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PERMITTING CERTAIN TRANSFERS OF POST OFFICE

GOVERNMENT

Storage

DEPARTMENT APPROPRIATIONS

HEARING

BEFORE THE

MITTEE ON POSTAL OPERATIONS

OF THE

COMMITTEE ON

OFFICE AND CIVIL SERVICE

SE OF REPRESENTATIVES

EIGHTY-NINTH CONGRESS

FIRST SESSION

ON

RR. 7423

A BILL TO PERMIT CERTAIN TRANSFERS OF POST OFFICE)

DEPARTMENT APPROPRIATIONS

AUGUST 17, 1965

Printed for the use of the Committee on Post Office and Civil Service

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON: 1955
A? 7 

• eRk l fik :1, 1 al t • 0- 1

•

COMMITTEE ON POST OFFICE AND CIVIL SERVICE

TOM MURRAY, Tennessee, Chairman ; ):

JAMES H. MORRISON, Louisiana

THADDEUS J. DULSKI, New York

DAVID N. HENDERSON, North Carolina

ARNOLD OLSEN, Montana

MORRIS K. UDALL, Arizona

DOMINICK V. DANIELS, New Jersey

LINDLEY BECKWORTH, Texas

HARI4EY 0. STAG0ERS, West Virginia

ROBERT N. C. NIX, Pennsylvania

JOE R. POOL, Texas

WILLIAM J. GREEN, Pennsylvania

SPARK M. MATSUNAGA, Hawaii

PAUL J. KREBS, New Jersey

RAYMOND F. CLEVENGER, Michigan

JAMES M. HANLEY, New York

JOHN V. TUNNEY, California

ROBERT J. CORBETT, Pennsylvania

H. R. GROSS, Iowa

GLENN CUNNINGHAM, Nebraska

EDWARD J. DERWINSKI, Illinois

ROBFRT F. ELLSWORTH, Kansas

ALBERT W. JOHNSON, Pe ylyani&

JOHN H. BUCHANAN, ER.,

JAMES T. BROYHILL, Nort Carolina

Ion

CHARLES E. JOHNSON, Staff Director

B. BENTON BRAY, Associate Staff Director

JOHN H. MARTINY, Counsel

WILLIAM A. IRVINE, Assistant Staff Director

SUBCOMMITTEE ON POSTAL OPERATIONS

THADDEUS J. DULSKI, New York, Chairman

JAMES H. MORRISON, Louisiana GLENN CUNNINGHAM, Nebraska

DAVID N. HENDERSON, North Carolina H. R. GROSS, Iowa

DOMINICK V. DANIELS, New Jersey ALBERT W. JOHNSON, Pennsylvania

ROBERT N. C. NIX, Pennsylvania

WILLIAM J. GREEN, Pennsylvania

Ex Officio Voting Members

TOM MURRAY, Tennessee ROBERT J. CORBETT, Pennsylvania

II
CONTENTS

Statement of—

Goodman, Sidney A., president, National Postal Union 23

Keating, Jerome J., president, National Association of Letter Carriers_ 10

McCart, John A., operations director, Government Employes' Council

AFL—CIO 22

Nicholson, Hon. Ralph W., Assistant Postmaster General, Bureau of

Finance, accompanied by Clarence Bruce, Assistant Controller for

Budget and Reports, and Thomas Chadwick, Special Assistant to

the Assistant Postmaster General 4

Nilan, Patrick J., national legislative director, United Federation of

Postal Clerks, AFL—CIO 14

Stoffer, Henry J., president, National League of Postmasters of the

United States 19

III

PERMITTING CERTAIN TRANSFERS OF POST OFFICE

DEPARTMENT APPROPRIATIONS

TUESDAY, AUGUST 17, 1965

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON POSTAL OPERATIONS OF THE

COMMITTEE ON POST OFFICE AND CIVIL SERVICE,

Washington, D.C.

The subcommittee met at 10 a.m., in room 215, Cannon House

Office Building, Hon. Thaddeus J. Dulski (chairman of the subcommittee) presiding.

Mr. Du',sm. The hearing will come to order.

The Subcommittee on Postal Operations is holding hearings today

on H.R. 7423, which I sponsored, to provide permanent legislative

authority for the Post Office Department to transfer not in excess of

5 percent of any appropriations available to the Department, with

the approval of the Bureau of the Budget, to any other appropriations.

(The bill, H.R. 7423, follows:)

[H.R. 7423, 89th Cong., 1st sess.]

A BILL To permit certain transfers of Post Office Department appropriations

Be it enacted by the Senate and House of Representatives of the United States of

American in Congress assembled, That section 2201 of title 39, United States Code,

is amended—

(1) by inserting "(a)" immediately before the word "Congress"; and

(2) by adding at the end thereof the following new subsection:

"(b) Not to exceed 5 per centum of any appropriation available to the Post

Office Department for each fiscal year may be transferred, with the approval of

the Bureau of the Budget, to any other appropriation or appropriations available

to such Department for such fiscal year.".

Mr. DuLsiu. The Post Office Department Appropriations Act of

1966, Public Law 89-57, contains authority permitting the transfer

of amounts not in excess of 2 percent. This authority is similar

to the authority contained in the Post Office Department Appropriation Acts extending back as far as fiscal year 1947.

The 1966 appropriation bill contained similar authority when

reported by the Appropriations Committee. However, a point of

order was raised on the floor of the House against the provision on

the basis that it was a legislative provision in an Appropriations Act,

and the provision was eliminated on the floor of the House.

The Senate restored the provision and the conferees accepted a

modified version authorizing transfers not in excess of 2% percent.

These hearings have been scheduled today so that we may provide

permanent legislative authority for the transfers between Post Office

Department appropriations. Also there are indications that the 2Y'2

percent limitation now contained in the 1966 Appropriations Act may

not be sufficient to cover the emergencies that can be expected to

arise in the Post Office Department during the coming fiscal year.

1
2 TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS

I would like to insert in the record at this time a summary report

of H.R. 7423, the Post Office Department report dated August 16,

1965, and an excerpt from the Senate hearings on the Post Office

Department Appropriations Act, 1966.

(The information referred to follows)

SUMMARY OF H.R. 7423, POST OFFICE DEPARTMENT APPROPRIATION TRANSFER

AUTHORITY

H.R. 7423 would enact, as permanent legislation, authority for the Post Office

Department to transfer not exceeding 5 percent of any appropriation to another

appropriation, with the approval of the Bureau of the Budget. The Post Office

Department Appropriation Act of 1966, Public Law 89-57, permits the transfer

of any appropriation not in excess of 2% percent.

The House Appropriation Committee reported the 1966 appropriation bill,

H.R. 7060, with the 5 percent provision, which had been a precedent since 1947.

However, a point of order was made on the floor of the House and the authority

to permit transfer of appropriations was eliminated on the basis that it was legislative language in an appropriation bill.

The Senate Appropriations Committee, in reporting H.R. 7060, restored the

5 percent provision. However, the committee of conference reduced the authority

to 23 percent.

The Postmaster General, in his testimony before the Senate Appropriations

Committee, pointed out that since 1947 the Post Office Department has had the

authority to transfer appropriations up to 5 percent from one account to another,

to meet unforeseen expenses. This has always been done with permission of the

Bureau of the Budget. He also pointed out that not more than $1 million could

be transferred to the general administration account.

In fiscal year 1965 the Post Office Department made transfers totaling

$7,476,000. $7 million of this amount went into operations and the remaining

$476,000 into facilities. $4,476,000 was transferred out of transportation and

$3 million out of plant and equipment.

The Post Office Department feels that the 2% percent authorization is inadequate. H.R. 7423 would enact the 5 percent transfer authority into permanent

law, and thus make it unnecessary hereafter to include such legislative provisions

in the annual Appropriations Act.

OFFICE OF THE POSTMASTER GENERAL,

Washington, D.C., August 16, 1965.

Hon. Tom MURRAY,

Chairman, Committee on Post Office and Civil Service,

House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: This is in reply to your request for a report on H.R.

7423, to permit certain transfers of Post Office Department appropriations.

The proposed legislation would make permanent this Department's authority

to transfer funds between appropriations within the 5-percent limit established

by the Congress. The transfer authority has by appropriation laws been made

available to the Department most years since 1948, following Congress recognition

of our need for flexibility in the use of such funds to effectuate efficient postal

service. It knows that the nature of our operations requires that large sums

are contingent upon workload estimates prepared more than a year in advance.

The workload estimates of the Department are inescapably subjected to changes

entirely beyond our control. Minor fluctuations in mail volume received from

the public, for example, could mean a cost impact of from $12 to $15 million

in our handling costs. Substantial variances occur when occupancy dates

estimated for major leased buildings are projected more than 2 years in advance;

and public utility rates and transportation patterns change frequently after

appropriation grants are once authorized. Where, for instance, a transportation

change evolves, the Department must be in a position to utilize varying transportation media to move the mail efficiently and expeditiously. In most instances we can accomplish this purpose only if we have the authority to make

the required emergency transfer of fund appropriations.

We feel the enactment of H.R. 7423, by permanently providing us with limited

transfer authority, would give the flexibility necessary to the efficient operation

of the Department's mission, and in many instances obviate the necessity for

supplemental appropriation requests. The authority would enable us to tern-
TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS

porarily curtail certain programs in one area and permit emergency transfer

of funds to other operating appropriations. This would keep us not only from

violating the Anti-Deficiency Act (31 U.S.C. 665) but would also help to avoid

curtailment or discontinuance of service.

The Bureau of the Budget has advised that from the standpoint of the administration's program there is no objection to the submission of this report to the

committee.

Sincerely yours,

JOHN A. GRONOUSKI,

Postmaster General.

SENATE HEARINGS ON APPROPRIATIONS (P. 413)

LANGUAGE CHANGE ON TRANSFER AUTHORITY

The bill was amended on the floor of the House to delete the Department's

transfer authority contained on page 11, line 21. Request is made for the restoration of this provision of the appropriation language which permits the transfer

of funds between appropriations within the 5-percent limit established by the

Congress and only after the Department obtains prior approval from the Bureau

of the Budget.

A limited transfer authority has been contained in our appropriation acts

since 1948, except for 1951-53, and both the Senate and House Appropriations

Committees have recognized the need for such flexibility for the efficient use of

funds made available to the postal service.

The nature of our operation is such that large sums are contingent upon workload estimates prepared more than a year in advance.

Examples of items inherent to postal operations requiring transfer authority

are as follows:

(1) Minor fluctuations in mail volume received from the public have cost impacts of from $12 to $15 million in our mail handling costs.

(2) Rates established by public utilities often change after the appropriation

act is passed.

(3) Occupancy dates estimated for major leased buildings projected more

than 2 years in advance are subject to substantial variance.

(4) Transportation patterns change frequently and the Department also must

be in a position to utilize varying transportation media in order to move the

mail efficiently and expeditiously.

(5) Experimental equipment may be proven and substantial savings resulting

from its installation can be realized if unobligated funds in other areas are made

available rather than waiting for the following year's appropriation.

(6) Rate changes authorized by regulatory agencies such as the Civil Aeronautics Board and the Interstate Commerce Commission often create demands on

our appropriations which can be financed by transfers.

The history of our transfers during the past will show no evidenceof abuse of

this privilege. This authority provides the Department with flexibility necessary to the efficient operation of its mission and obviates the necessity for supplemental appropriation requests in many instances. In many cases this anthority will enable us to temporarily curtail programs in one area to permit the

emergency transfer of funds to an operating appropriation in order to prevent

the necessity for service curtailment to keep from violating the Anti-Deficiency

Act (31 U.S.C. 665).

All transfers made during the year are fully explained to the appropriations

committees each year in the annual budget process which involves justification

of all estimates as compared to the prior year appropriation as approved by the

Congress.

The language referred to is as follows:

"Provided, That not to exceed 5 per centum of any appropriation available to

the Post Office Department for the current fiscal year may be transferred, with

the approval of the Bureau of the Budget, to any other such appropriation or

appropriations; but the appropriation 'Administration and regional operation'

shall not be increased by more than $1,000,000 as a result of such transfers

Mr. DuLsici. Our first witness is Hon. Ralph Nicholson, Assistant

Postmaster General, Bureau of Finance.
4 TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS

STATEMENT OF HON. RALPH W. NICHOLSON, ASSISTANT POSTMASTER GENERAL, BUREAU OF FINANCE; ACCOMPANIED BY

CLARENCE BRUCE, ASSISTANT CONTROLLER FOR BUDGET AND

REPORTS; AND THOMAS CHADWICK, SPECIAL ASSISTANT TO

THE ASSISTANT POSTMASTER GENERAL

Mr. NICHOLSON. I would like to introduce my colleagues, Mr.

Clarence Bruce, Assistant Controller for Budget and Reports, and

Mr. Thomas Chadwick, special assistant to the Assistant Postmaster

General.

Mr. Chairman and members of the committee, the transfer authority

provided in H.R. 7423 making possible limited exchange of funds

between appropriations has a very valid place in the post office

statutes. Heretofore this authority has been granted to the Post

Office Department by the Congress by language included in our

annual appropriation act, always subject to a point of order and

requiring renewal each subsequent year.

In 1966 we have authority to transfer funds between separate

appropriations, but the amount transferred may not exceed 2%

percent of the appropriation from which the transfer is ma de nor

may more than $1 million be transferred into the administration and

regional operation appropriation. Transfers may be made only after

approval by the Bureau of the Budget. Prior to 1966 the transfer

authority, when granted, allowed up to 5 percent of funds in each

appropriation to be transferred.

It has been argued that the Post Office Department should not

have transfer authority because such authority is not provided to

other Government agencies generally. However in considering this

matter one must keep in mind that the Post Office Department is

different from other Government agencies generally. Our workload

estimates are inescapably subjected to changes entirely beyond our

control, and very nearly all our expenditures are in support of these

unpredictable activities. Minor fluctuations in mail volume received

from the public can have catastrophic effect on our budget.

For example, in 1965 our operations appropriation was based on

an estimated mail volume increase of 2.8 percent. As it turned out,

out estimates later in the year showed the mail volume increase at

3.5 percent. This meant our original estimate of 2.8 percent was

0.7 of a percentage point short. This seven-tenths of 1 percent

increased the cost in our operations appropriation by $10 million

in spite of considerable absorption of the unexpected increase. We

simply cannot predict our mail volume with any greater precision,

and during the operating year it sometimes becomes necessary to find

money to pay for the operations of the Post Office Department.

Last year, in order to accommodate the unanticipated volume of

mail generated by the public,, we transferred $5 million from plant

and equipment, $3.5 million from transportation, and $1.5 million

from administration and regional operation appropriations to fund

the $10 million needed in the operations appropriation to maintain

continued smooth delivery of the mail.

So transfer authority is extremely useful in the unpredictable

postal operation. It serves other valid purposes as well.

Shifting requirements and opportunities in transportation that

occur after our annual appropriation are met by transfers.
-41111 .11 1mr

TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS 5

Occupancy dates for major construction projects in processes for

2, 3, 4 or more years cannot be projected precisely. Advancement of

dates requires additions to the appropriation, and delay will free

more money for other purposes if needed.

Rate changes authorized by regulatory agencies such as the Civil

Aeronautics Board and the Interstate Commerce Commission often

create demands on our appropriations which can be financed by

transfers.

There have been occasions when the Department has found that

it can create substantial future savings from the installation of certain

equipment if unobligated funds in other areas are made available for

equipment purchase by transfers.

Without the ability to make limited transfers, one or another of

the following would apply:

1. We would require a supplemental appropriation from Congress.

2. We would violate the Anti-Deficiency Act.

3. An opportunity to take constructive, efficient action would be

lost or postponed.

I believe it is correct to say that the present requirements of the

Antideficiency Act were designed specifically to control postal operations. Yet because we are essentially a single-purpose agency—

and that one purpose is to serve an unpredictable public requirement

for service—postal operations cannot easily be controlled in order

to comply with the Antideficiency Act. Transfer authority helps

materially in our compliance.

Our annual appropriation provides funds under six separate limitations. Each of the six is apportioned over the four quarters of the

year.

Apportionment for the operations appropriation reflects the seasonal

nature of our business—the Christmas peak for example. However,

once the apportionment has been made, we cannot shift funds from

later quarters into earlier quarters should mail volume in an earlier

quarter require more than the fuuds available. An amendment to the

Antideficiency Act makes it illegal for us even to request such a reapportionment. In any event it is illegal for the Bureau of the Budget

to grant such a request even if it were illegally made.

A minor unexpected bulge in workload in a given quarter can be

financed by transfer. Then if there is an offsetting drop in volume

in a later quarter, the transferred funds can be transferred back.

Without transfer authority we would have to have a supplemental

appropriation to cover even small increases in workload, or we would

have an antideficiency violation. In the event we got a supplemental

for a bulge in one quarter and found later in the year that the bulge

was offset by a drop in volume, the supplemental funds would turn

out to be unneeded and would lapse at the end of the year.

In the event Congress was not in session to process a needed supplemental, we would either be forced into an antideficiency violation or

we would have to curtail service to the public, when very possibly

the intent of Congress would be not to curtail service.

The histoty of transfer authority in the postal system goes back to

1.948 when such authority was included in the second supplemental

appropriations bill. In those years the Post Office Department had

58 separate accounts ranging upward from $4,000, which had the

effect of tying down funds in as many areas. For example, the First

53-268--65-2
6 TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS

Assistant Postmaster General had his own approp.riation, the clerks in

first-class and second-class post offices were covered by a separate

appropriation; contract stations, clerks in third-class post offices, and

mobile clerks, all opetated tinder separate appropriations. There

was even a sepatate appropriation for carfare and bicycle allowances.

Every time one of these areas had a deficiency, it was necessary to

come to Congress for a supplemental appropriation.

The transfer authority given the Post Office Department by the

Congress in fiscal year 1948 was for 5 percent. This 5-percent figure

was arrived at originally to meet the needs resulting from the conditions that existed in that particular year. However, through the

years the 5-pei cent figure has proven to be satisfactory, giving the

Department sufficient elbowroom to move funds. Such authority

has not supplanted the need for supplemental appropriations when

we had deficiencies of a serious nature.

The transfer authority was perpetuated by the Congress until fiscal

year 1951. In that year the Congress enacted for the Post Office

Department a new appropriation structure of four appropriations to

help overcome the budget problems resulting from our having 58

separate accounts. The Congress f,t the same time eliminated from

the appropriations act the iangw,ge to transfei authority. Apparently it was felt that there was no need for transfer authority with

the new appropriations striwttire.

However, by 1953 it was apparent the need for authority to transfer

funds from one appropriation to another still existed, so in the appropriations act for fiscal year 1954 the authority to transfer up to 5

percent of any appropriation available to the Department was placed

in the act. We have had this authority until now.

All transfers made during the year are fully explained to the Appropriations Committees each year in the annual budget process which

involves justification of all estimates as compared to the prior year

appropriation as approved by the Congress. All transfers must be

approved by the Bureau of the Budget.

I should emphasize that transfer authority cannot be used, and is

not used, as a substitute for possible supplemental appropriation bills

when the amounts of money involved are sizable. But a limited

transfer authority does enable the Department to make minor realinements of its activities to meet unforeseen changes in its unpredictable

operations, it does help us to conform to the requirements of the

Antideficiency Act, and it reduces the workload on Congress that

otherwise would probably be asked to process a number of small

supplemental appropriation requests each year.

I urge this committee to give favorable consideration to H.R. 7423.

Mr. DuLsici. Thank you, Mr. Nicholson.

I understand there is one amount of money that is being asked for

by the Post Office Department in its appropriations request. When

this is submitted to the Appropriations Committee you divided it into

how many different categories?

Mr. NICHOLSON. Six separate limitations, Mr. Chairman.

Mr. DuLsici. This has reference to the six; am I correct?

Mr. NICHOLSON. Yes, sir. The six, for your information, are

administration and regional operations, research, development, and

engineering, operations, transportation, building occupancy and postal
TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS 7

supplies, and plant and equipment. Those are the six separate funds

under limitation as provided in the appropriations act.

Mr. DULSKI. When you make your estimates in these six categories, where do you find the deficiency usually lies?

Mr. MelloLsoN. Usually, Mr. Dulski, the deficiencies lie in what

we refer to as the operating accounts, the operations appropriation,

and the transportation appropriation, because these two activities

have an unpredictable workload. When I say "unpredictable" I

mean unpredictable with exact precision.

Of course, we do forecast the amount of mail we expect each year,

and it is that volume of mail which requires the collection, sorting,

and delivery services paid for by the Bureau of Operations account,

and it is the amount of mail to be transported by railroads, trucks,

airlines, or water which accounts for the money spent in transportation.

If we miss the volume of mail so that it takes more hours of sorting

or more ton-miles of harling, then we are not in a position to pay

for those additional quantities of mail that we must work, so by and

large the deficiencies, if I may call them that, occur in those operating

accounts because the operations themselves are not precisely predictable.

Mr. DULSKI. You say the deficiency lies in the operation. Where

would the moneys be provided for the operation of something new,

an innovation like POMSIP?

Mr. NICHOLSON. Usually we try to absorb the cost of such an

activity, Mr. Dulski. In the case of POMSIP the activity is carried

on by the outstanding experts available to us in each of the several

operations in the post office, the man who knows most about collection services or delivery services or how to case mail. We will pull

together on a task force basis the experts in that specialty, take

them away from their regular jobs for periods of time while they

are active on POMSIP study.

Mr. DULSKI. Don't you have to replace those clerks who are part

of the task force?

Mr. NICHOLSON. Yes; if they are kept out of their regular jobs for

a sustained period of time of course it is necessary to replace them.

Mr. DULSKI. So you are increasing the operation by replacing

clerks with men taken from that position into the—POMSIP; is that

correct?

Mr. NICHOLSON. Yes, sir. It is also true that the members of the

POMSIP team do not all come from post offices. Some come from

our headquarters management and some come from our regional

offices.

Yes; when they are drawn off on a POMSIP study they leave a

gap behind and that gap cannot permanently be left there.

Mr. DULSKI. What would be the expenditure on POMSIP for the

fiscal year ending June 30?

Mr. NICHOLSON. I cannot make an estimate here but we shall

supply one for the record.

Mr. DULSKI. I would be very interested in getting it.

(The information follows)
8 TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS

POMSIP, FISCAL YEAR 1965

The basic aim of the post office management and service improvement program

(POMSIP) is to assist local post office management in providing efficient, improved

postal service at lowest possible cost.

This is being accomplished by working with employees at all levels to1. Strengthen local management performance;

2. Improve service;

3. Reduce expenditures;

4. Improve employee management relations with an expected parallel

improvement in employee welfare and working conditions.

During fiscal year 1965, 19 POMSIP studies were started, of which 17 were

regional team studies and 2 were departmental team studies at Boston and New

York.

The total salary and travel costs of the headquarters team studies was $316,136

in 1965. This included the time spent on the two studies started in 1965 as well

as time on the Houston project, started in 1964.

The following tabulation shows by project the 1965 cost of the headquarters

team on each of the three projects as well as the cost reductions in 1965 which

the team studies were instrumental in accomplishing.

Post office 1965 cost

Value of hour

reduction in

1965

Houston $30, 222 $437,760

Boston 22,417 141,469

New York _ 148,311 320, 353

Headquarters administration unallotted 115, 185 

Total 316,135 899, 582

The cost reductions realized in 1965 in Boston and New York are substantially

less than the annual rate of reductions indicated in the last period of 1965, which

are:

Boston $1,600,000

New York 2,900,000

We believe the accomplishments of the headquarters team are indicative of the

results obtained from the regional POMSIP studies. POMSIP studies are producing results without which we could not attain the goals that are programed in

our annual budget.

Mr. DuLsKi. Mr. Gross, I have been to various post offices. This

seems to be one of the dilemmas, this innovation of POMSIP. There

is much resentment by the employees over groups coming in and taking

over the post office.

Mr. GROSS. Frankly, Mr. Chairman, would you briefly explain

what POMSIP is? 

Mr. DuLsKi. What is the full meaning?

Mr. NICHOLSON. POMSIP derives from the words "post office

management and service improvement program."

Mr. DuLsKI. I was up to the Boston post office and other post

offices throughout that area, and found there is a great deal of resentment of POMSIP. I would like to know how much money is expended in this operation.

I have no further questions.

Mr. Gross?

Mr. GROSS. Thank you, Mr. Chairman.

This bill which you propose would provide for the transfer of 5

percent of any funds in the Post Office Department; is that correct?

Mr. NICHOLSON. Yes, sir; with one proviso, if I may: In the case of

our research, development, and engineering appropriation those
TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS 9

funds are appropriated on a no-year basis. We do not feel it is appropriate to apply this authority to any appropriation on a no-year

basis.

Mr. GROSS. With that exception this provides for the transfer of

any funds up to 5 percent within the Post Office Department?

Mr. NICHOLSON. Yes, sir.

Mr. GROSS. You are aware, of course, that Congress in these days

is in session for 8, 9, 10, almost 12 months out of the year?

Mr. NICHOLSON. Yes, sir.

Mr. GROSS. And that you can come to Congress at any time when

you find you are running short and ask for additional funds?

Mr. NICHOLSON. Yes, sir.

Mr. GROSS. You are aware of the supplemental appropriations bills

which come along, are you not?

Mr. NICHOLSON. Yes, sir.

Mr. GROSS. Still you want to take from Congress the authority to

control the purse strings?

Mr. NICHOLSON. No, of course not. Congress has that authority

and that responsibility to control the purse strings.

We believe, however, that the total amount appropriated is set by

the Congress and that minor exchanges from one appropriation to

another is within the spirit of the responsibility and control which

Congress very rightly exercises.

Mr. GROSS. You are now confronted with paying, for instance,

8,500 make-work employees. Is that correct? They will be paid out

of this patronage employment deal. They will be paid by the Post

riffice DerrtmePt, tb-se young•Jers you hove hired and are hiring

110W.

Mr. NICHOLSON. You mean the Youth Opportunity Campaign?

Mr. GROSS. So called.

Mr. NICHOLSON. Yes, sir; there are a number of those people on

the postal payroll and they are being paid 

Mr. GROSS. Was provision made in the budget for the payment of

these people?

Mr. NICHOLSON. No, sir; but our budget anticipates payment for

a given number of work hours. The amount appropriated covers the

work hours necessary to process mail. Hours worked by a candidate

recruited under the Youth Opportunity Campaign is a work hour

that is not, therefore, worked by some other temporary employee

who otherwise would be needed to fill in behind regular employees

who are off on leave.

Mr. GROSS. In order to obtain the funds to pay these make-work

employees you have hired, could it be you are cutting down on the

number of work hours of regular employees, the work hours of temporaries and substitutes?

Mr. NICHOLSON. The total number of work hours is, indeed, the

same. However, as you know, Mr. Gross, there have been very long

hours per week worked by individuals. Not rarely is a present employee working 60 and 70 hours each week. Some employees are

working two full shifts, 80 hours each week. To the extent we can

bring in additional pairs of hands this enables us to reduce the excessive overtime hours that are causing fatigue and complaint on the

part of the regular employees.
10 TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS

Mr. GROSS. What will you do after September I if you need these

unskilled hands to handle the mail? What will you do after September 1, after the Summer?

Mr. NICHOLSON. We would recruit additional personnel up to the

extent we are allowed by the ceiling set by the House Appropriations

Committee report. We would bring in as many new people as we are

authorzed to do in order to reduce the excessive overtime and to

handle the workload with which we are confronted.

Mr. GROSS. You say these 3-month employees come in with enough

skill to do the work of employees that you would employ permanently?

Mr. NICHOLSON. They do, indeed. Experience has been very

satisfactory.

Also the heavy leave season will be over by the 1st of September,

so the employees now on vacation would be able to return to their

work.

Mr. GROSS. If you had this authority you would be able to transfer

funds from the regular Post Office Department to pay these people?

Mr. NICHOLSON, Yes, sir. If we had the authority, both in the

form of ceiling, and if it was consistent with our work-hour needs,

with the approval of the Bureau of the Budget, and to the extent

funds were available, which is frequently not the case, to be sure, if

funds were available in other appropriations, we certainly would have

the authority to make such transfers.

Mr. GROSS. You are fully aware that if you are running short of

funds in any particular division of the Post Office Department operation that you can come to Congress, make your case and get money.

You are fully aware of that, I am sure.

Mr. NICHOLSON. Yes, of course.

Mr. GROSS. Mr. Chairman, I am opposed to this kind of legislation

for the reason that I can think of no valid reason why the Post Office

Department cannot do as other agencies and departments of Government do, come to Congress and make their case and get the money to

which they are entitled.

I am not willing to surrender control of the pursestrings on any such

basis as a 5-percent or any other percentage of transferability in the

Post Office Department or any other agency or department of Government.

That is all I have.

Mr. DULSKI. Mr. Morrison?

Mr. 1‘ IORRISON. I have no questions.

Mr. DIJLSKI. Mr. Green?

Mr. GREEN. I have no questions.

Mr. Durisicr. Thank you.

Mr. NICHOLSON. Thank you, Mr. Dulski.

Mr. DuLsxr. Our next witness will be Mr. Jerome Keating, president of the National Association of Letter Carriers.

STATEMENT OF JEROME J. SEATING, PRESIDENT, NATIONAL

ASSOCIATION OF LETTER CARRIERS

Mr. KEATING. Mr. Chairman and members of the subcommittee,

as president of the National Association of Letter Carriers, I am

pleased to have an opportunity to appear before this subcommittee

and lend our endorsement of H.R. 7423. I want to commend
TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS 11

Chairman Dulski on the interest he has shown in this most important

subject.

While this is primarily a management problem, there are few things

that management does that do not affect those being managed.

Since 1948, with one exception, the Post Office Department has

been granted limited authority to transfer 5 percent of an appropriation from one appropriation to another. This is done under the

strict supervision of the Bureau of the Budget.

The Post Office Department must make its estimate on expenditures more than 1 year in advance. The Department works under

a tight budget. It has no control on the volume of mail.

Inadequate appropriations mean poor service. The Department is

most conservative in its estimates. To illustrate, the Department

estimates the number of new families to be served annually at 1 to

1.2 million. Considering the number of new dwellings started every

year, this is obviously conservative. In 1962 there were 1.492

million dwellings started. In 1963 there were 1.641 million and in

1964, 1.591 million.

A tight budget leads to poor service. Under the transfer provisions

heretofore in effect, in the event of an emergency, the right to transfer

a limited amount was most helpful.

Frequently the necessity of making a transfer arises because of a

heavy snowstorm, a flood, a series of windstorms. On other occasions,

the cause is less spectacular, an underestimate in one area, an overestimate in another.

In long-term estimates we must allow for mistakes, according to an

old French proverb, "The best prophets are children and fools" and

it has also been said, "Wise men may well be mistaken in futures."

We believe that H.R. 7423 is necessary legislation. We believe

that it should be enacted through the operations of this committee

rather than through the Appropriations Committee. In this spreading and growing population, in the increasing volume of mail, it is

indeed a necessary management tool.

It has been the experience since that 5 percent has been allowed

that where they have transferred funds the transfer usually has been

made to operations. Operations, of course, spends most of the money,

but it also does the most important function of the Post Office Department, and that is to pick up and deliver the mail.

If there is a shortage of money the transfer of funds from some

other agency, where an expenditure can be postponed until the next

fiscal year, has proven to be very helpful in maintaining the service.

I know Mr. Gross raised the question about coming back for

supplemental appropriations. At one time that was the custom.

Prior to the reorganization of the appropriations act, we had some 84

or 85 appropriation items, and then the Antideficency Act was passed.

When the Department ran short it was the custom to come back for

a supplemental appropriation. Sometimes there was a second one

and sometimes a third one.

That practice has largely been done away with in recent years, and

this transfer fund proviso has been a sort of an escape hatch which

has been substituted for the supplemental appropriations.

Both the Appropriations Committee and the Bureau of the Budget

apparently frown upon the supplemental appropriations, but certainly

there must be some escape hatch to make it possible, when a mishap
12 TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS

of nature, an underestimate is made, for the Post Office Department

to come and get sufficient money to operate the delivery and collection

service which, after all, are the basic functions of the Department and

the only reason we have a Post Office Department. I think that this

bill is a good bill.

Mr. D-uLsici. Thank you.

Mr. Gross?

Mr. GROSS. Thank you, Mr. Chairman. I think what you have

said could be said of almost every other department or agency of

Government, Mr. Keating, that acts of God, one thing and another,

can change the course of events within an agency or department,

requiring less money or more money, so I do not think that the Post

Office Department is unique in that respect.

I suppose this year we will have five or six supplemental appropriations bills before we get through. I have forgotten the number we

have had up to this point.

I know that there are two more supplemental appropriations bills

to come. This was announced yesterday on the House floor.

I know of no reason why the Post Office Department, as I previously stated, cannot come to the Congress, justify any additional

appropriations it requires.

Mr. KEATING. Different ground rules are under operation recently

on supplemental appropriations. The Post Office Department comes

in for supplementals only in the event there is a change in law—for

instance, if a pay bill is passed, if there is a retroactive pay bill provision. Then the Department ccmes in with the supplemental, but

not with the operational sopp13 -,entt‘1_s. They have not (I,. te this

for some time.

Mr. GROSS. You agree there is nothing to prohibit them from

coming in for a supplemental—for any purpose? They can ask for a

supplemental appropriation. You agree to that, do you not?

Mr. KEATING. I know the Department has not, been doing it in

recent years under the procedures apparently established by the

Bureau of the Budget and the Appropriations Committee.

Mr. GROSS. I don't like supplemental appropriation bills any

better than someone else. At least they give the Congress some

opportunity to know how the money is being spent.

Mr. KEATING. The transfer authority is rather limited in this

instance. It is 5 percent. The request has to be approved by the

Bureau of the Budget; there are quite severe restrictions on it; and

the appropriations have been, in recent years, very tight. In fact,

the big problem in the Post Office Department is the trouble we have

now is poor service—and I know you have criticized it and I have

criticized it. I will continue to criticize it and I know you will, too.

Mr. GROSS. If I thought that was a matter of money alone, I might

take a different attitude to some of these things, but I do not think

the gentleman presently addressing the committee thinks it is due to

money alone.

Mr. KEATING. I think it is largely a question of shortage of manpower. I think it is almost entirely a question of shortage of manpower. We have had artificial ceilings put on the 1os6 Office Department. We had the Whitten rider which has been lifted now,

and the Bureau of the Budget has established ceilings. The poor

service comes from shortage of manpower alone.
TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS 13

Mr. GROSS. I am afraid I cannot agree with the gentleman that

that is the only reason for the poor postal service.

Mr. KEATING. The transportation problems have created some

difficulties, but basically it is the shortage of manpower.

Mr. GROSS. If the budgets have been so tight, what is wrong with

the Bureau of the Budget?

Mr. KEATING. I could not answer that.

Mr. GROSS. Has the administration of the Post Office Department

made a poor case with the Bureau of the Budget?

Mr. KEATING. The Bureau of the Budget has a lot to say about

the running of the Government.

Mr. GROSS. I wonder if the hierarchy in the Post Office Department has made a good case with the Bureau of the Budget?

Mr. KEATING. All I know is when they cut out that one delivery a

day, which we thought was a mistake, we talked to the top people

in the Post Office Department and in the Bureau of the Budget.

I suspect the order came from the Bureau of the Budget, although

they did not accept responsibility for it.

Mr. GROSS. That is all, Mr. Chairman.

Mr. Du-',sic'. Mr. Morrison.

Mr. MORRISON. You testified before the full committee that there

was nothing wrong with the Post Office Department so far as the

delivery of mail and the operation of the Post Office is concerned,

but that manpower was inadequate. Do you still take that position?

Mr. KEATING. I think that is correct; yes. I think it is principally

manpower. There are some things in management we criticize

and criticize rather severely, but essentially the problems of the

service could be solved by more adequate manpower.

Mr. GROSS. One more question, if I may.

Mr. DULSKI. Mr. Gross.

Mr. GROSS. If I may ask, Mr. Keating, are you getting any complaints, as I am, about the summer employment this summer and

the effect on the regular employees?

Mr. KEATING. We had a great many complaints on that particular

ordei. There is another order that ties in with it though it is not

directly related. The Commission issued an order that, prohibited

the employment of children of people employed in the agency. The

Commission said they issued that order to prevent the executives

from hiring their own children. The order, however, went to the

employees in the lower levels, and the children of postal employees

were not able to get a job in the summer. During the summer it

has been customary in some cities to employ people to help with

vacations. You have a problem where you have a year-round operation in trying to give employees a vacation when the children are out

of school. So some cities have hired college students to work during

the summer. I want to make it absolutely clear that where they have

hired them they have not done the more complicated work; they

have been limited in the things that they can do. They have not

done the work that requires a skilled employee.

This year, of course, there was a good deal of complaint from postal

employees because of the fact that the hiring was done the way it

was. It is hard for us to evaluate whether more people were hired

this year than before. I have not seen any figures, so on a general

basis, I cannot discuss it. The Department has hired people in other
14 TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS

summers but it has hired them from the civil service register or some

other source rather than under the poverty program.

Mr. GROSS. Do you agree the order as to the hiring of children of

postal employees did not extend to officials in the Government or

even Members of Congress, or at least one Member of Congress I

know of, but it certainly did not exclude the sons of Government

officials?

Mr. KEATING. It was limited to all Government employees.

Mr. GROSS. But the same restriction did not apply to Government

officials, to the sons of Government officials?

Mr. KEATING. It was supposed to.

Mr. GROSS. It was supposed to, but it did not.

Mr. KEATING. Originally that was the purpose of the order.

Mr. GROSS. But it did not apply this summer to Government

officials, including at least one Member of Congress.

Mr. KEATING. It was intended to.

Mr. GROSS. It may have been intended to but it did not.

Mr. KEATING. That is, in the same agency where the official is

employed. An official could get his children a job in another agency

but not in his own agency.

Mr. GROSS. On a moral basis it ought to apply to all agencies,

would you not agree?

Mr. KEATING. I would agree to that, yes, sir.

Mr. GROSS. Thank you.

Mr. DULSKI. Thank you very much, Mr. Keating.

Our next witness is Mr. Patrick Nilan, legislative director of the

United Federation of Postal Clerks.

STATEMENT OF PATRICK J. NILAN, NATIONAL LEGISLATIVE

DIRECTOR, UNITED FEDERATION OF POSTAL CLERKS, AFL—CIO

Mr. NILAN. Thank you, Mr. Chairman. If I may I would like

to read the prepared statement and then I shall be happy to answer

any questions the committee may desire to ask.

Mr. DuLsKi. Very well.

Mr. NILAN. Mr. Chairman and members of the subcommittee.

For the record, I am Patrick J. Nilan, national legislative director of

the United Federation of Postal Clerks, AFL—CIO, with headquarters

at 817 14th Street NW., Washington, D.C.

We appreciate very much the opportunity to appear before this

committee in support of H.R. 7423, introduced by the distinguished

chairman of the subcommittee, which proposes to permit certain

transfers of Post Office Department appropriations.

Mr. Chairman and members of the subcommittee, the Post Office

Department is restricted by the Anti-Deficiency Act from spending

or committing unapproved funds and/or requesting supplemental

appropriations to operate the postal service, even if necessary to

maintain public services. For a considerable number of years, as

I recall at least 15 years since the passage of the Antideficiency Act,

the Congress has regularly granted the Post Office Department a

certain amount of financial "flexibility" in operating the many and

complex functions of the service.

This "flexibility," as related to financial management of the postal

service, has been granted by each Congress in recent years in the form
TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS 15

of an authorization to transfer up to 5 percent of allocated funds among

the several bureaus of the Post Office Department directly concerned

with postal field services operations.

The authority granted by the Congress has permitted the transfer

of funds among and between such postal field service accounts as

Bureau of Operations, Personnel, Transportation, Facilities, et cetera,

with the approval of the Bureau of the Budget. Funds appropriated

for the Department headquarters establishment and the field service

are separate accounts and funds which may be available in one such

category cannot be transferred to the other.

For the first time in many years this 5-percent transfer authority

was reduced to 2Y2 percent when the Treasury and Post Office appropriation bill, H.R. 7060 for fiscal year 1966, was finally enacted into

law as Public Law 89-57 on June 30, 1965. The final 2 percent

authorization had been agreed to in House-Senate Conference Report

No. 550.

This substibntial reduction in postal financial ma naernent flexibility could be reflected in unusual and inadequate work scheduling

of the Nation's 245,000 postal clerks which the United Federation of

Postal Clerks represents under a national agreement with the Post

Office D epar n 9,ni... In addi ion., the ihte sque3ze oi appropriated dollars historically occurs in field service operations which,

in addition to causing hardships on our members, frequently results

in even more controversial reductions in service to the public.

We believe, Mr. Chairman, it is essential to authorize the Post

Office Department on a continuing basis to have this 5-percent flexibility to transfer funds among postal field service accounts in order to

avoid either of these undesirable alternatives resulting from the

inadequate 241 -percent authorization.

It has been estimated by Post Office Department representatives,

and accented in House and Senate appropriation hearing reports,

that the postal field service, mainly the operation end of it, needs

approximately $143'2 million a day to provide services to the public.

Further, such reports also indicate 85 to 90 percent of such operating

expenditures are directly concerned with salaries of posal clerks,

letter carriers, mail handlers, and other postal workers.

Mr. Chairman, our postal employees have not been required to

accept a delayed paycheck for a considerable number of years now

because of the lack of operating funds during the final pay period of

a fiscal year. We believe the 5 percent transfer of funds authority

as proposed in H.R. 7423 will continue to make certain our people do

not have to experience a delayed salary check any time in the futures

Mr. Chairman and members of the subcommittee, the United

Federation of Postal Clerks always supports the best possible postal

service and, of course, is also concerned with the protection and best

interests of our postal clerk membership. We favor this legislation

because experience has demonstrated time and again that shortage of

funds does not necessarily operate to decrease rents, transportation

costs, and other contractual requirements, but operates only and

adversely on employees and the related services they provide to the

public.

Debatable and controversial savings are always made on wages of

employees through the reduction of essential postal services for the

patron and/or maintaining inadequate services through reduced man-
16 TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS

power and further by not filling career regular employee vacancies or

the arbitrary reduction of substitute hours of employment because of

budgetary limitations. We do favor H.R. 7423, proposing to grant

the Post Office Department necessary authority to transfer certain

appropriations not to exceed 5 percent during each fiscal year with

the approval of the Bureau of the Budget. We believe this legislation

will help maintain existing postal field service operations for the public

through reasonable and flexible budget-controlled fiscal management

practices within the postal service. Also, postal employees should

have some protection and be not quite as susceptible to the arbitrary

adverse whiplash of budgetary limitations if H.R. 7423 is enacted

into law.

Thank you, Mr. Chairman and members of the subcommittee, for

the opportunity to present the views of the United Federation of

Postal Clerks on this most important legislation. We know, as always,

you and the members of your subcommittee will give thoughtful and

objective consideration to our representations.

Mr. DULSKI. Mr. Gross.

Mr. GROSS. Thank you. Mr. Chairman, before I address a question or two to Mr. Nilan, I would like to ask you the position of

the Bureau of the Budget with respect to this bill.

Mr. DuLsici. It is my understanding it is favorable. The Bureau

of the Budget has advised that from the standpoint of the administration's program there is no objection to the submission of this report

to the committee.

Mr. GROSS. Is it proposed to have some witnesses from the Bureau

of the Budget down here? I would like to hear from the Bureau

of the Budget. I would like to have them justify this kind of procedure. We can discuss that, I guess, later, I will not take the time

of the witness or any other witnesses at this time.

Mr. Nilan, do you suggest this procedure for other agencies and

departments of Government, to have the same transferability

authority?

Mr. NILAN. Congressman Gross, I am not as familiar with the

needs or requirements of the other departments as I am of the postal

service. I have been a postal clerk for 23 years and a union officer for

18 years, local and nationally, and I do know this, that whenever the

Post Office Department gets in a bind financially because of, they

claim, an inadequate appropriation—and I am not in a position to

challenge it—in the final analysis the onus is put on the employees,

and in the last 10 or 12 years, during the time this 5-percent authorization has been granted, we have experienced less problems than

previously.

Mr. GROSS. Do you agree good administration would dictate they

get from the Bureau of the Budget approval of funds necessary to

carry them through the year; and do you also agree that they have

a remedy when they run short of funds, and that is to come to Congress

and get a supplemental appropriation, if necessary?

Mr. NILAN. I would agree, Congressman Gross, that certainly the

opportunity is there for the Post Office Department to request a

supplemental appropriation. But also, from my brief experience as

a representative of our organization, I know there is (1) a reluctance

by postal administration to request a supplemental; and I believe

also there is a reluctance by Congress to support such supplemental

appropriations; so it does present some problems.
TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS 17

Mr. GROSS. We pass supplemental appropriation bills, as you well

know, I do not know how many so far this year but it seems to me two

or three and more to come.

I trust you do not disagree with me that Congress ought to retain

control of the purse strings throughout the Government. You agree

with that, that Congress should retain control of the purses trings, do

you not?

Mr. NILAN. There is no question about that. I certainly agree

with you on that.

If I may say, in response to your previous question, this is a particularly difficult time within the postal service because of the many

new policies and new programs the postal service is putting into effect.

As you well know, our organization in many instances has been quite

critical of some of these programs, and all programs, of course, do cost

money. We feel this 5 percent flexibility is extremely desirable at

this time in order to make certain that our people do not end on the

whipping boy part of the operation where perhaps the program does

not work out as well as it should or there is need for adjustment of

appropriations, and that is our main concern in supporting this

legislation.

Mr. GROSS. I might say I am highly irritated by one Post Office

Department policy, and that is denial to Members of Congress of the

identity and where the Youth Opportunity people are employed in

various post offices throughout the country. I can join with you in

criticizing some of the regulations, at least, of the Post Office Department and certainly I criticize this one and I hope this committee or

some subcommittee of the House Post Office and Civil Service Committee will move to pull down this curtain of secrecy that covers the

.operations of the Post Office Department at least in this respect.

Mr. DULSKI. Mr. Gross, I am advised that the Bureau of the

Budget was invited to appear and they said they would abide by the

request of the Post Office Department.

Mr. GROSS. They would abide by the request of the Post Office

Department?

Mr. DuLsKi. Yes. Our committee requested them to appear but

they said whatever testimony the Post Office Department presented

they will abide by it.

Mr. GROSS. That is just lovely but there is no exact substitute for

testimony by the Bureau of the Budget itself.

Mr. Dimsxi. We have asked them to testify.

Mr. GROSS. I understand. I would merely suggest that you renew

the invitation to them, if I may make that suggestion.

That is all, Mr. Chairman.

Mr. DuLsici. Mr. Morrison.

Mr. MORRISON. No questions.

Mr. DuLsKi. Mr. Johnson.

Mr. JOHNSON. Do I understand from your testimony that by reason

of the law that went into effect on June 30, 1965, we do have a firm

2%-percent authorization now?

Mr. NILAN. Yes, sir.

Mr. JOHNSON. And previous to writing 23 percent into the law,

the Post Office Department did administratively receive a 5-percent

leeway every year from the Bureau of the Budget?

Mr. NILAN. In our previous appropriation acts the Congress, in

its wisdom, did write in the percentage that the Post Office Depart-
18 TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS

ment could, within a certain number of funds, transfer funds up to

5 percent in each appropriation; yes, sir.

Mr. JOHNSON. And your fear is that the 2% percent in the present

law would not be adequate to take care of the necessary transfers

from one category to another?

Mr. NILAN. Yes. Let me give you one example. Our postal

clerks are now involved in this closing out of mail gateway facilities

and the ZIP code, and this is one of the areas in which we are at issue

with the Department. Frankly, we are concerned, if this does not

work out as the Department thinks it will, that the costs will require

an opportunity for the Post Office Department to transfer at least

5 percent to make sure our people continue to be paid without any

problem because of additional costs that may arise. So during the

transition period we feel the authority is necessary up to 5 percent.

Mr. JOHNSON. You say postal employees have not been required to

accept a delayed paycheck for a considerable number of years. Do I

understand by that statement there was a time when postal employees

did have to wait for their paychecks for a considerable period of time?

Mr. NILAN. Frankly, Mr. Johnson, I did put that in in respect to

a period when the paychecks were delayed that occurred 12 or 14

years ago. I was a substitute clerk at that time and in June, because

they did not have enough money, they had to hold up the paychecks

for 4 or 5 days, and I had a family and needed that check pretty badly

at that time, and I have never forgotten it. That was because the

appropriation act was not passed until after July 1. That was in

1948 or 1949, but I have never forgotten it, and I put it in the statement as a reminder of an unpleasant experience.

Mr. JOHNSON. That is the only time you know of that the employees

did not get their paychecks on time?

Mr. NILAN. Yes sir.

Mr. JOHNSON. You say if we do not make this firm it will result in

less service to the public. Can you relate any instances where, by

of not having funds, cutoffs were made and employees furloughed, and so forth?

Mr. NILAN. As late as 1965, employees where not furloughed as

such but, as my colleague Mr. Keating mentioned, the Post Office

Department felt it necessary to cut down mail deliveries and window

services were reduced and there has been a continuing thing of reduced services to the public, and we are told it is because of budgetary

considerations and insufficient appropriations. So our employees are

hurt and the public is hurt because they no longer have adequate

service. Our people are hurt because our senior employees who have

years of employment at a window lose that position and have to take

a less desirable position. This has happened as late as 1964 and 1965.

Mr. JOHNSON. I understood the cutback in the last year and a

half of windows on Saturday was so that the budget would not go

over $100 million and there would be more money for other Great

Society programs.

Mr. NILAN. I am not in a position to comment on that. All I

know is the service has been reduced, and our employees and the

public are suffering.

Mr. JOHNSON. Do you know if this 5-percent flexibility applies to

any other department?
TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS 19

Mr. NILAN. I am not familiar with the other departments, but I

would say, from the brief knowledge I have of the postal service, it is

almost impossible to predict precisely the increase in mail volume,

the change in transportation patterns as far as mail handling, and the

other elements mentioned by my good friend Jerome Keating. There

are so many intangibles we feel the Post Office Department does need

this flexibility to operate at least the way it is operating today. I am

not familiar with the other departments.

Mr. JOHNSON. With this 5-percent authority you would be transferring from categories which are relatively small to give to larger

items such as transportation costs and salaries?

Mr. NILAN. The experience we have had in this area—and, frankly,

it has been limited—but this flexibility, for instance, the Post Office

Department may have x million dollars in facilities or engineering,

and as they come to a period during the quarter they may very well

have to transfer some funds in order to maintain postal services where

the other activity budgeted for could be delayed until the following

quarter. They have programs they can control on a continuing

basis but you cannot control—or I would hope the Post Office Department would not further reduce service or reduce hours of employment—postal services.

Mr. GROSS. Will the gentleman yield?

Mr. JOHNSON. That is all I have.

Mr. GROSS. I am sure the gentleman from Pennsylvania, Mr.

Johnson, will be as interested as I am going to be in finding out how

much of the unbudgeted funds expended by the Post Office Department will be expended on the 8,500 Youth Opportunity employees at

$2.25 an hour hired this summer. This is going to be interesting,

whether they took this money away from the operation end of the

Post Office Department to make work for 8,500 so-called Youth

Opportunity employees; and it would be interesting to know what

effect this has had on the postal carriers and others in the Post Office

Department, particularly the temporaries and substitutes.

Thank you, Mr. Chairman.

Mr. DuLsKi. Thank you very much, Mr. Nilan.

Mr. NILAN. Thank you, Mr. Chairman.

Mr. DuLsici. The next witness is Mr. Henry J. Stoffer, president

of the National League of Postmasters of the United States.

STATEMENT OF HENRY J. STOFFER, PRESIDENT, NATIONAL

LEAGUE OF POSTMASTERS OF THE UNITED STATES

Mr. STOFFER. Mr. Chairman and members of the subcommittee,

my name is Henry J. Stoffer. I am president of the National League

of Postmasters and postmaster at Sheffield, Iowa. On behalf of the

members of the National League of Postmasters, I want to express

our appreciation for the opportunity to present our views and support

of H.R. 7423.

Estimating expenditures for a full year, when that year doesn't end

until 2 years after the planning starts for an agency as complicated

as the Post Office Department, must indeed be a nightmare. While

the public demands, and rightfully so, the best in mail service, postmasters are continually faced with appropriation restrictions, and the

pleas from their regions to cut down expenses. We accept as a part
20 TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS

of good business, both the demands for good service, and the requests

to save money. Within this acceptance, however, we can do no more

than to operate our offices on a day-to-day and, yes, an hour-to-hour

basis. As postmasters, we have no control over mail volume, the

actual hours of mailing, the amount of sick leave needed, the weather,

•or the additional duties the Congress may place upon us. In view of

these and other uncertainties that surround a service so complicated,

passage of H.R. 7423 is most essential.

The availability of funds from one appropriation to another near

the end of fiscal quarter or a fiscal year is indeed vital to an efficient,

smooth operation. The many problems that can, and often do, arise

to complicate this gigantic service, precludes total accuracy in the

prediction of actual operating expenses for each of its activities.

To deprive the Post Office Department of this authority, would be

disastrous for postmasters. If, because of unexpected conditions, we

were faced with lack of funds for operations, several possible situations

develop—none of which are pleasant for postmasters. (1) We can sit

it out, hoping the Post Office Department can hurry to Congress for a

• supplemental appropriation—costly in itself; (2) we can expect some

further curtailment in service—usually blamed on the local postmaster

or the Postmaster General; (3) we may be asked to reschedule a

.convention to avoid the cost of replacements. None of these choices

are desirable, and none of them help the movement of the mail.

Our national convention will be held in St. Paul, Minn., next

month. In preparation for the event, I have made several trips

to that city. On one trip in March, the snow was higher than

reported in many years. Many employees could not get to work,

others could not serve their routes, mail piled up, and the expenses

piled up with it. A goodly amount of extra help and overtime, not

previously scheduled or planned, was required to resume normal

conditions and service.

In about 3 weeks, the snow melted, and the mighty Mississippi

reached an alltime high, closing bridges, railway terminals, and

placed 12 feet of swirling water in the parcel post section of the post

office. Temporary quarters were found, detours were established,

and the mail did go through. Despite the creditable job of management and employees, efficiency was forced down, expenses went up,

and the total budgeted for operations could not stretch as planned.

There is never a time that I can recall, when adverse weather,

epidemics, riots, strikes, or similar catastrophes were not costly to

the operation of the Post Office Department. While every budget

may lend itself to adjustments required by circumstances, in this

agency, the budget cannot possibly provide for every eventuality

despite the efforts and experience of those who labor to do so.

The changing patterns of transportation demands the budget

flexibility sought in H.R. 7423. The budget requests for fiscal 1967

are now being drafted. Who among us can speculate the number

of mail carrying trains to be added or removed? And, how can we

estimate the use of air transportation? When a train is taken off,

the mail is usually moved by trucks, and thus part of the cost of

mail handling is removed from transportation and placed in operations. If trains are added, the reverse would be true.

The authority to transfer funds between the various appropriations

of the Post Office Department would be an incentive for each bureau
TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS 21

to conserve funds as much as possible. The request for transfer

authority would be meaningless, if it did not embrace the hope of

conserving funds so that emergency transfers could be made.

We fully agree that each bureau and each department should be

prudent at all times to concur with the budget set by Congress.

When this cannot be done, we feel the authority to transfer the

necessary funds from one account to another should be in the hands

of the Postmaster General. To do so will save valuable time, prevent

curtailments of service, raise morale of employees, and more importantly, provide consistently adequate service to our millions of

patrons.

Thank you for your time and consideration. Your favorable

consideration of H.R. 7423 will be greatly appreciated by our members.

Mr. DuLsici. Thank you very much, Mr. Stoffer, for the examples

you have given that justify the introduction of H.R. 7423.

Before introducing this legislation I was advised that the Post.

Office Department is the only Department that has a separation

of categories for transferring money from one to another. The Post

Office Department has six categories. Other departments have

various appropriations within the department.

You gave an example that when a train is removed from service, themail is usually moved by trucks and part of the cost of mail handling

is removed from transportation and placed in operations.

Mr. STOFFER. Yes. In the case of a mail carrying train they pay

the railway company so much for carrying the mail and moving it in

their terminals. If it is moved by trucks we have mail handlers and.

part of the cost of mail handling goes from transportation to operations. This would be one example.

Mr. DULSKI. Mr. Gross.

Mr. GROSS. Mr. Chairman, I think I should note Mr. Stoffer is a,

constituent of mine. I had the pleasure of recommending him to be

postmaster in my district back in the dim days when the Republicans

had post office patronage. I am pleased to see you here this morning,.

sir. I do not agree with you in your support of this legislation, but I

am pleased to see you.

MT. STOFFER. Thank you.

Mr. DuLsici. Mr. Morrison.

Mr. MORRISON. No questions.

Mr. DuLsici. Mr. Johnson.

Mr. JOHNSON. No questions.

Mr. MORRISON. Mr. Chairman, if I may, my friend referred to the

dim days when the Republicans had patronage. It looks to me like

he would refer to them as bright days.

Mr. GROSS. If the gentleman will yield, I meant dim in the memory

of man.

Mr. DULSKI. Thank you very much, Mr. Stoffer.

Mr. STOFFER. Thank you, Mr. Chairman.

Mr. DULSKI. The next witness is Mr. John McCart, operations

director, Government Employes' Council, AFL—CIO.

Mr. McCart.
22 TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS

STATEMENT OF JOHN A. McCART, OPERATIONS DIRECTOR,

GOVERNMENT EMPLOYES' COUNCIL, AFL—CIO

Mr. MCCART. Mr. Chairman and members of the subcommittee,

the Government Employes' Council, representing 31 AFL—CIO unions

with members in the postal, wage board, and classified services of the

Federal Government, desires to endorse H.R. 7423.

Its basic purpose is to restore to the Postmaster General the opportunity to transfer a limited amount of funds among the various

appropriations available to the Post Office Department. This

administrative flexibility is essential to accomplish efficiently the

principal mission of the Department—expeditious movement of the

mail.

With the enactment of Public Law 640 by the 80th Congress, severe

penalities could be invoked against Federal officials who knowingly

created a deficiency in appropriations for the purpose of securing

supplemental funds. Congress acted wisely in imposing this safeguard

on the Public Treasury.

In the case of the Post Office, however, it was readily recognized

that its need for around-the-clock operations geared to the volume of

mail necessitated special consideration. Consequently, in each of the

appropriations subsequent to approval of Public Law 640, the Department was granted authority to transfer between its various funds not

to exceed 5 percent of any appropriation granted by Congress. Care

was exercised that these transfers be used only for operating expenses

and not administrative functions.

In the appropriation for the current fiscal year, however, the amount

available for transfer has been reduced to 2Y2 percent.

The council believes Congress should recognize the necessity for

continuing the previous policy by incorporating it in substantive law,

rather than having the percentage available for transfer subject to

fluctuation from year to year as is now the case.

There is no need to document the accepted fact that the volume of

mail is increasing at a dramatic pace. There is no prospect of a

decline in the foreseeable future. All indications point to increased

use of postal facilities by individual patrons and businesses. And it

is apparent that the Department is unable to predict precisely the

amount of mail in a given period. An unexpected peak in mail

processing can necessitate expenditures in addition to those budgeted

for a particular year. As the fiscal year draws to a close, the Department can be confronted with a deficit in one budget account while

a surplus exists in another. Thus, it is desirable to permit a controlled

transfer of surplus funds to the operation which is essential.

Enactment of the pending bill will not authorize expenditures

beyond the total appropriated by Congress for a particular fiscal

year. H.R. 7423 will simply aid efficient management by allowing

the Department to utilize available money to process the mail as

intended by Congress and the users.

In addition, Congress will continue to exercise control over all of

the agency's fiscal activities through the continuing scrutiny of the

House and Senate Appropriations and Post Office and Civil Service

Committees. The functions of this subcommittee is an example of

such continuing review.
TRANSFERS OF POST OFFICE DEPARTMENT APPROPRIATIONS 23

As you are aware, Mr. Chairman, employees of the Post Office Department have established a tradition of keen interest in the affairs

,of their agency. They are genuinely desirous of assisting the Department attain the highest efficiency among Federal agencies. This is

the principal reason motivating their support of H.R. 7423.

But failure to accord the Post Office the flexibility provided by the

pending legislation can be disadvantageous to the employees also.

Involved in the question under consideration by the subcommittee

are use of overtime because of personnel ceilings required by appropriation limitations; increased use of contracts to transport mail

because of insufficient funds for normal inhouse operations. These

are just two of several practices the Department may have to utilize

in the absence of authority to exchange a limited amount of its

allocated appropriations between various operating accounts.

In view of these considerations, the council urges that the subcommittee act favorably on H.R. 7423 at an early date.

Mr. Dulam. Thank you, Mr. McCart.

The next witness is Mr. Sidney Goodman, president, National

Postal Union.

Mr. Goodman.

STATEMENT OF SIDNEY A. GOODMAN, PRESIDENT, NATIONAL

POSTAL UNION

Mr. GOODMAN. Mr. Chairman and members of the subcommittee,

my name is Sidney A. Goodman, and I am privileged to serve as

president of National Postal Union, located at 509 14th Street NW.,

Washington, D.C. I am accompanied here by our secretary-treasurer,

David Silvergleid. We represent over 53,000 postal employees,

.organized in excess of 500 local affiliates in 50 States, including

Alaska, Hawaii, Puerto Rico, and the District of Columbia.

National Postal Union strongly supports H.R. 7423, which would

restore the traditional option of the Post Office Department to transfer,

not to exceed 5 percent of any appropriation, within other bureaus of

the Department for which appropriations have been made.

The Post Office Department has always been granted this flexibility,

based on recognition of the fact that it was needed in view of the very

nature of its complex operations involving large expenditures covering

innumerable personnel and operations. Reduction of this authority

to 2.5 percent, in our opinion imposes an undesirable fiscal rigidity

which would interfere with proper efficiency.

This is particularly true at this time, when the 'Whitten amendment

has been rescinded as far as the Post Office Department is concerned,

.and a number of major new programs have been initiated or are in

their early stages. This is further emphasized by the introduction of

radical changes in the physical handling of mail, based on automation

and sharply increased mechanization.

We urge early and favorable action on H.R. 7423, and appreciate

the opportunity affoided us to express our views on this subject.

Mr. DuLsici. The subcommittee will now adjourn.

(Thereupon, at 11:25 a.m., the subcommittee adjourned.)

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