Washington’s Sixth Sense: Paying Dead People?

Though both sides of the aisle have their own ideas of what constitutes tossing money down the drain, the US government has a penchant for waste. Perhaps the baseline should be not handing out millions of dollars to dead people every year. Despite the mountains of evidence over the decades of how politicians and bureaucrats mail sizable checks to the deceased, the errors are never corrected.

Uncle Sam Pays Dead People?

A pair of US lawmakers penned a letter to Gordon Hartogensis, the director of the Pension Benefit Guaranty Corporation (PBGC), a 50-year-old entity established through the Employee Retirement Income Security Act that protects 31 million US workers in private sector-defined benefit pension plans. Reps. Virginia Foxx (R-NC) and Bob Good (R-VA) inquired why tens of millions of dollars from the American Rescue Plan were given to thousands of dead people.

As part of President Joe Biden's pandemic-era legislation, special financial assistance was extended to PBGC that would then be transferred to underfunded pension plans, including the Central States Pension Fund (CSPF). According to a PBGC inspector general report, $127 million was shipped to 3,479 deceased participants. While the issue is being probed, the GOP representatives purported that there has not been an adequate explanation for how the incorrect payments occurred or what is being done to recover the money. "Because PBGC did not provide an adequate response, it appears PBGC fails to recognize that its overpayments need to be rectified and suggests a total disregard for taxpayer dollars," the letter stated.

Sen. Bill Cassidy (R-LA) also remarked on the findings during a recent Senate Committee on Health, Education, Labor and Pensions hearing. He noted that workers covered by the CSPF "should be alarmed" because it told the committee that "it would be impossible for them to repay the money that they were improperly paid" and returning funds "would destabilize the fund." He added: "Frankly, it is infuriating to hear that a union’s pension plan could be on the verge of collapse only a few years after they received tens of billions of dollars from taxpayers to bail them out.”

The CSPF has defended itself by admitting that the error was an oversight because it cannot access the Social Security Administration Full Death Master File (DMF). Officials, including the PGBC inspector general, said the DMF should be used in the future and vowed to institute this recommendation by the end of March.

Been There, Done That

Of course, the mistake is not entirely surprising. It has happened before, and it will almost certainly happen again.

According to the annual Festivus report, courtesy of Sen. Rand Paul (R-KY), the US government paid $38 million in COVID-19 payments to dead people. "Specifically, $10 million was paid to individuals who were already dead on the date someone applied for funding. The government doled out $1.3 million of your money to 30 individuals who were dead for at least a year, in what fraud inspectors deemed one of the 'particularly egregious examples,'" the senator wrote. In June 2023, fiscal watchdog organization OpenTheBooks found that the current administration paid dead people nearly $1 billion in 2021 and 2022. "Dead people received $532.5 million in 2022 and $441.7 million in 2021 in mistaken payments," the group wrote. "Federal retirement services (pensions), old-age, survivors, and disability insurance, and social security were sent to dead recipients."

In May 2021, the Treasury Department announced that almost 60,000 stimulus checks from the CARES Act were shipped out to deceased individuals. In July 2020, the Government Accountability Office reported that $1.4 billion in pandemic stimulus checks was sent to more than one million Americans who died. Federal officials say that the government sprang into action as fast as possible and sent millions of checks quickly. In other words, the mistakes should be forgiven because it was a crazy time for everyone. When the GAO released its report, then-Treasury Secretary Steve Mnuchin and the IRS urged the return of these funds. Uh, who should have told them that it is hard for dead people to do anything?

To Err Is Government

Unlike a private company, the government is a monopoly that faces zero competition, meaning the state can make countless errors that cost taxpayers billions of dollars without repercussions. There is no incentive for elected officials and bureaucrats to do better, prevent these mistakes from happening, or even make the necessary corrections. English author Alexander Pope famously wrote, "To err is human; to forgive, divine." Today, it would be: "To err is government; to correct, impossible."