Rand Paul (17:06):
The committee will outcome to order.
(17:10)
The Postal Service is once again telling Congress that it's out of money, running out of money. And once again, the answer seems to be, send the bill to the taxpayer, just give us some more money. Every private business in America lives under a discipline. The Postal Service has escaped. When demand falls, a business makes hard choices, cuts cost, uses contractors when they can do the job for less. And when something fails, it stops doing it. A company that refuses to adjust does not double its line of credit from the treasury. It goes out of business. The Postal Service plays by different rules. When volume falls, it does not cut headcount. It adds. We've added over 120,000 employees. It's the opposite of what you do. When a private partner can do the work for less, you pull the work in house. Instead, you've been pulling the work in house at a higher cost.
(18:06)
When a capital project fails, the post office keeps writing checks. And when the bill comes due, the post office doesn't answer. It hasn't answered. It comes to Congress asking for a higher credit limit and calls it reform. That's the heart of the problem. The post office has been protected from the hard choices that would stop the bleeding, so the bleeding never stops. Look at the record. We were told that the 2022 reform law, which shifted $107 billion away from the post office, would pull the postal service out of the hole. We were told that the Delivering for America plan would modernize the network and restore solvency. We were told this time it would be different. It was not. Since those promises, the Postal Office has lost another 26 billion and it is spending money it does not have on infrastructure it may not need. Since 2007, the Postal Service has lost more than $117 billion, $9 billion in the last year. Before anyone calls those losses uncontrollable, its own numbers say otherwise. It has roughly 18 billion in controllable losses since 2007, three billion just last year. This is not a rough patch. That is a broken business model. The Postal Service has already maxed out all $15 billion that can borrow from the treasury. The Postmaster General warns it could run out of cash as soon as September if it continues to meet all statutory obligations. So the question is not whether the post office needs more money. The question is whether Congress will keep rewarding failure without requiring change.
(19:47)
This is a business built for a country that no longer exists and it refuses to adjust to the one that does. First class mail is down 34% since 2014. Over the same period, the post office grew its career workforce by 9%. That makes no sense. Volume down by a third, headcount up. No private business would do that. Labor's about 80% of the Postal Service's costs. At UPS, also unionized, it's closer to 60%. So the difference is not the union. The difference is whether management will adjust to reality. Instead of adjusting, it made things worse.
(20:25)
Since 2020, even as revenue fell, the Postal Service converted about 285,000 workers into career positions, raising their pay and locking in decades of pension and health obligations that has no plan to fund. When a private company's volume falls, it reduces labor costs. When the postal service volume fell, it added employees and made them more expensive. This is not reform. This is the opposite of reform. The new Postmaster General did not make all of these decisions, but he controls whether they continue. The fleet electrification, the multi-billion dollar network redesign, the capital projects without a clear return. These are not unavoidable costs. They're expensive choices and Congress deserves to know whether new leadership will continue them.
(21:15)
At the very least, the Postmaster General should immediately implement a hiring freeze to get labor cost under control. There are estimates that $1.8 billion could be saved in the first year with a hiring freeze. We've had a year and I haven't seen anything, any action in this direction. And while it runs up these costs, the Postal Service will still price its core product below what delivery cost. A stamp is 78 cents heading to 82, still among the cheapest in the developing world. With its dominant products priced below cost, it's no wonder the Postal Service can't break even. That is not a business plan. It is a hidden tax. Before Congress considers another dollar of relief or more borrowing authority, the Postal Service should show the committee five things.
(22:03)
A real plan to bring labor costs under control, proof that private partners will be used where they cost less, a commitment to stop capital spending that shows no return, a willingness to consolidate facilities that no longer make sense and proof the service mandate can be met without permanent losses. And if it cannot, an honest debate about the mandate itself. Anything less is not reform. It is a slower, more expensive way to fail. And as always, the bill will be sent to the American people.
(22:35)
Senator Peters.
Gary Peters (22:38):
Thank you, Mr. Chairman. Thank you for convening today's important hearing. For more than 250 years, the United States Postal Service has helped bind our country together. It's connected families. It supports small businesses. It ensures that Americans nationwide can receive the essential mail and goods no matter where they live. The Postal Service is the only carrier that delivers to every single address in America. That's a feat that for profit competitors don't even try to meet. For communities across the country, particularly harder to reach rural communities, the Postal Service and its workers provide an essential public service each and every day.
(23:22)
In 2022, I was proud to lead and pass the Bipartisan Postal Services Reform Act, which increased transparency around postal delivery performance, ended overly burdensome retiree health care prefunding requirements and integrated postal service retirees healthcare into Medicare and codified six-day delivery service. However, it's clear that the postal service continues to face significant challenges.
(23:50)
The Delivering for America plan has not worked. Costs are up. Service is down and customers are paying the price. The plan has not yielded the financial results needed to stabilize the Postal Services bottom line. Over the past five fiscal years, the Postal Service has posted $9.7 billion in controllable losses. Earlier this year, Postmaster General Signer testified in the House that the Postal Service could run out of cash as soon as this year. Since then, the Postal Regulatory Commission gave the Postal Service flexibility on how it spends revenue from its additional rate authority, providing the Postal Service with an additional $2.4 billion this year. The Postal Service has also temporarily suspended its normal contributions to the employee retirement plans to preserve cash. While the Postal Service has not provided a formal estimate of exactly when it will exhaust its available funds, it's clear that Congress and the Postal Service must take action to ensure Americans continue receiving mail reliably and affordably for the next 250 years.
(25:06)
The Postal Service has shared some proposals with Congress that would help put it on stronger financial footing, including investing its pension funds, revising its calculation for its civil service retirement system obligation, as well as raising the borrowing limit. The Postmaster General is also now asking Congress to consider reviving an appropriation for the postal service. These proposals certainly deserve serious review, but any reform must come with real transparency, real accountability, and clear service improvement plans.
(25:42)
The Postal Service must also do a better job of ensuring that every employee returns home safely at the end of each day. Last year, Nicholas Acker was tragically killed in an accident at a processing facility in Allen Park, Michigan. That facility was cited by OSHA on its safety standards compliance. At am I urging the Office of Inspector General has now launched a nationwide facility safety audit. I expect the Postal Service to fully cooperate with the audit and double down on its efforts to protect all of its employees when they're on the job.
(26:17)
And finally, we can't discuss the future of the Postal Service without addressing the recently published proposed rule on voting by mail that would enable President Trump to hijack the Postal Service for his own political gain. Postal Service is a proud tradition dating all the way back to the Civil War of successfully delivering absentee ballots. In 2024, they securely delivered almost 100 million ballots. Last year, the Postal Service reaffirmed that its job is simply to transmit the mail and explicitly said they do not administer elections. The President's March executive order directs the Postal Service to create "new mail-in absentee participation list," which they will use to verify which voters are eligible to receive and cast ballots through the mail. This would give the Postal Service unprecedented authority over American elections and is a unconstitutional subversion of the Postal Services duty. I'm disappointed that the Postal Service chose to give in to the president's illegal demands by issuing a proposed regulation that risks disenfranchising millions of eligible American voters nationwide. The Board of Governors did not even vote on these approved changes.
(27:41)
Under the proposed rules, states must submit each absentee voter to a new national database controlled by the Postal Service, and comply with new federal ballot mail-in requirements, or they will be prohibited from using the mail-in voting in their elections. The Postal Service will also conduct undefined ballot verification process to ensure states meet these new federally imposed standards. Ultimately, the federal government will serve as the final arbiter as to who can actually vote by mail. Yesterday, I led the entire Democratic Caucus to once again insist that the Postal Service abandon its effort, uphold the law, and return to its core functions.
(28:25)
The Postal Service has one mission to deliver the mail no matter who sends it and no matter where it's going. Mr. Steiner, I urge you to demand in these efforts and return the Postal Service to its constitutional role of simply delivering the mail, not acting as a partisan tool for the president.
(28:45)
And lastly, I would like to reiterate that the Postal Service must be transparent and responsive to this committee so that we can work collaboratively on the many issues that we face.
(28:55)
I hope that today's hearing will be a productive conversation about how we can work together to improve the financial position of the Postal Service and to protect its ability to deliver for each and every American.
(29:09)
Thank you, Mr. President.
Rand Paul (29:13):
It is the practice of this committee to swear in witnesses. Will you please rise and raise your right hand? Do you swear that the testimony you will give before this committee will be the truth, the whole truth, and nothing but the truth so help you God? Thank you. You may be seated. David Steiner is the 76th Postmaster General of the United States and Chief Executive Officer of the US Postal Service. He was appointed by the organization's board of governors and began his tenure on July 15th, 2025. In his role as Postmaster General, Steiner also serves as a member of the board of governors. Steiner is the former CEO of Waste Management, a $20.4 billion waste and environmental services company operating throughout North America with nearly 50,000 employees. He was CEO from two 2004 to 2016. Mr. Steiner, you are recognized for your opening statement.
David Steiner (30:06):
Thank you so much. Good morning, Chairman Paul, Ranking Member Peters, and senators of the committee. I appreciate the opportunity to discuss the future of the Postal Service, a venerated institution that has driven the growth of these United States for over 250 years, longer than the country itself.
(30:26)
The title of this hearing is APT. The Postal Service has a broken business model and we welcome the committee's focus on fixing it. Levers available to private sector enterprises and to government agencies are unavailable to the Postal Service. So for example, first we're mandated by law to deliver to every address, more than 170 million of them, six days a week. And there are over a million new stops added every year. This leads to 84% of city delivery and 52% of rural delivery routes being financially underwater. Moreover, 58% or 18,000 of our post offices are losing money, incurring over two and a half billion dollars in operating costs.
(31:15)
In a normal business model, if 70% of routes are losing money, you would adjust the routes. In a normal business model, if 60% of the stores you had were losing money, you'd close them. We're not allowed to do either. That is a broken business model. Second, we're not allowed to unilaterally raise prices and we're required by law to give billions of dollars in discounts to many mailers. Third, we can only invest our retirement assets in US treasuries. If we were able to invest conservatively in other assets, we could have had nearly $1 trillion in additional retirement assets and our retirement plans would be well overfunded rather than a-
David Steiner (32:00):
Retirement plans would be well overfunded rather than underfunded. Fourth, we pay an unfair allocation of CSRS benefits for retirees that were with the post office department before it became the independent postal service. That costs us about three and a half billion dollars a year. Fifth, we cannot borrow more than $15 billion due to a statutory limit that was established decades ago that has not been adjusted for earnings or for inflation. Sixth, we're not allowed to manage our workers' compensation claims, costing us anywhere from 400 to $800 million a year.
(32:40)
Now, despite all of these operational and accounting restraints, we're taking steps to fight our way back. That includes reducing transportation costs by $2 billion. We also reduced work hours by 56 million hours, equivalent to $3 billion, and reduced our overall headcount by 28,000. We've also made dramatic progress in improving our service scores, recently hitting on-time delivery numbers not seen in at last... in at least the last five years. This is significant progress, but it's not enough, and we will continue to drive costs and drive service.
(33:21)
So to me, the choice for Congress is clear. Either remove the mandates that create the unsustainable business model or compensate the Postal Service for those money-losing mandates. I will note that reimbursing the Postal Service for money-losing mandates is not a novel idea. In 1971, Congress foresaw that they would be asking the Postal Service to do things that were guaranteed to lose money. In return, Congress decided to pay the Postal Service $460 million a year for those public service mandates. However, this public service reimbursement has not been appropriated since the 1980s.
(34:03)
Our preferred proposal is that Congress update this public service reimbursement to reflect the true current costs of those mandates and allocate us those funds. However, we can also achieve profitability if we remove the money-losing mandates. But doing so doesn't just affect the postal service, but the entire ecosystem around it. That ecosystem supports $2 trillion in revenue and eight million jobs. If the Postal Service reduces service and raises prices, that ecosystem suffers, jobs are lost, and the overall economy suffers.
(34:40)
So in closing, I'm here to tell America that we can do anything they desire, but we can't afford to do everything they desire without more help. The Postal Service has been an integral part of the growth of America, subsidizing the growth of steamships, railroads, aviation, and technology. So subsidizing the post office has been a spectacular investment for the United States. We believe this economic engine and that investment is worth saving, and we look forward to discussing with you how to best do so. Thank you, Mr. Chairman, and now be glad to take some questions.
Rand Paul (35:18):
Thank you for your testimony. We'll now proceed to questions. There are things you can control and things you can't control. And the mandates, I frankly remove the mandates and treat it more like a business. I just remove them completely. Even some compromises, you go from six days to five days, you save 3 billion. You get to four days, you save 3 billion. Another 3 billion. That'd be 6 billion.
(35:40)
That's two-thirds of your annual debt just by going to four days. You can let people pay. If they want it six days, they pay an extra $30 a month or $50 a month to get it. I think what you'd find is, in the marketplace, almost nobody would pay. They'd get used to getting it in four days. But there are things you control. Hiring freeze. Hiring freeze, we see estimates as much as 1.8 billion a year, and actually, cumulative costs going up higher. Why no hiring freeze?
David Steiner (36:09):
We actually did institute hiring freeze, probably about 40 days ago. Put out a memo not only with a hiring freeze, but a spending freeze.
Rand Paul (36:19):
How does it work to have the postal rates change? The Postal Regulatory Commission does it. Do you ask them to do things? What is the communication between the board of governors and the PRC? Are they completely separate? How do rates go up?
David Steiner (36:34):
Yeah, so our rates are capped right now. Our rates are capped by an inflation factor and then a number of stops, basically type of [inaudible 00:36:46]-
Rand Paul (36:45):
Do you submit something to them saying, "We're losing money. We're below with a market rate. We have to go up." Do you submit-
David Steiner (36:50):
Well, we-
Rand Paul (36:50):
... that to them?
David Steiner (36:51):
Yeah. We recently... So it limits us as to what type of price increases we can get. We recently filed a petition, and they have undertaken a five-year review. We recently filed a petition that said, "Allow us to raise prices to meet this loss gap that we have." That petition is under consideration right now. I would hope that the PRC would give it full consideration.
(37:18)
The truth is, Mr. Chairman, that in my opinion, the PRC has not put the financial sustainability of the post office first, and they will tell you they have a number of factors that they have to balance. I completely agree with that. But at a time when we are failing, I think they should give more credence to allowing us to do the things that we need to do to become profitable, and they have prevented us from doing a number of those things.
Rand Paul (37:51):
If some of the numbers were accurate, you're telling us, you would've gone a long way towards reducing the 9 billion. Saving 2 billion in transportation costs, saving 3 billion in hours, that kind of goes along with hiring freeze. That'd be half of your deficit for the year, but I don't believe next year's deficit's going to be half of nine.
David Steiner (38:08):
Yeah. I mean, look, anyone that... I've been associated with a number of businesses ran a very large one for a long period of time. And the problem that you've got in any business is that you've got inflation in your wage base, you have inflation in your supplier base, you have a lot of different inflation.
(38:26)
So what you try to do is to get enough productivity to offset that inflation in your cost base. This year, we will offset all but 0.2% of our cost increases. But the problem is in order to make money, any business person go to any business school, they will tell you, get productivity to offset your inflation in your cost base, and then price and volume can drop straight to the bottom line, you become profitable.
Rand Paul (38:52):
So, currently, I just want to be clear, there is a hiring freeze at the post office.
David Steiner (38:55):
There is.
Rand Paul (38:57):
Raising the price from 78 cents to 95 generates about 1.6 billion. Hiring freeze about 1.8 billion in the first year, goes up over time, 3 billion for each day reduced. I think the hiring freeze could have come earlier, but at least you will start saving some from 40 days ago. There are some people reporting that this really isn't a full hiring freeze. I would like details on exactly what a hiring freeze means to you, to make sure it means the same thing to us.
(39:28)
I think that when you and I had talked and when we had talked with your staff coming into this, what we really wanted was you to prepare for us, "This is where we spend our money. This is where we could reduce. This I can do on my own, and this I can do with Congress's help." That's what I would do if I were in charge. I would put out things and say, "Well, instead of just complaining about the mandates," tell us specifically. It looks like for each one day it's $3 billion.
(39:56)
Congress needs to address that. Part of this is Congress's fault because they have unrealistic mandates that make it hard for you. But the previous postmaster expanded the post office. He made the post office bigger. The only thing you really can control is you can outsource, not insource. We have known that since the beginning of time. It's not rocket science. Contractors cost less than the government employees. 80% of your cost is labor. Reducing labor is the only thing you can do, and contractors do it better.
(40:24)
I don't care if you outsource 98% of it and have no post office, and you're a shell for contracting because it's the only thing you can do, because nothing the post office does is efficient or makes money. So what I would like is for you to send us a more detailed, "This is the money that comes in. This is what we would do. This is what happens if the rate goes up. We have sent a letter to the Postal Commission." I really think that we ought to consider combining it and just having one, just have a board of governors, have no Postal Rate Commission, just have one commission.
(40:59)
The people run it should be setting the prices, and there could be a veto power by Congress if they didn't want to do it. But the problem is when you vote on prices, nobody wants higher prices, so everybody wants to please the public, and so everybody would always vote for lower prices, but then that's why... it's part of the reason why we're here. So I hope you will at least pledge to us that you'll send me a more detailed analysis of what you can do, what you can't do, because the gist of what I got from you today is we just need to borrow more money.
(41:27)
And that to me is I think defeatism and not something I'm interested in doing, just loaning you more money when you lose 9 billion a year. It's not just you. It's the mandates, but it's also the system. And the hiring freeze should have... I would've done that day one. I still hear reports that it's not a complete hiring freeze. So we pledged to send us more information on what exactly we need to do to make the post office whole.
David Steiner (41:49):
Absolutely.
Rand Paul (41:49):
All right.
David Steiner (41:50):
Absolutely. I'm glad to do it. Senator, when I took this job, I took it, and had the very narrow focus of how do we make the Postal Service profitable? As I've gone through this job, I've recognized that you can't look at the Postal Service in isolation. You have to look at the Postal Service in the context of this 2-trillion-dollar industry that is virtually 100% dependent upon the Postal Service. And so what I'm trying to figure out, and I think what the discussion should be, is how do we do what is best for the American people and what's best for the American Treasury, right?
(42:28)
How do we get the most net dollars into the Treasury? And I wouldn't have told you this even three months ago, but I would tell you that, today, I think it's worth discussing whether having us act as an economic engine, a development company, if you will, of this 2-trillion-dollar industry that surrounds us, if that wouldn't generate more net dollars, generate more net jobs, generate more net service for the American public than reducing days of service and reducing numbers of post offices. Now again-
Rand Paul (43:03):
Well, I think they had-
David Steiner (43:04):
... again, I'll do it either way. We can do it either way. But I think that's the discussion we need.
Rand Paul (43:08):
You could argue that the Egyptians building the pyramids created trillions of dollars in jobs. I think it's a false argument because the money could be spent somewhere else. So we could build pyramids. We can build the post office bigger and call it, oh, for every dollar we create another dollar. But what you're ignoring is for every dollar you put into government, that dollar would've been spent much more effectively in the private marketplace. Senator Peters.
Gary Peters (43:35):
Postmaster General Steiner, the Postal Services proposed vote-by-mail rule published on June 2nd at the direction of the president. As I mentioned in my opening comments, I believe should concern every American. This rule marks certainly an alarming departure from the Postal Service's longstanding tradition of neutrally delivering all types of mail. You get a piece of mail with an address on it, you make sure it gets delivered to that address is in a timely fashion. You don't ask any other questions. What this basically rule will do is going to turn the Postal Service, however, into a ballot-verification agency that's going to... would control basically a master database of every American absentee voter. It would also give the Postal Service new power to determine whose ballots get delivered.
(44:29)
I think the Constitution is clear elections are to be administered by the states, not the federal government. We have a tradition of our local communities and states administering these elections. Once again, not the federal government. So my question for you is, under what legal authority can the Postal Service regulate who and how people can vote by mail?
David Steiner (44:52):
Yeah. As you know, our regulations are proposed regulations, not final regulations. As to the authority, I used to be a lawyer, but I was a business lawyer, not a constitutional lawyer. And so I would have to defer that to the courts to understand the authority.
Gary Peters (45:11):
Well, I think it's clear that there's nowhere in a Constitution, there's no federal law that the Postal Service is authorized to create these types of voter databases, ballot verification systems, or mandatory standards. It just simply doesn't exist. It's hard to interpret a law when it doesn't even exist there, which is what we have. Just because President Trump wants to do this does not make it law, doesn't make it right, doesn't make it constitutional.
(45:38)
There's certainly a massive difference between general mail requirements and regulating elections. Routine changes to the postal network can have a small impact on election mail, but this effort is a power grab to swap constitutionally mandated state control for what the president wants. I think it's very clear. So last year, Mr. Steiner, you issued a rule that explicitly said that the Postal Service has "no role in administering elections." What has changed?
David Steiner (46:13):
I don't think anything has changed. Senator, I'm not a political person, and the Postal Service is not a political organization. We, as you said, I think you quite aptly said, we deliver mail. That's what we do. We deliver mail, and that's what ballots are. Ballots are mailed. Now they are a special kind of mail, obviously. They need special care. And so years ago, we recommended what we call Kit 600. In Kit 600, the fundamental premises of Kit 600 is a unique barcode and a unique envelope that allows us to move those ballots more efficiently, more securely.
(46:52)
That is what our proposed rules suggest is that we have unique barcode, unique envelope, and that is not something that is new. That's something that's been being used by states throughout the country on both sides of the political spectrum. So California has followed it, Oregon has followed it, Arizona has followed it, Florida has followed it, among many other states. And so to me, it's not a political question. It's a question of how do we most efficiently and securely move ballots? We've been recommending this for many years. All this does is make it a requirement.
Gary Peters (47:37):
Well, certainly, best practices are different than having a mandatory requirement. You could follow best practices to deliver it more efficiently without having control of vast voter rolls and having the ability to have that data. This is basically a backdoor way for the federal government to get voting information that states control under the US Constitution. So, yes or no, if a state refuses to turn their absentee voter list over to the federal government, will the Postal Service still mail their ballots under this proposal rule?
David Steiner (48:07):
Under our proposed regulation, no. We would tell the state that we need the manifest in order to... Look, what we're asking for-
Gary Peters (48:14):
So I mean, that... that's the answer. You'd tell no. So the proposed rule basically coerces states to conform to these new requirements and hand over their absentee voter rolls or face the consequences of not being able to vote by mail. Some states, that's all they do. Oregon is completely vote-by-mail. If they say, "No, we control the list. The states control the list."
David Steiner (48:37):
And Oregon has followed-
Gary Peters (48:37):
"We're not going to give it."
David Steiner (48:38):
Oregon has followed Kit 600 since the day they started voting by mail.
Gary Peters (48:42):
This is a different issue. This will be a lot different issue. You're telling these states, "Either give the federal government this information, trust the federal government, trust the Trump administration will take good care of these. And if you don't do it, you can't mail absentee ballots." You're going to make a decision that people cannot vote by mail. That's unacceptable.
David Steiner (49:01):
Well, all that does-
Gary Peters (49:03):
Thank you, Mr. Chairman.
David Steiner (49:03):
... all that does, Senator, is make sure that we match the ballots that a state believes they're sending out to what actually gets sent out, right. And so all the state gives us is a list of here are the voters that are supposed to get ballots, and here are the ballots. We then compare the two, make sure that the ballots that are supposed to be sent get sent.
(49:23)
If Maryland had followed that, they probably wouldn't be in the problem they're in today. So it is a much more efficient, a much more effective way to make sure that states... I would think that states would want the information to ensure that the ballots that they think are sending out are the ballots that are actually being sent out.
Gary Peters (49:43):
Well, they do know what they're dropping mail. I think they can understand that. They think if they put an address with their voter rolls on a piece of mail for a ballot and give it to you, they do expect you're actually going to deliver it. You don't have to say, "We want all of your information. We want that information in our control." You mentioned Maryland. I think that was a printing error. This regulation wouldn't have done nothing to fix what happened in Maryland. The states control their own elections.
(50:11)
That's pretty clear in the Constitution, and an effort by this administration to nationalize elections and have the federal government having this information is incredibly dangerous precedent. You can imagine sharing this information with the Department of Homeland Security and using these lists for a variety of nefarious purposes. We need to protect the integrity of the voting rolls. We need to protect the separation of elections from federal government, ensure that our state and local governments are the one administering their own elections. That's what this is about.
David Steiner (50:42):
Well, we are the Postal Service. All we do is deliver mail. We're trying to deliver it securely, efficiently, and accurately.
Rand Paul (50:52):
Senator Johnson.
Senator Johnson (50:53):
Postmaster General Steiner, welcome to the committee. Thank you for taking on this very thankless task and bringing your business acumen to the table here. From my standpoint, there's two problems. There's the operational problem. There's the unfunded liability problem. And if there's a root cause to any of this, it's because Congress who has allowed us to become $39 trillion in debt, tries to micromanage the postal service with the mandates, with all kinds of other things.
(51:23)
So I would agree with president... or with Chairman Paul. I would love to see you use your... take... set the mandates, the congressional requirements aside, and just use your business acumen and go, "This is what we would need to do to make the postal system solvent operationally." I mean, this is a business that's been losing revenue, losing volume for years, and this isn't something new. Okay. So that'd be my request as well. Give us a detailed plan.
(51:54)
Forget all the congressional mandates, but what would you do as a business person looking at this as a business? Let's talk about the unfunded liability. When I became chairman of this committee in 2015, got a lot of pressure to do postal reform. And the post reform always was a taxpayer bailout, which would not fix it, would not address the operational. In 2022, we did postal reform, and we offloaded about $107 billion of the unfunded liability into Medicare, which, by the way, is not particularly solvent either. We still have 166 billion dollar unfunded liability, correct?
David Steiner (52:31):
That's correct.
Senator Johnson (52:36):
How many years does somebody have to work in the Postal Service before they can retire on full retirement pay?
David Steiner (52:43):
I don't plan to be here that long, so I never asked that question.
Senator Johnson (52:45):
I'm not. I'm not. Do you not know?
David Steiner (52:48):
I do not know.
Senator Johnson (52:49):
Okay. I think it's pretty short. Do you know what it was in your business?
David Steiner (52:52):
Pardon?
Senator Johnson (52:53):
Do you know what it was in waste management?
David Steiner (52:54):
In waste management, we didn't have a retirement plan. We had 401(k)s.
Senator Johnson (53:00):
Okay. Well, anyway, it'd be interesting to have that information. What is the Postal Service? What is average in private sector? Because I think one of the problems is-
David Steiner (53:09):
I do believe, Senator, I believe, and I may misspeak, but I believe you start vesting at five years. I'm not sure when you fully vest.
Senator Johnson (53:18):
But I'd like to know that because that's key information in terms... And then you compare it against the private sector. I have to bring this up. I know the House passed a bill with 74 additional zip codes. We get requests. City wants your own zip code.
(53:36)
You respond to this committee, I think the cost of setting that up would be $800 million, and then $90 million a year when you're hemorrhaging billions of dollars a year. Can you just describe for the committee the problem in these, I'll call them vanity zip codes?
David Steiner (53:50):
Sure. And first off, I do believe that we have some alternate type of solutions that we can do other than doing their own dedicated zip code. And so would love to have our staff speak with your staff or with any of the other members of the Senate or Congress that are looking at their own individualized zip code. I think we can come up with some other solutions. The problem, it's interesting because, being the newbie here, you would think new zip code, pretty simple, right. The problem is every single digit in that zip code means something. And so if you change a digit, what do you have to do?
(54:28)
You have to put a receiving facility there to receive that mail, right. And then as you go through our process, remember 110 billion pieces every year, call it 300 and some odd million pieces every single day. Our machines are set up by zip code so that boxes get transported to zip codes. You start adding zip codes, what do you have to do? You have to start adding more bays and more boxes, not in one plant, but in every plant throughout the United States.
(54:58)
That's why that 800 billion of capital that it would cost to do it sounds like a crazy number. It's not a crazy number because you have to make that change everywhere throughout the system. And so what we're trying to do is to come up with ways where we can do it without a zip code. Part of the reason why folks want their own zip code have nothing to do with the mail. It's because it might give them different insurance rates, right. Let's address the underlying problem rather than adding another $800 billion of cost to the Postal Service.
Senator Johnson (55:35):
Was that 800 billion or million?
David Steiner (55:37):
I'm sorry, 800 million.
Senator Johnson (55:38):
Million, that's what I thought. So again, just to underscore, we did a post-reform bill in 2022. $107 billion offload the American taxpayer. It didn't even come close to solving the problem. I think we need to really focus on that. Again, that's what I resisted during my chairmanship, and I'm not going to do it until you fix the problem. $107 billion didn't even touch the problem.
David Steiner (55:58):
Yeah. And I think that is a perfect example of how we got where we are, right. The problems that were fixed there were what I call the accounting problems, right, welfare, retirement, different things like that. They weren't the operational problems that plagued the post office, the mandates that I talked about in my opening remarks. And so that bill took care of a lot of the accounting issues, not all of them.
Senator Johnson (56:22):
At the expense of the American taxpayer.
David Steiner (56:24):
It actually but it exacerbated the operational problem. How did it do that? It required six-day-a-week delivery. And so instead of... What I'm here to say is let's have the discussion on how we holistically look at fixing both the accounting issues and fix the operational issues, because the operational issues have not been addressed in the prior reform acts.
Senator Johnson (56:45):
Thank you.
Rand Paul (56:47):
Senator Hassan.
Senator Hassan (56:48):
Well, thank you, Mr. Chair and Ranking Member Peters, for this hearing. And welcome, and it's good to see you, Mr. Steiner. As you already discussed with Senator Peters, the Postal Service recently proposed a rule that would allow it to unilaterally block ballots from being sent to certain voters before they ever have the chance to cast a vote. This un-American plan will inevitably result in some law-abiding US citizens not being able to receive the ballots they're entitled to and reduce citizen participation in our democracy.
(57:21)
And in my state of New Hampshire, where people vote absentee only if they are physically unable to be at the polls on election day and often don't know that that will be the case until kind of the 11th hour, it means that some eligible voters will be unable to vote in my state. The plan is also blatantly illegal.
(57:40)
The Constitution is clear that states are responsible for elections, not the Postal Service. So I'll join with other colleagues in urging you to immediately withdraw this rule, but even setting aside the merits of the rule and your own views about whether it is legal, I want to ask a more basic question about the rule of law. If a court tells you to withdraw your rule or to not enforce it, will you follow that court order?
David Steiner (58:04):
Obviously, yes, we follow court orders.
Senator Hassan (58:07):
Good. Okay. Moving on. On-time delivery for first-class mail in the New Hampshire region has fallen by more than 10 percentage points over the last eight years and is now more than five percentage points below the Postal Service's own target of 87%. That means nearly one in five letters are failing to arrive on time.
(58:28)
Prior efforts, including cuts to overtime and moving some mail processing out of New Hampshire, likely have contributed to those delays. As Congress considers options to address the Postal Service's financial deficit, those options will depend on your commitments to meet certain service levels. And I think you laid that out today pretty well. What specific commitments can you make to maintaining on-time delivery in rural areas, and how can this committee hold you to them?
David Steiner (58:55):
Yeah. I mean, we don't want to maintain on-time delivery. We want to improve on-time delivery-
Senator Hassan (59:00):
Right.
David Steiner (59:01):
... because it really is... To me, that is the calling card of the postal service, right? That is the price of admission that we have. If we can't effectively and efficiently serve our customers, then I completely agree with you. You shouldn't give us any help. And so, as I've looked at it, a big part of what we've got going on is the fact that we don't have end-to-end visibility.
(59:29)
And that is sort of what I've called the moonshot at the postal service now is how do we get end-to-end visibility? Because what happens... I won't go into a lot of detail, but what happens is when that box that's going to New Hampshire gets delivered, and then it's supposed to go first in, first out, and then another hundred boxes get delivered. It gets buried somewhere and lost.
Senator Hassan (59:51):
So, just because my time is limited-
David Steiner (59:53):
Sure.
Senator Hassan (59:53):
... what commitments can you make to maintaining or improving on-time delivery in rural areas? And again, what do you need from this committee? And if you can be brief, and we can follow up after the committee if necessary.
David Steiner (01:00:03):
Yes. Yeah. No, look, I would love to have ... There are so many different categories of first-class mail. I'd love to have that. Let's make sure we should be delivering at least as well as our competition delivers packages. So we're talking sort of 95%.
Senator Hassan (01:00:17):
And look, rural America depends on the post office for a whole lot of things. That last mile of delivery is critically important. We're talking about people's medications. We're talking about payments for small businesses and supplies. So this is really important to us. So let me just move on to one other issue, and I want to follow up on that last line of questioning with you-
David Steiner (01:00:36):
[inaudible 01:00:37].
Senator Hassan (01:00:37):
... and get some details, and get some commitments. But during your House testimony on March 17th, you committed to giving Congress five-year financial projections on cost-cutting measures. In a subsequent letter, the committee asked you to respond by this Friday. Getting timely analysis is critical for Congress to act on your request and understand the impacts of possible reforms on the services provided to our constituents. Will you meet Friday's deadline?
David Steiner (01:01:01):
Yes, I think we can meet Friday's deadline.
Senator Hassan (01:01:03):
Okay.
David Steiner (01:01:03):
To be honest with you, I've been spent the last couple of days studying for this, so I haven't had a chance to look at that, but we'll get you something by Friday.
Senator Hassan (01:01:10):
Well, so have you read the analysis? I mean, it was due Friday, and if you think you're going to meet the deadline.
David Steiner (01:01:15):
Yes. And so what we've put together is basically, here's what our trend line is, and then here are the things that can move that trend line up or down, price, volume, productivity. And so what we can get you is, here's the trend, here's how we think we can bend that trend positively or negatively.
Senator Hassan (01:01:36):
So let me-
David Steiner (01:01:37):
And I think that's exactly what you'd like to see.
Senator Hassan (01:01:39):
Let me... Yeah. What cost-cutting measures have you identified as part of the analysis, and what impact would they have on the projected date that you'll run out of cash?
David Steiner (01:01:47):
Yeah. I mean, when you look at what we're doing from a cost-cutting point of view, it really, for us, is all about the effective and efficient movement of the mail. And so you've got to look at the various categories.
Senator Hassan (01:01:59):
Right.
David Steiner (01:01:59):
So-
Senator Hassan (01:02:00):
But what specific measures have you identified, and what does that do in terms of the longtime projection from when you're running out of [inaudible 01:02:06]-
David Steiner (01:02:05):
Right. So let's start with... let's walk through... If you want, we can walk through the entire sort of mail system. So you've got the carriers, right, the carriers that deliver mail, that pick up mail. We look all the time at how do we make those routes more efficient. Then you go to the processing plants. We're looking at how do we make that more efficient. Obviously, you have to have investments in technology, and then that mail gets transported.
(01:02:27)
We're looking at how do you take out transportation costs? As I mentioned, we've taken out $2 billion in transportation costs. And then you've got it showing up again at another plant where it ultimately gets delivered by the carrier, that full cycle. We look at every single phase of it to see-
Senator Hassan (01:02:43):
So you-
David Steiner (01:02:43):
... where we can save money.
Senator Hassan (01:02:44):
... have proposals in this letter, and I realize I'm a little over time. So what does that... what do those proposals do to the projection of when you'll run out of money? Are you going to be able to be solvent for longer?
David Steiner (01:02:56):
Yeah. I do want to clear up a misconception because I think the PRC testified that we've got cash to last us a certain amount of time. Let me be very, very, very, very clear. We are out of cash. We are out of cash. If we had to pay all of our bills today, we could not pay all of our bills today. We are out of cash. What we are doing right now is we're basically borrowing money from our retirement plans to fund current operations. I'm not particularly comfortable with that. I promise you, our employees are not particularly comfortable with that.
Senator Hassan (01:03:35):
And neither am I.
David Steiner (01:03:35):
You all shouldn't be comfortable with that. None of us should be comfortable with that. To me, that's why we have to have this-
Senator Hassan (01:03:39):
All right. Is-
David Steiner (01:03:40):
... discussion of how we fix this broken business model.
Senator Hassan (01:03:42):
So I am over time. I want to follow up with you, and I hope you will be more clear about-
David Steiner (01:03:46):
Glad to. Glad to.
Senator Hassan (01:03:47):
... what the savings you think will do in terms of your cash flow and cash solvency.
David Steiner (01:03:51):
Absolutely.
Senator Hassan (01:03:51):
Thank you.
David Steiner (01:03:52):
Absolutely. Glad to come meet with you at any time you'd like to have that discussion. Glad to do it.
Rand Paul (01:03:58):
Senator Lankford.
Gary Peters (01:03:59):
Chairman, thank you. David, thanks. Thanks for stepping into this role and taking this on. This is a tough-
Gary Peters (01:04:00):
Chairman, thank you. David, thanks. Thanks for stepping into this role and taking this on. This is a tough task to be able to take on. I'm always interested that when we in Congress are talking to USPS about how you balance your budget, I find that always ironic for us to be able to be in that conversation as a body that has $2 trillion worth of overspending this year, and our debt-
David Steiner (01:04:19):
I wasn't going to bring that up.
Gary Peters (01:04:20):
No, I will. I will. It is a challenge that we got to be able to figure out. I want to be able to drill down on multiple things here. Part of the challenge that you're facing is, not only the complexity of the organization, the number of people that are in the organization, the equipment that are there, the out of date buildings, and all the other things that are there that make this incredibly expensive to be able to manage, but the lack of flexibility to be able to actually help fix this.
(01:04:47)
So I want to drill down on a couple of things. In the short time that you've been there so far, we're dealing with over the last 10 years, and you've only been there months at this point, but over the last 10 years, delivery has gotten slower as well. So we've got increasing amounts of expenses and decreasing speed of service.
(01:05:07)
In the same time period, Amazon and Walmart are racing to try to get deliveries to people's homes in two hours. And it's now taking five days for a lot of folks in rural America to be able to get a letter moving where I used to take two in the past. As you're dealing with the debt in other areas, this has got to be one of the areas you're focused on as well is just speed of delivery because that increases the volume of people actually using that. Where are you going on that?
David Steiner (01:05:29):
Yeah. And that's what I was talking about, the moonshot, the visibility. I mean, the reason why... Well, let's look at the context first. FedEx, Amazon, UPS, deliver, call it anywhere from maybe eight to 10 billion packages a year. We deliver 110 billion pieces every year. So the magnitude, the difference in the networks is dramatic.
(01:05:56)
And so for us, it's all about visibility. We've got to know where that piece of mail is at any particular point in time. Because what happens is it gets shoved to the back of the line and forgotten. And so we are working on it right now to where we can get visibility into every piece so that, if we see that a piece is delayed, we can call that plant manager, and say, "The piece is delayed." This is not rocket science technology. This is not technology that doesn't exist. This is technology that exists, that other companies use. Again, because we've underinvested in the network because we don't have the cash, we haven't been able to get that end-to-end visibility. That is absolutely where our focus is right now.
Gary Peters (01:06:40):
Okay. It's interesting to me. There's been an ongoing dialogue for a while about zip codes, and this has been fascinating for me. And a lot of it's really based around tax collection, quite frankly, online businesses, and trying to be able to get tax revenue to that local community.
(01:06:56)
And let me just give you a couple ideas. We have a beautiful community in Northern Oklahoma called Enid. Vance Air Force Base is there, great community, fantastic folks. There's also North Enid, which is a different town. And everybody just thinks, oh, that's the northern part of Enid. No, it's not. It's a totally different town. Same zip code, by the way. And the confusion is always there between North Enid and Enid to try to figure out where's tax revenue going and everything else. And they base it on zip code collection on this.
(01:07:24)
This has been an interesting thing. They're not looking for a new post office. They're not looking at a new physical location. They're just trying to do better tracking of where actually revenue should go and how this should actually flow. I can give you lots of different ideas like the fabulous community of Hochatown in Southeastern Oklahoma, which is a great resort community around the lake. They're also connected to Broken Bow. Same zip code on it. They're trying to figure out, they have totally different operations between Broken Bow and between Hochatown on it, but the tax revenue is all going to one. How do we solve this? They're not looking for a new physical place. They're just looking for a different number on this. Why is this so hard?
David Steiner (01:07:58):
Yeah. I mean, as I said earlier, every number means something in that zip code. And our entire network, so those 110 billion pieces only move because every number means something. And every time you add a new zip code, what do you have to do? You have to add something to the network. That's why, when I first heard that it would cost $800 million to fix all these zip codes, I thought, well, that's crazy. But it's true because you don't fix... There is not one light switch that you flip and say, okay, now the mail goes there. You've got to change the entire network. And that takes a lot of capital-
Gary Peters (01:08:39):
Is that a technology issue just from out of date technology? Because just about every other system, you change some numbers on it and it reroutes.
David Steiner (01:08:45):
No, it's not technology. It's physical assets. And so for example, we'll have a sorter that's lined up, and it would have call 24 bays in it. You add zip codes, you got to add a 25th bay, a 26th bay, a 27th bay, because those boxes are going to that specific zip code. And you don't have to add that in one plant, you have to add that in every plant. And so it's the multiplying effect of the capital that's required. And I would love to have our staff sit with your staff, and again, with any members of Congress, let's figure out a way. Because the underlying problem is insurance rates, taxes. It's not delivery of mail. The underlying problem is not our problem. Would love to have us all get together, and say, how can we fix this and change it without having to massively change our system?
Gary Peters (01:09:36):
Yeah. I look forward to that conversation on it. We've had some good dialogue before about the electric vehicles that were purchased by previous administration with no chargers and some of the waste that was done there that should have been actually going towards actually improving the quality of delivery on this rather than towards some other random goal that wasn't met. So thanks again for your work.
David Steiner (01:09:56):
Thank you.
Rand Paul (01:09:57):
Senator Kim.
Senator Andy Kim (01:09:58):
Thank you, Chairman. Thank you for coming before us here. I wanted to just start by asking you about the census. This is something that's so vitally important to our country, explicitly stated within the Constitution as a function of our government here. The Census Bureau is currently testing the use of postal workers to conduct the census. Is that correct?
David Steiner (01:10:20):
That is correct, yes.
Senator Andy Kim (01:10:21):
Is that something you approved?
David Steiner (01:10:23):
It is. Yes, absolutely.
Senator Andy Kim (01:10:24):
And so I guess I wanted to ask you, because this was looked into, this was examined during the first Trump administration. What was the outcome of that pilot during the first Trump administration?
David Steiner (01:10:37):
I'm not familiar with any pilot that was done in the first administration. I obviously wasn't here, so I'd hate to speak to that. What I can tell you is that we are in the middle of the pilots right now. There's two. They're small pilots. But in one, we actually have we tell our mail carriers, you can become an enumerator. So you have your current job, you can also be an enumerator. And in the other pilot, we're using our carriers to get follow-up information from addresses. They're both actually going fairly well. Look-
Senator Andy Kim (01:11:11):
Can I-
David Steiner (01:11:13):
... the only discussions I've ever had about this is how do we do it more efficiently and less costly for the American public? We'll see if we can do that through the pilots, but you would think that it would make sense that we could do it more efficiently and cheaper because we're already going to every house every day.
Senator Andy Kim (01:11:27):
I'm all for efficiency and for saving money. But again, this is a function of our government that's laid out in the Constitution. And I'll be honest with you, it concerns me that you were not aware of a pilot program that tried to do exactly this in the first Trump administration. Because, look, I'm just going through the census government report right now, and there's a recommendation section here, and it says, "All pilot activities were discontinued based on the irreconcilable conflicts of the requirements of 13 USC and 18 and 39 USC." So I guess I just want to ask you-
David Steiner (01:12:08):
You can tell me what those are because I don't know what those are.
Senator Andy Kim (01:12:10):
See, but this is what, see, this is not like you don't come to us for the cheat codes here. This is something that you should be aware of as you are approving this.
David Steiner (01:12:19):
I am absolutely aware of it. Our legal department-
Senator Andy Kim (01:12:23):
Okay. So tell me what-
David Steiner (01:12:23):
Our legal department is absolutely aware of it.
Senator Andy Kim (01:12:25):
So tell me then what-
David Steiner (01:12:26):
No one has said anything about us violating any particular statute. I know that there was some discussion-
Senator Andy Kim (01:12:30):
Can you tell me what the difference is between Title 39 and Title 13 then?
David Steiner (01:12:35):
I'm not a lawyer. No, I could not. Well, I used to be a lawyer.
Senator Andy Kim (01:12:38):
Well, I'm not a lawyer either, but I know the difference. And so what I'll just tell you is that what we have is Title 39 allows the Postal Service to share information with law enforcement and others during certain circumstances. In contrast, Title 13 explicitly forbids sharing of individuals' census data for any purpose.
(01:12:58)
The reason I raised this is that the pilots that you're trying to do down in Huntsville and Spartanburg, we've gone through this several years ago. And as mentioned, they were discontinued based off of irreconcilable conflicts between these two. So the question is, if you're trying to move forward with this, what's different? Are you seeking legislative fixes? Are there other things you're doing that would try to show this?
David Steiner (01:13:24):
Yeah. No, I am absolutely glad to get our staff together with your staff. I know that those were issues. I know that the oath was an issue. And I know that our legal department and the Department of Commerce's and the Census Bureau's legal departments looked at those issues, resolved those issues. I cannot tell you the fundamental underpinnings of the legal statutes that do that, but absolutely glad to have anyone on your staff or yourself talk with our law department-
Senator Andy Kim (01:13:53):
I'll follow with your team. I'm the ranking member in the subcommittee that oversees the census, which is why we've been so focused on this. If okay with you, I'd like to make sure that we have Congressional oversight to be able to do a visit to these pilot programs and be able to learn more. Is that something you can agree to?
David Steiner (01:14:10):
Sure, absolutely. Absolutely.
Senator Andy Kim (01:14:12):
Well, look, the other thing I'll just say here, and I just want to raise this, is that we've been having some issues down at the Trenton processing facility. There was an OSHA inspection, some continued things that haven't been remedied, and I've been hearing from some of my constituents there. I just wanted to ask, would you be able to ensure that you'll work with me to make sure that anything that is continued to be outstanding in terms of the concerns that were raised are ones that we can remedy?
David Steiner (01:14:42):
Yes. Thank you for bringing that to my attention. Look, safety is our number one priority. If there's some issues there, I won't send you to my staff to follow up on that, call me, and I'll make sure we follow up.
Senator Andy Kim (01:14:54):
Okay. Well, I'll make sure we get each other's numbers, we'll follow back up. Okay?
David Steiner (01:14:57):
All right. Thank you.
Senator Andy Kim (01:14:58):
Okay. Thank you. I yield back.
Rand Paul (01:14:59):
Senator Scott.
Senator Rick Scott (01:15:01):
Thank you. Thanks for being here. All right. So I don't understand how a business loses money. It just doesn't make any sense to me. So if you couldn't get any more money out of the government, and we didn't let you borrow more money, because if you borrow more money, ultimately you know what that's going to happen. The Postal Office, I've been up here seven years, it never makes money. So they'll come ask for a bailout, right? So we're not fixing anything. There's no real solution here. So if there were no limitations on what you could do, what would you do?
David Steiner (01:15:39):
So you may have seen the press reports. We actually brought in the preeminent restructuring firm in the world to look and tell us exactly that. Let's assume that we aren't going to get any help. What are we going to do? They're in the process of putting that report together. I would tell you that there is absolutely no doubt that that would lead to a streamed down postal service. It would lead to delays in service.
(01:16:15)
I mean, there's look, as the chairman very appropriately pointed out, 80% of our costs are labor costs. There's only one way you can become profitable here and that's address the labor costs. And so we would have to go in and look at how we can change days of service, reduce the level of services, and we would have to shut down a massive number of post offices.
Senator Rick Scott (01:16:45):
I looked on the report I've got that if you look at the number of pieces on marketing mail versus the revenue, it's dramatically les per piece than first class. So why is that? First off, I'm sure we all love all the marketing mail we get because I have to get an extra recycling bin for it.
David Steiner (01:17:07):
My old business, we loved that, by the way. Please recycle it.
Senator Rick Scott (01:17:10):
That's probably good for you. It's funny. You just recycle it, people don't look at it.
David Steiner (01:17:16):
But it is the antiquated pricing structure that is imposed upon us by the PRC. And so to the chairman's point-
Senator Rick Scott (01:17:26):
Who's the PRC? Why do we-
David Steiner (01:17:27):
The Postal Regulatory Commission.
Senator Rick Scott (01:17:29):
So who's that?
David Steiner (01:17:30):
They were set up when the postal service was split so that they could oversee this, quote, unquote, "monopoly." Now, in 1971, arguably we were a monopoly. There is zero chance that we are a monopoly at this point in time. And so I completely agree with the chairman. It seems to me that we have a regulatory body that is regulating in a past era.
Senator Rick Scott (01:17:56):
So why wouldn't they want you to make money?
David Steiner (01:17:59):
Well, they've got, what I've understood from them and I won't profess to speak for them, they say they have to balance a number of things. But here-
Senator Rick Scott (01:18:10):
Marketing mail.
David Steiner (01:18:11):
Right. So here's the balance that they did last. They told us we can only raise prices once a year. And they acknowledged that that could be $700 million to the Postal Service. That could cost us $700 million. In their opinion, they said, " But that doesn't make a big dent in their total loss. So we're going to do it." Who does that benefit? It benefits the marketing mailers. That's $700 million that got transferred from us directly to our customers.
Senator Rick Scott (01:18:43):
No, no. It got transferred to the taxpayers of the country. That's who it got transferred to. The taxpayers paid for it because we're going to have to cover your losses.
David Steiner (01:18:53):
That's absolutely correct. And so I think your point is absolutely correct. A normal business takes price and volume and finds the best mix.
Senator Rick Scott (01:19:05):
But why are they in existence? Why do you need them?
David Steiner (01:19:07):
We don't need them. But they are in existence ostensibly, again, I won't speak for them, but ostensibly because we are a monopoly and they have to regulate the monopoly.
Senator Rick Scott (01:19:18):
How many marketing contracts have you lost to FedEx and UPS?
David Steiner (01:19:24):
For you mean-
Senator Rick Scott (01:19:25):
For marketing mail.
David Steiner (01:19:26):
Oh no, marketing mail. We are the only ones that deliver marketing mail. We do have a monopoly on the mailbox. No one can-
Senator Rick Scott (01:19:32):
But you can't charge whatever price.
David Steiner (01:19:34):
No.
Senator Rick Scott (01:19:35):
And you have to charge less than first class.
David Steiner (01:19:37):
Absolutely.
Senator Rick Scott (01:19:38):
So a letter I want to send to my grandkid costs me more than the marketing stuff I don't want to read.
David Steiner (01:19:44):
Absolutely. And senator, you would not believe how arcane and complicated those pricing rules are because there's so many different classes and so many different discounts. You definitely need an advanced degree to understand them, and I don't.
Senator Rick Scott (01:20:00):
And you acknowledge if you go borrow money, ultimately all you're saying is if we go borrow money, you're going to go come back later and ask for the taxpayer to pay for it, right?
David Steiner (01:20:07):
Well, no. I truly believe, and this is in defense of the mailing industry, I truly believe that if we become an economic engine rather than just thinking of us in terms of delivery, and we help grow that industry, it is a $2 trillion industry. And actually the marketing that they do is very effective. We can make it more effective if we can manage the price and the volume.
Senator Rick Scott (01:20:39):
They should pay for it. If they're going to make money off of it, they should pay for it.
David Steiner (01:20:42):
And I would hope they do pay for it through paying taxes. And look, I completely agree on the price piece too. We have to match price and volume that's best for us. But I truly do believe that this $2 trillion ecosystem, we have a choice to either shrink it or grow it. It's been shrinking for the last 15 years. If it continues to shrink, net dollars into the treasury get reduced. I think it's a discussion worth having. And look, you all get to make those policy decisions. I'll do it either way. But I do think it's a discussion worth having.