The Brouhaha Over EBT Cards: 3 Things to Know

(A second further update, April 26, 2012: The House finished its budget debate last night. Restrictions on the use of EBT cards by welfare recipients were adopted. The restrictions largely follow the model proposed by the House Ways and Means Committee: EBT cards may not be used in any of 15 specific areas, including alcohol, tobacco, firearms, gambling, jewelry and cosmetics. A couple differences from that original proposal: purchasing toothpaste is now OK, but purchasing the services of a lawyer (to defend against an eviction, for example) is now illegal and therefore punishable by a 3-month suspension of benefits for the first offense and permanent suspension for the second. Paying any “fee” to the state or a town (like a fee for one’s child to play a school sport) is a no-no, too. Businesses that accept EBT funds for the purchase of any of the prohibited items are subject to criminal penalties.

The text of the amendment is here.

As for the most extreme of the EBT proposals — to prevent welfare recipients from having any access to any cash — the House wants that one to receive further study. A consultant is to be hired (at state expense of course) to figure out if that could work.

And the the families in the state who are living in poverty and are not receiving any welfare assistance – how are they doing these days? The debate didn’t touch that one.)

(Further update, April 13, 2012: Good news and bad news. First the bad: Some members of the House have decided that the House Ways and Means budget does not add enough misery to the lives of welfare recipients and are pressing (through the amendments process) for stricter measures, including the prohibition against any cash payments. Now the good: Other — one might say, more thoughtful — members of the House have come up with amendments that take this whole issue out of the budget or at least go about protecting against potential abuses without a compulsion to strip the families who receive these benefits of their dignity — or their toothpaste. There are three amendments: # 502, # 635 and # 842. You can call your State Representative to express your support for one — or more — of them).

(Update, April 11, 2012: The budget process in House of Representatives got started today. For those of you following this EBT issue, the budget that the House Ways and Means Committee proposed would prohibit recipients from spending their welfare payments in 15 specific areas, one of which is “cosmetics.” If you’re not sure what qualifies, here’s their definition:

“Cosmetics” includes (1) articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and (2) articles intended for use as a component of any such articles; provided, however, that cosmetics shall not include soap.

Toothpaste is something that is “applied to the human body or any part thereof for cleansing,” so that’s a prohibited cosmetic item. Which means that families receiving welfare are now supposed to wash their mouths out with soap. A punishment for being poor? That, alas, seems to be the whole idea.)

Spring is in the air, time for the Legislature to write the state budget for the coming year. And for some, that means finding a target to blame for why there isn’t enough money to go around.

It looks like we’ve got ourselves a scapegoat — people who receive welfare benefits. This year, some of us are SHOCKED to learn that these families receive their benefits in the form of EBT cards and that these cards can be used at banks to get CASH, of all things. Never mind that these benefits have always provided in cash and that EBT cards replaced paper checks because they save the state lots of money — if you think that in the good old days public assistance was a bale of flax and a live chicken, you’re just remembering wrong.

A collection of anecdotes (mostly undocumented) about frivolous expenditures is serving as the justification for a proposed crackdown. The most restrictive part of the package is a prohibition against ANY welfare payments being paid in cash — store purchases only. To receive rent payments from tenants who receive welfare, landlords will need to go to the state. Unclear how utility bills would get paid or Charlie Cards would get loaded. Howie Carr gave voice to what had been merely subliminal in this campaign to cut off access to any cash — welfare recipients, he said last week, are “probably wiring the cash back to relatives in their third world hellholes.”

So, as budget season begins, some context. Three things to know about welfare and EBT cards.

1. You might conclude from the EBT brouhaha that this was the first time the state ever thought of investigating fraud by recipients of public assistance. You’d be very wrong. To take just one example, the Bureau of Special Investigations in the Auditor’s office was set up 40 years ago for just this purpose. They investigate possible fraud involving welfare and food stamps, as well as in Medicaid, child care and other social services. Last year, the Bureau investigated 3000 cases across all these programs and found evidence of fraud, valued at $4.3 million, in 453 of them. You can read their reports here. (If, like Willie Sutton, you want to go “where the money is,” you need to look at fraud by the vendors in public assistance programs instead of recipients. For example, just last week, a testing laboratory admitted to a scheme in which they conducted unnecessary drug test screenings. They paid $20 million in restitution to the Medicaid program for their misconduct — four times the amount discovered by the Auditor’s office in a year.)

2. Some of those who are outraged about EBT cards want to know why, in January, more money was spent at 7-11 Stores than at Market Baskets. Well, that’s actually a good question. The answer has to do in part with the fact that many low-income people live in what the U.S. Department of Agriculture calls “food deserts,” where the nearest supermarket is more than a mile away. From Mattapan, for example, the nearest Market Basket is more than eleven miles away in Chelsea. There’s a Shaw’s closer by, but if you don’t have a car, you might need to take the bus to get there. But, whoops, if you can’t get any cash from your EBT card, you’re totally out of luck, because the bus doesn’t take EBT cards.

3. While we’re on the subject of the living conditions of low-income families, let’s remember that the average welfare grant these days is $475 per month, an amount that has not increased since 2000. If the grant had kept up with inflation, it would be $628 today, still well below the poverty line. And then take a look at this chart based on data from the Center on Budget and Policy Priorities. In 1994, 92 of every 100 families living in poverty received some form of welfare. In 2010, only 45 families did. Welfare is not reaching most of the families who are eligible for it.

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