Social Security Fairness Act of 2005

Mr. Chairman, I yield 2 minutes to the gentleman from Indiana (Mr. Burton), the former chairman of the Government Reform and Oversight Committee, who has played a lead role in moving this bill to where it is today, and spent 6 long years in the vineyards laboring on this when he was chairman of the committee.

Mr. Chairman, will the gentleman yield?

I thank the gentleman for yielding.

Mr. Chairman, the committee intends that the Postal Service will exercise the more clearly delineated rulemaking powers provided under this section in a way that is rationally related to the policy objectives set out in the revised statute, and it is predicated upon an understanding of the effect the regulations will have on the conditions in the postal sector.

I thank the gentleman for yielding. Mr. Chairman, the committee further expects that the Postal Regulatory Commission will distinguish carefully between abuses of the Regulatory Authority set out in section 404 and the legitimate exercise of managerial discretion by the Postal Service in its implementation of the complaint provisions contained in section 205 of the bill.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, most of us are familiar with the engraved saying outside the James A. Farley Post Office in New York City: ``Neither rain, nor snow, nor heat, nor gloom of night might stay these couriers from the swift completion of their appointed rounds.''

This is the unofficial motto depicting some of the circumstances our Nation's letter carriers face in fulfillment of the universal service obligation of the United States Postal Service.

Mr. Chairman, I rise today in support of H.R. 22, the Postal Accountability and Enhancement Act, which addresses a problem plaguing our Postal Service today that is far greater than the snow or rain or heat or gloom of night. That problem is the outdated and unsustainable structural framework of the Postal Service which threatens to bring it to the brink of catastrophe unless Congress acts immediately.

This legislation is about more than reforming the Postal Service itself. It is about reforming and sustaining a vital sector of our overall economy. After all, the Postal Service currently has about 707,000 career and 98,000 noncareer employees. In addition, more than 9 million American jobs, $900 billion in commerce, 9 percent of the Nation's gross domestic product, let me repeat, 9 percent of GDP depend on mail and package delivery. Thus, the Postal Service is not only vital to our national communication network but also to our national economy.

Each year the Postal Service processes and delivers 208 billion pieces of mail to more than 130 million addressees in the United States. That is 208 billion magazines, catalogs, thank-you notes, birthday cards, wedding invitations, Social Security checks, IRS refunds, letters to Congressmen, movie rentals, all delivered in fulfillment of the Postal Service's promise of universal service.

The last time Congress successfully passed legislation to overhaul the post office was 1970 when President Nixon signed the Postal Reorganization Act, before e-mails, before fax machines. It is time to bring the service into the 21st century.

The legislation we are considering today, the Postal Accountability and Enhancement Act, is the culmination of a decade of hard work and study, not to mention a great deal of bipartisan negotiation and cooperation amongst various groups. Consequently, H.R. 22 now represents our best chance at solving the structural, legal, and financial constraints that have brought the Postal Service to the brink of utter breakdown.

This past April, the Postal Service filed paperwork with the Postal Rate Commission to request a 5.4 percent rate increase for most categories of mail. These rate hikes, which are scheduled to take effect early next year unless Congress acts to prevent them, will impose a significant cost burden, let us call it what it is, a tax on the postal consumer.

For direct marketers, financial service companies and businesses relying heavily on shipping and mailing, these rate hikes are devastating. To make matters worse, increasing postal rates could send the postal office into what many observers call a death spiral, where declining business leads to higher rates which in turn leads to decline in business until it is too late to change course.

Unfortunately, under current law, the Postal Service's only recourse to remain competitive in today's market is to raise rates. That is no way to run an operation. In addition, the Postal Service's most recent request for a rate increase was spurred in part by an existing requirement that the Postal Service contribute $3.1 billion to a Federal pension escrow account which now houses more than $73 billion in civil service retirement savings that rightfully belongs to the United States Postal Service.

This is just one of many instances in which the USPS is hampered by the current legal framework. And it is one of many outdated requirements that H.R. 22 seeks to reform.

Quite simply, the laws that the Postal Service has today are outdated and unsuited for today's competitive environment. Let me take just a minute to highlight a few of the reform components included in this comprehensive bill that will enable the service to move into the 21st century.

Universal service. First and foremost, the bill preserves the Postal Service's commitment to universal service, the guaranteed delivery 6 days a week to each and every address in the United States.

Pension responsibility. It returns responsibility for funding the military cost of postal retirees' pension to the Treasury Department where it belongs. It is recommended by the President's commission. This liability was shifted to the Postal Service in the last Congress. That shift was little more than an accounting gimmick, but it is one that must be reversed if we are to be serious about fixing the Postal Service's long-term balance sheet.

The escrow account. As I have already mentioned, the bill frees up the $73 billion in civil service retirement savings that has been held in escrow, allowing the Postal Service to use this money to defray rate increases, among other options.

Modern rate regulation. This legislation shifts the basis of the Postal Rate Commission from a costly, complex scheme of rates to a modern system designed to ensure that rate increases generally do not exceed the annual change in the consumer price index. This applies only to market-dominated products, such as letters, periodicals, and advertising mail, because the Postal Service has provided different pricing freedom for its competitive products, like express mail and priority mail.

Strengthening the commission. This act will rename the Postal Rate Commission the Postal Regulatory Commission and give it teeth by granting it subpoena power and a broader scope for regulation and oversight.

Finally, the act sets the stage for future reforms by mandating several studies including a comprehensive assessment of the scope of standards for universal service.

Today, the White House released its statement of administration policy, its SAP, regarding this legislation. While we share the ultimate goal of effectively reforming the Postal Service, some issues still lack consensus between the Congress and the White House. The administration has established some general, overarching principles to guide the framing of the comprehensive reform of the U.S. Postal Service. These include best practices of corporate governance, transparency, flexibility, accountability, and self-financing.

Our bill shares these goals, but recognizes these principles are often times at odds with one another and may require some give and take. For example, the administration has proposed segment reporting for each and every class of mail, a practice which would unfortunately place the Postal Service at a competitive disadvantage with some of its toughest competitors. Thus, this requirement would be contrary to the administration's first stated proposal of best practices of corporate governance. It is just one example of an instance in which compromise is needed if we are to enact meaningful, comprehensive reform.

This bill, the refined product of nearly 10 years of careful negotiation and compromise, strikes an ideal balance among the guiding principles on which both the House and administration are in agreement. I just want to assure the administration we will continue to work closely will them as H.R. 22 heads toward a conference.

Before I conclude, I want to take this opportunity to thank the gentleman from New York (Mr. McHugh), who chaired our special panel on postal reform and was the original bill's chief sponsor. He was, without doubt, the right leader to undertake this daunting task.

I also want to thank the former chairman of the Committee on Government Reform, the gentleman from Indiana (Mr. Burton), who played an integral role in moving the ball forward on postal reform that allowed us to be where we are today.

Finally, I want to thank the Committee on Government Reform's ranking member, the gentleman from California (Mr. Waxman), and the gentleman from Illinois (Mr. Davis), the ranking member on the special panel, for their dedication to this subject and their willingness to operate in a bipartisan manner and work through this, through the difficult issues that have been presented.

Bipartisan cooperation is the primary reason why this bill has finally reached the House floor and why we have been able to keep such diverse stakeholders around the table in productive discussions.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield such time as he may consume to the gentleman from New York (Mr. McHugh), the chief author of this, someone who has championed this cause since I came to Congress.

Mr. Chairman, may I inquire as to how much time remains on each side?

Mr. Chairman, I yield 3 minutes to the gentleman from Utah (Mr. Cannon), who has been very helpful in putting this bill together.

Mr. Chairman, we have tried on this legislation to not get into some of the specific shortcomings of Postal Service delivery on ZIP codes and the like, but I want to tell the gentleman that I have looked at this Taylorsville issue. I want to pledge to work with the gentleman from Utah and with the Postmaster General to make sure these needs are resolved and to support a thoughtful solution for the city of Taylorsville, and just assure the gentleman that that is a priority.

Mr. Chairman, I yield 2 minutes to the gentleman from Pennsylvania (Mr. Murphy).

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I thank the gentleman from California for his support of this legislation and his efforts. I think it is important, as he points out, that all of these different impacts are taken into account when the Postal Service undertakes the realignment and consolidation of postal facilities. I look forward to working with him and the Postal Service as these unfold.

Mr. Chairman, I yield 1\1/2\ minutes to the gentlewoman from Texas (Ms. Jackson-Lee).

Mr. Chairman, I yield 30 seconds to the gentleman from Connecticut (Mr. Shays), the vice chairman of the Committee on Government Reform.

Mr. Chairman, I yield myself the balance of my time.

It has been said that victory has 1,000 fathers, and defeat is an orphan. As we approach a victory on this bill tonight, at least on the House side, let me thank some of the fathers. We have talked about some of the Members being involved, but thanks also go out to the National Association of Manufacturers, the National Federation of Independent Business, the Small Business Legislative Council; a group of financial service companies like American Express, Bank of America, Capital One, Chase, Citigroup, Financial Services Roundtable, J.P. Morgan; groups in the newspaper and publisher business like Magazine Publishers of America, National Newspaper Association, Printing Industries of America, Time, Inc.; labor unions like the American Postal Workers Union, National Association of Letter Carriers, National Rural Letter Carriers and the National Postal Mail Handlers Association; postal management organizations like the National Association of Postmasters, National League of Postmasters, National Association of Postal Supervisors; postal competitors like United Parcel Express, UPS and FedEx; and other organizations like the Alliance of Nonprofit Mailers, the Mailers Council, the Parcel Shippers Association, Pitney-Bowes and others.

And on the staff side, Melissa Wojciak, my staff director; Jack Callender, who has made his career on the committee the Postal Service; Robert Taub, who the gentleman from New York (Mr. McHugh) rightly, I think, gives the credit for being the father of this behind the scenes; Ellen Brown, Mason Alinger of our staff, Rob Borden, Kristina Sherry, Michael Layman, Phil Barnett, Michelle Ash, Denise Wilson, Naomi Seiler, Jill Hunter-Williams and Richard Boykin from the committee as well. All of these made major contributions.

What does this tell us if we pass this legislation? The cost of stamps is going up, but if we pass this legislation, it

will be nowhere near the increases that we will get without this important legislation.

The need for postal reform is obvious in this case. Failure to act is a job-killer. Inaction will jeopardize at least 1.5 million jobs. This is a top priority for industry, the mailing industry, a $900-billion-a- year industry, nearly 9 percent of GDP, its economic value, 9 million jobs. Failure to act would be the same as a tax increase on American consumers. If we do not seize this moment, we effectively impose a significant new tax and a new tax burden on every American who uses stamps. If we do not take action, the Postal Service will be forced to begin increasing postal rates, starting with 2 cents at the beginning of next year. A small business that spends $5,000 annually on postage will lose almost $300 a year. An industry like financial services would get slammed with over $600 million in increases annually with no increase in productivity. And the American public will waste over $20 billion in unnecessary postage over the next decade. That is why this legislation needs to be passed.

What is wrong with the current Postal Service? We have got some of the best and most dedicated workers in the world, as the gentleman from Maryland (Mr. Hoyer) and the gentleman from California (Mr. Waxman) and others have pointed out, but they are operating under a 30-year-old system that completely missed the information technology revolution. It is a service that is saddled with $7 billion in workers' comp claims, $5 billion in retirement payments and $57 billion in health care costs. The statutes governing USPS are some of the most rigid and restrictive in the U.S. Code.

Finally, this means jobs. We can talk about trade and everything else, but failure to enact this will cost jobs in every State.

Let me conclude by saying and echoing what the gentleman from California (Mr. Waxman) noted, and that is, this bill is not a perfect bill. It is not a perfect bill today. It will not be perfect probably when it comes out of conference. But as we look at this, this is a finely balanced piece of legislation that today has almost unanimous agreement in the industries that are affected, among the workers that are affected and among the consumers that are affected.

We want to keep this balance as this comes to the floor. There are some very attractive amendments, well-meaning amendments that are going to be offered, but they upset this balance and jeopardize this bill. We have in front of us jobs, we have productivity, and we have almost 9 percent of the gross domestic product of this country at stake if we fail to pass this bill. I urge my colleagues to support it.

Mr. Chairman, please include the attached exchange of letters between Chairman Don Young of the Committee on Transportation and Infrastructure, Chairman F. James Sensenbrenner, Jr. of the Committee on the Judiciary, Chairman Bill Thomas of the Committee on Ways and Means and myself.

House of Representatives, Committee on Transportation and

Infrastructure,

Washington, DC, April 25, 2005.

Hon. Tom Davis,

Chairman, Committee on Government Reform, Rayburn Building,

Washington, DC.

Dear Mr. Chairman: I am writing to you concerning the

jurisdictional interest of the Transportation and

Infrastructure Committee in matters being considered in H.R.

22, the Postal Accountability and Enhancement Act.

Our Committee recognizes the importance of H.R. 22 and the

need for the legislation to move expeditiously. Therefore,

while we have a valid claim to jurisdiction over certain

provisions of the bill, I will agree not to request a

sequential referral. This, of course, is conditional on our

mutual understanding that nothing in this legislation or my

decision to forego a sequential referral waives, reduces or

otherwise affects the jurisdiction of the Transportation and

Infrastructure Committee, and that a copy of this letter and

of your response acknowledging our valid jurisdictional

interest will be included in the Committee report and in the

Congressional Record'' when the bill considered on the House

Floor.

The Committee on Transportation and Infrastructure also

asks that you support our request to be conferees on the

provisions over which we have jurisdiction during any House

Senate conference.

Thank you for your cooperation in this matter.

Sincerely,

Don Young,

Chairman.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I yield 2 minutes to the gentleman from California (Mr. Waxman).

Mr. Chairman, I yield 2 minutes to the gentlewoman from Florida (Ms. Ginny Brown-Waite).

Mr. Chairman, I yield 3 minutes to the gentleman from New York (Mr. McHugh).

Mr. Chairman, I yield 2 minutes to the gentleman from Illinois (Mr. Davis).

Mr. Chairman, I yield 1 minute to the gentlewoman from Texas (Ms. Jackson-Lee).

(Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

Mr. Chairman, I yield myself such time as

I may consume. I thank my friend for offering his amendment. I am unable to support it, but I understand the spirit in which he is giving it to try to make this a better bill.

This is a carefully crafted bill in which Republicans and Democrats have come together to try to work through a lot of issues, and moving one part out really jeopardizes the total package.

The gentleman quoted the minority leader, or the minority whip, as saying, This is a good bill and it should be passed this year; and he understood that, but why would a Republican Congress do it.

A Republican Congress would pass this bill because we do not want a 2-cent rate increase next January. The only way we can forestall that rate increase is by passing this legislation; and to pass this legislation, we need to work together with Republicans and Democrats. That means we give on some issues and we take on others.

The question was raised, well, we ought to have a taxpayer on the board. I think everybody who is on the board is a taxpayer. The fact of the matter is, there are four members of the board who are management, but they are not postal management. There are two postal management members of the board, and this would reserve one for the unions to pick; and by the way, there are diversity among the postal unions. That is a tough job to pick somebody because of competing interests over mail handlers versus letter carriers and the like.

But this is good legislation, and I am afraid that this amendment, in my judgment, despite I think the best intentions of its author, will upset that delicate balance that we have created to this point. It is not something that is new to corporate America to have a member of labor sitting on corporate boards. It is actually done quite frequently, particularly in the airline industry and a number of other industries where this is fairly common at this point. And since the postal workers have a lot to gain or lose by this as well, we think their voice can be very constructive at the end of the day.

So for those reasons and the fact that this particular provision has been in the bill since its introduction 11 years ago, and until this amendment was filed, I do not think any objections have been raised. I understand where the gentleman is coming from; but for those reasons, I would ask my colleagues to reject the Pence amendment and to support the final passage.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I rise to claim the time in opposition, and I yield 2 minutes to the gentleman from California (Mr. Waxman).

Mr. Chairman, I yield myself such time as I may consume.

We are not bailing out the post office every 4 years; it is like every 35 years, since the last act. We did come out with some additional money because of anthrax and because of the added burdens that we put on the post office at that point, but the post office has to operate under its own budget; and right now, the only thing they can rely on is rate increases, and rate increases drive mail away into other areas, which is why we are working this bill tonight.

I appreciate the gentleman's amendment, but I think it is unnecessary. The Postal Service already has considerable authority to test and implement different methods of providing services to the public. Nothing in the current law, I repeat, nothing in the current law or in H.R. 22 prevents the Postal Service from employing contractors in providing mail service.

The post office has a long history of doing so, starting with the Pony Express. For most of its history, the Postal Service has relied on dedicated contractors to manage small post offices, often in rural communities. Almost 8 percent of all of the post offices are operated under contract, not by postal employees; 8 percent.

Also, for 160 years, the Postal Service has relied on private contractors for the transportation and delivery of mail. Star route carriers today continue to operate, transporting mail efficiently and effectively nationwide, even delivering the mail to over 2 million homes 6 days a week. In many rural communities, those served by both contract postal units and star route carriers, the Postal Service's entire relationship with their customers is already handled by contractors, not employees.

For these longstanding and successful postal contract arrangements, this amendment is at best unnecessary. At worst it adds a new layer of procedures that will place burdens on expanding these programs into newer areas. One puzzling aspect is its provision allowing the Postal Service to waive laws, rules and regulations, including sections of the criminal code, which I am not sure I understand. Maybe the gentleman on his time will explain.

But the Service does not need this waiver to contract the provisions. In fact, it only serves to remove needed protections safeguarding the sanctity, privacy and security of the mail. Do customers really want their mail delivered by contractors to whom no laws apply?

In short, the Postal Service has been conducting pilot tests of these ideas since the 19th century. I would say the evaluation phase is over, the results are in, they work. Let us not mess them up with a new, unnecessary, convoluted regulation. Both postmaster organizations oppose this.

And so I would urge that we defeat this amendment.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield 2 minutes to the gentleman from New York (Mr. McHugh).

Mr. Chairman, I yield myself 30 seconds.

Mr. Chairman, let me just say this: On the $6 billion figure floating around, it is important to understand that the reason the Congressional Budget Office scores this as an increase is because they have contemplated and put into their figuring that there will be rate increases. Our legislation takes away those rate increases, so that is not coming into the Treasury. So if you do not have a rate increase, it scores.

When you sit here and say it is going to cost the taxpayers, that means they do not have to go with a rate increase. We are being penalized because we are not doing rate increases, and it scores against us. We need to understand that. And that is why this legislation is being passed.

Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from Connecticut (Mr. Shays).

Mr. Chairman, I will reserve the balance of my time.

Mr. Chairman, I would just note that the universal service obligation of the post office gives it a burden in requirements that some of the other facts and figures alluded to do not have to meet.

Mr. Chairman, I would yield the remaining time to my colleague, the gentleman from Illinois (Mr. Davis).

Mr. Chairman, I yield 1\1/2\ minutes to the gentlewoman from Michigan (Mrs. Miller).

Mr. Chairman, I yield 1 minute to the gentleman from Illinois (Mr. Davis).

Mr. Chairman, I urge opposition to this. First of all, the Postal Service is self-operating. What it raises, it spends. The increased money that was added was because of the anthrax issue. It was a national security issue.

This amendment is bad for the economy. We are talking about 8 percent of GDP now having at least a 2 percent increase. In fact, under this amendment, it would not just be a rate increase, this would be basically a rate shock to Americans. It would be far in excess of that.

This hurts Americans' competitiveness, it is bad for the economy, and I urge my colleagues to vote against this amendment.

Mr. Speaker, I demand a recorded vote.

Mr. Chairman, I thank the gentleman for yielding me time.

Mr. Chairman, today, obviously, represents a critical step in what has to this point been a journey of more than 10 years, a decade and a half of hearings and meeting, of negotiations followed by more hearings, more meetings, more negotiations, to rewrite and rewrite again and again a piece of legislation that will serve as the first true serious reform of the sector known as the United States Postal Service, that since 1970.

In that length of effort, Mr. Chairman, that incredible commitment to the issue speaks directly to the critical importance of the Postal Service of this Nation and the complexity of this system that each and every day and each and every year delivers some 206 billion pieces of mail going through 38,000 postal facilities to 143 million addresses in virtually every community in every State in this Nation, 6 days a week, day in, day out, week in and week out.

So since 1775 this is the service that American people and American businesses alike have come and grown to expect. Universal service at a uniform price, no questions asked. No one in this country, Mr. Chairman, goes to his or her mailbox or his or her local post office wondering if the mail will be there. It is always there. It has always been there. But the true question, the question that this bill seeks to answer with a resounding yes, I might add, is will the mail always be there?

I am concerned that truly without this legislation the answer might well be far different than that resounding yes. Postal service of today is far removed from that of 30 years ago when reform was last enacted. Unlike then, the mail stream of today has diminished by such things as e-mails and faxes and cell phones and text messages, largely electronic means of communication that replace mail. They replace stamps. And thus they replace the revenues necessary to operate our key mail delivery system.

Some ask, if people are choosing to communicate in different ways, why do we need to change things at all? Some even go so far as to suggest that the time of the Postal Service has passed, that we ought to let the private sector take over.

But the fact is, Mr. Chairman, for all the challenges the Postal Service of the 21st century faces, it still retains its traditional place as a key cog in how American businesses conduct their affairs and how Americans all across this land communicate.

The postal business sector of this Nation, as we have heard the distinguished chairman of the full committee clearly state, represents a $900-billion-a-year industry, with 9 million jobs, and more than 8 percent, nearly 9 percent, of our entire Nation's economy.

The fact is, Mr. Chairman, if the Postal Service did not exist here in 2005, we would have to invent it. That is why more than 200 major companies in this country have strongly endorsed this measure, 200 companies representing the lifeblood of the economy of this Nation. That is why virtually every major labor organization within the Postal Service has endorsed it, why even those companies that compete against the Postal Service have endorsed H.R. 22, including United Parcel Service, including FedEx, and others.

Now, I have no doubt there are going to be those who believe they have a better idea, those who will say they can improve this bill by adding or diminishing its provisions. And, Mr. Chairman, speaking honestly, as someone who has been involved from day one for more than 10 years, probably some, if not all, of these critics may be right. But what I would urge my colleagues to resist this day is the understandable temptation to make the perfect the enemy of the good.

This bill's formation has taken more than a decade for some very good reasons. It is, frankly, based upon the complexity of the system itself. We have considered those interests of the people who manage it, those who man it, the businesses that rely upon it, those who compete against it, those who depend upon it, so many interests whose input and whose needs are all carefully balanced in this bill. Perfection? No, perhaps not, but a solution nevertheless, a solution to the challenges that provide the United States Postal Service with the necessary tools to operate in a manner that most of us expect, like a modern, flexible, nimble business competing on a fair playing field, operating in an efficient and professional manner.

Mr. Chairman, at the risk of sounding immodest, I am very, very proud of this legislation. I am proud of its vision, I am proud of its construct and its provisions, but I am truly prouder still of those organizations and those special people, those individuals involved in those organizations and in this reform effort that have been there from the start.

They say a year in government and politics is a lifetime, and if that is true, 10 years has to approach infinity. But through it all, we have had special people devoted to extraordinary efforts in a singularly vital cause. And our thanks, and clearly my thanks, are owed to so many to even begin to list at this moment. Many of them are cited on the page that I just held up, all those more than 200 interests who strongly support this.

Many, if it were appropriate under the House rules, I would note are in the gallery today. But seeing as how it is not appropriate to say that under the House rules, I will resist the temptation. But without naming them specifically, I owe them thanks.

At perhaps the risk of offending many, I have to acknowledge a particularly special few: The gentleman from Illinois (Mr. Davis) and the gentleman from Pennsylvania (Mr. Fattah), the two ranking members who first began

to help us move this issue forward. Mr. Chairman, the gentleman from Illinois (Mr. Davis) has been a stalwart, a ranking member who lost focus at no time and never lost faith.

The gentleman from California (Mr. Waxman), the full committee ranking member, who put aside partisanship, not an easy thing to do in Washington these days, for the simple reason he understood and deeply cared about the conclusion of this challenge.

Bill Clinger, followed by the gentleman from Indiana (Mr. Burton), the first and second chairman of the Committee on Government Reform, who continued to bring our attention to it and keep us focused.

And our current chairman, the gentleman from Virginia (Mr. Tom Davis), who might have, who might have, but thankfully did not, let this effort die; who urged us forward; whose political skills, intellectual depth, and administrative acumen have really advanced us to this threshold of success.

These are all important folks, but I want to say, as much as I deeply indebted for those efforts, in my opinion the success of today's consideration is predicated largely upon the efforts of one very special, very dedicated man: Robert Taub. Through it all, Robert has been the intellectual and spiritual glue that has held this effort together. He was always willing, even anxious, to my amazement, to do one more meeting, one more effort to advance reform. And when others saw failure, Robert saw a challenge. When others lost hope, Robert remained focused. When others remained angry, including myself, Robert remained calm. He has been the eye of the storm in a torrent of conflict, of divergent and seemingly irreconcilable differences. I am very, very proud that the payroll lists this very extraordinary man as my chief of staff. I am prouder still that in my heart I consider him a friend, and I am deeply in his debt particularly.

So I will, with again a thanks to Chairman Davis for all that he has done, look forward to the passage of this bill.

Mr. Chairman, I thank the gentleman for yielding me this time.

I want to be very quick here, and I certainly appreciate our distinguished colleague's comments and deeply appreciate his concern.

Just a couple of points. As the gentleman from California (Mr. Waxman) said, I have to disagree with the gentleman's comments that somehow the President's Commission is at odds with what this bill entails. In fact, I think it is fair to say the President's Commission adopted at least, at least, 80 percent of H.R. 22 as it was originally crafted and continues to be contained therein.

He also spoke about the Statement of Administration Policy, the SAP, and talked about labor representation as though the President has opposed this. That is not true. The President's SAP does not address this issue, and, in fact, the United States Postal Service has not taken a position on this particular provision as well, which is the context of the gentleman's amendment. So with all due respect, I think that clarification is vital.

It also talked about Republican-Democrat. I do not think this is a novel concept. Many major corporations from DaimlerChrysler, TWA, and on and on have labor union representation on their boards. I would also note that many organizations that are generally not considered liberal, perhaps Democrat, not just support H.R. 22, but oppose the gentleman's amendment. I will name just a few: American Express, Bank of America, Capital One, JP Morgan Chase, the Citigroup, Financial Services Roundtable. As I said, pretty conservative organizations that oppose this amendment.

The fact of the matter is, this is well accepted in the industry sector. There will be one out of nine members of the Board of Governors, and I do not think it is unreasonable to have such a labor- intensive organization have a labor vote on that. While I do respect the gentleman's intent, I think, as has been suggested, these are issues that are much better dealt with in the context of the committee.

Mr. Chairman, a couple of comments. The gentleman from Arizona (Mr. Flake) said you cannot expect the Postal Service to give back any of its monopoly powers. With all due respect, the Postal Service has agreed to this bill. In this bill there is a substantial reduction in the monopoly scope on first class mail.

Right now first class mail and monopoly is whatever the Postal Service says it is. Under this bill there is a bright line determination; it is six times the rate of the first class stamp, which is a substantial give-back.

I also have to underscore the distinguished chairman's concerns about the suspension of title 18. You can argue about the needs for reform in pilot tests and such, but maybe it was an inadvertent step, but the fact still remains the amendment before the committee today will be a suspension of the criminal code, which would empower, rightly or wrongly, those who would be entrusted with the mail of the United States Postal Service to be totally absolved under criminal responsibility.

Now, I can leave it to the imagination of the Members what that could potentially mean for identity theft and on and on and on. I doubt that the gentleman from Arizona (Mr. Flake) meant it, but regardless, that is what this reform calls for.

The last thing I would say is I think that a concern is about a new model for the Postal Service, and I would agree, and this bill understands that as well. We specifically negotiated with the administration a study to be conducted under the auspices of GAO. They will hire a contract specialty firm that will look at establishing a future business model that, in part, and I will quote from the bill, ``seeks to study the maintenance of the Postal Service in its current form as an independent establishment in the executive branch; and, two, transforming the Postal Service into an ordinary corporation, wholly owned by the government or wholly owned by private shareholders or partly by the government and partially by private shareholders.''

This bill admits we have to take a careful look at the future of the business model of the Postal Service. That is why this amendment should be rejected.

Mr. Chairman, a couple points with respect to the gentlewoman's comments about the 1971 legislation. She is right, but she is also a little behind because that is why we are making changes.

H.R. 22, in fact, applies anti-trust provisions against the Postal Service, overturning the 1971 bill. We require taxes paid on the business computations for the competitive products portion of the Postal Service, again overchanging the 1971 bill. So that is what this is all about. I am glad I had the opportunity to update the gentlewoman's perspective on that.

The other thing I would note is that, again, this would be the only Federal agency treated in this manner, the only Federal agency. And there is really no justification for it. I have heard a great deal about budget scoring, and I cannot speak as to the author of this amendment, but I suspect he along with others including myself, stood in the well of this House many, many times and spoke about the moronic perspective of scoring when it came to tax cuts. We did not want that kind of scoring, the same kind of scoring that is applied here. We wanted dynamic scoring, and if we were dynamically scoring, I think we would be referring to the statistics provided by others including the Envelope Manufacturing Association that says if this amendment were to pass, it would result in the loss of $64 billion in tax revenues from those firms that use the Postal Service for mailing and such that pay sales taxes and others; 245,000 jobs would be impacted just in the first year; and 3.5 million jobs would be impacted over 10 years, all of whom are taxpayers.

So if we are dynamically scoring, as all of us who were so strongly in support of it when it came to the tax cuts, this would not be even an issue.

Let me just state, here is what the Postal Service says about this particular amendment: ``If the Hensarling amendment is adopted, the Postal Service will be in worse financial situation then it occupied before the CSRS overfunding was identified and corrected. If the Hensarling amendment is adopted, the total of these four payments would be $97 billion over the next 10 years.'' That is a tax on the American mailing public, and I think we ought to resist this amendment.

Mr. Chairman, I ask unanimous consent that I control the time of the gentleman from California (Mr. Waxman).

Mr. Chairman, I yield myself such time as I might consume.

Mr. Chairman, Members of the House have worked over a decade to reform this important part of our national culture and economy. I am truly pleased to serve in this Congress which is moving this historic reform forward.

I also want to commend the gentleman from New York (Mr. McHugh), the gentleman from Virginia (Chairman Davis), and the gentleman from California (Mr. Waxman) and their dedicated staffs for their commitment to postal reform and for the bipartisan cooperation to work for its passage.

The gentleman from New York (Mr. McHugh) deserves particular recognition for his leadership and perseverance with regard to postal reform.

Postal reform is a significant issue for my congressional district as it is for much of America. I represent one of the primary postal hubs in the Midwest, the great city of Chicago. In addition to the 12,000 postal employees who deliver mail daily to 1.2 million homes and businesses in the Chicago area, we have many respected companies like R.R. Donnelley, the largest printing company in North America, that are clients of the Postal Service.

The Postal Accountability and Enhancement Act of 2005 modernizes the postal system, helping it remain healthy and affordable well into the 21st century. This bill is a delicate compromise that has gone through a series of processes of hearings, meetings and negotiations. We have worked extensively and effectively with administration representatives to address their concerns.

There is something in this bill for everyone. It may not be everything that interest groups desire; however, as the gentleman from Virginia (Chairman Tom Davis) has said, it is our best chance at solving the structural, legal and financial constraints that put the Postal Service at risk of catastrophe.

As the Comptroller General recognized this past January, comprehensive postal reform is urgently needed. The Postal Service historically has accumulated billions of dollars in debt and currently has massive unfunded liabilities.

Declining first class mail volumes, high infrastructure-related costs and rigid statutes necessitate reform. It has been 35 years since comprehensive postal reform occurred. It is our responsibility to protect our treasured national asset before it is in crisis. The time for reform is now.

H.R. 22 has many highlights for the Postal Service. It provides the rate-making flexibility and incentives needed to operate as an efficient business. For businesses it provides rate stability, fair competition rules, financial transparency, and procurement protections needed to predict costs and operate on a level playing field. For consumers it preserves universal service, maintains high-quality standards, and eliminates unfair mailing costs so that they have an affordable and reliable means of communication. For workers it protects collective bargaining and offers whistleblower protections that are needed to ensure safe employment. For taxpayers it ensures the viability of a national asset and removes the threat of a taxpayer bail-out of the Postal Service due to financial insolvency.

These are just some of the provisions that will go a long way to helping the Postal Service better serve its customers, compete fairly with the mailing industry and contribute to our Nation.

In addition, I am pleased that the bill requires a study of the number of contracts with women, minorities and small businesses, and that it protects our domestic airlines from outsourcing of jobs to foreign carriers. I represent many members from each of these groups, and it is important that our reforms treat them all fairly. I reiterate that this bill is the best option to protect our treasured national asset before it is in crisis.

I know that the issue of classifying single-piece parcels as competitive or market-dominant has caused a good deal of anxiety for many parties affected by postal reform. I look forward to addressing this issue in conference.

And at this time, Mr. Chairman, I would like to enter into a colloquy with the distinguished chairman of the Government Reform Committee, the gentleman from Virginia (Mr. Tom Davis).

Mr. Chairman, section 404 of the Postal Accountability and Enhancement Act alters paragraph 2 of section 401 of title 39 of the U.S. Code. This section pertains to the rulemaking authority of the United States Postal Service. Obviously the issue of fairness in rulemaking by the Postal Service affects a number of businesses in my district.

I would like to ask the distinguished chairman to clarify how rulemaking by the Postal Service should consider the circumstances within the postal sector.

I yield to the gentleman from Virginia.

Reclaiming my time, I would like to ask the distinguished chairman of the Committee on Government Reform to further clarify the meaning of the language related to the role of the Postal Regulatory Commission in entering complaints related to rule-making.

I yield to the chairman to find out his understanding.

Reclaiming my time, I would like to thank the distinguished chairman for his answers and for his cooperation.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield 3 minutes to the gentleman from Missouri (Mr. Clay), a member of the Committee on Government Reform whose father preceded him, and his father preceded him not only in office but in having a great interest in postal matters.

Mr. Chairman, I yield myself such time as I may consume to say that there is a big difference between vanity and pride, and the gentleman from New York (Mr. McHugh) has every reason to be proud of this product, and we do not think it is vanity at all.

Mr. Chairman, it is my pleasure to yield 3 minutes to the gentlewoman from New York (Mrs. Maloney).

Mr. Chairman, I am pleased to yield 2 minutes to the gentlewoman from California (Ms. Watson).

Mr. Chairman, I yield 2 minutes to the gentleman from Oregon (Mr. Blumenauer).

Mr. Chairman, I yield 4 minutes to the gentleman from Maryland (Mr. Hoyer).

Mr. Chairman, I yield 2 minutes to the gentleman from Massachusetts (Mr. Lynch).

Mr. Chairman, I yield 3 minutes to the gentleman from California (Mr. Schiff) for a colloquy.

Mr. Chairman, will the gentleman yield?

Mr. Chairman, I appreciate the gentleman's desire to see that the Postal Service takes into account the impact on local communities. I share his desire for a comprehensive evaluation of all issues regarding the realignment and consolidation of postal facilities, including individual impact on our local communities.

Mr. Chairman, I yield myself such time as I may consume.

We have heard a great deal of discussion, all good, and again I think it is important that we realize that it took the coming together not only of dedicated Members of the House, but also tremendous staff work. I know that the gentleman from California (Mr. Waxman) is not here at the moment, but I want to take the time to commend not only him, but his staff, Phil Schiliro, Phil Barnett, Naomi Seiler, Althea Gregory, as well as the members of my staff, Richard Boykin, Jill Hunter- Williams, and, of course, Denise Wilson, who have worked tirelessly and tirelessly for months and some of them even into years of trying to make sure that we shaped a comprehensive bill, one that all of the stakeholders and shareholders could, in fact, agree with and be proud of, one that did, in fact, continue to protect universal service, everyday delivery, knowing that people can get their mail no matter where they live, whether it is on a remote countryside, up the mountain, across the way, across the river, knowing that the mail is going to come.

Again, I want to commend, as we have done so often, and not without reason, the hard work and continuous dedication of the gentleman from New York (Mr. McHugh), who almost single-mindedly and sometimes people would say single-handedly has kept this train rolling, has kept this ship going, and has prevented it from veering off course. I am very pleased to have been a part of the process. I again commend all of those for making it happen.

Mr. Chairman, I urge strong support for the passage of this important piece of legislation.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield 1 minute to the gentlewoman from Texas (Ms. Jackson-Lee).

Mr. Chairman, I yield the balance of my time to the gentleman from California (Mr. Waxman), the ranking member.

Mr. Chairman, one of the great accomplishments of this legislation is the fact that it was able to bring labor and management together, to bring both sides to the table and have them agree. The gentleman from Indiana's amendment did not mention the fact that four of the slots were designated for management. So certainly, if management would have at least four slots pretty much designated, then certainly labor ought to have one.

The other point is that throughout the deliberations, very seldom did we hear much conversation about Democrats and Republicans. We really talked about moving a postal system and a postal service forward. So I would oppose the gentleman's amendment.

Mr. Chairman, where I come from, there is an old saying: If it looks like a duck, acts like a duck, quacks like a duck, talks like a duck, then it is a duck. And it seems to me that the bottom line is this is an attempt to privatize the Postal Service, which would decimate the concept of universal service. There could be no universal service if this amendment is passed.

Mr. Chairman, the argument for budget-neutral reform reminds me of the teaching of Frederick Douglass when he said that he understood one thing, if he did not understand anything else; and that is that in this world we may not get everything that we pay for, but we most

certainly will pay for everything that we get.

As the Comptroller General has pointed out, respected accounting principles indicate that the burden for payment for service belongs to the beneficiary. The U.S. Government benefited from military service, and it should cover the cost.

To ensure predictable rate increases, H.R. 22 employs strict rate caps at the subclass level, prohibiting rate increases at a rate greater than CPI. These restrictions, however, make it important that the Service have access to the one-third of its own money to help cover operational costs if need be. Otherwise there is no alternative but to accumulate debt.

Mr. Chairman, the Hensarling amendment would have us embedded in debt. I oppose it.

Mr. Chairman, I thank the gentleman for yielding me this time, and I rise in support of his amendment.

As I understand it, if there are nine members of this board, no more than five can be from the party of the President. Inasmuch as the President is presently a Republican, that would mean that at least four seats would be allocated to those who are members of the Democrat party. The last time I looked, although perhaps some labor unions are having a falling out amongst themselves, there has not been a falling out between the labor union movement and the Democrat Party, so I would think they would be well represented.

I think perhaps somebody that might be terribly underrepresented tonight would be the poor beleaguered taxpayer. Given that there are over 140 million of them, perhaps we should consider reserving at least one seat for them, to make sure that their interests are represented since, too often, so many of the aspects of this legislation that we are discussing tonight ultimately could fall upon them. If there is anybody who deserves special recognition, and not that all stakeholders should not be considered, I would suggest that we reserve a seat for the taxpayer.

Mr. Chairman, I thank the gentleman for yielding me time.

Mr. Chairman, I rise in support of this amendment. I do want to add my voice to those congratulating the gentleman from Virginia (Chairman Tom Davis) for his good work, and I know that the job has been very tough to try to reconcile all of the differing interests and opinions that are brought to bear. But I find it very difficult to believe that we have something to fear from a pilot program in 20 communities out of 38,000. It appears that something is not working, or we would not be here this evening.

Many, many years ago when I was in high school, I played both football and tennis, and I was equally poor at both, but I remember something a tennis coach once told me: There are many ways to lose at tennis. Try them all.

Well, we are losing here tonight if we are contemplating rate increases and imposing $6 billion on the taxpayers. Maybe we should try something new. Maybe we should try some pilot programs. Maybe we should get some more experimentation, some more innovation, some more competition into the system, and maybe we can find ways to start winning at this.

And because of that, I do rise in strong support of the gentleman's amendment.

Mr. Chairman, I offer an amendment.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, earlier this evening some Members rose in support of postal workers. Other rose in support of large postal customers. This is good, and this is well, and I respect that.

But tonight I wish to rise in support of the taxpayer. Today our Nation is riding a wave, an impending fiscal tsunami, that threatens to drown our children and grandchildren in a sea of red ink.

Since 2000, the amount that government spends annually per household has risen from $18,000 to over $20,000 in 2004. This is only the fourth time in our Nation's history that spending exceeded $20,000 per household. It also represents the largest expansion of the Federal Government since the Vietnam era.

The Federal debt now stands at a staggering $7.8 trillion, or roughly $26,600 for every man, woman and child in America. And the Nation's financial challenges are about to get markedly worse over the next decade.

Without reforms we know that Medicare will grow at a rate of 9 percent, Medicaid 7.8 percent and Social Security at 5.5 percent a year, far outstripping our country's economic growth or our ability to pay for them. Where will it all end?

According to the GAO, if we ignore the runaway growth of government spending, we will have to double taxes, double taxes on our children and grandchildren just to balance the budget by the year 2040. If this occurs, we stand to become the first generation of Americans to leave our children with a lower standard of living, not to mention a legacy of limited freedom and unlimited government.

Now, day after day Member after Member comes to this floor to decry the Federal deficit and the legacy of debt that we are leaving our children. Rarely have so many of us spoken so passionately against the Federal deficit and yet done so little about it.

Today, I wish to provide us with an opportunity to change that. In 1970, the fundamental principle of postal reform was established, that the Postal Service would become a self-financed entity. According to title 39 of the U.S. Code: ``Postal rates shall be established to apportion the costs of all postal operations to all users of the mail.''

Simply put, the U.S. Postal Service is supposed to pay its own freight; but according to the Congressional Budget Office, and I understand that the chairman of the full committee respectfully disagrees with their score, the CBO says H.R. 22 will actually place us further in debt by almost $6 billion over 10 years. And who should pay for that $6 billion?

It either must be paid by those who use the Postal Service or the taxpayers. I vote for those who actually use the service. Now, some of my colleagues have argued that the Postal Service faces unique responsibilities and thus taxpayers must subsidize them. It is true. The Postal Service does have some unique responsibilities, but they also enjoy a host of unique benefits that private businesses do not. The Postal Service pays no Federal, States, or local taxes. They are immune from most regulations such as zoning, motor vehicle registration, and even parking tickets.

The Postal Service can borrow from the Treasury at below-market rates and is immune from anti-trust laws despite the fact that it can compete against private companies.

The number one problem facing the United States Postal Service is not the lack of a taxpayer subsidy. It is their seeming inability to control costs. Labor costs consume 80 percent of the

Postal Service's revenue, whereas UPS and Fed Ex spend only 56 percent and 42 percent of their revenues on labor.

The Postal Service has been unable to close existing facilities or consolidate new operations. In fact, Mr. Chairman, over half of its 38,000 facilities do not generate enough revenue to cover their costs.

Mr. Chairman, again, I want to state that I respect the hard work that the gentleman from Virginia (Mr. Tom Davis) and the gentleman from New York (Mr. McHugh) have done on this bill. And I do understand that many different opinions had to be reconciled to get a postal reform bill to the floor. But I believe that we need to stand with President Bush, we need to stand with the American taxpayer and make this a budget-neutral bill. Instead, if we want to make the Postal Service more cost competitive, what we really need to do is enact all of the Presidential commission's workforce reforms.

In 2003, Congress decided that the Postal Service was on a course to possibly overpay its civil service retirement system costs. Rather than let the Postal Service spend the money, it retained it and an escrow account was created within the U.S. Treasury.

H.R. 22 releases that escrow account to pre-fund Postal Service health care liabilities. I agree this is a sound use of funds, but it is unfortunately incomplete. Under H.R. 22, only two-thirds of the funds would be used to fund the health care liabilities letting 2 to $3 billion a year slip back to the Postal Service for other expenditures.

With the Postal Service currently facing an unfunded health care liability of roughly $75 billion, I believe every dollar in the escrow account should be used to offset this growing concern. If not, taxpayers will surely be called upon to make up this tremendous shortfall.

Mr. Chairman, my amendment would reduce the cost of H.R. 22 substantially by ensuring that 100 percent of the civil service retirement system savings will be directed to the Postal Service's unfunded health care liability. In addition, this amendment would maintain the Postal Service's financial responsibility for paying the civil service retirement system costs associated with military service credits, instead of passing the cost on to the Treasury and the American taxpayer.

Again, the question is not whether but who will pay, the customers that use the Postal Service or the American taxpayers.

Mr. Chairman, I want the Postal Service to become more efficient, and I believe we can do so by enacting more of the President's initiatives. Let us not pass the buck to American taxpayers yet again. Let us not pile further debt upon our grandchildren. Let us ensure the United States Postal Service continues to pay its own freight. I do appreciate the good work of the gentleman from Virginia (Mr. Tom Davis), but let us make H.R. 22 budget neutral. I urge all of my colleagues to vote for this amendment.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, how much time do I have remaining?

Mr. Chairman, I yield 1\1/2\ minutes to the gentlewoman from Tennessee (Mrs. Blackburn).

Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from New Jersey (Mr. Garrett).

Mr. Chairman, I yield myself the balance of my time.

Mr. Chairman, 2 years ago the Postal Service was here asking for $7 billion from the taxpayer. They come here tonight asking for $6 billion from the taxpayers. Again, I ask the question: Where will it all end?

If we do not change the way we do business in Washington, we will have to double taxes on future generations just to balance the budget. Somehow, somewhere, some way, someday we must stop the madness of the spending.

I agree with many of my colleagues that there are only two choices: Either ratepayers or taxpayers are going to pick up this tab. I vote for ratepayers.

Mr. Chairman, I offer an amendment.

Mr. Chairman, I yield myself such time as I may consume.

I rise today to offer the Pence amendment to the Postal Accountability and Enhancement Act, and, along with several of my colleagues, will endeavor to bring real reform and real enhancement to a bill however well conceived and well intentioned by my colleagues. In fact, I rise today to begin by thanking the gentleman from Virginia (Chairman Tom Davis) and the gentleman from New York (Mr. McHugh), the author of this legislation, for their leadership on this measure and their sincerity in attempting to ensure the ongoing vitality of the U.S. Postal Service and the tradition that it has enjoyed in this Nation, an invaluable part of our economy since before our Nation was formed.

But before I get to the substance of the Pence amendment, Mr. Chairman, I want to begin to address the reasons why the Bush administration did today issue a Statement of Administration Policy opposing significant portions of this legislation and, in fact, suggesting that if this legislation did not achieve the objective of budget restraint and fiscal reform, that the President's advisers would encourage him to veto this legislation that will come before the House today.

A few observations from the report on the President's Commission of the United States Postal Service are in order. The Commission found that the number one problem facing the United States Postal Service is its complete inability to control costs, and ratepayers have been paying the freight as

a result of that along with taxpayers, who recently financed nearly $7 billion in a Postal Service bailout just a few short years ago. Of that uncontrollable cost, 80 percent of the United States Postal Service costs are constituted in labor, this in a competitive marketplace where its competitors like UPS and FedEx spend only 56 percent and 42 percent of their cost on labor. Clearly the United States Postal Service is, as the President's Commission found, desperately in need of flexibility to achieve labor and workforce reforms.

The USPS is currently providing its workers roughly $870 million more in benefits than Federal workers receive as a result of lucrative health and life insurance benefits, and that is just the beginning.

H.R. 22 that we will consider today contains none of the main collective bargaining proposals offered by the President's Commission. It contains none of the reforms offered by the Commission to establish a BRAC-style process to consolidate and shut down facilities that use money. And while H.R. 22 does laudably contain a cap on postal rate increases, many are highly skeptical about how that will work. The Congressional Budget Office states that the USPS will ``increase rates . . . more frequently than under current law, but by smaller increments.'' In addition, the cap could be blown if such an increase were ``reasonable and equitable and necessary'' for the continuation of services. Such a cap hardly equips the U.S. Postal Service with the tools to control costs and renegotiate its labor costs.

So we come today, a series of us, with the kind of reforms that we believe will give the Postal Service the opportunity and the flexibility to achieve reforms necessary to live within its means. That is why I submitted an amendment to enact the Commission's recommendation to ensure that health care and pension benefits ought to be a part of normal collective bargaining. It was rejected and will not be considered today. That is why the gentleman from North Carolina (Mr. McHenry) had offered an amendment to enact the Commission's recommendation to reform the workmen's compensation reforms to align more closely with the private sector. Unfortunately, these amendments were made not in order.

In fact, today the Pence amendment will deal with a provision of this legislation that, believe it or not, would set aside a seat on the Board of Governors specifically for an individual unanimously approved by all labor unions. More on that in a moment.

I say this with deep respect, Mr. Chairman. I understand why the Democratic minority whip just said on this floor that this was ``a good bill that should be passed this year.'' I just do not understand why a Republican majority in Congress, with the firm and clear opposition of a Republican President, would do likewise.

Let me get to the substance of the Pence amendment, if I may. The Pence amendment essentially removes a provision of H.R. 22 that requires that the first vacant slot on the Board of Governors literally be filled by an individual with the unanimous backing of ``all labor organizations.'' The headlines today would attest that it might be difficult, depending on the definition of ``all labor organizations,'' to get all labor organizations to agree on anything these days.

Currently the Board of Governors consists of nine members with no more than five from the same party. This bill would ensure that one of these seats would be set aside to represent the interests of one special interest group to the exclusion of other interests like mailers or, dare I say it, taxpayers. It is this type of provision that we must confront in this legislation, and the Pence amendment humbly seeks to strike that.

And workforce is the issue. Mr. Chairman, the U.S. Postal Service is the second largest employer in the United States, second only to Wal- Mart. And according to the President's Commission report, 3 out of every $4 earned by the Postal Service went to pay wages and benefits of its employees in fiscal year 2002. The unions have been extraordinarily effective over the last 25 years, as has been said over and over again, preventing layoffs and recently announcing having inked the second largest pay increase in the unions' history. I believe that is why the Statement of Administration Policy that was issued today simply read, and I quote, ``Should the final bill have such an adverse impact on the federal budget, the President's senior advisers would recommend that he veto the bill.''

The Pence amendment is all about bringing the kind of reforms in this bill that will allow the U.S. Postal Service to maintain its vitality and its fiscal integrity for years to come. The Pence amendment in its effort to strike section 401 is a modest effort to achieve that goal.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield 1 minute to the gentleman from Arizona (Mr. Flake).

Mr. Chairman, I yield 1 minute to the gentleman from Texas (Mr. Hensarling).

Mr. Chairman, I yield myself such time as I may consume.

I thank the members of the committee, especially the author of this bill, for their sincerity of purpose and civility in this debate. I also thank my colleagues who have risen in support of the Pence amendment, which, again, simply removes the provision of H.R. 22 that requires that the first vacant slot on the Board of Governors be filled by an individual with unanimous backing by all labor organizations.

The Pence amendment is supported by National Right to Work, by Americans For Tax Reform. We already have fairness on the board, Mr. Chairman: five members of one political party, the party in power in the White House, and four members appointed by the other political party. We do not need a tie-breaker member that is selected by the unanimous consent of all the labor unions.

If we are going to achieve the labor and workforce reforms necessary to restore efficiency to the Postal Service and ensure its vitality in the 21st century, we must ensure that those reforms are not stymied by a reserved seat for labor unions on the postal board.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I demand a recorded vote.

Mr. Chairman, I thank the gentleman for yielding me this time.

Mr. Chairman, I rise in strong support of the Flake amendment. There are 38,000 post offices, stations and branches in the U.S. Postal Service. The Flake amendment contemplates a pilot program that would affect 20 communities.

By my bad math, that is about \1/20\ of 1 percent of the communities that are served by 38,000 post offices, stations and branches. But that is an unacceptable reform.

I rise with great respect to the gentleman from California (Mr. Waxman), who has been a champion of postal reform for much longer than I have been in Congress. I do respect the gentleman and have great respect for the chairman. It is lost on me why we cannot say, in the name of reform, in the greatest free-market economy in the history of the world, that we will allow for competition in 20 pilot programs to run out inefficiencies and to bring innovation and new ideas to the delivery of postal services.

The Flake amendment is just simply that; 38,000 post offices, stations and branches. The Flake amendment asks humbly that we identify 20 communities to test the feasibility and desirability of alternative methods of delivery of postal services, and this reform bill and its reformers oppose that pilot program.

Let us bring real reform to reform. If we cannot, let us introduce a pilot program where reform and the ideas of reform might be able to take hold to create a truly diverse 21st century postal delivery system for America.