A motorist deposits her mail at a set of mailboxes in Coeur d’Alene, Idaho, in this April 30, 2008, file photo. Buffeted by the recession and the popularity of e-mail and electronic bill payment, the Postal Service lost .4 billion from April through June, officials said this week. The post office may cut costs by closing some offices, cutting its staff, and delivering mail only five days a week.

Washington ? Postmaster General John Potter is trying to think outside the mailbox.

“We have a network of 37,000 retail outlets. America loves them and we want to keep as many open as possible, but we cannot just sell stamps in them,” he told a Senate hearing Thursday.

The post office said Wednesday it has lost $4.7 billion so far this year and expects to be $7 billion in the red by the end of the fiscal year because of the recession and the movement of letters and bills to e-mail.

Several hundred offices are being studied for possible closing and the agency has proposed other cost-saving moves including cutting mail delivery to five days a week.

The Postal Service has sharply cut costs and staffing, Potter added, but also needs to look to additional sources of income.

He said in Australia people can renew driver’s licenses in post offices, while Italians can do their banking and other countries’ post offices handle insurance.

The U.S. post office is not exploring these particular ideas, he said, but “other countries faced with the same dilemma have explored these areas.”

He suggested that Congress allow the post office to consider some activities that have not traditionally been part of the post office, adding he assumed that would come with limits or regulations.

“The real issue is about generating income from these facilities,” Potter said.

Although Congress votes money for free mail delivery for the blind and for reduced rates to charities, the post office does not receive taxpayer funds for its operations.

The proposal to cut mail delivery to five days would save millions, Potter told the Senate federal services subcommittee of the Committee on Homeland Security and Governmental Affairs.

But, he added, post offices would be kept open on Saturdays, since that is the only day many people are free to go to these facilities. Mail would still be delivered to post office boxes on Saturdays, he said, and large customers could pick up mail at post offices.

Although the Internet has taken away a lot of first-class mail and the recession sharply reduced advertising mail, even worse has been a requirement imposed in 2006 that the post office contribute more than $5 billion annually to a fund to prepay medical benefits for retired workers.

That is in addition to $2 billion paid annually for benefits for already retired employees.

Postal Inspector General David C. Williams told the senators the amount of the payments has no basis in need, but was set to make sure the post office did not make the federal deficit appear larger.

The payments assume an unrealistic 7 percent annual inflation in medical costs, he said, while other businesses plan for 5 percent inflation.

And they do not take into account the declining number of postal employees. Williams said the annual payments could be cut to $1.3 billion.

From about 803,000 workers in 1999, the post office has cut its staff to about 630,000 and Potter said the goal is about 550,000.