[Senate Hearing 106-798]
[From the U.S. Government Publishing Office]
S. Hrg. 106-798
NOMINATION OF GEORGE A. OMAS
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HEARING
BEFORE THE
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
ON THE
NOMINATION OF GEORGE A. OMAS, TO BE A COMMISSIONER OF THE POSTAL RATE
COMMISSION
__________
SEPTEMBER 19, 2000
__________
Printed for the use of the Committee on Governmental Affairs
__________
U.S. GOVERNMENT PRINTING OFFICE
67-286 WASHINGTON : 2000
_______________________________________________________________________
For sale by the Superintendent of Documents, Congressional Sales Office
U.S. Government Printing Office, Washington, DC 20402
COMMITTEE ON GOVERNMENTAL AFFAIRS
FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
Hannah S. Sistare, Staff Director and Counsel
Dan G. Blair, Senior Counsel
Judith White, Detailee, International Security, Proliferation,
and Federal Services Subcommittee
Joyce A. Rechtschaffen, Minority Staff Director and Counsel
Peter A. Ludgin, Minority Professional Staff Member
Nanci E. Langley, Minority Deputy Staff Director,
International Security, Proliferation, and Federal Services
Subcommittee
Darla D. Cassell, Chief Clerk
C O N T E N T S
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Opening statements:
Page
Senator Cochran.............................................. 1
WITNESSES
Tuesday, September 19, 2000
Hon. Trent Lott, a U.S. Senator from the State of Mississippi.... 1
George A. Omas, nominated to be a Commissioner of the Postal Rate
Commission..................................................... 4
Alphabetical List of Witnesses
Omas, George A.:
Testimony.................................................... 4
Biographical information..................................... 12
Pre-hearing questions and answers............................ 20
Lott, Hon. Trent:
Testimony.................................................... 1
Prepared statement........................................... 2
Appendix
Hon. Benjamin A. Gilman, a Representative from the State of New
York, prepared statement....................................... 9
NOMINATION OF GEORGE A. OMAS
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TUESDAY, SEPTEMBER 19, 2000
U.S. Senate,
Committee on Governmental Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 9:30 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. Thad Cochran
presiding.
Present: Senator Cochran.
OPENING STATEMENT OF SENATOR COCHRAN
Senator Cochran. The Committee will please come to order.
This morning our Committee is considering a hearing on the
nomination of George Omas, who was nominated to serve a 6-year
term as Commissioner of the Postal Rate Commission. We welcome
all of you here for this hearing this morning. We also
especially welcome the distinguished Majority Leader of the
U.S. Senate, my colleague and friend, Senator Trent Lott of
Mississippi, who is here today to introduce Mr. Omas.
Mr. Majority Leader, welcome. You are recognized for such
time as you may consume.
STATEMENT OF HON. TRENT LOTT, A U.S. SENATOR FROM THE STATE OF
MISSISSIPPI
Senator Lott. Well, thank you very much, Mr. Chairman.
Thank you for having this hearing and moving forward on this
nomination. There is nothing I could tell you publicly about
this gentleman that you do not already know. You know that we
go back to about 1957, when we met on a bus in Biloxi,
Mississippi, on the way to Boys' State, and I have never
recovered from that experience.
But, George Omas is an outstanding nominee. He has a
wonderful family in Biloxi, Mississippi. He has been
outstanding in his involvement all his life, both in the
private sector and in the public sector. He certainly has the
qualifications, the experience and the educational background.
He has, of course, a B.A. and an M.A. and has done graduate
work at Florida State University.
I first started working with him in the private sector when
he was the National Executive Vice President of the National
Apartment Association. I was already a House member, and I
remember he brought representatives of that association to
Washington and we had a really good meeting. Then George served
awhile on the House Post Office and Civil Service Committee,
where I had the pleasure or the opportunity to serve for a
brief period of time.
George served as staff director of the subcommittee--
interestingly--on Census, Statistics and Postal Personnel. He
worked on the committee that looked after or looked over the
franking activities in the House of Representatives, the
Franking Commission. He served overall with the House committee
and its different arms for 18 years. He worked for 3 years in
the Doorkeeper's Office in the House of Representatives. He now
has 3 years of experience on the Postal Rate Commission, served
as vice chairman for a year and, of course, we are seeking his
confirmation now for a full 6-year term, which would expire
October 14, 2006.
Well, that is the record academically and from his
experience in the area that he is dealing with every day. I
also take note that postal rates have stayed pretty steady
under his leadership, and we like that, but more than anything
else about George Omas, from my own standpoint, is he is a
personal friend. I have always admired his commitment to duty,
his hard work ethic and his ethical standards.
We never would have to be concerned about George doing
something that would be an embarrassment to his friends, his
State, the Postal Rate Commission or any work that he does. So,
I am delighted, Mr. Chairman, to be here before you and to
support this confirmation, and I am hoping that we can get it
through here quickly and that George will be confirmed before
the end of the session.
So, thank you for this opportunity. I might say, Mr.
Chairman, I would like to ask that my complete statement be
made a part of the record.
Senator Cochran. Without objection, it will be made a part
of the record.
[The prepared statement of Senator Lott follows:]
PREPARED STATEMENT OF SENATOR LOTT
Mr. Chairman, it is a pleasure to be here in the Governmental
Affairs Committee today to introduce to the Committee one of our fellow
Mississippians, George Omas, and to speak in favor of his nomination
for this very important position.
Mr. Chairman, the Committee may recall that I introduced George at
its hearing on July 28, 1997, when he was first nominated to be a
Commissioner on the Postal Rate Commission. George was confirmed by the
Senate for this position on July 31, 1997, and he has been serving with
distinction on the Postal Rate Commission since that time. On October
1, 1999, George began a term as Vice-Chairman of the Postal Rate
Commission. So, it is a delight to be here today to refresh the
Committee Members' memories about this distinguished Mississippian.
George and I first met back in the summer of 1957 when a delegation
of boys on the Mississippi Gulf Coast assembled to attend Boys' State.
George Omas--a real character from Biloxi--was one of the first people
I met when I got on the bus, and we have been friends since that day.
George and I both went to college at the University of Mississippi,
which the Chairman knows we all fondly call ``Ole Miss.'' George earned
a B.A. and an M.A. degree at Ole Miss, and held a teaching fellow
position while there. George also did postgraduate work at Florida
State University.
For a number of years after college George and I kept up with each
other indirectly. When George became Executive Vice President of the
National Apartment Association, I was able to see George more often as
he worked on Federal issues. Later, he came to work for the Post Office
and Civil Service Committee on which I served in the House of
Representatives. He served as staff director on the Subcommittee on
Census, Statistics and Postal Personnel. Because he had done such a
good job, he was asked by the distinguished Chairman, Ed Derwinski, to
stay on after I had left. He worked for the House Committee on Post
Office and Civil Service for nearly 18 years in all.
More recently, before his appointment to the Postal Rate
Commission, he served for approximately 3 years in the Doorkeeper's
Office of the House of Representatives.
Mr. Chairman, George has gained invaluable experience over the past
3 years on the Postal Rate Commission, particularly since he has been
serving as its vice chairman for almost a year. This experience is in
addition to the knowledge he gained while serving as a staff member for
the House of Representatives' Committee on Post Office and Civil
Service. I believe that America would be well-served by taking
advantage of this experience. In addition to this excellent record of
experience, I want to personally attest to George's skills and
abilities which I have had the chance to observe throughout the course
of our friendship. I urge this Committee to act favorably on his
nomination, and I look forward to the full Senate confirming him for
this 6-year term which expires October 14, 2006.
Thank you, Mr. Chairman, for allowing me to testify on behalf of
George Omas.
Senator Cochran. We appreciate very much your being here
and introducing Mr. Omas to us. As a matter of fact, you may
remember my first encounter with George Omas was in the
capacity of his dormitory manager. When I went back to law
school after serving in the Navy, I found that I needed a
little extra money to pay the room rent and a dorm manager's
job might be available, and it just happened to be down the
hall from where George Omas was staying in Guest Hall at the
University of Mississippi.
Senator Lott. Well, he was from Biloxi. He didn't cause any
kind of commotion; did he?
Senator Cochran. Very rarely. He was a very positive
influence in all respects. That is my memory, anyway.
Senator Lott. Great.
Senator Cochran. Well, thank you very much for being here.
We know you are busy and you can go do whatever else you need
to do at this time.
Senator Lott. Thank you very much.
Senator Cochran. In keeping with the rules of the
Committee, I need to say that we have done the required
examination into the experience, qualifications, suitability
and integrity with questions to the nominee about his financial
situation. All of the materials that have been requested by the
Committee to be submitted by Mr. Omas have been submitted.
These items are on file.
The financial statements are available in the Committee
office for review by anyone who wants to see them. A copy of
Mr. Omas' biographical information and responses to the
inquiries of the Committee that had previously been submitted
are available upon request. They are all a part of the record
of this hearing.
I have also received a statement of support for this
nomination from Congressman Benjamin Gilman.\1\ His remarks
will be printed in the record, as well.
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\1\ The prepared statement of Mr. Gilman appears in the Appendix on
page 9.
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The Committee staff have reviewed all of the information
that the nominee has submitted in response to our inquiries,
including the financial disclosure report submitted by the
Office of Government Ethics. I have personally reviewed the FBI
background investigation reports and we are now ready to
proceed to the formal questioning of the witness. Our rules
require that all nominees be under oath while testifying on
matters relating to their suitability for office, including the
policies and programs which the nominee will pursue, if
confirmed.
So, Mr. Omas, if you will please stand. Do you solemnly
swear to tell the truth, the whole truth, and nothing but the
truth, so help you, God?
Mr. Omas. I do.
Senator Cochran. Thank you. At this time, we will be glad
to receive any opening statement or comments that you would
like to make, Mr. Omas.
TESTIMONY OF GEORGE A. OMAS,\1\ NOMINATED TO BE A COMMISSIONER
OF THE POSTAL RATE COMMISSION
Mr. Omas. Thank you, Mr. Chairman. I do have a brief
statement. Mr. Chairman and Members of the Subcommittee, it is
a privilege for me to once again appear before you today as you
consider my nomination to the Postal Rate Commission. Before I
make some very brief remarks, I would like to take this
opportunity to thank the President of the United States, the
Majority Leader, Trent Lott, and you, Mr. Chairman, and this
Subcommittee for giving me this opportunity.
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\1\ The biographical information and pre-hearing questions and
answers from Mr. Omas appear in the Appendix on pages 12 and 20
respectively.
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While it has been just slightly over 3 years since I was
last here, it has been an exciting and intense time in the
postal community. I arrived at the PRC in August 1997 after a
rate case had been requested by the Postal Service that July.
That case, R97-1, was not only massive, but I was told it was
one of the most complicated in recent history. Today, we are in
the process of considering R2000-1, and while I cannot talk
about the specifics of the case, I can say that it is just as
intricate and complicated as its predecessors.
Today, with 2 months left to go in the case, there have
been 69 witnesses from the Postal Service, 107 witnesses
representing other parties, with a transcript of over 20,000
pages. Due to the timing of my first appointment, and the fact
that generally new commissioners have much to learn, I had to,
as they would say, hit the ground running in R97-1. Having gone
through that process, I am now much more conversant--or so I
would like to think--with the complicated economic theories and
the legal arguments than when I last sat in this chair.
During the past 3 years, we have considered a number of
smaller cases. In addition to R97-1 and R2000-1, the rate
proceedings, these cases have been much narrower in focus and
are targeted to meet the needs of particular types of mailers.
Through the streamlined administrative process established by
the Postal Rate Commission to handle such cases, we are able to
process them much faster than the 10 months allowed by law.
Mr. Chairman, I have also had the opportunity to preside
over several cases and I take pride in the fact that we were
able to reach settlement agreements that allowed the Postal
Service and the mailers to immediately benefit from the
proposals. I look forward to working with the Postal Service
and the mailing community to make the rate-setting process as
expeditious as possible.
Also, Mr. Chairman, as you know from your recent hearing on
e-commerce issues, these are interesting times for the Postal
Service. The postal landscape is changing and it is not clear
what the impact of technology on the Postal Service will be
over the next decade. I can assure you, however, and the
Subcommittee that universal service, rates that cover cost and
a willingness to work with the postal community will be the
hallmark of my tenure at the Postal Rate Commission, should I
be reconfirmed.
I would be remiss, Mr. Chairman, if I did not comment on
the fine staff of the full Committee and the Subcommittee.
Awaiting word on your nomination, as you know, can be a little
anxious, and the staff was excellent in keeping me informed on
matters related to my renomination, and I want to thank them
personally.
Thank you, Mr. Chairman.
Senator Cochran. Thank you, Mr. Omas. I think we should
point out you are now serving as Vice Chair of the Postal Rate
Commission. Is that correct?
Mr. Omas. Yes, sir.
Senator Cochran. I think it is clear from the comments made
by Senator Lott and others whom I have encountered that you
have served with honor and have been a very positive influence
in the decision-making process of the Postal Rate Commission.
Let me ask you a few standard questions that the Committee
staff have put in my folder.
Is there anything you are aware of in your background which
might present a conflict of interest with the duties of the
office to which you have been nominated?
Mr. Omas. No, sir.
Senator Cochran. Do you know of any reason, personal or
otherwise, that would in any way prevent you from fully and
honorably discharging the responsibilities of the office to
which you have been nominated?
Mr. Omas. No, sir.
Senator Cochran. Do you agree without reservation to
respond to any reasonable summons to appear and testify before
any duly constituted Committee of Congress if you are
confirmed?
Mr. Omas. Yes.
Senator Cochran. Those are the required questions. I
thought up a couple on my own which would probably make you
nervous, but they do not have anything to do with our
recollections of student days on the campus of the University
of Mississippi, I assure you. But what I am curious about is
what your reaction is to legislation that Congress enacts
relating to the rate-making process. You mentioned in your
statement that R2000-1 is pending before the Postal Rate
Commission, and I guess this is the big rate case. This is the
request for increased rates submitted by the U.S. Postal
Service.
Mr. Omas. That is correct.
Senator Cochran. And, under the law, that has been referred
to the Postal Rate Commission for its consideration, approval,
or disapproval. You can modify it. You can amend it--isn't that
correct--and approve, in effect, rate changes?
Mr. Omas. Well, the Postal Rate Commission conducts public
hearings and, as I have said, we have had like 69 witnesses
from the Postal Service who defend the rates that they are
requesting. Then we give the opportunity to intervenors, which
we have had in this case 107, who come in to tell us whether
they support or whether they oppose what the Postal Service is
requesting, and we at the Postal Rate Commission must go by
what is on the record and we cannot--we can alter, but we must
have specific economic backup and statistics to back up
whatever decisions we make.
Senator Cochran. When the Postal Reorganization Act was
passed by Congress, signed, and became law, taking away from
Congress the supervision and control over the Postal Service
and making it an independent agency, in effect it created the
Postal Rate Commission, the Board of Governors, and the
arrangement we have now. At that time the Act was advertised as
an opportunity to get Congress out of the business of
interfering or managing, appointing postmasters, appointing
rural mail carriers, basically running it as a cottage industry
in the Congress, and leaving it up to the independent bodies
that were created to run it.
But now what I have noticed is, as Chairman of the
Subcommittee that has jurisdiction over these issues and the
laws, we are being called upon to legislate still on issues
that some might think are under the strict purview and
responsibility of the Postal Rate Commission, such as a recent
bill that we have approved here in our Subcommittee. We have
reported it out for consideration by the full Committee,
dealing with these very rates that you are now considering in
the Postal Rate Commission.
My question is what effect does that have on the process?
What effect does that have on the decisions that will be made
by the Postal Rate Commission in R2000-1?
Mr. Omas. Well, I think, Mr. Chairman, what you are
referring to is the legislation for non-profit mailers. And we,
or the Postal Rate Commission, must follow the rules and
regulations set forth in Title 39, and those regulations
stipulate that we must accept the case that is presented to the
Postal Rate Commission and then, according to the record that
is developed during the course of the hearings, make our
decisions accordingly.
Legislation is sometimes--in this particular instance with
non-profit mailers, is that, for some reason unbeknownst to the
Postal Service and to the Postal Rate Commission, non-profit
mail costs have just gone out of sight. Without legislation, we
would have to impose the rates that the statistics and--that
have been given to us. Those are the rates we would have to
impose on the nonprofit community unless the legislation is
passed by Congress.
Senator Cochran. So, you are telling me that this
legislation is welcomed by the Postal Rate Commission and
facilitates your decision?
Mr. Omas. Well, it would facilitate the interest of that
community, if that is what Congress so desires. Congress has
always tried to be of assistance to the non-profit community,
and if they want to continue that, this legislation would be
required.
Senator Cochran. Are there any other classes of mail where
the rates are influenced by legislative action, other than the
so-called non-profits, to your knowledge?
Mr. Omas. No, sir.
Senator Cochran. Did this start some time ago or did we
just dream this up this year?
Mr. Omas. Well, I think it is the first time that non-
profit costs have just--they are astronomical, and they had a
great increase in the R97 case, which I cannot remember the
exact percentage. But in this one, the rate increase for non-
profits could go anywhere from 18 to 40 percent in some
instances.
Senator Cochran. These are increases, 18 to 40 percent
increases, over current rates that are being paid for such
mail?
Mr. Omas. Correct.
Senator Cochran. Well, what would happen if we did not pass
the legislation, as a practical matter?
Mr. Omas. Well, that is very interesting. That was asked to
me by staff and we also asked that question of the Postal
Service when the case was filed. In fact, it is the first time
that the Postal Service, since the Postal Reorganization Act,
has submitted an omnibus rate case, that the rates of a
specific group of rates or a subclass was dependent on
legislation being passed. So, we, the Chairman, the Committee,
with the consent of the other commissioners, wrote a letter to
the Postal Service. When we did write a letter, it was in the
term of a POIR, a Presiding Officer's Information Request.
The Postal Service said the rates would stand as proposed
in R2000-1 should the legislation not pass and, as I told you
earlier, we can only go by what is supplied to the Postal Rate
Commission and what other facts are given to us in public
hearings.
Senator Cochran. Do you see any need for reform of the law
as it exists to restore the power to the Postal Rate Commission
to make these decisions? I mean, if we carried out the
legislative history of the Postal Reorganization Act, it would
seem to me that we would leave to the Postal Rate Commission
the full power and authority to set rates. Isn't that why the
Postal Rate Commission was created?
Mr. Omas. Yes, sir.
Senator Cochran. Why then would we permit a situation to
continue where your hands are tied and you really cannot set
rates except within very strict limitations which don't permit
you to respond to needs or justifiable changes that you think
are necessary, given the current state of the economics of
mailing or whatever the facts are? Should you be given more
power, rather than less? It sounds like you are getting less
power than you had when you were first created.
Mr. Omas. Well, Mr. Chairman, I don't know if we are
getting less power. This is, as I said earlier, non-profits are
sort of a special group that have always been treated in a
different manner. RFRA, which was a law that amended the Postal
Reorganization Act in, I think, 1994, said that the non-profit
rates would be half of the markup. That worked for awhile, but
for some unexplainable reason, non-profit costs have just gone
out of sight. And, as I said, we are only able----
Senator Cochran. Well, has the Postal Rate Commission
approved this?
Mr. Omas. No, sir.
Senator Cochran. When you say the rates have gone out of
sight, the cost of mailing----
Mr. Omas. I am sorry. The cost----
Senator Cochran. But not the rates.
Mr. Omas. But not the rates. I am sorry. The cost of
processing this subclass of mail has gone up, and we have asked
the Postal Service, we have asked intervenors, no one can tell
you why this particular----
Senator Cochran. Because of the requirement that each class
of mail has to stand on its own, you cannot cross-subsidize,
you are saying. Therefore, the rates have to go up unless you
are going to incur big deficits in the operation and require
subsidies from Congress, from the taxpayers, etc.
Mr. Omas. That is right. And that is why our hands are
tied, because with the facts presented to us and the figures
that have been given to us by the Postal Service, their rates
would have to go up anywhere from 18 to 40 percent, depending
on the subclass, just for it to cover its costs and stand
alone.
Senator Cochran. Well, I am sorry to spring all of these
questions on you here without any warning, but it occurs to me
that this is a matter of some urgency for us to decide, because
there is pending now in the full Committee, maybe for action
this week, this legislation that has been generated out of this
process. And I was curious to know why we are doing it.
Mr. Omas. Yes, sir.
Senator Cochran. I understand why we are doing it now.
Mr. Omas. I think the non-profit community feels that it is
very necessary.
Senator Cochran. Well, you have been very helpful to me
personally, as you have always been when I have had questions
about the Postal Service. With your experience on the House
Committee and now as Postal Rate Commissioner, you are the best
thing we have as an expert from our State on this subject. We
appreciate your serving with such distinction on the Postal
Rate Commission. I know of no other questions to submit to you.
We appreciate your attendance and cooperation with our
Committee. Good luck. I hope we can get you confirmed quickly.
We need your service to continue on the Postal Rate Commission.
Mr. Omas. Thank you, Mr. Chairman.
Senator Cochran. The hearing is adjourned.
[Whereupon, at 10 a.m., the Committee was adjourned.]
A P P E N D I X
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