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Editorial: Some improvements to safeguard welfare benefits

When welfare benefits are spent inappropriately – on beer or cigarettes, for example – support for the public assistance that millions of Americans, most of them single mothers, depend upon is diminished. For that reason, even the fiercest defenders of aid to the poor should be open to measures meant to ensure that public assistance money is spent on necessities, not luxuries.

Like all but a handful of states, New Hampshire provides people receiving direct financial help and Supplemental Nutrition Assistance Program benefits, otherwise known as food stamps, with an electronic benefit card that functions much like a bank debit card. There are restrictions on what may be purchased with the food stamp portion of the card’s benefits but very few limits on the financial benefit component of the cards. The cards can’t be used in liquor stores or strip clubs, but they can be used to obtain cash from automatic teller machines. According to an audit released last week by the Legislative Budget Assistance Office, the state has no way of knowing how that cash is spent e_SEnD whether it’s used to do laundry, pay a landlord or buy drugs. Absent that information, suspicion of abuse grows.

Support for public assistance is rarely strong and always under attack, as the current demand for a $40 billion cut to the food stamp program by Republicans in Congress demonstrates. Those benefits, now used by one in seven Americans, are critical to the health and well being of millions of people, many of them children. Some 4 million people would lose benefits if the cuts are made.

Lawmakers need to walk a fine line when setting limits on the use of benefit cards. The restrictions should not demean the state’s 10,000 cash assistance recipients by treating them as untrustworthy or wasteful, but some limits on the cash component of their benefits would be appropriate. Eliminating cash benefits, as some lawmakers want to do, would be more than inconvenient for recipients; it would also be costly for taxpayers because it would require more employees to process checks, pay bills and otherwise administer the program. Tracking how recipients use the cards would be similarly time- and labor-intensive.

The auditors’ recommendations include aligning restrictions on the use of the cash assistance with the goals of supplemental assistance programs, something that has yet to be done. The benefits, for example, could be used for education and job training but not to get jewelry or a tattoo. Retailers are supposed to be alert to examples of the inappropriate use of welfare benefits – using ATM cash to buy cigarettes, for example – and report abuse to authorities, but such enforcement mechanisms are impractical and ineffectual.

The Legislature should address the auditors’ recommendations and make changes next session. Among those they should consider is a monthly cap on the amount of a recipient’s benefit that could be withdrawn as cash. Some cash is a necessity: to do laundry in a laundromat, take a cab to a doctor’s office or purchase small items from a convenience store. But most bills can be paid these days with a debit card. Landlords who are not equipped to accept the cards would have to make the modest investment required to do so if they want to rent to welfare recipients. If vendors at farmers markets can do it, so can they.

Limiting cash withdrawals to an amount arrived upon after due diligence won’t eliminate the possibility that some taxpayer money will be used to buy a six-pack or lottery tickets. But it would mean that the potential for abuse would be reduced and, with it, pressure to cut or eliminate benefits many people need to live decently.

Legacy Comments1

A lot to agree with this well written article too bad you couldn't resist taking a back handed swipe at Republicans in congress/ You could have told the truth about the out of control growth of the food stamp program under Obama but holding Obama and the democrats accountable isn't part of your narrative. There is some real good ideas in this editorial that both sides could build on.

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