Government affairs

Legislative Updates

Senate committee holds hearing for two Postal Board of Governors nominees

Today, the Senate Committee on Homeland Security and Governmental Affairs (HSGAC) held a hearing on the nominations of Ron A. Bloom and Roman Martinez IV to the Postal Board of Governors (BOG), along with two nominees to the Superior Court of the District of Columbia.

In his opening statement, HSGAC Chairman Ron Johnson (R-WI) apologized for the lack of members on the BOG while also taking the time to note that the finances of the Postal Service of the last 10 years are unsustainable but did acknowledge that the financial crisis was sparked by the 2006 Postal Accountability and Enhancement Act (PAEA).

In his opening statement, Ranking Member Gary Peters (D-MI) stated that BOG vacancies have prevented the board from achieving a quorum and thereby leave it unable to address the immense financial and operational challenges now facing the Postal Service. He also stressed the need for Congress to enact bipartisan postal reform and to work closely with the BOG to ensure USPS continues to be a vital public service for every community across the country.

During the hearing, the nominees provided background information on themselves as well as other relevant information.

Ron A. Bloom of New York, nominated for the remainder of a seven-year term expiring December 8, 2020, began his career as an investment banker and union consultant before serving as the special assistant to the president of the United Steelworkers for many years. President Barack Obama appointed Bloom to serve as the Assistant to the President on Manufacturing Policy in 2009, when he helped rescue the auto industry during the Great Recession. In 2011, he returned to investment banking at Lazard Company, where he served as Vice Chairman, U.S. Investment Banking. During his time at Lazard, he advised the NALC on postal issues and appeared at both a national rap session and a national convention. Bloom is currently Managing Partner and Vice Chairman at Brookfield Asset Management, where he helps manage the firm’s private equity investments.

During his testimony, Mr. Bloom called on the Postal Service to “adapt itself to the enormous changes regarding the demand for and nature of its products, it must continue to play its role as the backbone of the nation’s delivery infrastructure, and it must honor its obligations and commitments by developing and implementing a plan that meets the needs of its customers and ensures long-term financial viability, all without requiring direct taxpayer assistance.”

Roman Martinez IV of Florida, nominated for the remainder of a seven-year term expiring December 8, 2024, began his career as an investment banker in 1971 at Kuhn Loeb & Company until it was acquired by the now-defunct global financial services firm, Lehman Brothers. Martinez worked there as the managing director of investment banking until his retirement in 2003. Since 2003, he has served on the board of directors for several different companies and has been involved in various Republican presidential and Senate campaigns.

During his testimony, Mr. Martinez highlighted that “for over 200 years, the Postal Service has effectively served the entire country, but recently, it has faced severe challenges. The digital revolution and rigid mandates have placed it in virtual insolvency. Its business model is not viable, but its function remains vital. The Postal Service is in dire need of restructuring.”


When asked by Chairman Johnson to summarize the biggest problem that USPS faces, both nominees cited the decline in first-class mail, and in addition, Mr. Martinez noted the mandate to pre-fund retiree health. “We want the USPS to be self-sustained, i.e. generate its own revenues as a private company, yet we mandate them with costs that the private sector doesn’t have, like in the retiree benefits situation.”

During the hearing, significant discussion was spent on maintaining services in rural communities and the need for an updated cost allocation model. Mr. Bloom stressed that the postal network cannot be allowed to degrade, yet the decline of first-class mail cannot be ignored. Mr. Martinez suggested that between urban and rural areas, service might need to be defined differently and while ‘essential services’ should remain for rural America, competitive products or ‘non-essential services’ would therefore need to be priced separately and competitively with private shippers.

When nominees were questioned about actively seeking the input of postal employees, Mr. Bloom indicated that he would encourage management to maintain an open dialogue, deeming it “absolutely essential.” Mr. Martinez noted that while employees have some of the best ideas, they should not be part of the decision-making process.

On the issue of pre-funding, Mr. Bloom testified that the liability should be carefully reviewed, including amortization and assumptions used to determine the liability. He further suggested the idea of investment should also be explored. Mr. Martinez pinpointed that the private sector is void of this liability, citing that most companies do not provide benefits. He went on to highlight private sector integration with Medicare and the need to learn more about the Postal Service’s flexibility in restructuring its liability.

The committee is expected to advance the nominees in the coming weeks or months and still have two other nominations to consider, Mr. Robert M. Duncan of Kentucky for his second term on the board, and Mr. John Mcleod Barger of California.

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