I do.
    Mr. Taub. I do.
    Senator Lankford. You may be seated. Let the record reflect 
the witnesses answered in the affirmative.
    I would like to recognize both of you, and I would remind 
you again we would be honored to be able to have the 
introduction of your family as well whenever you give your 
opening statement.
    Mr. Taub, you are first in this.

 TESTIMONY OF THE HONORABLE ROBERT G. TAUB,\1\ NOMINEE TO BE A 
           COMMISSIONER, POSTAL REGULATORY COMMISSION

    Mr. Taub. Thank you very much. Indeed, I will start out by 
introducing my family.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Taub appears in the Appendix on 
page 28.
---------------------------------------------------------------------------
    My dear wife, Cynthia Taub, is here. Our twin daughters are 
away at college and could not be here today to witness our 
Constitution in action today. And my dear father, Carlson Taub, 
and my sister, Beth Laddin, have both traveled a distance from 
upstate New York to attend as well. And so all have lent me 
love, encouragement, and a good dose of understanding over the 
years.
    I would also like to take an opportunity to acknowledge my 
colleague and fellow nominee today. Commissioner Acton is a 
dear friend and a good colleague on the Commission with me, and 
I wish him well as well. And as Senator Carper indicated, last, 
I would like to thank my home State Senators, Senators Schumer 
and Gillibrand, for their statements for the record.
    Mr. Chairman, Ranking Member, and Members of the Committee, 
I want to thank you for the opportunity to be here today and 
for your consideration of my qualifications to be a 
Commissioner of the Postal Regulatory Commission for another 
term.
    When the Senate confirmed me as a Commissioner 5 years ago, 
I was serving as a senior executive in the Department of the 
Army as the principal civilian advisor to Secretary John 
McHugh, helping him oversee a workforce of more than 1.2 
million people and manage an annual budget over $200 billion. I 
had arrived at the Army with Secretary McHugh, having served as 
his longtime chief of staff in the Congress as well as his 
leading staffer on postal issues within the House Oversight and 
Government Reform Committee. Like Secretary John McHugh, over 
the course of my 30 years in public service, I have worked in 
bipartisan fashion to develop solutions to many public policy 
issues, particularly the challenges confronting our Postal 
Service.
    The President designated me as head of the Commission 
nearly 2 years ago. During that time, the Commission has become 
even more efficient and effective in carrying out its mission 
as measured by budget savings and timeliness of the work. The 
Commission has achieved improvements in its employees' 
satisfaction and engagement, as evidenced by the Federal 
Employee Viewpoint Survey results. The Commission has become a 
more frequently sought resource for postal expertise, 
particularly to the Congress. If confirmed, I would welcome and 
hope to build upon these accomplishments to achieve further 
improvements in staff achievement, the timeliness and quality 
of work products, and the efficiency and effectiveness of 
agency operations.
    On December 20, the Commission will begin what may be its 
most important work in its 46-year history: a statutorily 
mandated ``10-year review'' of the Postal Service's price cap 
system, with unilateral authority to modify it or adopt an 
alternative system. Considering that the Postal Service's 
consecutive net losses since 2007 has increased its cumulative 
net deficit to more than $57 billion, the importance of this 
review cannot be overstated. The Postal Service's total 
liabilities exceed the total value of its assets by more than 
$53 billion. As I testified to the Committee in January, the 
Postal Service's balance sheet must be fixed. With the growing 
liability of retiree health benefits, the inability to borrow 
for needed capital investments, and the continued loss of high-
margin First-Class Mail revenues, the important task of 
improving the financial condition of the Postal Service is 
daunting.
    I want to assure this Committee that I appear here before 
you today with few delusions as to the challenges that lie 
ahead. I believe I have a clear understanding of the serious 
and numerous challenges that face America's postal system.
    But the fact is, for all the challenges the Postal Service 
of the 21st Century faces, it still retains an integral role as 
a key cog in how American businesses conduct their affairs and 
how Americans all across this land communicate. The Postal 
Service is the one government agency that touches every 
American on a daily basis. It is an organization that literally 
serves 155 million American households and businesses on a 
typical day. It facilitates trillions of dollars in commerce. 
For 241 years, our Postal Service has provided a service that 
American people and American businesses alike have come and 
grown to expect. Universal service at a uniform price, no 
questions asked. Very few in this country go to his or her 
mailbox or his or her local post office wondering if the mail 
will be there. It is always there. It has always been there. 
But the true question, the question confronting our Nation, is: 
Will the mail always be there? The Postal Service is in a 
serious financial crisis that must be fixed.
    There are no easy answers, but answer we must. And I 
promise you, if confirmed, my first priority will be, along 
with this Committee, the entire Congress, the President, and my 
fellow Commissioners, to engage in a constant search for the 
discovery and implementation of solutions. I am truly honored 
to be considered. Thank you.
    Senator Lankford. Mr. Acton.

 TESTIMONY OF THE HONORABLE MARK D. ACTON,\1\ NOMINEE TO BE A 
           COMMISSIONER, POSTAL REGULATORY COMMISSION

    Mr. Acton. Thank you, Mr. Chairman and Members of the 
Committee. I am honored to be with you today, and I thank you 
for holding this hearing to consider my nomination as a Postal 
Regulatory Commissioner.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Acton appears in the Appendix on 
page 75.
---------------------------------------------------------------------------
    I want to thank the President for the honor of nominating 
me for this appointment, and I am most grateful for the support 
of our Senate Majority Leader and my home State Senator, Mitch 
McConnell. My thanks to Committee staff for their expert 
guidance, and I also would like to acknowledge the support of 
my partner, family, and friends, some of whom are here today.
    I spent 4 years on staff at the Postal Rate Commission 
assisting the agency Chairman in administering PRC operations, 
and since then I have served as first a Postal Rate 
Commissioner and now as a Postal Regulatory Commissioner. I 
believe that my 14 years of postal policymaking experience 
affords me an informed perspective regarding the key postal 
issues that come before us today, as well as a great 
familiarity with the concerns of the postal community 
stakeholders at large. I am pleased to be considered for a 
continuing public policy role, and if confirmed, I pledge to 
work with this Committee to advance workable solutions that 
help to renew the vitality of a great American institution--the 
United States Postal Service.
    Mr. Chairman, I look forward to working with you and the 
other Members of this Committee, and I would be pleased to 
answer any questions.
    Senator Lankford. Thank you, Mr. Acton.
    I have three mandatory questions that we ask all of our 
nominees for all hearings, so let me ask these three, and then 
I am going to defer to the Ranking Member for his questions 
then. So these will all be ``yes'' or ``no'' questions, and I 
will ask both of you at the same time to be able to respond.
    Is there anything that you are aware of in your background 
that might present a conflict of interest with the duties of 
the office to which you have been nominated?
    Mr. Taub. No.
    Mr. Acton. No.
    Senator Lankford. OK. Thank you.
    Do you know of anything, personal or otherwise, that would 
in any way prevent you from fully and honorably discharging the 
responsibilities of the office to which you have been 
nominated?
    Mr. Taub. No.
    Mr. Acton. No.
    Senator Lankford. OK. Thank you both.
    Do you agree without reservation to comply with any request 
or summons to appear and testify before any duly constituted 
committee of Congress if you are confirmed?
    Mr. Taub. Yes, I do.
    Mr. Acton. Yes.
    Senator Lankford. Thank you both. Senator Carper.
    Senator Carper. Thanks, Mr. Chairman.
    I would like to talk about customer service for starters. 
We have three offices in Delaware, a little State, three 
counties, an office in each county, and we have in each of 
those offices someone who is responsible for constituent 
services. And we have in my Wilmington office a woman named 
Heather Guerke, who has been with me since I was Governor, and 
she is great on constituent services. One of her areas of 
responsibility is Internal Revenue Service (IRS). She has her 
hands full there. Another is the Postal Service, which for many 
years, frankly, was not much trouble, not much concern.
    Boy, that has changed. We have gotten more complaints about 
quality of service, lack of quality of service from so many 
Delawareans, mostly residential but some businesses, over the 
last couple of years, much more than we have ever seen before.
    What is the responsibility, where is the intersection 
between the PRC and the Postal Service with respect to quality 
of service for the folks that we represent?
    Mr. Taub. Senator, the Postal Regulatory Commission has a 
very important responsibility of providing transparency and 
accountability of the Postal Service, not only with rates and 
products but service. In the 2006 law that was put together, 
when that law was passed, the only public data that was out 
there about service quality was what was on single-piece First-
Class Mail.
    Today, as we speak, nearly 10 years later, we have full 
transparency of data on the service performance for all market-
dominant classes of mail--First-Class, periodicals, Standard 
Mail--and we look at that annually and report on whether those 
service standards are met.
    The Postal Service has a major problem with service 
performance, and the Commission earlier this year in its most 
recent annual compliance determination, this was the first year 
we found that the Postal Service did not meet any of its 
targets for all of First-Class Mail. Standard Mail, 
periodicals, flats, and First-Class Mail flats are a perennial 
problem and had gotten worse.
    So we have directed the Postal Service to do a 
comprehensive analysis of what we identified as potential pinch 
points throughout the whole process and look at what are some 
of the solutions there. Again, we are the regulator, not the 
operator. Our responsibility is to provide some sunshine and 
spotlight that did not exist before and exists today. And the 
Postal Service did come back to us just a few months ago with 
that report. We have had some follow-up with them, and we are 
making some decisions among the Commission as to what the next 
steps will be.
    So the bottom line is the information from your case work 
operation is not an anomaly. Service performance is not where 
it should be for the U.S. Postal Service.
    Senator Carper. All right. Thank you.
    Maybe a question for Mr. Acton. In a conversation we had 
just this week, you talked a little bit about some of the 
different aspects of the postal reform legislation that we have 
worked on in this Committee and that is being worked on in the 
House of Representatives. And one of the challenges the Postal 
Service has, as almost every employer in the country that 
offers health care for their pensioners has, there is a 
liability associated with it. Most private sector companies 
frankly do not acknowledge that. I guess a lot of States do not 
acknowledge that liability for their pensioners either. The 
Postal Service has a lot of pensioners, and there is a 
liability, and it has to be acknowledged. The question is how 
to pay for that, over what period of time, and to what extent 
should it be addressed. There is a similarity in the House 
legislation and the Senate legislation on that point.
    One of the other areas where there is some similarity, but 
not total, is with respect to innovation and looking--I 
mentioned the challenge. We have a lot of challenges at the 
Postal Service. We also have opportunities. I like to say in 
adversity lies opportunity. That is actually Albert Einstein, 
not me.
    But with respect to innovation, in our Senate legislation 
we created a Chief Innovation Officer within the Postal 
Service, where we created sort of like a commission or a board 
of really smart people from the private sector who are very 
creative and thoughtful and can think of new ways for the 
Postal Service to generate income by providing services that 
are needed. And the question I would ask you, and I will start 
with Mr. Acton and then Mr. Taub: To what extent should we be 
thinking about, after having created a Chief Information 
Officer, creating a board or commission of people who advise 
the Postal Service, should we then tie the hands of the Postal 
Service and say, well, you cannot really be very innovative 
except maybe with respect to State and local governments? Any 
thoughts on that, please?
    Let me just say that some people want to see the Postal 
Service, like they have in other countries, to be a bank. OK? I 
am not interested in seeing the Postal Service be a bank. Some 
people are interested in seeing the Postal Service be an 
insurance company. I am not interested in seeing them be an 
insurance company. But I would like to not tie their hands in 
terms of being innovative and creative and using their brand 
and using what is unique about them, this legacy, 200-year-old 
delivery network that goes to every post office box in the 
country, five or six times a week. What do you think in terms 
of innovation and the flexibility of the Postal Service to use 
it to innovate?
    Mr. Acton. Thank you, Senator Carper. The Commission has 
been a ripe playing field for the Postal Service to come to 
with innovative thought. In instances where the Postal Service 
is proposing certain market tests for new revenue streams, the 
Commission in every instance has approved the market test. And, 
in fact, in our last report, which we call the ``701 report,'' 
which is a mandate from Congress in the law for the Commission 
to come forth with some proposed changes in the legislation 
that might improve things, we talk in there about raising the 
thresholds of revenue involvement for market tests and 
extending the trial period.
    So I think that the Commission has demonstrated over a long 
period of time that we are very open to innovative thought. I 
do think, though, that if you are going to provide the Postal 
Service with that avenue to enhance the revenue situation, that 
you do have some regulatory involvement because it is important 
to remember, as I know you know, the Postal Service is a two-
headed beast. It is operating in a market-dominant environment, 
and it is also competing in a competitive market environment.
    So when you talk about innovation, it is important that a 
regulator be involved--not an activist regulator, but a 
regulator who is there to ensure there is not an improper 
cross-subsidization between those two market arenas that 
compromises or distorts the competitive playing field.
    Senator Carper. All right. Thank you.
    Mr. Taub, I have just a few seconds. Anything you want to 
add or take away, please, quickly?
    Mr. Taub. I would concur with what Commissioner Acton said. 
Just a couple points I would amplify on.
    First of all, as you know, the 2006 law drew a very hard 
line as to the Postal Service is not allowed to get into non-
postal products and services under current law. So the law 
would have to change if the aperture would grow.
    Knowing that, I do believe the Postmaster General and her 
team right now understand that their focus is innovating the 
core of the postal products. To the extent that aperture 
opened, I would just offer an observation. This has been a long 
concern of mine, which is trying to get to first principles. 
Why else do we have a government administration providing 
postal service? It is to provide universal service. But in the 
United States, we have never defined exactly what that means. 
And as we look to the Postal Service to get into other areas, 
it seems to me we need to have a conservation about what is it 
that we need and want this government administration to do to 
meet that universal service obligation (USO) and what is its 
cost. And then we could better sense what things could be added 
or subtracted from that equation.
    Senator Carper. All right. Good. Thank you so much. Thank 
you both.
    Senator Lankford. Senator Heitkamp.

             OPENING STATEMENT OF SENATOR HEITKAMP

    Senator Heitkamp. Thank you, Mr. Chairman, and thank you, 
Senator Carper, for opening up exactly the topic of 
conversation that we are having consistently on this Committee, 
which really is kind of putting the cart before the horse. As 
you said, Chairman Taub, we do not talk about service; we just 
talk about how we are going to run the post office without 
defining what we expect that service to look like and what our 
expectations are.
    Spending the first couple years on this Committee with the 
previous Postmaster General, I was reminded of a statement that 
I give often, which is you cannot fix a problem you will not 
admit you have. We have a problem with service, and that 
problem is very acute in rural areas. With the closing of 
service centers, the narrowing of the focus, to suggest that we 
are getting the same level of postal service that we did 20 
years ago is incorrect. Our service is getting worse. When I 
sent out a ``Fix My Mail,'' opening up a portal on my Web page, 
600 North Dakotans responded. Now, you think about it, we are 
small State. You get 600 people to volunteer concerns, that 
tells us that we have a very real concern.
    Senator McCaskill and I recently asked for a GAO report 
taking a look at utilization and service in rural communities. 
In spite of broadband, there is this idea that broadband 
eliminates the necessity for attention to universal service. I 
will tell you, the GAO report argues the other way, that rural 
communities are even more dependent on the Postal Service than 
other parts of the country. And so we are going to be 
myopically focused in my office, and I think for a number of 
members here, on what is happening with universal service in 
rural communities.
    And so I think that the Commission plays a very important 
role in guaranteeing improvement in service and guaranteeing 
universal service. And so I just want a commitment from both of 
you that simply making the ends meet financially, balancing all 
of this, will not be the sole priority if as a result of that 
you do not have a post office that delivers any service. So I 
would like comments on that, but also a commitment that you are 
going to be focused on universal service and what that means, 
especially as it relates to rural communities.
    Mr. Taub. Senator, you have my personal commitment. I am 
heart attack serious about delivery performance for the Postal 
Service and seeing that improve. I was born and raised in 
northern New York State. I served for a decade as then-
Congressman John McHugh's Chief of staff. His congressional 
district was over 14,000 square miles, one of the largest east 
of the Mississippi. Some of the communities may not have had 
much, but what they did have was a post office. So I personally 
well understand the importance in these rural areas.
    The Postal Service has to do better, and we are on top of 
that. Your legislation I think acknowledges that current law 
only goes so far with our tools in our toolkit, and the 
Commission would have some additional tools under what you have 
proposed to take that a bit further.
    But I fully agree, as I said, universal service is--why 
else do we have a government institution providing a service 
that is in a competitive marketplace every day, but to provide 
this type of level of service to all communities? The law 
already says there has to be effective service to areas of the 
country that may not otherwise be financially viable. And so 
the bottom line is I am with you 110 percent on that.
    Senator Heitkamp. Thank you, Chairman. Mr. Acton.
    Mr. Acton. Thank you, Senator. I just would like to, first 
of all, offer my assurances that I understand there is a 
problem. Do I understand all the particulars of why there is a 
problem? No. Do I think that the Postal Service is taking 
ownership of the fact that they have a problem? I do think that 
they are doing that. We have been meeting with them on a 
monthly basis in our consultations. They show us the trends 
about what they think went wrong operationally and otherwise 
back in the States. And they seem to be implementing some 
operational adjustments and working closer with the mailers in 
a fashion that is making some trend toward improvement. I hope 
that that trend continues. They have a long way to go, 
particularly in rural and remote portions of the Nation.
    There are four of us on the Commission. There is a guy from 
Kentucky. There is a fellow from upstate New York, which is 
largely rural. We have a fellow from rural Missouri. And we 
have someone from Hawaii, which is pretty remote in America. So 
remote and rural American concerns are always at the forefront 
of a lot of the postal policymaking that goes on at the 
Commission, and I think that you can examine our record and see 
that we often point to the disparate effect of certain 
operational changes that may result, particularly where the 
Postal Service is most important, which is in rural and remote 
America.
    Then the thing I would close with is your point about 
making finances better does not necessarily result in the sort 
of improvements we need, and I agree with that. But I also feel 
that there is a nexus between what is happening with the 
degradation of the Postal Service's performance particularly in 
rural and remote America and their fiscal status in terms of 
their health on the bottom line. And I think if you can get 
some meaningful, targeted reform through that offers them some 
improvements, that does not force the sort of cost efficiencies 
that they are driving that is compromising these performances, 
there could be some additional improvement.
    Senator Heitkamp. I think it is critical that we look for 
efficiencies, but I am always reminded of the story, if you are 
in retail business and you decide to cut your inventory and 
your cost of goods sold, you will not be in business very long.
    Mr. Acton. Yes, agreed.
    Senator Heitkamp. And that is my point. My point is if you 
cut service to the point where you are not delivering anything, 
that will just continue this spiral. And so you have to be 
ready to deliver the service that you are making a commitment 
to deliver. And if you cannot meet those, you are going to lose 
business, and it is going to be, I think, even more difficult 
for the Postal Service to catch up.
    So just know we are going to be myopically focused on this 
service issue. We think it is critical. And we need a partner 
on the Commission, partners on the Commission in doing that.
    Thank you, Mr. Chairman.
    Senator Lankford. Senator Tester.

              OPENING STATEMENT OF SENATOR TESTER

    Senator Tester. Thank you, Mr. Chairman and Ranking Member, 
for having this hearing. Thank you both for your willingness to 
serve.
    I guess we will start out with one of the things you said, 
Mr. Taub, that the balance sheet needs to be fixed, and I could 
not agree more. Have you looked at any of the proposals that 
have been put forth over the last 6 years to see if you have a 
favorite?
    Mr. Taub. Senator, I do not have a favorite. What I have a 
favorite for is having something done to fix the balance sheet. 
I think all of them are moving in that same direction.
    Senator Tester. And I could not agree more with Mr. Acton 
when--I mean, I think finances do have an impact on everything 
we do. And so hopefully in this new Congress--I do not know 
that you are still going to be in this position, Senator 
Carper, but if you are, or whoever is Ranking Member of this 
Committee with the Chairman, make this a priority to get it 
done, because it is just really important, as Senator Heitkamp 
has pointed out, for rural America.
    Have you had the opportunity to go back and look at the 
Network Rationalization Plan--this is for either one of you--
that was supposed to save a whole bunch of money, hundreds of 
millions of dollars, and it ended up costing millions of 
dollars, to determine what went wrong? Because, quite frankly, 
there were Members on this Committee that were arguing very 
vociferously not to close down all those processing centers. In 
Montana, I think we went from seven to three. You have trucks 
going over passes in wintertime. I mean, it was obvious what 
was going to happen, and what happened, happened. Your 
transportation costs went through the roof, and that is with 
$2.35 gas.
    So have you guys taken a look to see why it went south and 
we did not save the kind of money that was being predicted?
    Mr. Taub. Senator, we have not. We did under the law, 
because the separation of regulator and operator, when it came 
to the change itself, the Postal Service had to seek what was 
called an ``advisory opinion'' from us in 2012, and we outlined 
some very deep concerns to the Postal Service about how they 
are proceeding and some caution. But under the law, they can 
proceed forth once they had that advisory opinion, which they 
did.
    I do know their Office of Inspector General (OIG), which 
does have that focus on fraud, waste, and abuse, has done some 
studies to look at the network rationalization and has 
identified that the cost savings that they were expecting have 
not borne fruit to the level they thought.
    Senator Tester. So who puts forth the recommendations on 
how to fix it? I mean, one of the reasons it takes a week to 
mail a letter and get it across the State in Montana is we do 
not have those processing centers. I can give you plenty of 
examples where a letter that would go down a block or two would 
have to travel 300 miles or better. So who puts forth the 
proposals on how to fix it?
    Mr. Taub. The U.S. Postal Service does.
    Senator Tester. And you either bless it or you do not?
    Mr. Taub. They actually do not need our approval on that, 
but that is where Senator Heitkamp's legislation that you have 
been a cosponsor on would give us some tools to take that 
further under current----
    Senator Tester. OK. So let us talk about what your 
authority is. Is it strictly pricing?
    Mr. Taub. No. We do, as I was mentioning, oversee and 
report on service where, before the 2006 law, we were not 
providing that transparency.
    Senator Tester. OK.
    Mr. Taub. So we have been able to say----
    Senator Tester. But when it comes right down to it, if the 
Postal Service wants to do it, you cannot stop them.
    Mr. Taub. That is correct.
    Senator Tester. So what is your club?
    Mr. Taub. The club, when it comes to service, is our 
providing that report that did not exist in 2006, which is 
clear transparency on what is going on. So rather than, say, 
before 2006, where the Postal Service said, ``Yes, you may be 
hearing some problems from your constituents, but trust us, it 
is OK,'' we now have the data, fully transparent, reliable, and 
accurate, that shows performance is not being met. We have 
taken them to task on that. We have asked for reports on how to 
improve it. We are getting those reports. But in terms of our 
ability to, if you will, force those changes, that is not fully 
in our toolkit right now when it comes to the service. But 
compared to where we were before the 2006 law, there is more 
transparency.
    Senator Tester. So help me through this. I do not have my 
staffer whispering in my ear, so I will just ask you. If they 
want to close down a processing center, who makes that call?
    Mr. Taub. The Postal Service's Board of Governors.
    Senator Tester. The Board of Governors. And that is it, 
once they make it?
    Mr. Taub. Again, the theory in the 2006 law was maintaining 
this regulator versus operational separation. So there was a 
view that when it came to processing plants, that is an 
operational decision for the U.S. Postal Service and the 
Governors who exercise the powers of the Postal Service.
    Senator Tester. OK. So on your Commission, on the PRC, is 
there a view that the Postal Service has outlived--you did not 
say it in your opening statement, but is there a view by some 
members on the PRC that the Postal Service has outlived its 
usefulness?
    Mr. Taub. Senator, I can speak for myself on this, that no 
way in heck have they----
    Senator Tester. But how about the rest? And either one of 
you, just your sentiments. This is not about you guys. It is 
about the Board in general. I know there are only four and 
there needs to be five. But just tell me, is it--because I have 
gotten the sentiment by some in the Postal Service, I have 
gotten the sentiment by some in the Senate, by some on this 
Committee, that they would like to see it go away and let UPS 
and FedEx handle it.
    Mr. Acton. I would just say, Senator, that with the proper 
sort of targeted reform that this chamber and the House are 
considering, I think there is a bright future for the Postal 
Service.
    Senator Tester. I could not agree more.
    Mr. Acton. The aspects of the present situation that 
concern me most in terms of what you are talking about as an 
alternative go to these issues with respect to rural or remote 
America, because if you move, I think, to try to reduce the 
Postal Service's footprint in certain parts of America by, say, 
privatizing certain aspects of it, it is going to compromise 
the integrity and the livelihood of the entire infrastructure 
in a fashion that could have consequences which we do not 
anticipate well or plan for properly at this point.
    But, with just a few changes--for instance, this 
reamortization of the unfunded liabilities, that is the one 
position that the Commission has come forth in response to a 
congressional request to offer expert testimony that says that 
those changes should be made in a responsible fashion. The 
intent of covering those unfunded liabilities through the 
percentages that they initially enacted was a very responsible 
public policy approach, but it had some unintended consequences 
that basically have brought the Postal Service to the brink of 
bankruptcy.
    Senator Tester. Right.
    Mr. Acton. So the Commission is on the record with its 
viewpoint that some nature of reamortization needs to be done, 
and that alone could go miles toward establishing the Postal 
Service's fiscal health.
    Senator Tester. Make no mistake about it. As we point 
fingers at one another, Congress gets most of the fingers 
pointed at them, and rightfully so. We have not acted, and we 
should have acted many Congresses ago. And so thank you, folks, 
for your testimony and thanks for your willingness to serve.
    Thank you, Mr. Chairman.
    Senator Lankford. Thank you. Senator Peters.

              OPENING STATEMENT OF SENATOR PETERS

    Senator Peters. Thank you, Mr. Chairman. And, again, I 
would reiterate what my colleagues have said. We appreciate 
your service and willingness to serve. This is a very difficult 
position that you will be conducting, but we stand behind you, 
and we have to figure out ways to make this work.
    My colleagues raised a number of issues that I had when I 
came here, so you have answered some of those. But I would pick 
up a little bit on what Senator Tester asked related to 
processing centers and take it down to local post offices. The 
State of Michigan, which I represent, has a very large rural 
population in addition to the urban areas, and folks have been 
concerned about individual post office closures and the 
negative result that that has brought about to their community. 
My understanding is that you are involved in oversight of the 
appeals process where communities can appeal. Could you tell me 
a little bit about that appeals process and how you see that 
functioning? And are there things that we need to be aware of 
to potentially improve the opportunity for folks to have a 
stronger impact in that appeals process?
    Mr. Taub. Senator, we have a process that dates from the 
1970s and the law in which any community or a patron of a post 
office, if it is being closed, can appeal to the Commission for 
a review as to whether the Postal Service followed the 
procedures that are outlined in statute. And if not, the 
Commission either can remand that decision back to the Postal 
Service for further action or affirm it.
    However, when it comes to processing facilities, as we were 
discussing with Senator Tester, those are not part of the 
process that the Commission is involved in and are wholly 
within the purview of the U.S. Postal Service itself. But I do 
believe the community aspect of citizen participation that 
allows people to come to the Commission is an important feature 
that should be maintained.
    I would note that the Commission updated and modernized its 
rules on post office closures in 2011 and 2012, and we recently 
held a proceeding looking at some precedent in this area. So we 
are trying to stay fresh and involved in that. But when it 
comes to the processing plants, that is just in the purview of 
the U.S. Postal Service itself.
    Senator Peters. Right, I realize that. But I am talking 
about individual post offices, which you have addressed, which 
have an impact on the community. At least some of the feedback 
that I have received from these local communities is that the 
decisionmakers look at the issue related to the health of the 
Postal Service as opposed to the impact on the local economy, 
and that the local economy should be factored in more in some 
of that appeals process. Is that accurate? Is that a concern or 
not? If you could comment on that, I would appreciate it.
    Mr. Acton. Thank you for the question, Senator. My personal 
view on the post office appeals process, as it is called, is 
that the name alone is a bit misleading. It implies that the 
Commission is empowered with the responsibility to decide 
whether or not the Postal Service has made the proper decision 
about closing or relocating a given post office, when indeed 
what it is is the Commission is tasked by law to review the 
administrative record that the Postal Service assembles in 
managing these decisions.
    So when the Postal Service comes to us in answer to an 
appeal for a given post office, they have to demonstrate to the 
Commission that they followed the proper rules and regulations 
that are outlined for building the record that is needed to 
make the decision that Postal Service management has made. And 
often those decisions are related to portions of the Postal 
Service network where it is not clear what the Commission's 
authority is. And in our recent 701 report, we put forth some 
recommendations, since you are contemplating postal reform, 
where you might want to improve that clarity about where the 
line is drawn between what the Postal Service does with respect 
to post office closings and suspensions and what the Commission 
is responsible to do. And I think that would be helpful moving 
forward.
    Senator Peters. And some clarification as to criteria 
beyond just following certain processes?
    Mr. Acton. People talk about applying criteria for the 
universal service obligation and for closing post offices, and 
I think that, broadly speaking, that is wise, and we have done 
that in the past in our Universal Service Obligation study 
where we talk about the various elements and aspects of the 
USO. But I also know now through my experience in having done 
dozens of these post office closing appeals and reviews that 
they are fact set specific; that what constitutes troublesome 5 
miles in Idaho can be much different than 5 miles in a more 
urban area.
    So lots of times, those considerations have to be taken up 
on an instance-by-instance basis, which is what the Commission 
does. I think if you start trying to apply general metrics 
about, do not close a post office within a certain radius of a 
number of miles, then you begin to generalize a process which 
in many instances is very specific to the community at hand.
    Senator Peters. All right. Very helpful. Thank you. I 
appreciate it.
    Senator Lankford. Thank you.
    Mr. Acton, let me continue to press on through just 
cooperation and some of the things that you are doing, and 
interaction. Tell me about just the relationship between PRC 
right now and the Office of Inspector General for USPS, 
distinctly different responsibilities but I would hope there is 
some coordination there as well in the oversight and 
transparency.
    Mr. Acton. We coordinate with them in the sense that we 
often have shared examinations of similar issues of concern. 
Sometimes Congress is interested in knowing the Postal 
Regulatory Commission's position with respect to a certain 
issue or concern, and sometimes they want it from the OIG, and 
sometimes they ask for it from both. So we do not interact with 
the OIG's office as regularly, as robustly as we do with the 
Postmaster General and her executive leadership team, whom we 
meet with monthly. But we are informed on what the OIG is up 
to, and the Acting Chairman and his staff are very active in 
keeping the Commission in close concert with all of the 
important postal players, including the Inspector General's 
office.
    Senator Lankford. OK. Your group, the PRC, has subpoena 
power to be able to get information from USPS if needed. Are 
there other tools that you need to be able to do your job?
    Mr. Acton. Well, I will tell you that it is my fervent 
belief that the Postal Service management is working hard to 
make things better, and they are stressed with the fiscal 
situation which pervades every aspect of their operation. So 
when the regulator talks about needing to develop these 
methodologies or pursue these systems or come up with this 
data, the thing that is always in the back of my mind, and I 
think the Commission's mind, when we pursue those sorts of 
avenues is that that costs money. And the Postal Service does 
not have a lot of money. In fact, as you know, they are 
billions in debt.
    So we do what we can to try to stress where we think pinch 
points may lie and where they may focus resources and introduce 
some metrics that will improve the situation in terms of how 
the community learns about these problems and what the Postal 
Service is doing to address them.
    But there are limited arrows in our quiver with respect to 
what we can do to drive that type of action, and subpoena power 
is certainly one of them. Another one is fining them for 
certain offenses, like not meeting service terms. But for me, 
if you fine the Postal Service for a given offense, that is the 
mailers' money, that is the ratepayers' money; and they will 
end up having to pay that bill, which for me does not seem 
equitable.
    Senator Lankford. All right. Mr. Taub, the recommendations 
came out today, the 701 recommendations and such. Any high 
points that you want to be able to walk us through on that?
    Mr. Taub. Probably high points 1, 2, 3, 4, 5 and on is 
fixing the financial balance sheet. That really is our 
overarching message to the Congress. We offer a variety of 
possible options on how to do that. The Postal Service and 
comments that are attached to the report go beyond and offer 
some additional ones. The bottom-line message is anything and 
all of the above that can be done in a fiscally responsible way 
can go a long way to giving the Postal Service that breathing 
room. Right now they have almost no working capital, very 
little liquidity. That is unsustainable for a $70 billion 
operation itself.
    Senator Lankford. Let us talk a little bit about 
international packages coming in and the two issues that come 
up over and over again, and that is, prohibited items coming 
into the United States through USPS or paying customs fees and 
being able to pick those up once they are coming in. What is 
the progress on those? And where do things stand right now? 
Just picking up customs fees and then picking up prohibited 
items.
    Mr. Taub. I would say, although the Commission has a very 
important role when it comes to international mail issues, it 
is over their rates and service offerings. We have to opine on 
any proposals to the Department of State before they conclude 
those treaties. Largely, this is within an area of the 
Department of Homeland Security (DHS) and Customs and Border 
Protection, but they are interrelated.
    Senator Lankford. Any interrelation is obviously the cost 
of how it is coming in and why, and what drives that cost and 
such to be able to pick that up internationally.
    Mr. Taub. That is right, and there is, unfortunately, 
distortions in the international system right now that create 
incentives for foreign posts and foreign mailers to use the 
postal systems, both for the lower cost that they are paying as 
well as avoiding the customs fees.
    The 2006 law had a directive that there should have been a 
strive for equalization of customs treatment, and that was on 
the Department of Homeland Security. Suffice it to say that has 
not been achieved, and I know there is some pending legislation 
both in the Senate and the House, and I think that would take 
it the full step to ameliorate the problem.
    Senator Lankford. Any comments on that?
    Mr. Acton. Thank you, Senator. I would mention, this rate 
review that we are talking about, this 10-year rate study, 
calls for the Commission to look at these nine featured 
elements of the law and decide whether or not they are being 
properly balanced under the present ratemaking system. One of 
those objectives includes security of the mail. So there is a 
hook to hang our hat on here going forward in terms of 
examining this if we think it is appropriate, and that may be 
part of what the Commission does.
    I would just follow up for a moment about Acting Chairman 
Taub's reference to some of the rate-setting activities with 
respect to global shipping. We do provide the Department of 
State with insights about whether or not their proposals that 
they are presenting at the Universal Postal Union (UPU) are in 
keeping with the criteria of American law. It is usually a sort 
of pro forma process. We do it on a 4-year basis. But the last 
examination was different in a lot of regards, and there are 
some fundamental problems with what is happening there in terms 
of how those rates are set and what it means for the American 
consumer.
    For me--and I said this in my remarks--the notion that an 
American consumer can go on Amazon today and have the same item 
delivered for less from Beijing, China, than you can from 
Dallas, Texas, to me strikes to the core of what is wrong with 
an international rate-setting body where, in an organization 
like ours that delivers 40 percent of the world's mail, gets 
only one vote. And so those outcomes are not equitable for the 
American consumer who is interested in getting fair shipping 
rates.
    Senator Lankford. Thank you.
    Senator Carper, any questions?
    Senator Carper. I have two quick ones, if I could, Mr. 
Chairman.
    I am going to direct this first question, if I could, to 
Chairman Taub and then ask Commissioner Acton to respond as 
well. In both of your written testimonies--earlier this year, 
one I think before this Committee in January, I believe it was 
January 21, and the other I think might have been before the 
House Oversight and Government Reform Committee on, I want to 
say, May 11. But you remain optimistic--and we have heard this 
here today--about the future of the Postal Service and stated, 
and I think this is a quote--``There is still strength in the 
system.'' Could you just expand a little bit on that thought, 
if you will, Mr. Chairman? And then I am going to ask 
Commissioner Acton to do so as well.
    Mr. Taub. Definitely, Senator. Thank you. Yes, I am very 
optimistic about the future of the United States Postal 
Service. Despite all the challenges that face us, it is still 
that key center of gravity (COG) of a delivery system in the 
United States that American businesses and households depend 
upon. As you indicated in your statement, by some estimates it 
is the center and a linchpin of a $1.4 trillion sector of our 
economy with 7.5 million jobs. So despite the problems the 
Postal Service faces, that is enormous strength that the 
Congress, the President, and all policymakers can build upon. 
So despite the loss of First-Class Mail and the reduced 
revenues there, I think the Postal Service is going through 
that process of, as some have called it, ``a new normal.'' But 
the idea that it is time to shut out the lights and we no 
longer need a postal administration--if it did not exist, we 
would have to think of it.
    Senator Carper. Thank you.
    Mr. Acton. I think you know, Senator, that public opinion 
polls consistently rate the United States Postal Service as the 
most trusted government agency in the land, and that does not 
happen by happenstance. It happens because, despite people's 
concerns about waiting time at the post office or what-not, 
they almost invariably have a great appreciation for this 
Federal Ambassador who visits their household, reaches out and 
touches their homes 6 days out of 7, and sometimes 7 out of 7.
    So I do not foresee the demise of the Postal Service by any 
means within the short term. I think that we have at hand a 
toolbox of reform that can make an important difference to put 
the Postal Service back in the black for years and years to 
come.
    Senator Carper. I like that, ``Back in the black.'' Maybe 
that could be our slogan here.
    A last question. I would direct this to you, Commissioner 
Acton, and, Chairman Taub, if you would like to take it on too, 
just briefly. Mr. Commissioner, what do you think might be the 
biggest challenge out of several challenges that plague the 
U.S. Postal Service in your eyes? And what is your role as a 
Commissioner in helping the Postal Service evolve in its third 
century and to remain relevant for years to come?
    Mr. Acton. We have been harping today on the problems with 
the Postal Service's business model, and I would say that that, 
of course, is the most challenging aspect of what the Postal 
Service is facing because it compromises every element of their 
operation, because once you start hemorrhaging losses at that 
scale, it pervades the entire enterprise.
    So I think the Commission's role here is still what the 
Commission's role was when it was created in the 1970s as the 
Postal Rate Commission. The Congress wanted out of postal rate 
setting. They wanted an expert body who could provide legal and 
technical assistance to give you the sort of information and 
insight that you are asking for here today so that you can make 
informed judgments which you have reserved for yourself, and 
rightly so, about what will best work to bring the Postal 
Service back to viability.
    So, for me, the Commission's real role here is to do what 
we are trying to do, which is focus the resources you afford us 
in a fashion that informs your view so that good decisions can 
be made.
    Senator Carper. Thank you. Mr. Chairman.
    Mr. Taub. Senator, I would echo Commissioner Acton's points 
on that. First and foremost, the financials need to be fixed. 
And, second, I am a big proponent of strategic planning, in the 
small percentage of time where you can be proactive as opposed 
to reactive. We just concluded just a few months ago a 
strategic planning process, issued a new strategic 5-year plan 
for the Commission where we identified our strengths, our 
challenges going forward, involved the whole agency from top to 
bottom. And first and foremost was a reaffirmation of our basic 
mission, which is twofold: transparency and accountability to 
the U.S. Postal Service, and ensuring a vital and efficient 
universal mail system for the United States. That is part and 
parcel of what we see our role in doing. Our challenge, quite 
frankly, is ensuring we have the staff and resources to do what 
needs to be done. We are a very small agency, a micro agency. 
We are about 75 folks. That includes the five Commissioners and 
their staff. We have our own Office of Inspector General, which 
is another three folks--once you peel back the administrative 
folks, it is really about 40 staff working really hard day in 
and day out ensuring that transparency and accountability. Our 
appropriation has been generally flat-lined, and to deal with 
that in previous years, the Postal Regulatory Commission was 
deferring hiring and deferring investments in information 
technology (IT) that are no longer sustainable. With the 
Congress' help, this past appropriations cycle we have been 
starting to turn the curve on that.
    But those are some of the internal challenges that we have, 
and certainly the external one for the Postal Service is the 
financials.
    Senator Carper. Good. Thanks. Just a concluding thought, if 
I could, Mr. Chairman.
    First of all, our thanks to both of you for your service to 
date and for your willingness to continue to serve. I think 
there is great opportunity that lies ahead, and I think you may 
in these positions, if you are reconfirmed, be in a position to 
help us seize the day, and that would be wonderful. I am 
encouraged that it can and will happen.
    I serve on another Committee called Environment and Public 
Works, and a couple of years ago, Mr. Chairman, maybe 6 years 
or so ago, George W. Bush was the President and he offered 
legislation called ``Clear Skies.'' It dealt with emissions of 
sulfur dioxide, nitrogen dioxide, mercury, and CO2 for the 
regulated community, utilities, and I offered legislation--we 
called it ``Really Clear Skies.'' And we brought in a bunch of 
utility Chief Executive Officers (CEOs) to come in and testify 
before us on--not to testify but actually meet with us in 
private on the President's proposal and our proposal, 
bipartisan proposal in the Senate. And I will never forget this 
one curmudgeonly old CEO from a utility, a southern utility. 
And he came in and he said to us about both the proposals, the 
President's proposal and our proposal, he said, ``Here is what 
you should do, Senator. Here is what you and your colleagues 
should do. Tell us what the rules are going to be. Give us some 
flexibility, give us a reasonable amount of time, and get out 
of the way.'' And what he was really saying is that they wanted 
some certainty and predictability, they wanted some 
flexibility, and a reasonable timeframe. And I think we have an 
obligation to those who are served by the Postal Service to 
better ensure they get the kind of service that they want and 
deserve and that we want them to have.
    But a good place to start, before we even pass our 
legislation--and I hope we will pass legislation. I hope we 
will actually continue the very hard work that is being done, 
Democrat and Republican, House and Senate, to narrow our 
differences and to try to do our job this year before we go 
home for the holidays. But a good place to start is with 
confirming these nominations. Excellent nominations. Both I 
think are Republican, if I am not mistaken. But we are lucky to 
have you in these jobs.
    The second would be we have--the President has nominated 
six people to serve as the Board of Governors. I just said to 
the Chairman that the one remaining non-postal person on the 
Board of Governors, they just had his retirement party 
yesterday, and so we are down to zero folks on the Board of 
Governors who are not part of the Postal Service. That is just 
not acceptable.
    And so we have excellent nominees to report out of 
Committee. We need to get that done. And I think there is a 
clear path to actually--not an easy path but a clear path to 
having bipartisan legislation to actually address a lot of the 
concerns that need to be done, the work for us to be enablers 
for the Postal Service, and for you to be able to do your work. 
And I am going to fight like hell to see that we realize that 
potential this year--this year, not some year down the road but 
this year--to get it done while we can, do our job.
    Thanks so much.
    Senator Lankford. Thank you, Senator Carper.
    Just one comment to my friend. As you were recalling it, 4, 
5, maybe 6 years ago when President Bush was President, I think 
it is more than six.
    Senator Carper. Probably. [Laughter.]
    It only seems like two or three.
    Senator Lankford. It always does. Time is flying when you 
are having fun with it.
    Gentlemen, you have served the men and women of the USPS, 
and we are very grateful for that. They are some very fine 
folks, including some of my own family members, that serve, 
that are out, as you all know well, in rain, snow, sunshine, 
whatever it may be. There are people that most of our neighbors 
will never, ever meet that are literally being served by folks 
every single day that work for the United States Postal 
Service. And so I want to say to you thank you for your service 
to them as they serve the entire Nation and as you all serve 
the Nation as well. This is a difficult, complicated task, and 
what we have asked you to do is difficult, because none of 
these decisions are easy. Twenty years ago, this was a simpler 
job. It is no longer simple, and this is a complicated process 
that we all have very hard decisions to make in the days ahead, 
and we appreciate your insight with that.
    Mr. Taub and Mr. Acton have filed responses and 
biographical and financial questionnaires, answered prehearing 
questions submitted by the Committee, and have had financial 
statements reviewed by the Office of Government Ethics. Without 
objection, this information will be made part of the hearing 
record\1\ with the exception of the financial data, which is on 
file and available for public inspection in the Committee 
offices.\2\
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    \1\ The information of Mr. Taub appears in the Appendix on page 30.
    \2\ The information of Mr. Acton appears in the Appendix on page 
76.
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    The hearing record will remain open until 12 p.m. tomorrow, 
November 16, 2016, for the submission of statements and 
questions for the record.
    To both of you, thank you, and to your families, thank you 
for your endurance through this long confirmation process, and 
we look forward to passing it on to the full body in the days 
ahead.
    With that, this hearing is adjourned.
    [Whereupon, at 3:34 p.m., the Committee was adjourned.]

                            A P P E N D I X

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