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Federal agencies told not to pay dead people

Sat., June 19, 2010

WASHINGTON – Here’s an idea, Uncle Sam: Stop writing checks to dead people.

The government sent benefit checks to 20,000 departed Americans over three years, totaling more than $180 million – a remarkable number that 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.

“We’re making sure that payments no longer go to the deceased – it sounds ridiculous even to say it,” Vice President Joe Biden acknowledged 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. Ditto with the General Services Administration, which has an “Excluded Parties List System” for ineligible contractors.

An order signed by President Barack Obama on Friday would centralize the information from numerous sources.

The figures on payments to the deceased come courtesy of the White House Office of Management and Budget, which also says checks went to 14,000 convicted felons, in jail and on the lam. The three-year total there: $230million.

With the federal debt mounting and red ink worries spreading in Europe, Obama is under increasing political pressure to cut spending sharply. Recently, he told federal agencies to come up with ways of trimming 5 percent from their budgets next year.

Another cost-cutting measure announced Friday was an online fraud detection program for Medicare and Medicaid. OMB said those programs made $65billion 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.

The White House reckons improper payments of all kinds – from outright fraud to checks to inmates to simply mistyped pay stubs – totaled $110 billion in 2009.


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