Magazine article American Banker

Social Security's Point Man on Automation Exits Early

Magazine article American Banker

Social Security's Point Man on Automation Exits Early

Article excerpt

By MARJANOVIC, STEVEN

Michael D. Johnson, who spearheaded a host of initiatives to modernize and automate Social Security payments, said he is taking early retirement to pursue a career as a private consultant.

Mr. Johnson, 54, spearheaded the Social Security Administration effort that resulted in 75% of beneficiaries receiving their payments through direct deposit. With 35.2 million people participating, the agency's program is the largest originator of automated clearing house transactions.

A Social Security payment via ACH costs 2 cents-40 cents less than a check, Mr. Johnson said. The agency calculates that electronic payments are saving it $168.9 million a year.

Social Security "gave me a rare opportunity to essentially be an entrepreneur," Mr. Johnson said.

He is to leave Tuesday, and no successor has been named.

A 31-year veteran of the agency and director of its payment and recovery policy staff for the last 10 years, Mr. Johnson said he had recently been encountering more obstacles in attempts to achieve his goals.

He cited government downsizing and the watering down of EFT '99, the regulations stemming from a 1996 law that required most government disbursements to be electronic by the end of this year.

Social Security's staff has been reduced from 82,000 in the 1980s to 64,000. And this year, the Treasury Department decreed much of the EFT '99 mandate optional, in response to pressure from Congress and objections from consumer groups.

"I am a little bit disappointed we could not use the opportunity to expand direct deposit a little more aggressively," Mr. Johnson said. "But I understand what Treasury was up against."

He added, "I've been doing this for a long time. It's time to move on to the next phase and let the next generation take over."

As liaison to the National Automated Clearing House Association's rules and operations committee for the past 10 years, Mr. …

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