When the first few funeral homes made it possible to pay by credit card, taxes couldn't be far behind.

Joseph R. Wright Jr., deputy director of the Office of Management and Budget, proposed yesterday the expanded use of electronic funds payments and credit cards for the "wide range of payments the public makes to the government.

"Not just taxes, but also things like patent and copyright fees, immigration and passport fees, Customs fees and penalties, recreation fees and a broad range of other daily financial transactions," Wright said in a speech to the Government Computer News Forum.

The private sector is already dominated by credit cards, Wright said. "Why can't the government pay employes, major grantees and contractors over a certain size" by the electronic transfer of funds directly to financial institutions, he asked rhetorically. "We should."

It would "bring the federal government into modern financial times," he said.

Another priority area for change, he said, is welfare services. "We should consider revamping, or even consolidating, some of the many disjointed {welfare} programs. It may be less costly for the federal government and more convenient for the recipients if payments for AFDC, food stamps and Medicaid were consolidated and/or coordinated administratively."

Wright said in an interview that he was talking not about consolidating welfare programs at the Washington level, but "taking the best of the systems that are being tested at the state level and offering incentives to other states to implement them."

"Pennsylvania has begun a program of sending both welfare checks and food stamp coupons to local banks every 15 days for pick-up by recipients. In addition to reducing Treasury investigations of stolen and lost checks significantly in Pennsylvania, this process provides recipients with a local safe point of receipt for consolidated benefits," he said.

New York City has issued magnetic strip cards to all welfare and food stamp recipients after it was plagued with 240,000 cases annually of lost or stolen benefits. "This simple process has saved the half-million New York City residents $12 million in check cashing fees and city and state governments another $11 million in administrative costs," Wright said.

"At one time," he said, "the federal manager was a leader in the innovative application of technology.

"We should expect our government to at least use modern, commercially available technology to reduce unnecessary regulations, paper work, and hindrances to our everyday lives," he said.

Today, Wright said, he was giving the computer community a preview of "a major administration plan for upgrading public services in some key priority areas."

The OMB budget process will be used, he said, to emphasize improvement of basic services to the public instead of "organizing things for the government's convenience."