Stop Paying Dead People

Posted on: June 20th, 2010 by

Financial Planning - Rockville, MDThe Federal deficit is over $13 trillion; what’s an easy to start cutting the debt?  Stop writing checks to dead people.

The government sent benefit checks to 20,000 departed Americans over three years, totaling more than $180 million.  This ridiculous number provoked the Obama administration to create a government-wide “do not pay” list as part of its brainstorming for ways to save taxpayer money.  Once the database is  up and running, agencies will have to search it before sending out payments.  A pre-check check.  “We’re making sure that payments no longer go to the deceased — it sounds ridiculous to even say it,” acknowledged Vice President Joe Biden in describing the database.

Also planned for inclusion: contractors who’ve fallen behind in their payments or, even worse, landed in jail, and companies that have been suspended or otherwise deemed ineligible for government work.  “This stuff seems obvious on its face,” Biden acknowledged.  “The voters will go, ‘My God, isn’t that happening already?'”  In fact, the Social Security Administration does have what it calls a “Death Master File.”  But some other agencies don’t routinely check it before issuing benefits.  The same goes for the General Services Administration, which has an “Excluded Parties List System” for ineligible contractors. An order signed by President Barack Obama on Friday centralizes the information from numerous sources.

The figures don’t just stop at payments to the deceased; the figures also show that checks went to 14,000 convicted felons, both in jail and still on the lam. The three-year total there: $230 million.  With the federal debt mounting and red ink worries spreading across Europe, Obama is under increased pressure to cut spending sharply.  Recently, he told federal agencies to come up with ways of trimming 5 percent from their budgets next year, and of saving billions in Federal building costs. Another cost-cutting measure announced Friday was an online fraud detection program for Medicare and Medicaid.  The Office of Management and Budget said those programs made $65 billion in erroneous payments last year.

The software, developed by officials charged with scrutinizing Obama’s stimulus plan, was demonstrated for reporters by OMB Director Peter Orszag.  A slide show portrayed auditors using it to discover that a number of contractors and subcontractors scheduled for payment by the government were in fact located in a single home.  Plus, a satellite photo showed the home had a pool and a boat.  “Suspicious,” Orszag said.  The White House believes there are improper payments of all kinds — from outright fraud to checks to inmates to simply mistyped pay stubs — totaled $110 billion in 2009.  “We think we have the tools now to take a real bite out of this,” Biden said.



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