September 1, 2013
Food stamp fraud not something to be dismissed
Food stamp fraud is on the rise nationally. Yet Matt Bruenig, writing for The American Prospect, proclaims fraud is “not even a problem” and “totally fine.”
“I don’t care about it and neither should you,” Bruenig writes.
Most Oklahomans likely disagree. Taxpayers support food stamps as a last-ditch effort to ensure the truly poor don’t go hungry, not to provide recipients with “mad money.”
Here’s how the fraud occurs. Those with food stamp cards use them for phony purchases. The cashier rings up the bogus purchase, and then provides cash equal to the purchase amount, with the cashier typically taking a cut.
Bruenig argues this shouldn’t upset people. He notes an individual who spends $300 per month on food, but then gets $100 in food stamp benefits, has therefore freed up $100 in personal funds that previously went to food. The fraud, he argues, has the same effect. But fraud allows the recipient to not only free up $100 of his own money, but also redirect money donated by his neighbors (taxpayers). That cash can then be used for less-beneficial purposes.
When The New York Post conducted an open-records review of 200 million Electronic Benefit Transfer records from January 2011 to July 2012, it found welfare recipients used EBT cards to make cash withdrawals at porn shops, strip clubs and bars. In 2010, the Los Angeles Times reported that debit cards with welfare funds were used to withdraw $4.8 million in casinos and $12,000 in strip clubs over a three-year period. Such cases are one reason Oklahoma lawmakers voted this year to ban the use of welfare cash cards at strip clubs, casinos and liquor stores.
Liberals rightly insist being poor doesn’t make one a criminal or drug addict. But there’s no denying that certain behaviors reduce income mobility and make you more likely to be poor. People who commit fraud often commit other crimes; substance abuse is common in those circles.
Bruenig and others note the rate of food stamp trafficking fraud is only 1.3 percent, although instances have increased 30 percent over previous norms. And the 1.3 percent rate isn’t inconsequential, especially given rising food stamp participation.
Enrollment in the federal food stamp program has increased 70 percent since 2008. The program’s costs have surged 41 percent since President Barack Obama took office in 2009. Enrollment hit a record 47.8 million at the end of 2012. Much of that growth is due to relaxed eligibility standards and program expansion authorized by the 2009 federal “stimulus” bill.
Therefore, having 1.3 percent of the total wasted on welfare fraud translates into millions diverted from feeding the truly needy. Economist Casey Mulligan of the University of Chicago has found increased government benefits, including food stamp expansion, have reduced the incentive for work because potential paychecks are less than the value of benefits lost upon gaining a job. Mulligan estimates half or more of the labor market depression can be linked to expanded government benefits.
Shrugging off food stamp fraud only makes that situation worse. To allow individuals to convert food stamp funds to other, potentially detrimental uses not only insults Americans’ charitable nature, but opens the door for taxpayer funding of activities that are actually detrimental to society.
That is pointless and unnecessary. Food stamps should be used for one thing — food — or not used at all.
— The Oklahoman