Long before the Treasury Department sent $1.4 billion in stimulus checks to dead people last year, the U.S. government struggled to keep track of the deceased.
Dead farmers received about $22 million in crop subsidies over five years. The Federal Emergency Management Agency sent Hurricane Sandy disaster benefits to 45 people who died before the agency received their assistance applications. The Agriculture Department incorrectly paid $35 million in rural housing rental assistance because it didn’t know whether tenants passed away.
The misfires often aren’t human error. They result from a decades-long battle between state, local, and federal officials about who should have access to a portion of the Social Security Administration’s records on deceased Americans.
Their competing interests blocked a handful of attempts by Congress over the last decade to alter that access—until a watchdog report pointing out that more than 1 million stimulus checks went to dead people put a spotlight on the problem.
“The average person would think, have they lost their minds?” said Sen. Tom Carper (D-Del.). He has introduced three bills in his career about payments to deceased people.
To be sure, the U.S. Government Accountability Office found that the Internal Revenue Service and Treasury’s Bureau of the Fiscal Service sent stimulus money to deceased people because it thought it had to quickly send checks to all Americans who filed a tax return in certain years, not because tax collectors couldn’t check who is dead or alive. (The IRS has access to Social Security’s full death records but the Bureau of the Fiscal Service doesn’t, even though both are part of Treasury.)
But the situation lit a fire under members of Congress to fulfill a recommendation that same watchdog put at the top of its list for improving the federal coronavirus response—to direct the Bureau of the Fiscal Service to check the Social Security Administration’s state death records before payments from across agencies go out the door. Officials said they couldn’t do that without a law change.
States have lobbied against the idea for years, partly because they fund their record-keeping by selling death information to the Social Security Administration, and they want other federal agencies to fork over the dollars to use them, too.
Under a law (Public Law 116-260) signed by former President Donald Trump in December, the Social Security Administration will have to rethink how much it pays states for death data, and other agencies who use it will have to swallow some of the costs. Still, it will take until 2023 for the Bureau of the Fiscal Service to start checking the death records before sending checks to Americans—and stimulus dollars are still being doled out.
The IRS, as of April 30, had managed to recover roughly 57% of the $1.2 billion in checks sent to deceased people during the first round of stimulus payments, according to the GAO. But it decided it wasn’t worth the time and expense to go after the rest.