Published — June 20, 2013 Updated — May 19, 2014 at 12:19 pm ET

Senators grill Treasury official about debit card program

Payments increased for contractor, poor hit with fees


Sen. Elizabeth Warren, D-Mass.

Democrats on the Senate Special Committee for Aging pummeled a Treasury official Wednesday with questions about the effort to replace paper checks with electronic payments to mostly poor and elderly beneficiaries of government programs.

Questioning Treasury Fiscal Assistant Secretary Richard Gregg, Sen. Elizabeth Warren of Massachusetts repeatedly expressed her concern about the decision to pay an additional $30 million to Comerica Bank that was not in its original contract.

Comerica issues a taxpayer-subsidized debit card that the government is pressuring beneficiaries to use if they haven’t already signed up for direct deposit.

Unsatisfied with Gregg’s response that the nature of the deal changed between 2008, when Comerica offered to perform the service for free, and 2010, when the Treasury Department agreed to the additional millions, Warren repeatedly interrupted his answers.

“Mr. Secretary, let me stop you there,” she said at one point. “My question is about the contract … and that we agreed to give Comerica — we, the U.S. government, through Treasury — an additional $30 million without knowing if they were already making substantial profits on this contract or not.”

Still, Warren, Florida Sen. Bill Nelson, who chairs the committee and Richard Blumenthal of Connecticut, conceded that the program had achieved its main goal: Saving money for the government by getting people to switch to plastic debit cards and direct deposit for benefits.

At the hearing, Gregg appeared to be inflating the cost savings of the program by using some seemingly contradictory math. Gregg said it costs $1.25 to mail a check — a 19 percent jump from the $1.05 he cited nine months earlier, when he last testified on the subject.

The cost of sending a payment electronically, meanwhile, didn’t budge from 9 cents.

As a result, the purported savings for making a payment electronically instead of mailing a check leapt to $1.16 from 96 cents. Multiply that 20-cent difference by the millions of people who receive at least one payment each month on a check, and it adds up to millions in extra savings, at least on paper.

Based on the new math, Gregg claimed, Treasury saved $885 million in the fiscal year ended September 2012 — the same month Gregg testified that the old, less favorable figures were correct.

Asked to explain the discrepancy, Treasury Department officials said that the cost per check has increased as Treasury sends out fewer of them. The officials refused to speak for attribution because they were not authorized to do so.

The biggest group affected by Treasury’s e-payments policy is people who collect benefits from the Social Security Administration for old age, or because they are both poor and disabled. But the rules affect all benefits from the Veterans Administration, as well as less-known programs that support retired railroad workers and coal miners who developed black lung disease.

Comerica won the government contract by offering to issue the cards at no cost to taxpayers. After the bank said it was having trouble profiting from the program, Treasury agreed to sweeten the deal with tens of millions of taxpayer dollars. Treasury’s inspector general is probing the contract between Treasury and Comerica, The Center of Public Integrity reported early Wednesday.

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install itunes on windows 7Bob FrankstonLinda GordonET69Jello Beyonce Recent comment authors
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sam fetters
sam fetters

What do AT&T, Verizon and Crown Castle International Corp have in common? The largest institutional shareholders of each includes firms like: Vanguard, BlackRock, State Street (the “Big Three”), Invesco, Fidelity (FMR), JP Morgan, Wellington Management, Geode, T Rowe Price, Bank of America, and other of the largest money-management and investment firms, whom operate collaboratively (even comprising the largest shareholders of each other), forming virtual monopolies amongst the largest “competing” corporations, in most every single industry, via large share holdings. (source = These are the same firms whom also largely own the third largest telecom, T-Mobile. The own the largest… Read more »

Jello Beyonce
Jello Beyonce

I’ve a theory that the supposed “Trade Wars” and “sanctions” and political/military strife going on between the U.S., China, Russia, etc. are merely distractions, serving to divert attention away from the growing authoritarianism and Oligarchic control spreading across the globe. “Nationalism” is being used as a propagandist covert means of continued increasing Globalism. As this article states: “A Russian woman stood up to speak at one of these public meetings, and she said that when she lived in Russia, the government slam dunked her and she had no say,” King said. “Now she lives in the United States of America,… Read more »


Marx was right about capitalism . Capital gets more and more concentrated in fewer and fewer hands. There is no way out of this greed. We need socialism!

Linda Gordon
Linda Gordon

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Bob Frankston

The real issue with 5G is that it’s an attempt to roll back the Internet and return to the telecom of the 1970s when the phone company controlled all.

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