72,000 dead people received stimulus payments

Inspector says little more than half returned

By Stephen Ohlemacher
Associated Press / October 8, 2010

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WASHINGTON — About 89,000 stimulus payments of $250 each went to people who were either dead or in prison, a government investigator says in a new report.

The Social Security payments, part of last year’s economic recovery package, were meant to increase consumer spending to help stimulate the economy.

But about $18 million went to nearly 72,000 people who were dead, according to the report by the Social Security Administration’s inspector general. The report estimates that a little more than half of those payments were returned.

The administration had received notification of the deaths of 63,481 of those beneficiaries, the report said, yet failed to ensure they were not sent the checks.

An additional $4.3 million went to more than 17,000 prison inmates, the report said. However, most of the inmates were eligible to get the payments because they were newly incarcerated and had been receiving Social Security.

In all, the $250 one-time payments were sent to about 52 million people who receive either Social Security or Supplemental Security Income, at a cost of about $13 billion. Other federal retirees also received the payments, but they were not part of the inspector general’s review.

Social Security spokesman Mark Lassiter said: “Inaccurate payments are unacceptable. Social Security’s Recovery Act payments were 99.8 percent accurate, and we quickly collected the majority of the inaccurate payments. Each year we make payments to a small number of deceased recipients, usually because we have not yet received reports of their deaths.’’

The inspector general has been auditing the payments to make sure no checks went to ineligible recipients. The latest report was dated Sept. 24 but was just recently posted to the agency’s website.

People were eligible for payments if they were getting benefits during any one of the three months before the law was passed in February 2009.

The report said the law contained no provision to recover payments incorrectly sent to dead people.

“Based on the failure of the SSA to properly check its records, and Congress’s failure to fully think through the provisions needed to govern these payments, SSA lost $22.3 million in American tax dollars,’’ said Senator Tom Coburn, an Oklahoma Republican. “These findings are yet another example of congressional stupidity and a lack of accountability.’’

The Social Security Administration said it had faced tight deadlines to get the checks out.

“We worked with Treasury, developed new processes, and began issuing [payments] about 30 days earlier than the legislatively mandated deadline,’’ the agency said in a written response included in the inspector general’s report. “This was a major accomplishment for our agency.’’

The inspector general’s report said if similar payments are authorized in the future, prison inmates should be ineligible and the government should be able to recover payments made to people who have died. The report also called on the agency to be more vigilant in identifying those recipients who have died or have been imprisoned. The Social Security Administration agreed with the recommendations.

The checks were part of one of President Obama’s top domestic priorities early in his administration: a package of tax cuts and spending increases intended to soften the blow of the credit crisis on the economy and workers.

The White House has insisted the stimulus package, now with a price tag of $814 billion, prevented the economy from suffering greater damage, but Republicans have used it on the campaign trail to paint Democrats as free spenders who do not understand how to create jobs.

The nonpartisan Congressional Budget Office has estimated the measure created or saved 1.4 million to 3.3 million jobs and continues to boost economic growth.