Who Cares if the IRS Sent Stimulus Checks to Dead People?

So it turns out the federal government sent more than 1 million coronavirus relief payments to dead people. That’s according to a report released Thursday by the Government Accountability Office, which earned some breathless coverage from the Washington Post describing the “revelation” as a problem of “astonishing scope.”

In fact, it’s anything but. The IRS has sent out more than 160 million economic impact payments, worth $269.3 billion since Congress passed the CARES Act in March. Out of all those direct deposits, checks, and debit cards, the GAO says that 1.1 million—or 0.4 percent of the total, worth about $1.4 billion—went to individuals who are deceased. We are quite literally talking about a rounding error that appears to have been the product of Washington’s efforts to get money to Americans as quickly as possible in the middle of an economic and public health disaster. The Post writes, “The report makes clear how, in the mad dash to pass legislation to prop up an economy in free-fall in the midst of an unprecedented pandemic, mistakes were made.” But even calling this a “mistake” is a stretch, given that the alternative was to slow down the process of delivering much-needed aid.

Here’s what appears to have happened. The IRS was required to send stimulus payments out to Americans based on the information contained in either their 2018 or 2019 tax returns. According to the GAO, the IRS’s lawyers determined that it “did not have legal authority to deny payments to those who filed a return for 2019, even if they were deceased at the time of payment.” Technically, they could have used the Social Security Administration’s death records to double-check whether people who filed a tax return for 2018, but not 2019, were still alive. But they decided not to for the sake of speed.

This approach wasn’t even without precedent. To fulfill the CARES Act’s mandate to deliver payments as “rapidly as possible,” the GAO explains, “Treasury officials said Treasury and IRS used many of the operational policies and procedures developed in 2008 for the stimulus payments, and therefore did not use the death records as a filter to halt payments to decedents in the first three batches of payments.” Eventually, the Treasury and IRS reversed course and concluded that, actually, they did have the legal power to deny checks to dead people, and started verifying that recipients were alive in their fourth batch of payments.

On the Richter scale of public policy failures, this one barely registers; I am pretty sure the republic is going to survive if a few widows got a preloaded debit card with $1,200 that was meant for their dead husbands. But the GAO is a government watchdog that exists to root out things like improper payments and thinks the government could have gone to greater lengths to prevent them, and should make more of an effort to get the money back. It says that so far, the agency has put a message on its website urging people to return any payments that were sent out to the deceased but not much else.

The real headline here should really be that the government did its job pretty well. When Congress passed the CARES Act, many were worried about how quickly the government could actually get money out the door. But within two weeks, the IRS had managed to deliver 80 million payments electronically. Its speed is part of the reason that poorer households were able to start spending normally again by May despite an unemployment rate rivaling the Great Depression’s.

The fact that the Post is instead treating this topic like a small scandal reflects a broader problem with how some news organizations have covered the government’s response to the coronavirus. Instead of focusing on the broad policy questions about whether programs were helping the economy as intended, many news outlets have focused on trying to track down every single instance of people and companies getting cash that they maybe didn’t deserve. This phenomenon was most pronounced in the case of the Paycheck Protection Program, where journalists and activists harped on how some larger companies like Shake Shack were initially able to get loans through the small business rescue, instead of focusing on more fundamental issues like whether the effort was properly funded or if its rules made any sense. The whole phenomenon even earned a nickname—“PPP shaming”—and probably hampered the entire effort a bit, forcing the Treasury Department to try to tamp down on the public outcry by issuing a bunch of confusing edicts about which businesses were eligible for the program, rather than resolving basic questions about it like how loan forgiveness would actually work. (They only really got to that one in late May).

It’s not a mystery why some journalists prioritize their coverage this way. “Dead guy gets money” is the kind of basic, nonpartisan shoe-leather story that a lot of beat reporters are conditioned to write. It’s scoopy, and in some cases, it is indeed important for public accountability purposes. But without proper context, it creates an appearance of deep bureaucratic incompetence where none exists and makes politicians less likely to back the kind of fast, decisive rescue actions that the economy needs to survive right now. (If you want incompetence, look to the Trump administration’s public health failures.) The Post itself seems to realize this. “The news that so much money has gone to the dead could add to reluctance from some Republicans to agree to more direct relief payments,” the paper suggests. Maybe politicians wouldn’t overreact if journalists didn’t either.

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