Senator Wolf Is Right: Welfare Fraud Is A Distraction From Real Issues

State Senator Dan Wolf, who, like Treasurer Steve Grossman is contemplating a run for Governor, had some criticism for his potential rival last week over remarks Grossman had made in a speech before the Greater Boston Chamber of Commerce.

Wolf, who believes that additional state revenue is needed to help fill a budget deficit of more than a billion dollars and to invest in the state’s future, chided Grossman for “missing an opportunity” to make the case for new taxes to the business community. Wolf also criticized Grossman for raising the issue of welfare fraud — an unworthy distraction, in his view, from the state’s real issues:

What’s more, for Treasurer Grossman to allow the conversation to turn once again to the few people on public assistance who may be abusing EBT cards is nothing more than blaming the victims, blaming the most vulnerable, and turning us away from the real issues we face. It has absolutely nothing to do with how our communities have been undermined over the past 30 years, nothing to do with helping so many people who, through no fault of their own, have become the working poor.

The debate spilled over to BlueMassGroup and I joined in on the side of Team Wolf, because I agree with him that the issue of welfare fraud has been vastly overinflated to support the notion that the state does not have a revenue problem, it has a spending problem. The Republican Party, with the significant help of some media, has used welfare fraud to try to dominate — and demean — the annual state budget debate in recent years, and doubtless would like to do so again this year.

So let’s look at some recent stories that demonstrate just some of the reasons to be skeptical that welfare fraud is among the state’s most pressing issues.

Last month, the Inspector General filed a report that had been requested by the Legislature on the Transitional Aid to Families with Dependent Children (TAFDC) program, the program most people think of as “welfare.” This program serves about 53,000 families in the state at an annual cost of about $315 million (less than one percent of the total state budget). The Inspector General’s report was widely understood as having concluded that “$25 million in taxpayer money is going to welfare recipients who aren’t eligible” (Boston Herald, 2/15/13).

The problem, of course, is that the report made no such conclusion. After examining whether the pieces of documentation that proved eligibility (is there a signed and dated application for benefits? is the child attending school? are child’s vaccinations up to date?) were in the case file, the Inspector General found that in just under nine percent of the case files examined, one or more pieces of documentation needed to demonstrate eligibility were missing. Extrapolating from this finding, the report identified “potential eligibility concerns” worth about $25 million. The report did not say that these families were ineligible; in fact, the Inspector General’s office said expressly that the required documentation, once obtained, might prove that all these families were qualified.

(That conclusion, incidentally, is the same one the State Auditor reached in a 2005 report, which audited the welfare department under the administrations of Acting Governor Swift and Governor Romney. As the Inspector General did this year, the auditor inquired whether the documentation of eligibility for welfare benefits was recorded in the case file and concluded that in some cases (more cases than in this year’s report) the required supporting documentation was not complete. Beyond a tut-tut from the Globe editorial board to the welfare department about the importance of accurate paperwork, that report attracted no attention at all.)

Also in January, it was reported that “nearly $30 million in food stamp money went to recipients who were not eligible” (Boston Herald, 2/1/13). Again, the reality is rather less “shocking” than the Herald describes. The welfare department, facing a 72 percent increase in families receiving food stamps during our Great Recession and no additional state resources to manage this much larger caseload, made a temporary decision, in cases where recipients had filed the required paperwork to prove their ongoing eligibility but the department had not yet been able to review it, to continue the food stamp benefits until the department’s review was complete. The department has since been able to catch up with the caseload spike and the policy has been rescinded. The amount of money at issue represents just 1.3 percent of the food stamp benefits received by Massachusetts families during the time period. Certainly no one favors waste, fraud or abuse, but a temporary policy undertaken during the biggest economic crisis of our lifetimes to err on the side of food stamp recipients who have complied with all the program rules surely does not amount to proof that welfare fraud is among the state’s biggest problems.

I do agree with one statement that Treasurer Grossman made during his speech: “Every time people read a story about the waste of your money — the waste of taxpayers’ money — it saps our energy and reduces our confidence in government’s ability to get things done.” Indeed – especially when the stories are so misleading.

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