It’s amazing how expensive something as simple as benefit checks can be. The Treasury Department is getting ready to stop mailing government benefits to citizens in check form and, instead, switching to electronic payments. In a blog posted this morning, Office of Management and Budget Director Peter Orszag said this will save $300 million over the first five years, and more than $120 million each following year.
But what about those who don’t have a bank account, or who don’t want to use direct deposit? Orszag said they’ll get their benefits through Treasury’s Direct Express debit cards. He said this change will benefit people without bank accounts because they won’t have to go to check cashing places, which charge very high fees.
Orszag also said moving to direct deposit will also mean no more checks will be lost, stolen, altered or fraudulently signed. But anyone who decides to use debit cards will have to be extra careful, since it’s easier to use stolan debit cards than stolen checks.
“This is a win-win for the American people because it makes government more convenient and cost-effective,” Orszag wrote. “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.”
This reform follows the Obama administration’s March announcement that 640,000 federal employees would stop receiving paper pay stubs.