William J. Driver, 67, a lawyer by training who made his career in government service where he rose to become a widely respected head of both the Veterans Administration and the Social Security Administration, died of kidney failure June 25 at Arlington Hospital.

Mr. Driver joined the VA here in 1946. As administrator of veterans affairs from 1965 to 1969, he was the first career employe to head the agency. From 1980 to 1981, he was the commissioner of Social Security.

He held the Veterans Administration's two highest awards, the Exceptional Service Medal and the Meritorious Service Medal. In 1964, the National Civil Service League presented him with its career service award, honoring him as one of the 10 most outstanding persons in the civil service.

His years as head of the VA were not easy ones. Coming two decades after World War II and at an important time of the computer age, his tenure provided him with two major challenges. Perhaps the easier of them was the streamlining of the agency's vast record-keeping system through increased automation. The second was the reallocation of the agency's hospital resources.

The age of World War II veterans meant that patients were entering VA hospitals in larger numbers, for longer stays, and with more serious problems than ever before. Shifts in populations, both nationally and in the older age groups, meant that older hospitals in some parts of the country were underutilized while new facilities were desperately needed in the Sun Belt.

This meant that more money was needed and that some hospitals, especially in the North, needed to be closed. Mr. Driver ran into a bipartisan whirlwind on Capitol Hill, led by congressmen who did not want their districts to lose VA hospitals. Opposition, fanned over this issue, contributed to Mr. Driver's stepping down as the head of the VA in 1969.

From 1969 to 1978 he was president of the Manufacturing Chemists Association; then he practiced law in Washington before serving as head of the Social Security program from 1980 to 1981. During his years as commissioner, his huge agency oversaw the distribution of more than $100 billion a year in benefits to more than 35 million pensioners, plus another $12 billion a year in welfare benefits.

Since leaving the government in 1981, he had been affiliated with the Save Our Security (SOS) coalition.

Mr. Driver, who lived in Falls Church, was born in Rochester, N.Y. He worked his way through Niagara University, graduating cum laude in 1941 with a degree in business administration. He earned a master's degree in public administration and a law degree at George Washington University.

He served with Army in Europe during World War II and in this country during the Korean conflict. He earned the Legion of Merit and the Bronze Star Medal and attained the rank of lieutenant colonel.

Following World War II, he moved here and began his VA career as a management analyst. His subsequent posts include those of records management service director, compensation and pension service director, and chief benefits director, before he served as deputy administrator of veterans affairs from 1961 to 1965. He also had served on presidential commissions dealing with aging, health manpower, and employment of the handicapped.

His first wife, the former Marian R. McKay, whom he married in 1947, died in September 1984. His survivors include his wife, Zi Zhen Ni Driver, and two sons, William J. Jr., and Kellie McKay Driver, all of Falls Church; a brother, James, of Denver, and a sister, Evelyn Cocking of Rochester.