Cash Strapped Post Office Finding Ways to Revamp For Survival

July 6, 2010— -- Mailing that rent check or sending Mom her yearly birthday card is about to get a bit more expensive, if the post office gets its way. On Tuesday the U.S. Postal Service announced it wants to raise the price of your stamps by another two cents, bringing the price to 46 cents. The hike would also be applied to other postal services; the cost for mailing small packages would increase by roughly 7 percent.

All these changes come at a time when the postal service is very worried about its financial future.

"The postal service faces a serious risk of financial insolvency," said vice president Stephen Kearney.

Last year alone the postal service cut 40,000 full-time employees and made other reductions to expenses. It still ended up losing $3.8 billion last year and is looking at a deficit of $7 billion this year.

The post office has not raised prices since 2006, but this new round of hikes is already provoking howls from many business people. And the rate hike won't even fully solve the problem. The increase would bring in roughly $2.5 billion, not even half of what the postal service expects to lose this year.

This increase is just the most recent in a series of deficit-fighting plans the postal service has been trying out since March. Another large part of the plan is their proposal to cut mail delivery to just five-days a week, but eliminating Saturday delivery. According to their reports cutting back delivery by just one day would save two to three billion dollars a year.

But even cutting back on Saturday delivery might not be enough, so the post office is getting creative about other ways they can generate revenue in the future.

One idea involves turning the 36,000 post offices in the United States into places where you can buy retail items, get hunting and fishing licenses, or just hang out, much as one does at a Starbucks.

"It could well be something like where you get Wi-Fi or help with some sort of identification card that you need more info on," said Ruth Goldway of the Postal Regulatory Commission.