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Benefits payments going paperless by 2013

By Ed O'Keefe

Eye Opener

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 dollars 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 one 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 the safe, quick delivery of funds and make receiving payments easier for residents impacted by natural disasters. The change just so happens to fit nicely 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 R. Orszag said in a statement.

Leave your thoughts in the comments section below

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By Ed O'Keefe  | June 14, 2010; 5:55 AM ET
Categories:  Eye Opener  
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Another blow to the Postal Service....

Posted by: susandix | June 14, 2010 8:11 AM | Report abuse

I fully agree with susandix, but what I want to know is, "When is the pork going to be cut and instead of millions of dollars I want to see posted the billions that would be saved from the hussein administration?"

Posted by: bwise1948 | June 14, 2010 9:44 AM | Report abuse

2013? It takes the government three years to figure out direct deposit?

Posted by: win_harrington | June 14, 2010 10:12 AM | Report abuse

Direct Deposit? For some, but not all? Why are ALL federal payments not direct deposit. One answer is that "illegal aliens" have their checks sent to friends, checks are then endorsed, partial funds sent to intended recipient living in Mexico with her kids...let's clean the entire house, not just the few rooms. Too much fraud going on in the house, total clean up is the only way to go..THE PATRIOT

Posted by: SaveUSA | June 14, 2010 10:44 AM | Report abuse

I think you need to see the big picture when it comes to direct deposit for taxpayers who may be elderly or sick. First, let's think about all the fees that banks, and all other financial instutions will be charging these folks everytime they use the card. If you are on a fixed income such as SSA, can you really afford to pay a higher price at the gas pump (cash only gets the cheaper price), or a fee everytime you need to pay a bill or go to an ATM to get some cash. I see this as big profit for the banks. Plus, why can't an American citizen state how they want their money--now the gov't is demanding that you either have a bank account for direct deposit or have to have a gov't debit card. More government in our private lives which gives them more control. NO THANKS

Posted by: cherylrussell | June 14, 2010 1:11 PM | Report abuse

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