U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

85–502 PDF 2014

S. Hrg. 113–429 

NOMINATIONS OF HON. TONY HAMMOND AND 

HON. NANCI E. LANGLEY 

HEARING 

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

NOMINATIONS OF HON. TONY HAMMOND AND HON. NANCI E. LANGLEY 

TO BE COMMISSIONERS, POSTAL REGULATORY COMMISSION 

OCTOBER 2, 2013 

Available via the World Wide Web: http://www.fdsys.gov/ 

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

THOMAS R. CARPER, Delaware Chairman 

CARL LEVIN, Michigan 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

JEFF CHIESA, New Jersey 

RICHARD J. KESSLER, Staff Director 

JOHN P. KILVINGTON, Deputy Staff Director 

KATHERINE C. SYBENGA, Senior Counsel 

DEIRDRE G. ARMSTRONG, Professional Staff Member 

KEITH B. ASHDOWN, Minority Staff Director 

CHRISTOPHER J. BARKLEY, Minority Deputy Staff Director 

ANDREW C. DOCKHAM, Minority Chief Counsel 

CATHARINE A. BAILEY, Minority Director of Governmental Affairs 

JOSEPH D. MOELLER, Minority U.S. Postal Service, Office of the Inspector General Detailee 

LAURA W. KILBRIDE, Chief Clerk 

LAUREN M. CORCORAN, Hearing Clerk 
(III) 

C O N T E N T S 

Opening statements: Page 

Senator Carper ................................................................................................. 1 

Senator Coburn ................................................................................................. 2 

Senator Ayotte .................................................................................................. 5 

Prepared statements: 

Senator Carper ................................................................................................. 15 

WITNESSES 

WEDNESDAY, OCTOBER 2, 2013 

Hon. Nanci E. Langley, to be Commissioner, Postal Regulatory Commission 

Testimony .......................................................................................................... 3 

Prepared statement .......................................................................................... 62 

Biographical and financial information .......................................................... 64 

Letter from the Office of Government Ethics ................................................. 84 

Responses to pre-hearing questions ................................................................ 87 

Responses to post-hearing questions .............................................................. 109 

Hon. Roy Blunt, a United States Senator from the State of Missouri ................ 7 

Hon. Tony Hammond, to be Commissioner, Postal Regulatory Commission 

Testimony .......................................................................................................... 7 

Prepared statement .......................................................................................... 17 

Biographical and financial information .......................................................... 19 

Letter from the Office of Government Ethics ................................................. 37 

Responses to pre-hearing questions ................................................................ 39 

Responses to post-hearing questions .............................................................. 59 

Statement for the record from Senator Schatz ..................................................... 112 

(1) 

NOMINATIONS OF HON. TONY HAMMOND AND 

HON. NANCI E. LANGLEY 

WEDNESDAY, OCTOBER 2, 2013 

U.S. SENATE, COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 11:18 a.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Thomas Carper, 

Chairman of the Committee, presiding. 

Present: Senators Carper, Coburn, and Ayotte. 

OPENING STATEMENT OF CHAIRMAN CARPER 

Chairman CARPER. This is like the second half of the day-night 

doubleheader in baseball and I am glad that you all stuck around 

for the second game. We welcome our nominees here this morning. 

The Committee will come to order to consider the nominations of 

Tony Hammond and Nanci Langley to continue to be members of 

the Postal Regulatory Commission (PRC). 

As my colleagues and those following this hearing certainly 

know, these are very challenging times for the U.S. Postal Service 

(USPS). While so many other vital Federal services are shut down, 

the mail continues to be delivered. Absent the legislative action, 

however, the post office may face a similar fate unless Congress 

can get its act together, and frankly, I would just say, if the Administration gets involved. We need the Administration to be a participant in this in a significant way as well. 

The Postal Service has maxed out, as we know, its line of credit 

with Treasury and is rapidly running out of cash. Despite an improving economy and some positive signs from parts of its business, 

its immediate future is unfortunately still not bright. 

Absent legislative intervention, the Postal Service will likely limp 

along for a few more months, unable to invest for the future, with 

its employees and customers uncertain of what that future holds, 

and that is not good. 

It is up to those of us on this Committee and the rest of our colleagues in the Senate and the House and the Administration to do 

what we need to do to avoid a postal shutdown, a shutdown that 

would threaten the jobs of some 8 million people across the country 

whose jobs depend on the kind of private-public sector relationship 

that they enjoy with the Postal Service. 

Over the past 2 weeks, this Committee has debated some of the 

tough decisions that will need to be made in the coming months 

and years regarding the level of service the Postal Service should 
2 

offer the American people and the type of workforce we must develop to provide that service. We also discuss how it should price 

and market its product and how much it should pay to fund its employees health and pension obligations. 

Most importantly, we have heard about some innovative ways 

the Postal Service can make itself relevant to new generations of 

customers by taking creative advantage of its one-of-a-kind retail 

processing and delivery network. 

In the very near future, we will take what we learned from our 

hearings and go to work on crafting and refining a legislative response to the very real crisis we face on this issue; and in fact, we 

have already spent a fair amount of time crafting that legislative 

response; and while I think it is not a final product, I think it is 

a good effort. We will look forward to making it better. 

But today we gather to consider two very qualified nominees that 

the President has put forward to continue their service on the Postal Regulatory Commission. That commission has played a key role 

in recent years in partnering with the Postal Service to develop a 

rate system that has, since it was implemented, followed the postal 

reform legislation signed into law in 2006. 

That law gives the Postal Service significant new commercial 

flexibilities that have helped it to whether both the major recession 

and significant growth in electronic communication. 

It has also served as a venue where postal employees and customers can have their voices heard about the painful but often very 

necessary changes that postal management has been forced to consider. 

In the coming months and years, the work of the Postal Regulatory Commission will be no less important. 

So, I am pleased that Mr. Hammond and Ms. Langley are willing 

to continue their service. While I have not always agreed with 

every decision by the Commission, I am sure you have not always 

agreed with everything that we have done either. But the Congress, the Postal Service, and the public in general rely on it to efficiently and effectively perform its responsibilities and to be a 

source of key knowledge and expertise during both good times and 

bad. 

Dr. Coburn, you are recognized. 

OPENING STATEMENT OF SENATOR COBURN 

Senator COBURN. I have no opening statement, and I apologize 

for having to leave in about 5 minutes; I will submit my questions 

for the record. 

Chairman CARPER. OK. Would you want to ask any questions before you go? 

Senator COBURN. No. 

Chairman CARPER. With that, then what we are going to do is 

I am going to ask you to do something you have done before and 

that is to rise and to raise your right hand and we will administer 

the oath before you testify. 

Do you swear the testimony you will give before this Committee 

will be the truth, the whole truth, and nothing but the truth so 

help you, God? 

Mr. HAMMOND. I do. 
3 

1The prepared statement of Ms. Langley appears in the Appendix on page 62. 

Ms. LANGLEY. I do. 

Chairman CARPER. Please be seated. [Pause.] 

I think that Senator Blunt is going to try to get here to introduce 

you, Mr. Hammond; and when he arrives, we will recognize him. 

And maybe even if it interrupts the flow a little bit, we will interrupt and we will do that and ask him to make some comments 

about you. 

I am going to withhold my comments, my introductory comments, in anticipation of his arrival. If he is unable to come, I will 

revisit them. 

Nanci Langley was sworn in as a Commissioner in June 2008. 

During her tenure she has been elected to two separate terms as 

vice chair of the Commission. 

I note that the Chairman of the Commission is here. We welcome 

her. 

Commissioner Langley has over 30 years of public service experience, including 24 years as a senior adviser to two U.S. Senators 

from her home State of Hawaii, most recently Danny Akaka, be 

loved by all of his colleagues and now retired in Hawaii. 

Please give him our aloha. 

She has also served as Deputy Staff Director of the Senate Committee on Homeland Security Subcommittee on Government Management and Federal Workforce. 

Mr. Hammond, why do you not go ahead and proceed with your 

statement, well, I will tell you what. Just hold on to your statement. We will let Nanci go first and then maybe if Senator Blunt 

will join us we will roll right into you. OK. 

Ms. Langley, as you know, your whole statement will be made 

part of the record. Feel free to summarize and we will then turn 

to your colleague there and ask him to proceed. 

Thank you. Please proceed. 

Ms. LANGLEY. Thank you very much. 

Chairman CARPER. Welcome. 

TESTIMONY OF THE HONORABLE NANCI E. LANGLEY1 TO BE A 

COMMISSIONER, POSTAL REGULATORY COMMISSION 

Ms. LANGLEY. Mr. Chairman and Senator Ayotte, distinguished 

Members of this Committee, and I know that Senator Coburn has 

departed but my appreciation to him as well. 

I appreciate having the opportunity to appear before you today 

and I thank you for considering my nomination to a second term 

on the Postal Regulatory Commission. I am very honored to be 

nominated by President Obama to a second term and I thank him 

for the trust that he has placed in me. 

I also appreciate the recounting of my career here at the Senate 

as well as the Commission. I never set out to spend 30 years as 

a Federal employee and it still surprises me every day that I continue to enjoy what I am doing but I do and I appreciate the comments. 

And, I was honored and privileged to advise Senator Akaka on 

issues that came before this Committee for a little over 15 years, 

nine of which as his Deputy Staff Director. He was one of the guid-
4 

ing forces on the development and enactment of the Postal Accountability and Enhancement Act (PAEA). 

He was particularly interested in financial transparency and 

championed the idea of having the Postal Service adhere to some 

aspects of the Sarbanes-Oxley Act, and I am very pleased to see 

that has actually turned out to be a very good thing for the Postal 

Service. 

So, I do appreciate his support for my initial nomination as well 

as my renomination. I am absolutely grateful for the unwavering 

support he has provided me through much of my career and that 

of my husband, William Selander, of 33 years. He is unable to be 

here today but I know he is thinking about me right now and 

cheering me on. 

Having grown up in Hawaii, I understand the unique challenges 

faced by individuals who reside in rural, remote, or noncontiguous 

areas of the United States. Their dependence on the U.S. Mail is 

different and many times greater than for those who reside in 

urban or suburban areas. 

But just as I appreciate the challenges they face, I also understand the challenges that the Postal Service is requiring to make 

right now because of the volumes declining, the diversion of mail 

because of new technologies that were really unheard of or 

unthought of by our Founding Fathers when they called for the development of the U.S. Postal Service. 

So, I am pleased that this Committee and Congress is tackling 

these issues; and as Chairman Carper said, these are really tough 

decisions that need to be made for the Postal Service to ensure its 

sustainability. 

The Postal Service is vital to the Nation. It spurs economic 

growth yet fosters the entrepreneurial spirit that is so much a part 

of the country, and it really does bind family and friends across 

thousands of miles. 

So, even though we are communicating in ways that were 

unimagined, the importance of the mail continues. It is a relevant 

part of our society and it is important that it provides universal 

and affordable service. 

So, after working on the PAEA and now implementing the provisions, I have a deeper appreciation of the importance of an independent regulator. The need for clear, well reasoned, and unbiased 

reviews of Postal Service initiatives and its financial condition are 

especially important to ensure a balance between the flexibilities 

given to the Postal Service by the PAEA with the accountability 

and transparency provided by the Commission. 

As a Commissioner, I strive to provide fair, reasoned, and expeditious review on all matters that come before me; and I will continue to work toward streamlining our review processes while ensuring due process, if I am confirmed for a second term. 

Thank you, Chairman Carper and Members of the Committee. I 

also wish to thank your staff who have helped me through this 

process, especially John, Katie, Kata, Joe, and Deirdre. 

And I want to thank the dedicated Commission staff for their 

professionalism and expert advice as well as the support of Chairman Ruth Goldway, Vice Chairman Robert Taub, Commissioner 
5 

Mark Acton, I am especially pleased to appear before you today 

with my good friend and colleague, Commissioner Tony Hammond. 

Mr. Chairman, this concludes my statement and at the appropriate time I am happy to answer any questions that you may have 

of me. 

Thank you. 

Chairman CARPER. Thank you very much. I think what I am 

going to do is ask you the three questions, standard questions we 

ask all of our witnesses at this and then I am going to yield to Senator Ayotte for some questions she may have. 

I understand Senator Blunt is 5 or 10 minutes out so that should 

work out pretty well. Here we go. Three standard questions. I have 

already had a chance to practice this once today so hopefully it will 

go well. 

Is there anything you are aware of it in your backgrounds that 

may present a conflict of interest with the duties of the office to 

which you have been nominated? 

Ms. LANGLEY. No. 

Chairman CARPER. I would ask the same question of you, Mr. 

Hammond. 

Mr. HAMMOND. No. 

Chairman CARPER. All right. Do you know of anything, personal 

or otherwise, that would in any way prevent you from, either of 

you, from fully and honorably discharging the responsibility of the 

office to which you have been nominated? 

Ms. LANGLEY. No. 

Mr. HAMMOND. No. 

Chairman CARPER. And No. 3. Do you agree without reservation 

to respond to any reasonable summons to appear and testify before 

any duly constituted Committee of Congress if you are confirmed? 

Ms. LANGLEY. Yes. 

Mr. HAMMOND. Yes. 

Chairman CARPER. Senator Ayotte please. Thanks for sticking 

with us. 

OPENING STATEMENT OF SENATOR AYOTTE 

Senator AYOTTE. Thank you, Chairman. You are very kind to let 

me ask first and I thank both of you for being here. I appreciate 

it. 

I just wanted to get a sense of—a lot has changed. I know that, 

Mr. Hammond, you have been appointed to the then Postal Rate 

Commission since 2002. 

Mr. HAMMOND. Yes. 

Senator AYOTTE. We have seen a 25 percent drop in volume. And 

so, is the PRC structured to properly respond to the changes? 

I mean, what we are doing here is we are hearing, the Committee is trying to work on a bipartisan basis to allow the Postal 

Service to appropriately restructure in a way that allows them to 

continue to serve the public that I think all of us are committed 

to but in light of the changing market conditions. 

So, I guess I wanted to ask the two of you, in light of the changes 

we are having to make in the Postal Service, is that PRC structure 

where it should be and it just wanted to get your thoughts on that. 
6 

And then related to that, since I know—I do not want to take up 

too much time—I know that the Chairman will explore in much 

more detail which I am sure he will ask about is the Consumer 

Price Index (CPI) rate cap and the proposed legislation that is 

pending before this Committee, what are your views on that. 

But most of all I wanted to ask first about the structure as we 

look to make changes here based on your experience. 

Mr. HAMMOND. Well, I think if you do make changes in the law, 

I think the Postal Regulatory Commission can adapt to any new 

structure. I was a member of the old Postal Rate Commission before the PAEA was passed; and once the PAEA was passed, we had 

to setup an entirely new rate-making system. We had a whole lot 

of obligations to go along with that. 

We changed in the agency. I think we did a good job at that time. 

It took a tremendous amount of work cooperation from the chairman and the staff that we had at the time but we worked our way 

through that without a big difficulty. And, I think if new legislation 

is passed, I think our structure can adapt so that we will be responsive. 

Senator AYOTTE. And, do both of you have a view on the legislation that is pending that we are examining and having important 

hearings on right now that would give the Board of Governors 

greater authority to set rates? And so, I wanted to get your 

thoughts on that. 

Ms. LANGLEY. I have read the legislation and I am aware of the 

change that the legislation right now is seeking. Knowing that 

nearly 80 percent of postal revenues are from the market dominant 

products and that the Postal Service has a market dominant position for these products as well as a captive audience that uses the 

products, I do believe that where there are customers who do not 

have other alternatives, individuals and businesses that could be 

harmed without adequate protection and oversight, that the idea of 

the price cap as it was written was prudent public policy. 

But I am also aware that the objectives of maximizing incentives 

by reducing costs and increasing efficiencies as well as providing 

predictable and stable rates has worked. 

One of the objectives which is to assure adequate revenues, including retaining revenues, has not been met. So, I do believe that 

there are appropriate discussions going on; but as Commissioner 

Hammond said, the Commission has performed remarkably well in 

transitioning from one form of body to another; and now that we 

are a full-time regulator, we have been able to adjust quickly and 

we have an extremely flexible staff who are dedicated to doing the 

work that Congress intends us to do. 

Senator AYOTTE. Well, I see my colleague Senator Blunt here. I 

am so glad to see you, Senator Blunt. So, I know that the Chairman will want to take back over and allow Senator Blunt to speak. 

I appreciate your answer. I know that there will be further followup. I am going to submit some additional questions for the 

record; but as I am hearing you both, what I heard you say is that 

you will work with whatever changes we make with regard to this 

legislation to make sure that the PRC functions properly and assist 

in the goals that we all share to have a viable Post Office. 

Ms. LANGLEY. That is correct. 
7 

1The prepared statement of Mr. Hammond appears in the Appendix on page 17. 

Senator AYOTTE. Thank you. 

Chairman CARPER. Senator, thank you so much for joining us 

today. 

Senator Blunt, nice to see you. How have you been, pal? 

Senator BLUNT. I am good, Senator Carper. Thanks for letting 

me come in. 

Chairman CARPER. Welcome. I understand you have a couple of 

stories you want to tell us about Tony Hammond. 

TESTIMONY OF THE HONORABLE ROY BLUNT, A UNITED 

STATES SENATOR FROM THE STATE OF MISSOURI 

Senator BLUNT. Well, I could tell you a lot of stories, and thanks 

to Senator Ayotte for going ahead and allowing me to say some 

things about Tony Hammond. 

I have known him a long time. That may not necessarily be good 

for him but it has always been good for me. When he started his 

career, our Congressman Gene Taylor was the ranking member on 

the Post Office Committee and Tony staffed that Committee. 

This is the fourth time he has been before this Committee to 

serve on the Commission. So if you approve him and if the Senate 

approves him, we have done it three other times, and I think Tony 

has done a good job. 

Only one of those was a full term and then he served two partial 

terms. So, he knows what he is doing here. He has done a great 

job. We are lucky he is willing to continue to do it and I am pleased 

to see him nominated. I hope that he is easily confirmed and know 

that he will continue to do the good work he has been doing on this 

Commission for some time now. 

Chairman CARPER. Well, you are good for coming. I know you 

have a lot on your plate today. Thank you so much for coming by. 

I know it means a lot to him as well. 

Senator BLUNT. Thank you. Good luck. 

Mr. HAMMOND. Thank you. 

Senator BLUNT. See you all. 

Chairman CARPER. Thank you, Roy. 

Mr. Hammond, that is a tough act to follow but we are going to 

give you some time to do that. You are recognized for your statement. Please proceed. 

TESTIMONY OF THE HONORABLE TONY HAMMOND1 TO BE A 

COMMISSIONER, POSTAL REGULATORY COMMISSION 

Mr. HAMMOND. Thank you, Chairman Carper, and I would like 

to express my appreciation to you and Dr. Coburn for scheduling 

this hearing to consider our nominations to continue as members 

of the Postal Regulatory Commission, and I appreciate Senator 

Ayotte for being here also. 

I do appreciate the confidence that President Obama placed in 

me with this nomination as well as the support I received from 

Senate Minority Leader Mitch McConnell during this process, and 

I especially do want to thank Senator Blunt for his willingness to 

be here today to introduce me to this Committee. I am grateful for 
8 

his comments and especially for his friendship and the support that 

he has given me in my renomination. 

I also appreciate our Chairman Ruth Goldway being in attendance here today, and I especially feel fortunate that I have been 

able to go through this nomination process with my colleague and 

friend Nanci Langley. 

Although we are of different political parties, she shows every 

day on the Commission how we can work together in a bipartisan 

and cooperative manner, and that is very important for the work 

that we do. 

The one other person that I would like to recognize, if I could, 

is fortunately my nephew Tracy Hammond is once again to represent the family. It is easier for him since he and his wife live 

here in Washington but I appreciate him making time to be here. 

Chairman CARPER. I will ask Tracy to raise his hand please. Welcome Tracy. Thank you. 

Mr. HAMMOND. Much has changed since my original appointment 

to the old Postal Rate Commission in 2002. As we were discussing, 

the PRC gained enhanced responsibilities with the passage of the 

PAEA in 2006. 

It required a major revamping of our agency’s functions, and it 

was because of the hard work and cooperation among the commissioners and staff that the transformation we made to a new agency, 

I believe, was achieved in a responsible and effective manner and 

in keeping with the mandates of the PAEA. 

And, I was pleased to be actively involved in all the transition 

activities of the Commission. The first among them, of course, was 

the requirement that the Commission implement an entirely new 

rate making system which we actually completed several months 

ahead of schedule during that process. 

We also provided the report on the universal Postal Service and 

the postal monopoly to the Congress on time as mandated by the 

PAEA. Each year the PRC is also responsible for our annual report 

to the President and the Congress which, of course, among other 

things, contains the current estimated value of the monopolies and 

the estimated cost of the universal service obligation (USO). 

We also continue to produce the comprehensive annual compliance determination (ACD), which is the ongoing mechanism for 

providing accountability, transparency, and oversight of the Postal 

Service. 

Recently, I have advocated the reform of our regulations to better 

assure that our advisory opinions are both timely and relevant, and 

I especially appreciate, Mr. Chairman, the interest that you have 

shown in this matter and the suggestions that you provided to our 

Commission for improvement of the process, and I hope we are able 

to finalize the proposed new regulations governing the issuance of 

advisory opinions in the very near future. 

As the Members of this Committee know, the Postal Service is 

dealing with multiple challenges; and because of that, the Postal 

Regulatory Commission has an extraordinary responsibility to adjudicate fairly in a professional and timely manner all the decisions 

on every case that comes before us. 

For approximately 10 years now, I have enjoyed the challenging 

work at the Commission and I hope that this Committee will look 
9 

favorably on my experience in considering my nomination for an 

additional term to the PRC. 

Mr. Chairman, I want to thank you once again and the staff of 

this Committee for this opportunity, and I will be happy to respond 

to any questions that you or your colleagues would have. 

Chairman CARPER. Good. Thank you, Mr. Hammond. 

I have a question for both of you if I could. Were both of you 

present when we held the earlier hearing for Beth Cobert to be the 

Deputy at the Office of Management and Budget (OMB) for Management? Were you here? 

Mr. HAMMOND. We were able to watch part of it. 

Ms. LANGLEY. We watched part of it. 

Chairman CARPER. OK. When I asked her, one of the questions 

I asked was to talk about what she learned from her mom and dad 

that might be applicable and helpful in this new role and what she 

learned in her role as a spouse, as a mom, as well; and she said 

that among the things she learned being a spouse and a mom is 

she learned the value of patience. 

When we were closing out her hearing, I said I believe that patience is a virtue but in the Federal Government we need to convey 

a sense of urgency. 

And, there is so much that we need to be doing, and we only 

have so much time, and it is especially frustrating this week as you 

might imagine for people particularly like Dr. Coburn and I and 

the others who have been here today. 

Let me just say in terms of conveying a sense of urgency, one of 

the things that we sought to do before is to convey a sense of urgency to the PRC to go through the regulatory process. 

I think, Mr. Hammond, you used the word timely when you were 

talking about adjudication. Just talk to us about trying to find the 

right balance between being timely and being, by the same token, 

appropriately thoughtful. 

Ms. LANGLEY. I appreciate that; and as Commissioner Hammond 

said, your letter of last year I thought was very thoughtful and appropriate in its comments. 

I always look at doing things as expeditiously as possible but also 

keeping in mind that we do act in a quasi-judicial fashion; and as 

such, we need to give appropriate consideration to the issue of due 

process. 

And, one of the, I think, guiding principles for an independent 

regulator is to make sure that they are, indeed, independent and 

give an unbiased review. We do have procedures in place that allow 

interested parties to make comment but we are working right now 

on streamlining the advisory opinion process. We are in the process 

of reviewing the comments that we have received; and they have 

been very active and thoughtful but also very pointed in some instances. 

We are looking to try to see if we can achieve a 90-day turnaround while still preserving due process. So, I am happy to discuss more of that or let Commissioner Hammond also talk. 

Mr. HAMMOND. Well, I would just reiterate what Commissioner 

Langley said. One of the things that we have an obligation to do 

is to provide due process to parties that are interested in all the 

activities that come before the Commission. 
10 

In our system, the Postal Service and interveners alike come before us; and when the Postal Service comes before us and provides 

the evidence, the interveners want to know more about that evidence, want to be able to question the Postal Service, et cetera. 

And so, part of the time and especially in the advisory opinion 

process because people are allowed that opportunity, that can slow 

things down. I admit it. 

And, possibly at times we have been too accommodating to both 

sides as they tried to explore everything involved there. But I think 

that, as Commissioner Langley said, we are in the process right 

now of going through the final review of comments that have been 

submitted; and I think that we are going to be able to come to 

agreements on new regulations that will be acceptable to both 

sides, maybe not entirely but I think that we will be able to do 

that. 

Chairman CARPER. All right. Thank you. 

I think, Ms. Langley, you indicated you had a chance to review 

the legislation that Dr. Coburn and I have introduced. Is that correct? 

Ms. LANGLEY. I had gone through it once, yes. 

Chairman CARPER. OK. Mr. Hammond, have you had a similar 

opportunity? 

Mr. HAMMOND. I have looked at it somewhat too, not an expert 

on it. 

Chairman CARPER. Both of you have thought a lot about these 

issues before and at least one of you has played a role where you 

helped counsel and advise people, as it were Dr. Coburn and my 

colleagues said, what do you find especially encouraging about the 

legislation? What are some areas that you think it could be improved? 

I would like to say everything we do, we know we can do better; 

and when we introduced the legislation, we described it as a work 

in progress. We think it is a pretty good work but we know it can 

be improved. 

So, just give us some of your thoughts. Where do you think it 

has, we found the right spot, the sweet spot and what were a couple of areas where maybe we could do better please? 

Ms. LANGLEY. Well, I hesitate to give my personal views because 

we are in the process of responding to a question by Senator 

McCain that asks us to go through the legislation and provide our 

views. 

And as the Commission did with the testimony presented by 

Chairman Goldway a couple of weeks ago, that was something that 

the Commission and the Commissioners reviewed. 

But I can say personally that I am very pleased to see certain 

aspects, particularly the reamortization of the Retiree Health Benefit Fund (RHBF). I think that is a very good and appropriate and 

necessary undertaking, using Postal Service specific demographics 

is quite important. 

The PRC did a report on what we consider pension surplus, both 

on the Civil Service Retirement System (CSRS) and the Federal 

Employees Retirement System (FERS). Those are good. Changing 

or ensuring that the definition of Post Office covers all postal retail 

facilities, postal-run retail facilities, is an important change that I 
11 

see as being responsive to some of the concerns that people out in 

the communities have, and ensuring that there is no distinction 

among stations, branches, and post offices. 

Chairman CARPER. Thank you. Mr. Hammond. 

Mr. HAMMOND. Well, there is no doubt the legislative changes 

are needed to place the Postal Service on a more sound financial 

footing. I agree with all of those provisions which Commissioner 

Langley brought up, especially, of course, one of the major ones is 

the adjustment of the pre-funding of the retiree health benefits 

schedule. That helps address the liquidity challenge and is very important. 

Some of the other provisions that I have looked at, and I know 

we discussed this last time I was before you last year with your 

previous bill, in having a provision that allows opportunities for 

non-postal products offerings. I think that is good as long as they 

do not create unfair competition with the private sector, and you 

seem to have taken care of making sure that is what occurs. 

Chairman CARPER. We have sought to do that. 

Mr. HAMMOND. Yes. 

Chairman CARPER. I hope we were effective. 

Mr. HAMMOND. And also as Nanci mentioned, clarifying which 

retail facilities are subject to review, I am glad to see that in there. 

If you include the provision that would increase the amount of dollars involved in experimental products that the Postal Service can 

provide, I think that is possibly something that should be done 

also. 

So, those are some of the provisions which seemed to be very 

positive. 

Chairman CARPER. What are—just give some broad guidance and 

counsel if you would—some areas that we need to keep in mind as 

we legislate, particularly in areas where we think we can do better. 

We are meeting with people of this week, probably everyday this 

week, next week as well; meeting with our colleagues to get their 

input, their staffs, and the key stakeholders. But my guess is that 

the two of you have forgotten more than most people have learned 

about these issues. 

I just welcome some general thoughts you have where we might 

be able to do a better job. 

Ms. LANGLEY. I think it is always difficult to find, as you said, 

the sweet spot, the balance. But I think looking at the rate cap is 

certainly an appropriate action since the Postal Service has not 

been able to retain revenue. 

But as I mentioned to Senator Ayotte, I do believe that it is good 

public policy to ensure that there is appropriate oversight and independent oversight. So, I would just urge that it is appropriate public policy that drives any changes that might be considered. 

Chairman CARPER. All right. Mr. Hammond. 

Mr. HAMMOND. Well, in broad overview, just like Commissioner 

Langley says, if you are going to make the changes and increase 

flexibility to the Postal Service once again, you do need an independent oversight of that if it is going to be effective. 

People sometimes get tired of hearing me say it but I continually 

remind them that the U.S. Postal Service is the world’s biggest 
12 

government monopoly; and so since they are the world’s biggest 

government monopoly, you have to have oversight of them. 

You have to have some controls on them. You have to force efficiencies upon them. Otherwise, I do not know what government 

monopoly would become more efficient if they are not required to, 

for instance. 

So, things like that I think that you do need to keep in mind as 

you look at the legislative proposals. 

Ms. LANGLEY. And, I just want to add to that. The rate cap as 

it exists now has been effective. It has not been as effective as it 

could be and that is because of many external issues. 

But when you take the Postal Service’s total revenue for fiscal 

year 2012 and back out the Retiree Health Benefit Fund as well 

as workers’ compensation adjustment, there is a remaining $2.4 

billion that is under the control of the Postal Service. 

So, the amount of money that needs to be bridged under the current rate cap system is not quite as great. But the rate making system has worked before the Commission. We do have a statutory review of 45 days for market dominant products, and the Commission 

itself has instituted a 34-day review of that general rate case. 

So, we are providing a very quick turnaround, looking at whether 

or not the law has been met and whether or not any workshare 

costs are over the 100 percent attributable cost. 

So, the rate making system for market dominant is a very quick 

turnaround, and a more in-depth review comes during our annual 

compliance determination review. And, the same as with competitive products, where there is a 30-day review. 

I think the Commission, while ensuring public participation and 

a comment period, is turning around rate cases in a very expeditious time line. 

Chairman CARPER. OK. I do not know if it was in your statement, Ms. Langley, or in response to a question raised by Senator 

Ayotte, but I think you mentioned that 80 percent of the Postal 

Service’s revenues come from market dominant products. 

Just tell us what those include please. 

Ms. LANGLEY. Periodicals, First-Class Mail, Standard Mail, Special Services, and some international mail. 

Chairman CARPER. And the other 20 percent would include 

what? 

Ms. LANGLEY. That is the competitive Priority Mail and some of 

their market tests which are competitive, Express Mail. 

Chairman CARPER. We have had any number of hearings. Even 

last month we had two hearings on the legislation that Dr. Coburn 

and I introduced, and one of the points I have made as important 

as it is to find efficiencies within the Postal Service, it is not 

enough to just cut, cut, cut but they have to be encouraged and 

incentivized to find ways, and we cannot be an impediment, as they 

look for ways to use this unique distribution system. 

It goes to every mailbox in the country at least 5 or 6 days a 

week, find ways to use that, and their brand, to generate additional 

revenues. 

When you think of some opportunities that are out there that 

you heard about, you know of, that you maybe even suggested to 
13 

the Postal Service to consider, what are some of the more promising places for them to turn to generate additional revenues? 

Mr. Hammond, Ms. Langley, either of you can respond. 

Mr. HAMMOND. Well, she is much more articulate. I like for her 

to talk more than me but, well, like I mentioned before, one of the 

provisions that you have that would allow the Postal Service an increase in experimental products. 

I cannot tell you what experimental product they need to propose 

to us next. It does work the other way where we are the ones who 

are responsible for, once they come up with a new product, for instance, for us to review it rather than for us to recommend to them. 

So, I do not want to be nonresponsive but I also do not want to 

make a whole bunch of recommendations for the Postal Service to 

send us when we are the ones that are going to have to review 

them. That is one of the areas of where they have flexibility and 

you are going to provide possibly increased flexibility. 

Chairman CARPER. Ms. Langley. 

Ms. LANGLEY. I think the concept of an innovation chief is a good 

idea. There could be great benefit to having someone at or a division within the Postal Service where individuals can go with their 

ideas. 

I think there are a great many ideas out there. But sometimes 

when you reach into the Postal Service, just because of its size and 

the number of different departments and different individuals, it is 

not always easy to find where you should go, where somebody 

should go to bring a good idea. 

But the Postal Service has been working on utilizing emerging 

technologies to bring forward to us incentives and experimental 

products. One of their most successful ones has been the Every 

Door Direct which allows—and it is really geared to small and medium-sized businesses—but cutting through some of the barriers 

that these much smaller mailers might see. And, that has been a 

successful initiative that the Postal Service has undertaken. 

But they are trying to work with product samples, for example; 

and I remember we used to get products in the mail, small sizes 

of detergent or face cream, something. 

That was always exciting, and I think the Postal Service is trying to go back to some of the concepts that used to work to see if 

there is a way of bringing it back into the fold but also utilizing 

technology. 

So, if you can have a quick response (QR) code that you can read 

on an envelope and it drives a customer to look at a catalog or to 

use the QR code that then takes you to that page on a Web site, 

I think there is great innovation out there and great opportunities 

to continue to grow volume. 

Chairman CARPER. We had a hearing here early this year—in 

fact, the first hearing we did with Dr. Coburn and I as the leaders 

of this Committee, was on postal reform. And, we had a fellow from 

one of the States. I do not know if it was Wisconsin; but his company a legacy company in the paper industry, and the name of the 

company was Quad/Graphics. 

And I have always been intrigued by his testimony because what 

he basically said they have really what we are is a legacy industry, 
14 

and they figured out how to be relevant, not just relevant but very 

profitable in the digital age. 

I am convinced that there are opportunities like this. You just 

mentioned one of them with respect to the Postal Service where 

they can find ways to generate revenues and be relevant in the digital age. 

And, what we want to do is make sure that we incentivize them, 

do not impede their ability to do that, at the same time trying to 

be respectful of the fact that it is not appropriate for them to be 

competing head to head with the private sector on things the private sector is perfectly capable of doing. 

Well, my colleagues and I will probably have some questions for 

the record. Before I talk about the deadline for submission of those, 

let me just say that we appreciate your giving us responses to the 

questions that we have asked with respect to your biographical and 

financial questionnaires, answering prehearing questions that have 

been submitted by the Committee, and you have had your financial 

statements reviewed by the Office of Government Ethics. 

Without objection, this information will be made a part of the 

hearing record with the exception of the financial data which are 

on file and are available for public inspection in our Committee’s 

offices. 

And, the hearing record will remain open until noon, October 3, 

for the submission of statements and questions for the record. 

Again, we thank you both for your service. We thank you for 

your presence here today and for your willingness to continue to 

serve. 

With that, this hearing is adjourned. Thank you so much. 

Mr. HAMMOND. Thank you. 

Ms. LANGLEY. Thank you. 

[Whereupon, at 12:02 p.m., the Committee was adjourned.] 
(15) 

A P P E N D I X 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
50 
51 
52 
53 
54 
55 
56 
57 
58 
59 
60 
61 
62 
63 
64 
65 
66 
67 
68 
69 
70 
71 
72 
73 
74 
75 
76 
77 
78 
79 
80 
81 
82 
83 
84 
85 
86 
87 
88 
89 
90 
91 
92 
93 
94 
95 
96 
97 
98 
99 
100 
101 
102 
103 
104 
105 
106 
107 
108 
109 
110 
111 
112 

Æ