Memo to the government: Dead people don't spend

May 24, 2009 @ 12:01 am

By Jim Pavia

In an effort to energize the economy, stimulus checks are being mailed to millions of people. Unfortunately, thousands of the recipients are dead.

Let me explain.

As part of the government's stimulus plan, checks in the amount of $250 are being mailed to retired senior citizens. The idea is to put these people on an equal footing with workers who are getting a tax break through the stimulus legislation.

When completed, the Social Security Administration will have mailed 52 million checks to older Americans as part of the $787 billion stimulus package. Here is the glitch: as the American people learned that Social Security and Medicare are running out of money faster than ever before, the SSA admits that about 10,000 checks, worth millions of dollars, have been mailed to dead people.

Now, assuming that even the most obtuse Washington bureaucrats understand that dead people can't push shopping carts through Costco or Wal-Mart, how did the government do something this foolish?

The SSA, of course, has a perfectly solid explanation for the mailing gaffe.

The agency blames the error on the strict mid-June deadline for mailing out all the checks, which didn't give officials much time to clean up their records.

But how much time do they need?

James Hagner, 83, of Orchard Beach, Md., re-ceived a stimulus check for his mother, Rose, who died in 1967. SSA spokesman Mark Lassiter said in a published report that officials rushing to distribute payments didn't thoroughly review all Social Security records.

Even though Ms. Hagner hadn't received a Social Security check since the Johnson administration, the agency didn't have an official record of her death. Therefore, Mr. Lassiter said her records fell into bureaucratic limbo, and she was sent a stimulus check.

It is more than a bit unsettling that it takes the government 40 years to figure out that someone died. And since the SSA has already admitted that thousands of other dead people also received checks, one has to question how many other checks that SSA doesn't know about were sent to the dead. (And who knows how many checks are still to be sent to the unliving.)

In another case, Antoinette Santopadre of Valley Stream, N.Y., received a $250 stimulus check made out not to her, as expected, but to her father, Romolo Romonini.

Mr. Romonini, an American citizen who went to Italy in 1933 and returned to the United States once, for a seven-month visit in 1969, died in Italy 34 years ago.

To make matters even stranger, the SSA later found out that he never even participated in the Social Security system.

Something more than a little odd is going on here. We all expect the enormous federal bureaucracy to spend money stupidly, but sending millions of dollars to the dead is even more wasteful than the $57,000 spent on gold-embossed playing cards for Air Force Two.

There are, of course, even bigger and more serious implications.

One has to wonder how many people, dead or alive, have fallen into bureaucratic limbo, as Mr. Lassiter explained.

SSA officials are reminding the public that it is a crime to cash someone else's Social Security check. While that will limit the government's losses due to fraud, the warnings are insufficient.

This ridiculous mess requires congressional attention. The SSA needs to understand that the American taxpayers should expect accurate, updated record-keeping.

How can we take seriously the SSA's warnings about its financial health when it doesn't even know how to write a check?

Jim Pavia is the editor of -InvestmentNews.

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