Mr. Chairman, thank you for holding this oversight hearing. I'd also like to extend my warmest aloha and welcome to Postmaster General Potter and Chairman Blair.

Right now is an exciting time in the postal community. Over the past year, both the Postal Service and the Postal Regulatory Commission have been working tirelessly to implement provisions that we passed in the Postal Accountability and Enhancement Act a little over a year ago.

Perhaps the most apparent change has been the first rate filing under the new inflation cap. This process, I am sure Chairman Blair and General Potter will agree, has greatly streamlined the rate increase process, ensuring predictable increases that we hope will not cause undue rate shock. I want to commend Chairman Blair and the PRC for issuing the new rate regulations in such a timely fashion, ensuring the Postal Service could quickly take advantage of the new flexibilities.

Importantly, this new system provides more flexibility for the Postal Service and a check by the PRC on new rate increases, the first of which was recently submitted. Now more than ever there is the need to look to the future and watch the economic winds to ensure that increases under the cap are fair, and that there is enough unused rate authority banked up for future needs should they arise.

The Postal Service's latest financial information showed that even by using virtually all of its rate authority, it barely broke even. This further emphasizes the need to allow room for unanticipated future needs. As the economy slows and mail use declines, the Postal Service needs to look at both revenues as well as expenses to balance the bottom line.

I know that the Postal Service has already taken a hard look at expenses and implemented important reforms to save money. I applaud these efforts and encourage you to keep finding new opportunities for savings. That being said, I also want to emphasize the importance of continuing to foster a dedicated federal workforce at the Postal Service to ensure the highest quality of workers and confidence for the public.

Recently, the Postal Service created a set of modern service standards, which I hope will more accurately reflect the flow of the mail, giving more transparency for postal customers. Now that the Postal Service has developed these new standards, they should serve as a baseline for a constantly evolving effort to find opportunities for increased efficiencies.

In many ways, the fruits of our labors in creating this postal reform are just now beginning to show. There is still much work ahead, but I am confident that under the leadership of General Potter and Chairman Blair, we will continue foster a stronger, more transparent Postal Service with a dedication to universal service to the American people.