Cracking down on EBTs would add to nanny state
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Everyone agrees that welfare recipients shouldn’t be able to waste our money on alcohol and cigarettes. Everyone is wrong.
Convenience store clerk Jackie Whiton became a champion against welfare waste by refusing to sell cigarettes to a customer using his state Electronic Benefits Transfer card. This united even House Speaker Bill O’Brien and the Monitor editorial board in calling for tighter restriction on EBTs.
The problem with such reforms is that it leads to nanny-state bureaucracy trying to micro-manage the lives of low-income families.
Since the 1990s, New Hampshire has been replacing the paper checks sent to welfare recipients with EBTs. These cards work much like your debit card, and can be reloaded by several state and federal welfare programs. Taking the paper out of the system saves the state a lot of money and removes some of the social stigma that came from cashing in food stamps. Not everyone agrees that this last feature is a good idea.
The state Department of Health and Human Services Division of Family Assistance uses EBT cards for food stamps, as well as Temporary Assistance to Needy Families, and Aid to the Temporarily and Permanently Disabled.
Division Director Terry Smith says the U.S. Department of Agriculture has placed restrictions on what may or may not be purchased with food stamps, and retailers have to train employees to handle customers buying ineligible items, whether they are cigarettes or paper towels.
“The client has the choice of food stamps or cash. The allowable food stamp purchases are monitored by the clerk to make sure they are allowable,” Smith explained. “The nonallowable items are then purchased with cash, from the same card.”
Smith says clients can’t withdraw food stamp benefits as cash, but that other programs on EBT cards have no more restrictions than putting a check in the bank.
Congress has mandated that states block EBT cards at casinos, liquor stores, and strip clubs by 2014. But even then, there would be nothing preventing a welfare recipient from taking Temporary Assistance to Needy Families funds out from an ATM, and walking across the street for a whiskey and a lap-dance.
TANF benefits are capped at 60 months, with limited hardship exemptions. The Obama administration last week moved to waive these restrictions, both in violation of the law and the best interests of those receiving assistance.
If we want our welfare programs to promote self-sufficiency rather than dependency, welfare benefits must be both modest and temporary. They need not be overly prescriptive.
We can’t hope to lift people out of poverty by micro-managing their day-to-day purchases. If we’re going to send cash assistance to low-income families, we have to accept that they will spend some of that money in ways that many of us will find wasteful.
People on welfare will make bad decisions with money; not because they are on welfare, but because they are people.
Many objected to what they saw as someone trying to use food stamps to buy cigarettes. He didn’t. But the broader objection was that taxpayers should have some say in how their money is spent. They work hard, only to see their money buying someone else’s smokes.
Cracking down on EBT use would require the same costly and inefficient bureaucracy that conservative oppose and liberals deny exists under ObamaCare. Okay, cigarettes and booze are out. Could you use an EBT card to take your wife out to dinner once a month? Could she get the lobster and a cocktail, or just the chicken? Is dessert covered? Is O Steak and Seafood too expensive? Is McDonald’s too unhealthy?
Once we let government exert this kind of control, we quickly cede any limits on state intrusion.
We face the same dilemma in health care, whether you call the new bureaucracy an independent payment advisory board or death panels.
We certainly could force those asking for help to live up to our arbitrary standards. As we debate the best way to help out those most in need, we should resist the paternalistic urge to improve their lives with our wisdom. The only people that the nanny state makes more prosperous are the new bureaucrats it employs.
Grant Bosse is lead investigator for the Josiah Bartlett Center for Public Policy, a free-market think tank based in Concord.
Posted under Featured, News.
Tags: Concord Monitor, EBTs, Food Stamps, Welfare
6 Comments For This Post So Far
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NH Watchdog Poll- EBT Crackdown
[...] Hampshire lawmakers are debating how people use their Electronic Benefits Transfer cards. Should the state place limits on how welfare benefits can be spent, like the Food Stamp [...]
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2:50 pm on July 16th, 2012
I have to admit that beginning to specify what welfare or other payments may or may not be used for opens up a huge can of worms. There could be no end of ideas about what should be prohibited as a purchase by a welfare recipient.
In addition, there are other payments made by the federal and state governments to individuals that could be swept into the same thinking. What about farm subsidies paid to farmers? What about student loans and scholarships? What about natural disaster aid? What about social security?
2:53 pm on July 16th, 2012
Thanks, Doug. I hadn’t considered that fallout. But the same logic holds.
3:42 pm on July 17th, 2012
Grant, you say, “If we want our welfare programs to promote self-sufficiency rather than dependency, welfare benefits must be both modest and temporary.” You also imply that making people use food stamps instead of debit-card-like EBT cards will embarass them into rising out of poverty sooner. What about the many physically and mentally disabled people, including veterans and their families, who cannot be expected to rise out of poverty?
7:20 am on July 18th, 2012
Doug Hall:
Your comment “What about social security?”
We pay into Social Security. That is OUR money.
11:38 am on July 20th, 2012
Having worked in the Division that determined eligibility for all of these programs for thirty years, I agree with most of what you have said. The cost of micromanaging is far greater than any funds lost due to spending on inappropriate items. I would also add the following:
Old Age Assistance (65+) also uses the EBT Card
There is no indication that there is a large problem.
I doubt that the very few men who receive Temporary Assistance to Needy Families are going out for a “whiskey and lap dance” since TANF is an Employment Support Program and those are are able-bodied are involved in some sort of work program. Single moms? – I don’t think so.
Many people who receive assistance are employed – they just cannot make enough money to support themselves and their families with multiple part time jobs or jobs that pay way below the NH Living Wage.
The reason for waiving the five year time limit is that, depending on a state and or area’s unemployment rate, it may be impossible to either get a job or make enough money working to get off financial assistance. Waiving the five year time limit does not waive the work and preparation for work requirements. These are the requirements that establish TANF as a program that fosters self sufficiency – not the time limit. If you do not comply with work requirements, you do not receive assistance. During a recession, job placement goes down and training and education increase. Combining this with the needs of NH employers and the federal tax credits for hiring TANF recipients helps everyone but may not be enough to provide full support for a family. It is important to note that NH has a job experience program where recipients work to gain experience but do not receive wages.
Key to the TANF program is the payment of child support. Far better than micromanaging financial assistance, we can do a better job of helping families out of poverty by increasing the ability of all states to collect child support which in turn offsets the amount of TANF assistance.
NH has one of the most efficient and well run public assistance programs in the country. I would encourage everyone to read the state laws on these programs, look at the stats on employed recipients – both in NH and nationally- and talk to both workers and recipients to see what are the real improvements that can be made.
As for Food Stamps- NH and many other states have tried to get waivers on how food stamps can be spent. When I asked the Federal Agency why – I was told that the Food Lobby was very strong and that Congress would not change the law. Since this was about 8 years ago, it would be interesting to know the current answer.