POLITICS

Yes, The Government Mailed Stimulus Checks To Dead People. It's Not A Big Deal.

The real story is a bit more complicated and not as outrageous as it seems.

A new report from the Government Accountability Office, a top watchdog of federal agencies, found the Trump administration mailed more than 1 million coronavirus stimulus checks ― totaling some $1.4 billion ― to recently deceased people.

The seemingly alarming statistic quickly made the rounds Thursday on the Internet and on cable news in scary-sounding headlines. The New York Times even alerted its readers with a widely seen push notification to mobile devices. The underlying reaction to the news was clear: The government sent over a billion dollars to dead people? Talk about waste and incompetence!

The real story is a little more complicated and not as outrageous as it seems.

The $1.4 billion paid to deceased people accounts for a fraction ― 0.5% ― of the estimated $269 billion the Internal Revenue Service has distributed to  Americans so far via economic rebate payments that Congress approved in March as part of its response to the coronavirus pandemic.

And while $1.4 billion certainly is a lot of money, it represents a relatively small error rate for one of the most ― if not the most ― successful new program the government set up in a matter of weeks to respond to the health crisis.

At the time, Congress and the administration were under extreme pressure to get the money out the door as quickly as possible to help millions of Americans who suddenly found themselves unemployed and were facing deadlines to pay rent and other bills.

That the program didn’t work perfectly is the result of a tradeoff Congress and the IRS made in a race to get checks in people’s mailboxes. The alternative ― lengthier delays in aid to those suffering to ensure fewer snafus ― would have been a worse outcome.

According to the GAO, the IRS was aware of the problem as the legislation was being drafted, but the agencies determined that it “did not have the legal authority” under the law to deny payments to those who had filed a tax return for 2019, even if they were now deceased. Treasury Department officials, meanwhile, told GAO they were unaware of the problem but took steps to correct it upon learning that payments had been made to decedents.

And here’s a key point ― there’s no data yet on how many of the checks mailed to deceased people were actually cashed. The GAO recommended in its report the IRS take steps to notify ineligible recipients to return payments.

The economic rebate payments of up to $1,200 per eligible person were one of the most efficient parts of the government’s response to the coronavirus.

The Paycheck Protection Program, which gave small businesses loans to keep workers on payrolls, was plagued by problems early on, mostly due to lack of sufficient funding and its reliance on the nation’s largest lending institutions. The book is still out on whether it worked as well as intended, given the continued high unemployment rate and the millions of Americans filing new jobless claims every month.

The stepped-up $600 unemployment benefits that expire in July gave people laid off due to coronavirus a tremendous lifeline and a boost in capital. But their distribution was also bedeviled by huge delays, thanks to haphazard regulations on the state level.

The portion of the CARES Act that deserves the most scrutiny ― and alarming headlines ― is the controversial $500 billion fund in aid to corporations, states and cities that could be leveraged to reach as much as $4.5 trillion.

Hardly any of the funds have yet to be dispersed by the Treasury Department. And earlier this month, a group of inspectors general ― government watchdogs who focus on specific agencies ― warned Congress that previously unknown Trump administration legal decisions could substantially block their ability to oversee the program.

“This would present potentially significant transparency and oversight issues because Division A of the CARES Act includes over $1 trillion in funding,” the inspectors general wrote in a letter.


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