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76–060 PDF 2012

S. Hrg. 112–566 

NOMINATION OF STEPHEN CRAWFORD 

HEARING 

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

NOMINATION OF STEPHEN CRAWFORD TO BE A GOVERNOR, U.S. 

POSTAL SERVICE 

JULY 12, 2012 

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 

MARK BEGICH, Alaska 

SUSAN M. COLLINS, Maine 

TOM COBURN, Oklahoma 

SCOTT P. BROWN, Massachusetts 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JERRY MORAN, Kansas 

MICHAEL L. ALEXANDER, Staff Director 

KRISTINE V. LAM, Professional Staff Member 

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

Government Information, Federal Services, and International Security 

NICHOLAS A. ROSSI, Minority Staff Director 

JENNIFER L. TARR, Minority Counsel 

WILLIAM H. WRIGHT, Minority Staff Director, Subcommittee on Federal Financial 

Management, Government Information, Federal Services, and International Security 

TRINA DRIESSNACK TYRER, Chief Clerk 

PATRICIA R. HOGAN, Publications Clerk 

LAURA W. KILBRIDE, Hearing Clerk 

(III) 

C O N T E N T S 

Opening statement: Page 

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

Prepared statements: 

Senator Carper ................................................................................................. 17 

Senator Brown .................................................................................................. 19 

WITNESSES 

THURSDAY, JULY 12, 2012 

Hon. Benjamin L. Cardin, a U.S. Senator from the State of Maryland: 

Testimony .......................................................................................................... 1 

Prepared statement .......................................................................................... 21 

Stephen Crawford to be a Governor, U.S. Postal Service: 

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

Prepared statement .......................................................................................... 23 

Biographical and financial information .......................................................... 25 

Letter from the Office of Government Ethics ................................................. 32 

Responses to pre-hearing questions ................................................................ 33 

Responses to post-hearing questions .............................................................. 48 

(1) 

NOMINATION OF STEPHEN CRAWFORD 

THURSDAY, JULY 12, 2012 

U.S. SENATE, COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 3 p.m., in room SD– 

342, Dirksen Senate Office Building, Hon. Thomas R. Carper, presiding. 

Present: Senator Carper. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. The Committee will be in order. 

We welcome our colleague and our nominee and at least part of 

his family, I think. I am going to ask, Senator Cardin, if you will 

just lead us off. And, once you have presented, I think you have 

a lot of other things on your plate, but you are welcome to stay for 

as long as you can. Thank you for being here. It is great to see you. 

TESTIMONY OF HON. BENJAMIN L. CARDIN, A U.S. SENATOR 

FROM THE STATE OF MARYLAND 

Senator CARDIN. Mr. Chairman, first, thank you very much for 

allowing me to introduce a great Marylander, Steve Crawford, and 

I thank you for the courtesy; and let me just, if I might, tell you 

how pleased I am that Dr. Crawford is willing to allow his name 

to come forward for this very important position. 

He has proven his leadership in both the private and public sectors. I think he is well suited for the U.S. Postal Service Board of 

Governors at this critical time in the history of our Postal Service. 

As the U.S. Postal Service confronts the challenges of a multibillion-dollar shortfall, the agency needs Dr. Crawford’s intelligence, 

his expertise, and his leadership skills. He has experience in this 

area. He has proposed a number of innovative initiatives for changing the U.S. Postal Service’s business model in a paper the agency 

commissioned, including creating new revenue streams via savings 

accounts and hybrid electronic services. 

His ideas on open source innovation and collaborative innovation, 

that is, harnessing the creativity of employees and customers in 

building a better Postal Service, are particularly, I think, relevant 

to the needs of the reforms within the postal system. 

At the same time, Dr. Crawford understands the importance of 

smart reforms that preserve important mail delivery services in our 

communities. As we continue to build a 21st Century Postal ServVerDate Nov 24 2008 11:03 Oct 17, 2012 Jkt 076060 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 P:\DOCS\76060.TXT SAFFAIRS PsN: PAT
2 

ice, his vision for an efficient and reliable service is critical to the 

agency’s future success. 

Let me just point out some of Dr. Crawford’s leadership experiences. He was the Executive Director at the Center for International and Security Studies in the School of Public Policy at the 

University of Maryland. 

He was the Executive Director of the Governor’s Workforce Investment Board; and as you know, that is very much involved in 

the type of issues that are going to be confronting the Postal Service. He was successful in getting the Maryland General Assembly 

to give adequate budget support to those efforts, which is not an 

easy task, showing his political ability. 

He helped develop the National Policy Association where he 

served as the Vice President and the Chief Financial Officer. He 

became Director of the National Governors Association’s Division of 

Social, Economic, and Workforce Programs, again showing his experience at all levels of government. 

He was Deputy Director of the Metropolitan Policy Program at 

the Brookings Institution. Today, Dr. Crawford is a research professor at George Washington University in the Institute of Public 

Policy where he manages public policy projects. 

He has a wealth of experience in the public and private sectors 

related directly to the challenges being faced by the U.S. Postal 

Service. 

Dr. Crawford holds a Bachelor’s Degree from Cornell, a Ph.D. in 

Economic and Political Sociology from Columbia University, and a 

Master’s Degree in Public Finance from Wharton Business School 

at the University of Pennsylvania—quite impressive credentials. 

He has a strong history of civic engagement in Maryland, including the American Red Cross and the Frederick County Substance 

Abuse Advisory Council. He served our Nation in the U.S. Army 

where he earned six medals, including a Bronze Star and the Combat Infantryman Badge in Vietnam. 

The Postal Service needs people like him who can deal with the 

crisis that is currently being confronted in a direct way, but always 

mindful of the responsibilities to the public. I am honored to 

present him to you and urge the Committee to consider his nomination as promptly as possible. 

Thank you Mr. Chairman. 

Senator CARPER. We thank you very much. 

I would ask the witness, is there anything he said that you 

would disagree with? [Laughter.] 

I have been watching your wife right behind you, Mr. Crawford, 

and she is sitting there nodding her head. She is saying, Senator 

Cardin knows my husband pretty well. 

Those are mighty nice things to say about anybody and especially 

our nominee. Senator Cardin, thank you so much. Take care. 

Today, we are here to consider the nomination of Stephen 

Crawford to be a member of the Postal Service’s Board of Governors. 

I think it is great whenever one of the Senators, sometimes both 

of them, are able to come by and introduce a witness. It says a lot 

about the regard that they have for you. We have a whole lot of 

respect for Senator Cardin. So, it is good that he could come. 

3 

I know our nominee is aware that the Postal Service has been 

facing challenging, even dire, financial trouble for some time. The 

trouble will come to a head in the coming months, and the Postal 

Service is reporting record losses each quarter and hemorrhaging, 

we are told, about $25 million each day. 

By the end of this fiscal year, it is likely it will not have enough 

money to meet its health and workers’ compensation obligations; 

and by sometime in 2013, we are told it will not have enough 

money to continue operations at all. 

I would like to say that the situation is dire, but it is not hopeless. This is a set of problems that we can fix, and the legislation 

that we passed here in the Senate will go a long way toward allowing the Postal Service to heal itself. 

We need for our friends in the House to pass a bill. I will probably say this a couple of times in my comments. We need for the 

House to pass a bill so that we can go to conference and hammer 

out an even better bill than we have passed in the Senate. 

But the Postal Service operates, as we know, at the center of a 

$1 trillion mailing industry that puts as many as 8 million men 

and women to work every day. It is a key cog in our economy. Its 

continued vitality is an important part of our efforts to get the 

economy moving again, and at a time of so much economic uncertainty, we cannot afford to let the Postal Service collapse or even 

to intimate that it might collapse. It is not helpful at all. 

As I said earlier, the Senate has passed legislation that attempts 

to address the Postal Service’s near-term financial crisis and give 

it some of the tools it needs to address long-term challenges, not 

just by working on the cost side, but also making sure that we 

allow the Postal Service to do some good work on the revenue side 

to grow revenues. 

Our bill would clean up the Postal Service’s books by refunding 

the more than $10 billion it has overpaid into the Federal Employees Retirement System and setting up a less aggressive schedule, 

I think a more realistic schedule, for funding postal retiree health 

obligations. 

But even what we have done here in the Senate bill I think is 

probably more conservative than most State and local governments 

and perhaps more than most businesses with respect to pre-funding retiree health obligations. 

But a portion of the pension refund that would come back to the 

Postal Service from a Federal Employees Retirement System refund would be used to encourage about 100,000 postal employees 

to retire, an effort that could save as much, we are told, as $8 billion per year. That is almost half of what they are losing. 

Our bill would also push the Postal Service to streamline its 

processing, delivery, and retail networks, albeit at a more gradual 

pace than postal management would have liked. 

These provisions would allow the Postal Service to achieve billions of dollars in savings while preserving levels of service that 

many customers rely on. 

If these cost-cutting efforts do not prove sufficient in the coming 

years, the Postal Service will be permitted to move forward with 

more aggressive efforts. 

4 

1The prepared statement of Senator Brown appears in the Appendix on page 19. 

But our bill, as I said, does not just focus on cuts, it also encourages the Postal Service to be more entrepreneurial, something I understand our nominee has been an advocate for in recent years. It 

does this in part by pushing the Postal Service to find innovative 

ways to bring in more mail volume and make the best use of the 

valuable system it maintains in order to deliver the mail to every 

home and business 6 days a week. 

As I said before, our bill is not perfect. Anything this complex is 

unlikely to be perfect or to solve every single problem and challenge facing the Postal Service. 

But it gets us, I think, most of the way there; and depending on 

how serious the Postmaster General and his team are about continuing to cut costs in a smart way and to make effective use of 

the tools that we provide for them, the legislation has the potential 

to get us to our goal of financial stability for the Postal Service, 

and that, given where we are today, will be a good day’s work. 

Our nominee before us today, Mr. Crawford, has significant academic, research, and public policy experience; and I am interested 

in learning more today about how that experience would benefit 

the Postal Service during this difficult, trying time. 

I would also like to hear more about how Dr. Crawford’s background will help him, if confirmed, in working with the rest of the 

Board of Governors to tackle the major management challenges 

that they face, not just this year, but in years to come. 

Senator Brown may be joining us in a little bit. If he is able to 

join us later, then we will recognize him for whatever comments he 

wishes to make. If he wants to submit a statement for the record, 

we will be happy to have that.1

Dr. Crawford has filed responses to a biographical and financial 

questionnaire. He has answered pre-hearing questions submitted 

by the Committee. He has had his financial statements reviewed 

by the Office of Government Ethics. 

Without objection, this information will be made part of the hearing record with the exception of the financial data, which are on 

file and available for public inspection in the Committee office. 

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

Dr. Crawford, I am going to ask you to please stand and raise 

your right hand. 

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. CRAWFORD. I do. 

Senator CARPER. All right. Let us give you a chance to give your 

full statement. If there is anybody in the audience that you would 

like to introduce, you are more than welcome to do that. 

Please go forward. 

5 

1The prepared statement of Mr. Crawford appears in the Appendix on page 23. 

TESTIMONY OF STEPHEN CRAWFORD 1 TO BE A GOVERNOR, 

U.S. POSTAL SERVICE 

Mr. CRAWFORD. Thank you, Mr. Chairman. I am pleased that my 

wife, Liliane Floge, is here with me. She may have to leave early 

to pick up our 12-year-old daughter who is at a camp performance, 

but we will see how that plays out. 

Senator CARPER. Mrs. Floge, it is very nice to see you. Thank you 

for coming. Thank you for your willingness to share your husband 

with our country one more time. 

Were you all married when he was in the military? 

Mr. CRAWFORD. No. 

Senator CARPER. Please proceed. You can talk for as long as you 

want. Usually we say you have 5 minutes, but you can talk for as 

long as you want. If it gets to be about 6 o’clock, we will wrap it 

up. [Laughter.] 

Mr. CRAWFORD. Chairman Carper, thank you for the opportunity 

to testify today. I am truly honored to be nominated by the President to serve on the Board of Governors of the U.S. Postal Service, 

and I am pleased to share with the Committee how, if confirmed, 

I would approach the responsibilities involved. 

As you know, the Postal Service faces enormous challenges. In 

assessing them, I find it helpful to keep in mind the magnitude of 

what is at stake. In my view, the Postal Service remains a vital 

national asset. It directly employs almost a half million Americans, 

and it makes possible a $1 trillion mailing industry that, as you 

just said, employs 8 million others. 

Although mail volume has declined from its 2007 peak, the Postal Service still delivered 168 billion pieces of mail last year to more 

than 150 million households and businesses. Many of these households depend on those deliveries for essential services that they 

could not afford were it not for the Postal Service’s important commitment to universal service. 

Similarly, many small businesses, non-profits, publishers, and 

other mailers depend on the Postal Service’s internationally recognized efficiency and reliability. 

Amazingly, this vital institution now finds itself on the verge of 

insolvency. It is in these dire straits, I believe, for three main reasons: The growth of electronic communications and resulting diversion of First Class Mail; the recent recession and its lingering impact; and the unique regulatory environment in which the Postal 

Service operates. 

While there seems to be broad agreement on these causes of the 

Postal Service’s deficit, there is considerable disagreement about 

how to fix it. 

Some emphasize cutting costs by consolidating facilities, reducing 

delivery frequency, and/or changing service standards. Some emphasize increasing revenues by adding new products and services. 

Some call for adjusting the price cap, and many call for changing 

the current requirements for pre-funding the health benefits of future retirees. 

I believe that the challenges are so severe that the Postal Service 

should explore all the above as, in fact, it has been doing, aided reVerDate Nov 24 2008 11:03 Oct 17, 2012 Jkt 076060 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 P:\DOCS\76060.TXT SAFFAIRS PsN: PAT
6 

cently by the Senate’s passage of S. 1789. I say that as someone 

whose past experience has included privileged opportunities to examine the Postal Service’s problems in broad terms. 

Yet, if confirmed, my views might evolve as I learn more. As a 

board member, I would consider all reasonable options and make 

decisions based on my sense of what is best for the country and the 

long-term health of the Postal Service. I would approach these decisions as someone who listens carefully and communicates honestly, 

takes seriously the interests of all involved parties, and yet believes 

strongly in innovation and leadership. 

I believe that my prior experience has prepared me well to serve 

on the Board and to make distinctive and significant contributions 

to its work. To be sure, I have never managed an organization of 

more than 50,000 employees. However, I have advised and worked 

closely with the top leaders of such organizations, especially State 

governors, but also corporate Chief Executive Officers (CEOs) and 

university presidents. 

I have also conducted research, published articles, and advised 

on the kind of business model innovation needed to harness new 

technologies and adapt to changing markets. 

A research colleague and I recently briefed, at her request, Undersecretary of Education Martha Kanter and her senior staff on 

our ideas for streamlining higher education, another industry 

where rising costs and online alternatives are calling into question 

the traditional business model. 

Finally, as a member of the Obama-Biden transition team and 

later as a consultant to the Postal Service, I have had wonderful 

opportunities to assess the problems and potential solutions facing 

the Postal Service, the mailing industry, and such related government agencies as the Postal Regulatory Commission (PRC) and the 

Office of the Inspector General. 

In closing, I would like to thank the Committee for its impressive 

efforts over many years to provide the policy framework needed to 

enable the Postal Service to accomplish its vital mission. It is clearly a difficult task in today’s rapidly changing environment, but I 

am optimistic that good solutions are within reach. 

I look forward, if confirmed, to working with the Committee, with 

you, and with all the Postal Service’s stakeholders on crafting and 

implementing such solutions. I appreciate the opportunity to testify 

today and welcome your questions. 

Senator CARPER. Thank you. That was a very good statement. I 

am sorry that more of my colleagues were not here to hear it. 

I will start our questioning today with three standard questions 

that we ask of all the nominees. First, is there anything 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. CRAWFORD. No, Mr. Chairman, there is not. 

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. CRAWFORD. No, sir. 

7 

Senator CARPER. And finally, 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. CRAWFORD. I do. 

Senator CARPER. In that case, we can go on to these other questions. These are maybe a little harder to answer, but we will give 

it a shot. 

Legislation signed into law by President George W. Bush in 2006 

requires that by 2015, at least four members of the nine-member 

Board of Governors have experience managing large organizations; 

and I, as I said earlier, co-authored that legislation with Senator 

Collins and a number of our colleagues. 

Our goal with this particular provision was to encourage the 

President to send nominees for the Board with relevant business 

experience, something that was sorely lacking on that body at the 

time. We now have some governors with business experience on the 

Board, but frankly not as many as we had hoped to have at this 

point when we were drafting the 2006 law. 

Would you take a couple of minutes to share with us your 

thoughts on the 2006 qualification criteria for the Board and also 

about what you think you would bring to that body, if confirmed? 

Mr. CRAWFORD. I am happy to. For sure, I have never run an organization of 50,000 people or anything like it. I headed an independent agency of Maryland State Government. The full State government was an organization of 80,000, but I headed a small agency with a small staff. We did oversee all of the work force development operations around the State, but that is not what the authors 

of the Postal Accountability and Enhancement Act had in mind 

when they were talking about experience running a large logistics 

firm or some sort of big enterprise like that. 

I applaud the Committee’s thinking. Fifty thousand is a high bar 

given that nowadays there are many CEOs of very impressive hightech companies who would be disqualified. 

But putting aside the 50,000, it seems to me the bigger issue 

here is having some experience in working with leaders in industry 

and the private sector, but also having some connection to the public policy side of these issues because clearly, the Postal Service is 

not a purely private enterprise. 

And, I think that I have useful experience—as an Executive Director of three organizations, as someone who has worked in State 

government, as someone who has worked in the private sector, as 

someone who has been in think tanks where we analyze public policy issues, especially issues of innovation and economic growth and 

the kinds of new business models that are increasingly talked 

about as critical. And I would just add here, one issue is that as 

technologies change, quite often the old business models are now 

not well suited to exploiting their full potential; and yet changing 

business models is very tough once you have an established pattern. 

So, I have had the opportunity to delve into the literature and 

work with experts on that area and would hope that will enable me 

to contribution in that respect. 

But I am very serious about the innovation side. I think there 

are great opportunities for the Postal Service, and I think my backVerDate Nov 24 2008 11:03 Oct 17, 2012 Jkt 076060 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 P:\DOCS\76060.TXT SAFFAIRS PsN: PAT
8 

ground working on open source innovation and variants of that will 

be useful and different from what some of the other Board members bring to it. 

Senator CARPER. Thank you for those comments. 

When we met in my office earlier this week, you shared with us, 

and you mentioned here again today, your work on the ObamaBiden transition team. Would you talk a little bit about that experience and how it relates to the Postal Service, please? 

Mr. CRAWFORD. I am happy to. It was an extraordinary experience for me. I think like most Americans, I sort of took the Postal 

Service for granted. My mail is there every day; I go out and get 

it. Sometimes my Economist magazine, if it did not arrive Saturday, I had to wait until Monday. That sort of annoyed me a little 

bit. 

But as soon as I plunged in as part of the transition team, I 

found myself interviewing members of the Postal Regulatory Commission, members of the Board of Governors, all the senior managers in the Postal Service, the leaders of all the unions, and the 

mailers and their associations. 

And so, I had an extraordinary opportunity to get a look at the 

big picture for the mailing industry and the critical role the Postal 

Service plays in that. But I also had my eyes opened to the challenges that the Postal Service faces because even then it was 

clear—the growth of e-mail and declining volumes and the increase 

in the number of delivery points. 

So I wrote a paper for the transition team that is a private 

paper, but everybody knows that the number of delivery points 

goes up by more than 1 million a year and at the same time the 

volume of mail goes down every year. 

Senator CARPER. When do you think it peaked? What year? 

Mr. CRAWFORD. Well, I have heard different stories on this—2007 

is the peak that I used in my opening statement and that is, I 

think, correct, although I occasionally see other figures put out 

there. 

Senator CARPER. When did you actually do this transition team 

work? Was it at the tail end? 

Mr. CRAWFORD. In 2008–2009. The deficits and the pre-funding 

of the retirees health benefits and all sorts of issues were there already, but they just did not seem as serious as they do now. 

Senator CARPER. I presume others were working with you on 

this? 

Mr. CRAWFORD. I was the head of the team, and it was a very 

small team. I had some assistants who helped out. 

Senator CARPER. What conclusions did you reach then about a 

path forward for the Postal Service to avoid the kind of cataclysmic 

problems that have occurred since? What conclusions, if any, did 

you reach that might be helpful for us today? 

Mr. CRAWFORD. I said many of the things that appear in S. 1789. 

I was terribly pleased to see the bill shape up the way it did because it seemed to me—— 

Senator CARPER. Are you suggesting that we may have plagiarized the work of your report, which no one has ever seen on the 

Committee? 

Mr. CRAWFORD. I would love to flatter myself, but I know better. 

9 

Senator CARPER. All right. 

Mr. CRAWFORD. I said the Postal Service has to do something to 

increase revenues and cut costs. The volume is going down. Maybe 

there has to be some streamlining and rightsizing. I am not sure 

of the best way to do that. 

Maybe it has to be considering the frequency of delivery. Maybe 

it has to be considering shorter operating hours at small post offices that now serve towns that are smaller than they used to be. 

It was easy to put all of these options out there. I am not sure 

I appreciated all of the politics that are involved. But I also talked 

a lot about new products and services and innovation. I talked at 

considerable length about crowd sourcing and the Web 2.0 opportunities for not just having passive information available on Web 

sites, but having a dialogue going back and forth, and I talked 

about having contests for kids to design stamps. 

We see this going on even in the National Aeronautics and Space 

Administration with volunteer astronomers identifying craters on 

heavenly bodies. I mean, it is extraordinary the resources that are 

out there. And so I did say quite a bit in my paper to the Administration about maybe hybrid mail, maybe postal savings accounts—— 

Senator CARPER. You talked about hybrid mail, I think, but just 

tell us what you mean by that. 

Mr. CRAWFORD. By hybrid mail, I mean when the post office of 

origin scans the envelope from people who participate in this service and emails to the designated recipient an image of the front 

and back of the envelope. Let us say I am on vacation or I am a 

consultant and a road warrior. I open up my laptop, and there is 

an email from the Postal Service that says you have the following 

mail in your mailbox at the point of origin. You can decide whether 

you want us to send it on to you in its original hard copy form— 

maybe it is a graduation diploma and you want that desperately— 

or we can scan the contents inside the envelope if you give us permission—we have a high-tech security system—and email you an 

electronic version of the contents and you will get that immediately 

wherever you are, or we can throw it out. 

So, that has been experimented with in Switzerland. I have not 

updated my knowledge of how that works, and I am not advocating 

that for the U.S. Postal Service. In fact, it may be obsolete, given 

the rapid changes in technology; but when I mentioned it, that is 

what I had in mind. 

Senator CARPER. Thank you. I asked John Kilvington, who is sitting behind me and is our subcommittee staff director and has 

worked on these issues for a number of years, how that might relate to the concept of electronic mailboxes. And, my sense is that 

it does not. 

Is that a concept that you have thought about then when you 

were doing your work? 

Mr. CRAWFORD. I certainly did not back then, and there is still 

a great deal more I would like to learn about electronic mailboxes. 

I do think that there may be opportunities for the Postal Service 

to get into the business of identity creation and authentication 

services—electronic identity. The number of passwords that people 

struggle with and the opportunities for fraud are becoming serious 

10 

issues in our society, and the Office of Inspector General has produced a paper on this that I find quite interesting. 

I know less about electronic mailboxes than I would like to know. 

I would like to learn more about that, but this related service may 

be an opportunity. 

Senator CARPER. Maybe someday you will have the opportunity 

to be the expert on the Board of Governors on electronic mailboxes. 

Mr. CRAWFORD. I would like that. 

Senator CARPER. Let me just say, it is one thing to pass legislation. My hope is that the House will pass a bill, I do not care, any 

bill, and just call it a postal bill and pass it on suspension, voice 

vote, and we will go to conference and hammer something out that 

is hopefully a better bill than the Senate bill and a lot better than 

no bill. 

It is one thing to pass legislation, hopefully thoughtful legislation, but give us some idea, if confirmed, how you would work with 

your colleagues to put into action some of the ideas that are in our 

bill, a bipartisan bill, that apparently you considered 3 years ago. 

But how would you work with your colleagues to put some of 

these ideas into action and to further improve the Postal Service’s 

financial condition? 

Mr. CRAWFORD. There are two issues. One is if the legislation 

passes, then it is a matter of implementing it aggressively and as 

rapidly as possible, and that is a challenge for a big organization. 

So, it seems to me that the Board’s role is to push, to ask tough 

questions, and to urge the Postal Service to get on with the task 

at hand. 

But if the legislation gets considerably changed from what is in 

S. 1789 because of conference committee compromises, then maybe 

there will not be a Chief Innovation Officer in the legislation. 

Maybe there will not be a requirement for an Advisory Council. 

In that case, once I got a little bit more comfortable with my colleagues and got to know them, I would say to them, why do we not 

do this anyway? Why do we need legislation in order to have a 

Chief Innovation Officer? Can that not be done on our own in the 

Postal Service? And, I would urge action on some of these things 

just because they are good ideas. 

If it is trying out some new service, then it seems to me you have 

to have careful market testing and the PRC involved, and the legislation talks about those. 

It seems to me that you have to be careful about pilots and experimenting and testing out new ideas, whether it is for digital 

verification services or postal savings accounts or whatever the little item might be—or not so little, like fishing licenses with State 

governments and things. We need trial and error and learning. 

One of the challenges for the Postal Service, to be honest, is to 

have a culture of innovation and to feel free to occasionally make 

mistakes because that is what happens when you are in an entrepreneurial situation. You learn by sometimes being wrong, pulling 

back, and trying something else. 

Senator CARPER. This gives me an opportunity to inject one of 

my favorite quotes. No one ever quotes Richard Nixon, at least not 

on our side of the aisle. But Richard Nixon used to say, ‘‘The only 

11 

people who do not make mistakes are the people who do not do 

anything.’’ 

And you said a mouthful with respect to having an atmosphere 

that invites experimentation, invites innovation and creativity, particularly with respect to raising revenues, and does not discourage 

postal employees, managers, and others from being innovative and 

creative and knowing that if there is a failure, hopefully not of any 

consequence, it is not the end of the world, particularly if there are 

five things that work to grow revenues or to reduce the growth of 

expenses. 

One of the big jobs, I think, that the Board will have is to help 

create that environment for innovation and creativity and to not 

just say we are going to do things pretty much the way we have 

always done them and we are going to get stability and sustainability simply on the expense side. 

There is plenty that can be done and should be done on the expense side, but I think there is some real potential on the revenue 

side, and we have to pursue that with a lot of vigor. 

That is not going to be something that we are going to necessarily impose on you, although there is some pretty strong language in the Senate bill to encourage that. But the Board needs to 

drive that. 

Talk to us about 5-day versus 6-day a week delivery, please. 

Mr. CRAWFORD. Well, I mentioned earlier that it is sometimes 

frustrating when my Economist, a magazine I subscribe to, does 

not arrive on Saturday. Especially if it is a holiday Monday, I do 

not get it until Tuesday, and there is a new one on the newsstand 

by Friday. So, it is getting dated quickly. 

So, I would hate to see Saturday delivery eliminated, and yet, 

and I have said this in an article that I wrote, I think the option 

has to be kept on the table as a last resort. If we are unable to 

balance the books and cover costs, then at least we should carefully 

look at whether there are real savings involved by eliminating Saturday delivery. 

I would hate to see it come to that. I would hate to see the service go down, and there is some risk that revenues will go down and 

usage of the Postal Service would go down. Those are things we 

need to have the freedom to experiment with and learn about. 

It seems that the public is pretty ready to accept it, if it is necessary. Seven out of 10 in the surveys seemed to say that they 

would be OK with cutting out Saturday delivery. 

But personally, it is my great hope that through increases in productivity, through increased revenues through new services and 

products, through other forms of rightsizing, we can avoid that. 

But I am very happy that the bill includes the possibility of getting there. We just have to be realistic if it comes to that. We may 

need to consider it. 

Senator CARPER. I have encouraged friends at the National Association of Letter Carriers and the current leadership and the previous leadership to do what I think they tried to do a number of 

years ago, and that is to negotiate with management to see if there 

is some way to continue to sustain Saturday delivery, but maybe 

to do it in a different compensation structure than may occur on 

the other 5 days. 

12 

Mr. CRAWFORD. Yes. 

Senator CARPER. And do it in a way that allows us to continue 

Saturday delivery, but is more cost-effective. I know there has been 

some serious efforts to do that in the past, and my hope is that we 

will see some serious efforts that flow out of any legislation that 

we develop. 

Talk to us about standards of delivery. We have been operating 

to date on one- to three-day delivery, a lot of overnight delivery, 

but everything pretty much done within 3 days, at least within the 

continental United States. 

Mr. CRAWFORD. Yes. 

Senator CARPER. Talk to us about the modified one-day delivery 

that is inherent in our legislation. What are your thoughts about 

that and how that relates to mail processing centers. We have 

about 480 of them across the country today. I think there is an interest in going to maybe 325. 

And also please comment on the 33,000 post offices that we have 

and the interest in trying to find a way to save money with the 

way we run our post offices, but at the same time to continue to 

provide a menu of options for more rural communities for the mail 

service in their communities. 

Mr. CRAWFORD. These are tough issues. 

Senator CARPER. You know what? They were, and I think we 

have come to a pretty good place. And a lot of people have worked 

on this. We got help from the folks in unions, ideas from them, 

from the rank-and-file employees, from management, and from customers. Democrats and Republicans worked on this here. I think 

we have come to a pretty good place. I think the Postal Service 

showed a fair amount of creativity. 

But what are your thoughts? 

Mr. CRAWFORD. I am entirely comfortable with S. 1789’s handling of the closing of small post offices, the provisions for reduced 

window hours, and the consolidations of two post offices that are 

nearby, but maintaining access and service, perhaps village postal 

offices or some alternative retail outlets. 

It seems to me there is a lot of creative leeway there to try to 

maintain access for people for whom it is essential, and I respect 

that. 

On the processing facilities and the service standards, there is a 

relationship between how quickly mail has to get a certain distance. It it is overnight or first-class mail, then there are more 

overtime hours and the use of equipment is compressed into a 

smaller time frame. 

It has to do with the point of entry and the time of entry. And 

so there are lots of variables in this one. But it seems to me that 

a compromise is emerging that allows some processing centers to 

be consolidated and the number of them reduced and at the same 

time to maintain service standards. 

So, I am not an expert on these things, but from what I can gather, reading the bill, that looks very positive to me. 

Senator CARPER. All right. Thank you. 

For someone who might be watching this hearing from someplace 

across the country, there are roughly 33,000 post offices in communities across the country, and a lot of them have postmasters. Some 

13 

of them pay their postmasters $50,000–$60,000 a year to mainly 

sell $15,000–$25,000 worth of stamps a year, and that is not a viable business strategy for long. 

But, rather than say we are going to close post offices, what we 

have done is say if there are 13,000 post offices with economic challenges, why do we not give the communities a menu of options? 

They can say we would like to have our own post office. 

We may not need to have it open 6 days a week, 8 hours a day, 

but we would like to have it open 6 days a week, or we would like 

to have service at least 2, 4, or maybe 6 hours a day. 

The post office may not need to have a postmaster. The Postal 

Service can incentivize a postmaster who is eligible to retire, receive benefits and a pension, and come back to work 2 or 4 hours 

a day and earn some extra money. 

For some postmasters, that would be attractive; for others, it 

would not. But that is one option. 

Another option is co-location with supermarkets or convenience 

stores or such. Another option is rural delivery. Rather than people 

coming into a post office and picking up the mail, have rural delivery; and maybe when they stop for lunch at a gas station or at a 

convenience store, folks may want to buy stamps or drop off packages for mailing, they can meet their rural letter carrier at that location. 

There is a bunch of different options; but the idea is to say it is 

not one way, one size does not fit all, but to provide the communities with some options and then to have a real conversation, a 

real negotiation. Maybe in the end, let the communities vote, 

maybe vote-by-mail, to say which of those options they like. 

And vote-by-mail is, I think, a great idea for States. We have a 

couple of States—Oregon and Washington—who are already doing 

that. One of our Senators from Washington State said to us a couple of months ago, I think she said that—I do not know, maybe it 

was Oregon—they had vote-by-mail a couple of years ago and their 

participation was in the low 70s. Very good. 

They are looking to get maybe 80 percent turnout this time. That 

is terrific compared to a lot of places in this country where it is 

barely 50 percent. 

I think there is an opportunity maybe to do something more costeffectively, that is, encourage more people to vote, get better results 

for less money, and provide a nice piece of business for the Postal 

Service, too. That might work. 

Those are the kinds of things we have to be thinking about. 

I have a question here on pre-funding retiree health benefits. I 

think we have already heard from you on that, and I will give you 

a question in writing to explore a bit more on that. 

I have at least one more question then. In the coming months if 

Congress and the Administration are unable to come to agreement 

on postal reform legislation, the Postal Service will need to make 

some tough decisions about how to preserve operations with a 

dwindling amount of cash. 

This will be put, if you are confirmed, in your lap and the lap 

of the other Governors. But if you are confirmed, how would you 

direct the management of the Postal Service as it seeks to keep the 

business running during this crisis that we would face? 

14 

Mr. CRAWFORD. Well, I think the Postmaster General has made 

it clear that you have to set priorities if you cannot pay all your 

bills. Right? 

So, the first priority is to deliver the mail, and that is important 

to the whole Nation’s commerce, to our economy. It is unimaginable 

to think what would happen if suddenly that stopped. 

So, to do that you have to pay people’s salaries and you have to 

pay suppliers, pay for the fuel for the vehicles. So, those are the 

first priorities. 

There has already been a delay in paying the $5.5 billion prefunding annual payment for the retirees health benefits, and that 

could happen again with $11.1 billion due in August. I guess the 

first installment is due on August 1 and the rest by September 30. 

So, do those payments get delayed again? Workers’ compensation—I suppose those payments are further down the list than the 

payment of salaries. 

Senator CARPER. Let me just ask, do you have anything else that 

you want to add or take away? Is there anything you asserted that 

you would like now to reverse and take a diametrically opposed position? 

Are you happy with what you have been able to put on the table? 

Do you want to refine anything? 

Mr. CRAWFORD. No. I am excited about the opportunity. I am impressed by the seriousness of the challenges before the Postal Service and very hopeful that the House will produce a bill, it will go 

to conference, something will happen before September 30 that will 

create a Federal Employees Retirement System refund, and some 

things will start happening that will give the Postal Service the 

flexibility it needs. 

And then it seems to me the job for the Board, for management, 

for the whole Postal Service and the wonderful employees is to implement; and that is a big challenge in itself. It is nice to have 

flexibility, but you have to use it well. 

I would not be interested in this position if I were not optimistic 

that solutions are within reach. But I look forward to talking to 

lots of others in the industry because I know that there are no silver bullets. We need to put together a very creative package to get 

through this. I think it can be done, and I am excited about it. I 

thank you for the opportunity. 

Senator CARPER. You are quite welcome. We appreciate the 

President’s submitting your name to us and giving us an opportunity to consider that nomination, and we appreciate very much 

your willingness to serve. 

I like to kid around a little bit, and we have done that some here 

today. Having said that, the situation that the Postal Service faces 

is dire. It is serious. We know that. 

But there is hope in a hopeless world, and there is, I think, reason to be hopeful for the Postal Service, too. I will say again, the 

legislation that we passed with a bipartisan majority in the Senate 

does not solve all the problems. It does not make the Postal Service 

viable or profitable forever. But I think it helps get them headed 

back in the right direction, and it is something that can be improved upon, and it needs to be. 

15 

I know you worked for National Governors Association and had 

the opportunity to call any number of governors, from States and 

territories, governor. I was wondering, did you ever think in those 

years that someday people would refer to you as governor? 

Mr. CRAWFORD. I did not. 

Senator CARPER. And you would not have to run for the office, 

would not have to raise a dime, kiss a baby, or do any of that? 

Mr. CRAWFORD. That is true. 

Senator CARPER. This is a way to get to be called governor. Now 

people can call you governor, if you are confirmed, maybe for the 

rest of your life, and they will not know that you did not have to 

set up a super PAC or any of that stuff. 

Mr. CRAWFORD. Will you speak to my wife and my 12-year-old 

about this? 

Senator CARPER. I will. All governors have first ladies or first 

husbands. It is a package deal. 

I think that is it. The record will remain open for our colleagues 

if they would like to submit statements for the record or if they 

have questions that they would like to ask you. I think their deadline for doing that is noon tomorrow. So, I expect you might hear 

from some. We would ask you to respond promptly. 

With that having been said, this hearing is adjourned. Thank 

you so much. 

Mr. CRAWFORD. Thank you, Mr. Chairman. 

[Whereupon, at 3:50 p.m., the Committee was adjourned.] 

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