Paper checks being phased out for government beneficiaries
Monday, June 14, 2010
The Treasury Department will announce on Monday that most government benefits payments will be made by direct deposit by 2013, the latest in a series of cost-cutting moves by the Obama administration.
The change will eliminate about 136 million paper checks sent by the Social Security Administration, Department of Veterans Affairs, Railroad Retirement Board and Office of Personnel Management, and caps years of efforts to cut back on paper and postage costs. The move should cut about $48 million in government postage costs and save taxpayers approximately $303 million in the first five years after the switch, Treasury said.
Americans who enroll for benefits payments on or after March 1, 2011, will receive them by direct deposit or be enrolled in the government's Direct Express Debit MasterCard program if they do not provide bank account information. Beneficiaries now receiving payments will switch to direct deposit or the debit card by March 1, 2013, after agencies inform them of the changes, according to the proposed rule change set for publication in Monday's Federal Register. About 1 million Americans already receive benefit payments through the Direct Express card, according to the Office of Management and Budget.
Officials argue that direct deposits or the debit cards ensure safe, quick delivery of funds and make receiving payments easier for residents hit by natural disasters. The change also coincides with the Obama administration's ongoing efforts to address the soaring deficit and adapt government operations to new technology.
"This is precisely the type of smart, streamlined improvement that this administration is committed to making across government to boost efficiency and modernize how we do business," OMB Director Peter Orszag said in a statement.