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U.S. effort to get rid of checks hits a setback


WASHINGTON -- Jan. 2, 1999, was a worrisome date for 32 million Americans: the day the government was to have eliminated paper checks for federal benefit recipients.

Not to worry. The check is in the mail.

The Federal Debt Collection Improvement Act, passed two years ago, set tomorrow as the day when all benefit payments were to be made through direct deposit.

Stung by complaints, the Treasury Department changed direction.

"It's a date without real significance," said Don Hammond, the Treasury Department's fiscal assistant secretary.

Sponsors of the debt collection improvement act figured moving everyone to direct deposit would save $500 million in processing and postage costs over five years.

As of November, only 29 percent of the benefit payments sent out by the Treasury -- 19.1 million -- were in the form of mailed checks.

But between 8 million and 10 million federal benefit recipients don't have a bank, Hammond said.

The debt collection law includes a provision for the Treasury Department to set up bank accounts for benefit recipients who don't have one. This proved difficult to implement, however, and the accounts won't be ready until summer at the earliest.

Pub Date: 1/01/99


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