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Post office considers closing 3,653 retail outlets nationwide

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The vast majority of sales in post offices are stamp purchases, officials said, and that can easily be handled at the new Village Post Offices. In addition, those offices would accept flat-rate packages and some could provide post office box service. For passports or other more complex services customers would have to go to a remaining regular post office.

(Photo: Heather Farrell)

Already some 70,000 locations such as supermarkets and department stores sell stamps.

Over the last four years the Postal Service, which does not receive tax funds for its operations, has cut its staff by about 130,000 and reduced costs by $12 billion in an effort to cope with the loss of first class mail to the Internet and the decline in advertising mail caused by the recession. For example, about half of all bill payments are made by Internet now, up from 5 percent a decade ago.

Postal officials have also sought permission from Congress to reduce mail delivery to five-days-a-week and to ease the requirement that they pay $5.5 billion annually into a fund to pre-pay future retiree medical benefits.

Without the $5.5 billion annual pre-payment - which is not required of any other government agency - the post office would have made a profit over the past four years. However, because of the complex way federal finances are structured, the payment is counted as income to the government and eliminating it would make the federal deficit appear to be $5.5 billion larger.

The agency has also suspended payments into its pension fund and eliminated bonuses and performance awards for managers and executives.

Of the 1,400 offices announced for review in January, 620 are still in the review process and 300 will move to the new review list.

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