Good morning. We are pleased to have with us today John Potter – the Postmaster General – and David Walker – Comptroller General. Both of you have contributed so much to framing our discussion of how to strengthen the Postal Service and safeguard its core mission – providing universal mail service to all Americans at affordable prices.

Mr. Potter, in the first eleven months of your tenure, the Postal Service has faced events that no one could have foretold. Over the past 10 days, the Service and its employees once again found themselves on the front lines, and I want to commend them for the courage and determination they showed in response to this latest attack.

All too often we take them for granted, and I was so pleased when the Senate unanimously adopted a resolution last November that Senator Boxer and I introduced that commended Postal employees for their service and dedication. The events of the past eight months have clearly demonstrated that these men and women deserve to be recognized for their courage in the face of substantial risk.

We are also honored to have with us today the Comptroller General, whose commitment to an effective and efficient government is underscored by his continued personal involvement with our oversight of the Postal Service. Mr. Walker, I thank you and your staff for spotlighting the serious financial and operational challenges facing the Postal Service and for your recommendation for transformation.

I sincerely believe that we have the right folks in the right place at the right time to assist us with the task of securing the Postal Service's future. I also wish to thank those members of our audience who worked with the Postal Service as it put together this Transformation Plan. Your cooperation and partnership added exceptional value.

Last March, the leadership of this Subcommittee and the full Committee asked the GAO to review the financial condition of the Postal Service after learning that the Service faced a possible $3 billion deficit for fiscal year 2001. A month later, GAO placed the Service's transformation efforts on its High Risk list, and in May, at a joint Committee-Subcommittee hearing, we responded to Mr. Walker's recommendation for a transformation plan by asking the Postal Service to provide us with its short-, mid- and long-term vision. That Plan and the GAO report are the focus of today's hearing.

I do not have to remind any of you that the operation of the Postal Service and the delivery of mail is critical to our nation's economy. It is the linchpin of a $900 billion mailing industry that employs nearly 9 million workers and is 8 percent of gross national product.

This morning we will examine the consequences of ignoring the challenges facing the Service as laid out by the Plan and GAO. I believe both reports make a strong case for change and both propose some tough options on tough issues – some of which will be politically unpopular. I am also aware that given the diverse nature of the mailing industry, it may be difficult to forge a true consensus. But I agree with the Postmaster General that the only way to tackle the future of the Postal Service is through working together.

I will not take any more time to discuss where we have been. Rather, I would like to talk about the Transformation Plan. I appreciate the extent to which the Plan addresses many of the fundamental issues associated with postal operations, rates and pricing, human resources, regulatory reform, and mail safety.

However, within those categories there were details that were not clearly defined, such as implementation timeframes; how proposed cost-cutting goals and no rate increases until 2004 will provide adequate funds for capital needs and debt reduction; and how the Postal Service will deal with the long-term liabilities associated with pension plans and post-retirement health benefits while ensuring the retirement security of its employees.

We need fuller explanations of the Service's strategies to improve labor-management relations and how it will enhance workplace culture; how will changes to procurement and contracting procedures produce savings; and how will the Service fund mail safety and security programs beyond congressional appropriations.

It is also fair to ask why existing flexibilities have been seldom used, and what has changed that the Postal Service believes it can now take advantage of the short-term options outlined in the Plan? How do we balance the interests of those who use first class mail with the interests of commercial mailers as the Postal Service seeks additional pricing flexibilities? How do we protect Universal Service and make sure that the Postal Service's core mission doesn't erode? Although we do not have the time to examine all of these questions today, we will seek answers to these and other questions.

Let me conclude by saying that should Congress concur with the recommendation that the Postal Service become a Commercial Government Enterprise, we must protect the institutional and fiduciary interests of the government, the Congress, and the public. We must consider how a government entity – with commercial mandates – would function, and how we would ensure congressional accountability and protection against the misuse of federal funds and authority.

Without strong guarantees of accountability and credible financial auditing to protect the public interest, a future generation of lawmakers will be obligated to reconsider the very issues we will discuss today.