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S. Hrg. 111–1045 

NOMINATION OF DENNIS J. TONER 

HEARING 

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

JUNE 10, 2010 

NOMINATION OF DENNIS J. TONER TO BE A GOVERNOR, U.S. POSTAL 

SERVICE 

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 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

ROLAND W. BURRIS, Illinois 

EDWARD E. KAUFMAN, Delaware 

SUSAN M. COLLINS, Maine 

TOM COBURN, Oklahoma 

SCOTT P. BROWN, Massachusetts 

JOHN MCCAIN, Arizona 

GEORGE V. VOINOVICH, Ohio 

JOHN ENSIGN, Nevada 

LINDSEY GRAHAM, South Carolina 

MICHAEL L. ALEXANDER, Staff Director 

KRISTINE V. LAM, Professional Staff Member 

KENYA N. WILEY, Counsel 

JOHN P. KILVINGTON, Staff Director, Subcommittee on Federal Financial Management, 

Government Information, Federal Services, and International Security 

BRANDON L. MILHORN, Minority Staff Director and Chief Counsel 

JENNIFER L. TARR, Minority Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

PATRICIA R. HOGAN, Publications Clerk and GPO Detailee 

LAURA W. KILBRIDE, Hearing Clerk 

(III) 

C O N T E N T S 

Opening statements: Page 

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

Senator Kaufman ............................................................................................. 1 

Prepared statements: 

Senator Carper ................................................................................................. 13 

Senator Kaufman ............................................................................................. 15 

WITNESS 

THURSDAY, JUNE 10, 2010 

Dennis J. Toner to be a Governor, U.S. Postal Service: 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 16 

Biographical and financial information .......................................................... 17 

Responses to pre-hearing questions ................................................................ 25 

Letter from the Office of Government Ethics ................................................. 38 

(1) 

NOMINATION OF DENNIS J. TONER 

THURSDAY, JUNE 10, 2010 

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. Thomas R. Carper, 

presiding. 

Present: Senators Carper and Kaufman. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. The Committee will come to order. It is not exactly standing room only, but that does not mean this is not an important hearing. 

Senator KAUFMAN. Quality over quantity. [Laughter.] 

Senator CARPER. We are delighted to be here, Senator Kaufman, 

myself, and Dennis Toner. I do not know what the odds would be 

that three guys from Delaware would be sitting here in these three 

rows for today’s hearing, but however long those odds might be, we 

are here, and it is a good thing, I would like to say, for Delaware 

and for our country, I hope. 

Today, we are going to be considering the nomination of Dennis 

Toner to be a member of the U.S. Postal Service’s Board of Governors. Senator Kaufman has in his past, not too recent past, been 

a governor. I have been a governor. And if things go well with your 

nomination and the confirmation process, the three of us may 

share the common bond of being governors, recovering governors in 

the case of Senator Kaufman and myself, and you, a real governor 

as a member of the Board of Governors. We will see how this process moves forward after today. 

Before I give my opening statement, I want to give my friend, 

our colleague from Delaware, Senator Kaufman, the opportunity to 

introduce this nominee, whom I think he knows pretty well. Sometimes, we have the opportunity to introduce people that we really 

do not know that well, but in this case, you know him well, so we 

are anxious to hear what you have to say about him. Senator Kaufman. 

OPENING STATEMENT OF SENATOR KAUFMAN 

Senator KAUFMAN. Thank you, Mr. Chairman. It is a great honor 

to be here with you chairing the Committee, and—— 

Senator CARPER. Well, we were just talking earlier. We reversed 

roles about a month or so ago, when you chaired the Judiciary 

2 

Committee for the hearing for Leonard Stark when he was nominated to be a Federal District Court Judge. 

Senator KAUFMAN. Yes, small world. 

Senator CARPER. It is interesting how we do this. Obviously, 

Delaware has taken over here. 

Senator KAUFMAN. Exactly. [Laughter.] 

You said it. It is a great day for Delaware, and it is a great day 

for the country. 

Senator CARPER. Could I ask you a question before you go any 

further? 

Senator KAUFMAN. Yes. 

Senator CARPER. How long have you been married? 

Senator KAUFMAN. Fifty years. 

Senator CARPER. When is your anniversary? 

Senator KAUFMAN. Today. 

Senator CARPER. Congratulations. 

Senator KAUFMAN. Thank you. 

Senator CARPER. Is that not great? 

[Applause.] 

Let the record show polite, scattered applause. [Laughter.] 

No, it was robust. It was vigorous. 

Senator KAUFMAN. And it is a special day, too—— 

Senator CARPER. Congratulations. 

Senator KAUFMAN. I just want to thank you for the opportunity 

to introduce Dennis Toner to be the President’s nominee for the 

Board of Governors for the U.S. Postal Service. As you say, I have 

known Mr. Toner for over 30 years, and he is truly a man of singular intelligence, character, integrity, and conviction. 

He had a career spanning more than three decades of service in 

the Federal Government as an invaluable, important, essential 

member of then-Senator Joe Biden’s staff. As someone who had the 

true privilege of working closely with him for much of this time, 

I can attest to his loyalty and his strong leadership. As long as I 

have known him, I have always been able to rely upon his wise 

judgment and sound advice. 

More importantly, he brings a business acumen to the Board of 

Governors that will help the Postal Service successfully navigate 

the major financial and operational challenges that it currently 

faces. He served as Finance Director for Biden for President and 

Citizens for Biden, and as a business consultant over the last 2 

years, he provided comprehensive business solutions to a broad 

range of private and public entities. 

I am truly confident that he can draw upon his wealth of business knowledge and experience to identify the critical issues affecting the Postal Service and implement the vital reforms that it 

needs to continue serving its essential role to our country. 

He will be an excellent leader and member of the Postal Service 

Board of Governors if the Senate chooses to confirm him, and I certainly hope they will. Mr. Toner is truly one of the most qualified 

people that I have ever worked with. 

Thank you, Mr. Chairman. 

Senator CARPER. Thank you, Senator. Thank you very much. I 

know it means a lot to him that you are sitting here with him, and 

it means a lot to me, as well. Thank you. 

3 

I have a statement I am going to go on with. Senator Kaufman, 

I know you are on about four or five committees, and if you have 

to leave, we understand, but you are great to be here. 

Dennis Toner is, of course, no stranger to me. For many years, 

he and I have been runners in Delaware. He has run in more Caesar Rodney Half-Marathons than I have and certainly a lot more 

marathons. I have never run in one, but he has run in a bunch of 

those. I have never finished ahead of him, and I have always 

looked forward to the opportunity to get even with him—— [Laughter.] 

And then today comes along. I only recognize him in a race from 

behind, way behind. So he is no stranger to me, certainly no 

stranger to Senator Kaufman and to those who worked with him 

during all those years that he worked for Senator Joe Biden. 

I am delighted that he is willing to now put in the time and the 

effort that is needed to help steer the Postal Service out of the difficulties that it finds itself in. As anyone watching this hearing certainly knows, this is a challenging time for the Postal Service. It 

is a challenging time for our country. 

Mr. TONER. Yes. 

Senator CARPER. I think the country is up to that challenge, and 

I believe the Postal Service is, too. We need good people in leadership positions, and we have the opportunity to find out that we 

have a pretty good one right here, I think. 

Mr. TONER. Thank you. 

Senator CARPER. The Postal Service ended fiscal year 2009 with 

a 13 percent decline in mail volume compared to fiscal year 2008. 

This resulted in a year-end loss of some $3.8 billion, up from $2.8 

billion a year before, and a couple of years ago, this outfit was 

making that much money, and here we are dropping like a rock. 

This loss comes despite heroic efforts on not just the part of the 

Postmaster General and his team, but a lot of folks who work in 

the Postal Service across the country in towns large and small as 

they have sought to achieve more than $6 billion in cost savings 

over a very short period of time. And the loss would have been significantly higher, I think a total of about $7.8 billion, to be exact, 

if Congress and the President had not acted at the last minute to 

reduce the size of the Postal Service’s overly large retiree health 

prefunding payment. 

Unfortunately, the projections for the current fiscal year look no 

better than the results for fiscal year 2009. And despite an expected recovery in at least some areas of the economy, the Postal 

Service is anticipating a further decline in mail volume. This, coupled with the fact that savings will likely be harder to come by, not 

easier, this year, will result in the kind of massive $7 or $8 billion 

loss that we were expecting right up until the end of fiscal year 

2009. 

On top of all this news, the Postal Service recently hired a group 

of three outside consultants to look at its business model and to 

look ahead. Those three outfits came back with findings showing 

that the Postal Service will continue to lose mail volume, even 

when the economy recovers. They even pointed out that the Postal 

Service can be expected to lose more than $230 billion over the 

next decade if major changes are not made. 

4 

Congress must address this situation, first by finishing the work 

we began last September and permanently restructuring the Postal 

Service’s retiree health obligation in a way that makes sense. Payments that the Postal Service is required to make under current 

law are unaffordable, especially during such a difficult economic 

time when the Postal Service is already losing customers to electronic forms of communication. I will also note that these payments 

are not related at all to what the Postal Service owes to its future 

retirees. 

I have introduced with some of my colleagues legislation to address this problem. It has been reported out of this Committee. My 

hope is it can be considered by the full Senate in the near future. 

We also need to look at the Postal Service’s pension obligations. 

According to an analysis conducted not many months ago by the 

Postal Service’s Office of Inspector General, the formula that is 

used to determine how much the Postal Service must pay into the 

old Civil Service Retirement System may have actually resulted in 

an overpayment by the Postal Service into that system of as much 

as $75 billion. The Postal Regulatory Commission is currently examining these findings and should be finished with that work 

sometime this summer. It is my hope that any overpayment that 

did occur can be used to provide the Postal Service with immediate 

relief and to prevent or delay potentially damaging service or other 

cuts that might be on the table during this difficult time. 

Another thing that Congress can do to help in this environment 

is to leave the day-to-day management of the Postal Service to the 

Postal Service. Too often, those of us here in the Senate and the 

House stand in the way of the Postal Service’s efforts to streamline 

operations and to remove excess capacity, especially when it comes 

to closing or consolidating retail and processing facilities. We also, 

unfortunately, are preventing the Postal Service from changing delivery frequency to adjust to the changing mailing economy. Studies have shown that the elimination of Saturday delivery alone 

could save the Postal Service upwards of $3 billion per year. In addition, about 75 percent of the public would support such a move, 

according to a number of polls. I might say, that 70 or 75 percent 

number came as a surprise to me and, I know, to a number of my 

colleagues. 

In many ways, then, we need to let the Postal Service management do what it needs to do to manage its way through the crisis 

it currently faces, and that is not to say we do not have some obligations here, as well, and we need to meet those obligations. But 

I think a good deal of it lies on the management and their ability 

to work with the rank and file and the union leadership, as well, 

to manage through this crisis. 

Mr. Toner, you have decades of experience in public policy, in 

management, and perhaps most importantly, in listening to a variety of views and finding consensus—not just finding consensus, but 

building consensus—and those are skills that will be much needed 

in the days ahead on the Board of Governors in the Postal Service. 

I look forward to learning more today about how you would apply 

that experience and those skills to the crisis currently facing the 

Postal Service. 

5 

1The prepared statement of Mr. Toner appears in the Appendix on page 16. 

At this time, I would usually turn to my colleagues on the dais 

for any statements that they might like to add. The fact that there 

is no one here sitting with me at this moment is actually a good 

sign because if they were sitting here, they probably would not be 

here to throw bouquets in your direction. [Laughter.] 

It might be to throw some tough questions your way and to raise 

questions about your worthiness as a nominee. 

Mr. Toner, I would note for the record, has filed responses to a 

biographical and financial questionnaire. He has also answered 

pre-hearing questions that were submitted by Committee Members 

and Committee staff. In addition, his financial statements have 

been reviewed by the Office of Government Ethics. 

Without objection, this information will be made part of the hearing record. Financial data, however, will remain on file and available for public inspection in the Committee offices. 

Committee rules require that all witnesses at nomination hearings give their testimony, as you may know, under oath. 

Mr. TONER. I understand. 

Senator CARPER. I am going to ask you, if you would, to please 

stand and raise your right hand, and I will administer this oath. 

Do you swear that 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. TONER. I do. 

Senator CARPER. Please be seated. So far, so good. And with that, 

you are recognized to offer your statement. I would ask that you 

keep your statement within 30 minutes. [Laughter.] 

Mr. TONER. Very good. Thank you. 

Senator CARPER. If you go much beyond that, I will have to 

leave. [Laughter.] 

TESTIMONY OF DENNIS J. TONER 1 TO BE A GOVERNOR, U.S. 

POSTAL SERVICE 

Mr. TONER. Thank you, Mr. Chairman, both for your kind remarks and, as well, for holding this hearing this afternoon. I am 

very grateful to President Obama for nominating me to serve as a 

Governor in the U.S. Postal Service. I would like to thank you, Senator Carper, for your abiding interest in the Postal Service and the 

role the Postal Service plays in American life. If confirmed, I hope 

to be able to work with you to address the many challenges confronting the Postal Service. 

I would also like to take a minute to thank my personal friend, 

Senator Kaufman, for taking time out of his schedule to introduce 

me today. I had the pleasure and honor of working closely with 

Senator Kaufman for more years than we need to count when we 

both worked for then-Senator Joe Biden. I would just like to simply 

say thanks to Senator Kaufman for the support and friendship he 

has provided me throughout this process. 

I have been asked by many why I would want to serve on the 

Postal Board of Governors given the extreme financial difficulty it 

faces today. My answer is this: The Postal Service is woven into 

the fabric of every American community. It is a way of life. HowVerDate Nov 24 2008 11:46 Aug 10, 2011 Jkt 58032 PO 00000 Frm 000009 Fmt 06633 Sfmt 06633 P:\DOCS\58032.TXT SAFFAIRS PsN: PAT
6 

ever, it is clear that changes are needed on a number of fronts to 

allow the Postal Service to regain its financial footing. 

In my more than 30 years working for the U.S. Senate, I developed an ongoing interest in the challenges that arise from organizations such as the Postal Service and Amtrak—Federal organizations that Congress wants to act like a business but provide public 

service in all of its many combinations. Should I be confirmed, I believe that I can bring that experience to bear working with the 

Governors, Postal Service management, and the many different 

Postal Service stakeholders to address the mutual interest facing 

the Postal Service. 

I thank you for holding this hearing, and I will be happy to answer any questions. Thank you. 

Senator CARPER. You are quite welcome. Thank you for that 

statement. 

Under the Committee rules, there are a couple of standard questions that I need to ask you and ask that you would then respond 

to those, and then I will ask you a number of questions that are 

policy-related. 

Mr. TONER. Thank you. 

Senator CARPER. First, 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. TONER. No. 

Senator CARPER. Second, 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. TONER. No. 

Senator CARPER. Third, 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? 

Mr. TONER. Yes. 

Senator CARPER. Thank you. Now, a couple of policy questions, 

if I could. As you and I discussed recently, we made changes to the 

law in 2006, I believe, so that members of the Board of Governors 

had the experience necessary to play a role in managing what is 

really one of the largest organizations in the world. What do you 

think that you would bring to the Board, particularly at such a 

challenging time for the Postal Service? There are times in our 

lives to be modest, and there are times to be immodest. This is the 

latter. 

Mr. TONER. Thank you, Mr. Chairman. I believe my experience 

or what I bring to the Board rests heavily on my 30-plus-year Senate career. It has given me an opportunity to provide insight in this 

constant match that we come across between government and business models, that is, the idea to balance service and costs. I believe 

my Senate career has dealt with this throughout its entire time, 

and I consider that a real asset, hopefully, if I should be confirmed 

or added to the Board. 

In addition to that, I just believe the institutional knowledge that 

I have gained on postal legislative issues that continue to be 

shaped by continuing technology will be an asset. When I first 

came to the Senate in the very early 1970s, when there were disVerDate Nov 24 2008 11:46 Aug 10, 2011 Jkt 58032 PO 00000 Frm 000010 Fmt 06633 Sfmt 06633 P:\DOCS\58032.TXT SAFFAIRS PsN: PAT
7 

cussions regarding electronic mail, the ideas were just foreign to 

any of us. 

Senator CARPER. Did they still have quill pens then? [Laughter.] 

Mr. TONER. No, we did not, but we did have the old facsimile machines. We did have those. 

In addition to that, I believe that my career has provided the 

process in which it has become clear that we need to involve all 

stakeholders in possible solutions. But at the same time, we need 

to strive to find solutions that are both realistic and achievable. I 

think what I bring is a conservative outlook in terms of what is 

possible as we deal with the legislative process as it relates to any 

government agency, but particularly the Postal Service. 

Senator CARPER. All right. Thank you. 

As I noted in my opening statement, the Postal Service suffered 

a significant loss in fiscal year 2009, coming on the heels of an 

early loss in 2008. The Postal Service is projected to lose a significant amount this year, as well. If confirmed, how would you work 

with your new colleagues on the Board of Governors and with senior Postal Service management to attempt to minimize the financial impact of the loss in revenue that the Postal Service is currently experiencing? 

Mr. TONER. Mr. Chairman, I agree with your statement that the 

Postal Service is experiencing financial losses of historical proportions. I believe every facet, every piece needs to be on the table in 

terms of negotiation. I have had the opportunity to review the business model presented by the Postal Service. I am encouraged by 

the new initiatives that have been offered. But at the same time, 

I think we need to do more in terms of reviewing the cost control 

measures in particular. These are hard choices as relates to excess 

capacity and how we best address declining volume. 

My position, as a candidate for the Postal Board of Governors, 

is that it is imperative that the Governors continue or increase 

their outreach to all stakeholders to help best determine how we 

go forward in terms of addressing the financial situation in which 

we find ourselves. 

Senator CARPER. Thank you. 

As you know, the Postal Service is required to make a payment 

at the end of each fiscal year to pre-fund its future health obligations for its pensioners. These payments are large, ranging anywhere from about $5.4 billion to $5.8 billion. They are not closely 

related to what the Postal Service owes its future retirees. They 

are also something that the Postal Service simply cannot afford at 

a time like this when the economy is still recovering and the competition from electronic forms of communication is growing. 

How important is it, in your view, for Congress to find some way 

to permanently restructure the Postal Service’s retiree health obligation—not to walk away from that obligation, but to restructure 

it in a way that is more realistic and sensible? 

Mr. TONER. Thank you for the question. Mr. Chairman, I fully 

support the need for Congress to restructure these obligations. I believe the retiree health benefits represents the most threatening 

issue the Postal Service needs to address. These current obligations 

have produced far-ranging consequences on other operations, as 

well. Absent a solution provided by Congress as relates to retiree 

8 

health benefits, we will not be able to address other issues that 

need to be considered. 

Senator CARPER. In my old job as State Treasurer, the State 

Treasurer’s responsibilities included administering fringe benefit 

programs for State employees, including all the folks in our school 

system. At the time, in 1976, 1977, we had no pension fund. We 

had not created a pension fund. We paid pension payments every 

month to State retirees on a cash basis. When the State of Delaware’s credit rating was lowered to the lowest in the Nation, the 

rating agencies pointed to the fact that we had no amortization 

schedule. It was one of the problems with our finances. We had 

given no thought to meeting the health care obligations of future 

pensioners. We did not even have a pension fund for the pension 

obligation. 

Mr. TONER. I did not know that. 

Senator CARPER. And you know what? We were not by ourselves. 

There were a lot of other States and local governments in the same 

situation. 

Fast forward about 20 years, and the State of Delaware, which 

used to have the worst credit rating in the country, ended up with 

the best credit rating, AAA credit ratings across the board. We had 

literally about 10 years to create a pension fund that fully amortized our pension obligations, but we got the AAA credit ratings. 

The folks from the rating agency said, you still have not done much 

at all with respect to your future health obligations that you owe 

to those people. You are going to be making pension payments, too. 

So we began making a downpayment on that obligation, but a very 

modest downpayment. And over the last 8 years, with the governor 

who succeeded me, the State attempted to make some progress in 

meeting that health care obligation to those potential future pensioners, but not much progress was made. 

And as it turns out, relatively few State and local governments 

have done much to meet the similar obligation to their future pensioners. If you actually look at corporations, the private sector, and 

what they have done in terms of setting aside money to meet their 

health care obligations for their future pensioners, their story is 

not a great deal better than the State and local governments. 

The legislation that was signed by President Bush in 2006 said, 

we are going to require the Postal Service to commit to a prepayment schedule that is unlike any that we would ever require with 

a State or local government or a private corporation. And while we 

think it is important to meet that obligation within a reasonable 

schedule, to have it front-end loaded and as conservative as it is, 

in my view, just makes little sense. And as it turns out, I think 

that is a view that is shared by my colleagues. 

Mr. TONER. Good. 

Senator CARPER. In my view, it is important for the Postal Service to combine any efforts to cut costs and streamline operations 

during this financial crisis with an aggressive effort to attract new 

business and retain as much as possible of what is left after the 

downturn. What is your assessment of the steps that the Postal 

Service management has done so far on the revenue side in recent 

months and years? What further steps might you suggest be taken, 

if confirmed, to further bolster future revenues? 

9 

Mr. TONER. Mr. Chairman, I have had an opportunity to review 

the business plan. I have also considered the Government Accountability Office study and other reactions to the plan offered by the 

Postal Service in this process. But in terms of the Postal Service 

business plan itself, I believe that the steps represented so far are 

just that, first steps. I believe that the revenue initiatives that 

have been attempted—flat-rate boxes, for instance, summer sales, 

pursuing partnerships—these are awfully strong productive measures that the Postal Service has put forward, and hopefully it is 

measures such as these that will best allow the Postal Service to 

regain a firm financial footing. 

I believe going forward that the Board of Governors, in particular, needs to do even more in terms of outreach with all of its 

stakeholders to find common grounds so that we can all work together to bring the financial footing the Postal Service needs back 

to a reasonable course. 

Senator CARPER. A colleague of ours from Oregon, Ron Wyden, 

and I and others have introduced legislation modeled after what 

they do in Oregon when it comes to voting. They end up being able 

to realize a far greater turnout of voters conducting elections every 

couple of years in a way that not only draws a greater turnout, but 

I think actually costs less money. They have been able to, they 

think, in a satisfactory way, address the potential for fraud among 

folks trying to vote, and they do it by relying on the mail. 

In my old role as Governor, I used to say that every problem, 

every challenge we face in Delaware, some other State has not only 

faced that challenge, but solved it, figured out how to do it, and 

sometimes I think of the States as laboratories of democracy. In 

this case, I think Oregon could be a State for us to model as a Nation. 

There are some benefits that flow to the Postal Service, obviously, in terms of additional revenues and business, but there is 

also on the civic side the potential for 10, 20, 30 percent greater 

turnout and the ability to hold elections not only with more people 

voting, but also in a way that does not cost more money and might 

actually cost less. So that is the kind of thing we are looking at. 

There is a fellow that a lot of us from Delaware know. He is a 

professor at the University of Delaware College of Earth, Ocean, 

and Environment. His name is Willett Kempton, and he works on 

technology called Vehicle to Grid. And as you know, Mr. Toner, the 

State of Delaware is looking forward to, about 2 years from now, 

being able to deploy a windmill farm—— 

Mr. TONER. Yes. 

Senator CARPER [continuing]. Twelve miles off the cost of Rehoboth. Down in Dover, I think this week, they are beginning the 

work on a 60- or 80-acre solar energy farm just outside of the city 

to provide the city and the city’s residents with much of their electricity needs. 

We also know that the wind does not always blow and the sun 

does not always shine—— 

Mr. TONER. Yes. 

Senator CARPER [continuing]. And however wonderful these renewable energies might be, and they are, we need the ability to be 

able to store electricity when the wind is blowing and the sun is 

10 

shining. Willett Kempton has been working on a technology to do 

that, to store the energy through something called Vehicle to Grid, 

where the electricity generated is actually stored by batteries of 

fleets of vehicles, and then as the energy is needed to go back onto 

the grid to meet our needs, the electricity is drawn down from the 

fleet of vehicles. 

There are not many companies in this country that have more 

vehicles in their fleet than the Postal Service, and there are not 

many companies in this country that have an older fleet than the 

Postal Service. And there might be some opportunities here for the 

Postal Service to help in a day that we are trying to do more with 

non-fossil fuel generation of electricity, and at the same time do 

some good things for our environment, strike a blow for technology 

and innovation, and make some money at it at the same time. 

Those are a couple of ideas. 

Mr. TONER. Good. 

Senator CARPER. You probably are aware that the Postal Service 

receives criticism whenever it attempts to close or consolidate facilities. Let me just ask, what do you think the Postal Service 

needs to do to address this criticism and, where necessary, to eliminate excess retail and processing capacity? 

Mr. TONER. Mr. Chairman, I believe that excess retail and processing capacity clearly has become a drain on the resources and 

has contributed, in part, to the current state that the Postal Service finds itself. At the same time, I believe the Postal Service has 

been very diligent in terms of maintaining its service standards 

that it has always kept in place. 

As relates to processing facilities, again, I do believe that we all 

must recognize excess capacity, but I do think it is important that 

we do as good a job or even a better job in communications with 

all of the stakeholders as we attempt to redefine or streamline this 

excess retail capacity so that people can plan accordingly and private citizens can be assured that we will continue to maintain the 

same standard of service. And I think if we can just do a better 

job of communicating our attempts to deal with excess processing 

capacity, we can help alleviate the fears that people have with it. 

Senator CARPER. All right. Thanks very much. 

In the past, I have spoken about the need for the Postal Service 

to focus not just on closing facilities, but also expanding access to 

the services that it offers. This does not necessarily mean building 

new post offices. It could, where appropriate, mean expanding access to alternate retail, such as Automated Postal Centers located 

in places where people go every day, like our grocery stores or our 

pharmacies. 

It used to be that if I wanted to go to the bank, I would go to 

the bank. Today, I can go to the bank at my grocery store. It used 

to be I would go to the pharmacy, or today I can go to the pharmacy in my grocery store. Times have changed, as you know. But 

what do you think the Postal Service might be able to do in this 

area? 

Mr. TONER. Thank you, Mr. Chairman. I believe that obviously, 

the Postal Service needs to discover new revenue initiatives if it is 

going to survive. To the extent that I have had a chance to review 

it, I believe the Postal Service has done a commendable job during 

11 

the past 6 years in terms of dealing with cost controls and so forth. 

However, these measures are not sufficient to deal with the financial realities that the Postal Service faces. Thus, the new revenue 

initiatives need to be put into place. 

And I believe that the customers are comfortable, provided alternative access is available, that is, as you point out, Mr. Chairman, 

as it relates to doing so-called multi-tasking, be it grocery shopping 

and pharmacies and so forth, such actions are likely essential to future growth, and the Postal Service needs to do as other outfits 

have been able to do, and that is, follow your market, so to speak. 

These new revenue initiatives, I think, can only enhance the financial stability that we need to get to. 

Senator CARPER. Thank you. One of the biggest issues that the 

Congress and the Postal Service will face in the coming months is 

the question of whether delivery frequency should be changed, perhaps by eliminating Saturday delivery. How important do you 

think it is that the Congress allow the Postal Service to make the 

business decision to eliminate a day of delivery if doing so is 

deemed necessary? 

Mr. TONER. Thank you, Mr. Chairman. In my view, I believe the 

Postal Service has done a commendable job in involving all socalled stakeholders regarding the possible change in frequency, be 

it 6 days to 5 days or 6 days to whatever. I believe the Postal Service has done its homework in terms of conducting studies, holding 

interviews, completing its various opinion polls, and seeking outside guidance in terms of developing the business plan that could 

perhaps address moving delivery from 6 days down to 5 days. 

All of that being said, I believe the Postal Service is well positioned to make the decision itself, and I believe the decision should 

be made by the Postal Service rather than the Congress. 

Senator CARPER. Thanks. Do you think there might be some way 

to retain 6-day-a-week delivery and to take a page out of what they 

have done over in the U.S. domestic auto industry, where new folks 

who are being hired to build cars, trucks, and vans in America actually come in at a somewhat different wage-benefit structure than 

the folks who have been there for an extended period of time? 

Maybe the folks who deliver the mail on Saturdays could come out 

of a somewhat different compensation structure. 

Mr. TONER. Interesting thought. Obviously, when I was completing a round of interviews during the past few days with a few 

of your colleagues, such a proposal was put forward. I believe it is 

worth further study. I would like to have the opportunity to speak 

with various stakeholders about the prospects, but again, I think 

the Postal Service needs to become just more responsive to this 

should the decision be made to maintain 6-day service as opposed 

to the cost savings that could be represented by a reduction to 5- 

day service. 

Senator CARPER. I may have some extra questions for the record, 

and my colleagues may have some questions for the record. This 

is the last one I will ask you today. The Postal Service receives a 

lot of praise. When you ask people in this country, when they consider different, if you will, government services that are available 

to them, where do they have the most confidence or where they 

12 

give the highest ratings, I think the Postal Service usually ranks 

right up around the top. That should be noted and commended. 

But the Postal Service receives a fair amount of criticism due to 

the fact that labor costs are such a large percentage of their total 

costs. As I recall, it is maybe as much as 80 percent. All four Postal 

Service unions will be entering contract negotiations with the Postal Service in the coming year or so, and if confirmed, how would 

you recommend that Postal Service management approach these 

negotiations? 

Mr. TONER. Thank you, Mr. Chairman. It is a very difficult, involved question, obviously, when you are dealing with labor costs 

that have become such a high percentage for not only the Postal 

Service, but any such institution, be it public or private business. 

I believe that all parties are now aware of the historic financial 

times the Postal Service finds itself and that sacrifice is needed by 

all the stakeholders. I think the Postal Service will need to do more 

to address this idea of an 80 percent figure as relates to labor costs. 

As I understand it, I believe the Postal Service has made some 

gains in lowering this percentage cost and hopefully will continue 

to work to that end. I think, in addition to that, the role of the Governors needs to be to further encourage these discussions and continue these communications as we approach all of the assets as it 

relates to the upcoming negotiations. 

Senator CARPER. Thank you. Again, my thanks to you for responding to our questions. 

Mr. TONER. Thank you, Mr. Chairman. 

Senator CARPER. I thank you for appearing before us today and 

for your testimony. I also want to thank you for your service for 

more than three decades and for making our former junior and 

then senior Senator, Joe Biden, look good enough to actually become—— 

Mr. TONER. Easy task. Thank you. 

Senator CARPER [continuing]. Vice President of this country, no 

small undertaking. But we thank you for your willingness to maybe 

continue that service to our country in a different way through 

serving on the Board of Governors, should my colleagues see fit to 

confirm your nomination, and if they do, I certainly look forward 

to working with you. I know I speak for our staff and for my colleagues. 

The hearing record will be open until noon tomorrow for the submission of additional questions. That is a pretty short period of 

time. I think we might be having a Committee markup the following week. And there is a chance that if there is no objection 

raised by our colleagues, your nomination could literally be on the 

agenda for that business meeting the week after next, but we will 

see. 

Mr. TONER. I would welcome that. Thank you. 

Senator CARPER. Again, thanks to our staff for helping to arrange for this hearing and to you for your preparation and your responses. I wish you well and look forward to seeing you again soon. 

Thanks so much. 

Mr. TONER. Thank you. 

Senator CARPER. And with that, this hearing is adjourned. 

[Whereupon, at 3:12 p.m., the Committee was adjourned.] 

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