USPS proposes village post offices to cut costs

In the old days in small town America, the post office was located in the general store, which became the village meeting place.

Well, guess what? In a blast of common sense, the money-strapped Postal Service is considering closing 3,653 post office buildings and going back to the old ways. CBS News correspondent Byron Pitts explains how they are doing that.

In Madison Township, Ohio, folks have been losing jobs and local landmarks, symbols of the town's vibrancy. First it was K-mart, then the GM plant, and now the Lincoln Post Office.

"Doggone it, this is one more thing, one more thing that's being taken away," said Bill Hartnett, a resident for 36 years.

The Postal Service's response: We had no other choice.

The Lincoln Post Office was one of nearly 26,000 nationwide -- 80 percent of all post offices -- not turning a profit. Today, Postmaster General Patrick Donahoe announced a new "Village Post Office" strategy, an effort to partner with local businesses to offer postal services.

"Village post offices provide nice options in terms of access and convenience," said Donahoe. "The convenience is the key thing."

Donahoe has urged Congress to drop Saturday delivery and reduce payments for future retirees' health benefits. If not, economists warn in the next five years, taxpayers could face a bailout of the Postal Service's unfunded liabilities in excess of $100 billion.

"Do you ever worry that one day the post office will just go the way of the horse and buggy?" asked Pitts.

"Well, we're gonna deliver 170 billion-plus pieces of mail this year," said Donahoe. "I don't think it's gonna go away anytime in the near future."

Back in Madison Township, Ohio, Bill Hartnett doesn't underestimate the value having a local post office. "I think it's important for people to kind of say, 'This is an asset. It puts business in our community. It brings dollars into our community.'"

Business owner Jessica Little is feeling the ripple effects of the post office closing next door. For years, she depended on the extra business it brought to her barber shop.

"If I lose a lot of business, I could go," she said. "What else can go? What else is gonna go?"

With so many small businesses across the country barely hanging on, the opportunity to incorporate as a new village post office could be the only way to stay open.