New Legislation Would Cut Back on Bureaucracy and Save Billions of Taxpayer Dollars

Many Americans are all too familiar with the bureaucratic nature of our government agencies and the many mistakes that they make, but what some Americans don’t know is that every year, taxpayer dollars are being wasted on payments improperly sent to the deceased. Not only that, but family members who’ve already suffered enough then have to deal with the tedious and unsettling task of returning their deceased family member’s check to the IRS. 

This problem was recently highlighted after the passing of the CARES Act, which stipulated that the IRS send $1,200 stimulus checks to individuals across the country, resulting in almost 1.1 million payments being sent to the deceased. These improper payments also occur more frequently through programs such as Medicaid and Social Security.  

There is a system in place to gather death records to prevent improper payments, but the persistence of the problem highlights the need for reform. The death records database could be administered more efficiently and the information should be shared more broadly. For example, the Department of Treasury is one of a few federal agencies that does not have access to Social Security’s “Death Master File” (DMF).

Legislation in Congress could fix this expensive mistake. And four bills have been introduced since last year which aim at doing just that.

1. S. 1333 - Introduced 5/06/19 by Sen. Thomas Carper (D-DE) and 12 cosponsors.

  • Requires the Social Security Administration (SSA) to reimburse states their reasonable costs for compiling and sharing records of deaths with the SSA. Allows SSA to share death data with federal and state agencies for various purposes such as ensuring proper payments of benefits and tax administration duties. Requires that the Office of Management and Budget develop guidance for federal agencies that collect death data, and the Department of the Treasury and the Department of Health and Human Services shall jointly develop a plan to assist [...] states, local agencies, and Indian tribes in providing the data.
  • The bill was approved by the Committee on Homeland Security and Governmental Affairs on 6/25/19.

2. H.R. 2543 - Introduced 5/07/19 by Rep. Cheri Bustos (D-IL) and 17 Cosponsors

  • Identical to S. 1333.

3. S. 4104 - Introduced 6/30/20 by Sen. Rand Paul (R-KY), Sen. John Kennedy (R-LA), and Sen. Susan Collins (R-ME)

  • Same as S. 1333 but added an amendment authored by Sen. Paul which grants the Secretary of Treasury access to records and information maintained by the Commissioner of Social Security in order to recover the mistaken payments.
  • The bill was passed unanimously in the Senate on 6/30/20, and sent to the House.

4. H.R. 7696 - Introduced 7/21/20 by Rep. John Curtis (R-UT) + 10 cosponsors

  • According to the text of the bill, it would ensure that the Secretary of the Treasury provides for the integration of Social Security Administration death records in the databases used for verifying eligibility for payments.

According to a press release on Curtis’ website, his bill, H.R. 7696, specifically gives the Department of Treasury access to the SSA DMF, a subset of the entire death file. The Government Accountability Office had cited the Treasury’s lack of access to the DMF as the reason the COVID-19 stimulus payments were improperly sent to the deceased and reported that Congressional action was needed to fix this problem.  

“The American taxpayer should never be on the hook for clumsy federal decision making,” said Rep. Curtis, “We could have saved the American people more than $1 billion if we had done our homework. This common-sense legislation gives our federal agencies the requisite tools to sync their data systems on the front-end versus scrambling for solutions to avoidable problems on the back-end.”

S. 4104, passed in the Senate unanimously, is more broad and all-encompassing than H.R. 7696, making the complete death file, rather than just the DMF, available to the Do Not Pay Program, which is administered by the Department of Treasury, arguably preventing more improper payments as more frequent checks would be made against the more complete file. 

According to Sen. Carper, S. 4104 would also establish protocols to ensure the accuracy of the data itself, like requiring the SSA to screen individuals who are “extremely elderly,” like the 6.5 million people who were still alive at age 112 according to the 2015 Inspector General Report. It is also worth noting that Sen. Paul’s amendment in S. 4104 specifically aims at reclaiming the incorrect COVID-19 relief payments. 

The concept of sharing SSA’s death data with more agencies is supported by the bipartisan Social Security Advisory Board, who actually recommended fully shifting the DMF over to the Treasury in a report last year and reiterated their recommendation after the CARES stimulus checks were sent out to the deceased earlier this year. 

And President Trump supported the idea in his budget proposal, where he recommends that the Do Not Pay Business Center be given full access to the Death Master File and that the SSA and Treasury work together to determine the right solution to prevent wrongful payments.

Since Congress has already needed to spend billions of dollars to mitigate economic damage caused by COVID-19, now is the perfect time to enact a common sense, bipartisan policy that ensures more transparent, accurate data and saves taxpayer dollars.