Wall Street Journal: Food Stamps for Millionaires

Wall Street Journal June 23, 2011

The Food-Stamp Crime Wave

By JAMES BOVARD
Millionaires are now legally entitled to collect food stamps as long as they have little or no monthly income. Thirty-five states have abolished asset tests for most food-stamp recipients. These and similar “paperwork reduction” reforms advocated by the United States Department of Agriculture (USDA) are turning the food-stamp program into a magnet for abuses and absurdities.

The Obama administration is far more enthusiastic about boosting food-stamp enrollment than about preventing fraud. Thanks in part to vigorous federally funded campaigns by nonprofit groups, the government’s AmericaCorps service program, and other organizations urging people to accept government handouts, the number of food-stamp recipients has soared to 44 million from 26 million in 2007, and costs have more than doubled to $77 billion from $33 billion.

The USDA’s Food and Nutrition Service now has only 40 inspectors to oversee almost 200,000 merchants that accept food stamps nationwide. The Government Accountability Office reported last summer that retailers who traffic illegally in food stamps by redeeming stamps for cash or alcohol or other prohibited items “are less likely to face criminal penalties or prosecution” than in earlier years.

Lax attitudes toward fraud are spurring swindles across the nation:

• Earlier this month, the Milwaukee Journal Sentinel revealed that Wisconsin food-stamp recipients routinely sell their benefit cards on Facebook. The investigation also found that “nearly 2,000 recipients claimed they lost their card six or more times in 2010 and requested replacements.” USDA rules require that lost cards be speedily replaced. The Wisconsin Policy Research Institute concluded: “Prosecutors have simply stopped prosecuting the vast majority of [food-stamp] fraud cases in virtually all counties, including the one with the most recipients, Milwaukee.”

• Troy Hutson, the chief of Washington state’s food-stamp program, resigned in April after a Seattle television station revealed that some food-stamp recipients were selling their cards on Craigslist or brazenly cashing them out on street corners (for 50 cents on the dollar) and using the proceeds for illegal drugs and prostitution. Washington state Sen. Mike Carrell complained: “Dozens of workers at DSHS [the Department of Social and Health Services] have reported numerous unpunished cases of fraud to me. They have told me that DSHS management has allowed these things to happen, and in some cases actively restricted fraud investigations.”

• Thirty percent of the inmates in the Polk County, Iowa, jail were collecting food stamps that were being sent to their non-jail mailing addresses in 2009. But Iowa could not prosecute them for fraud because the state’s food-stamp form failed to ask applicants whether they were heading for the slammer. Roger Munns, a spokesman for the Iowa Department of Human Services, told the Des Moines Register last year that asking such questions could make food-stamp applications “unwieldy.” (Many states do make such inquiries.)

Looser federal rules are spurring a bureaucratic crime wave. Last December, two veteran employees for New York City’s Human Resources Administration were busted for concocting 1,500 fake food-stamp cases that netted them $8 million. Nine Milwaukee, Wis., staffers plundered almost $300,000 from the program during the last five years, and a Louisiana state bureaucrat pleaded guilty last year for her role in a scam that snared more than $50,000 in fraudulent food-stamp benefits.

The Obama administration is responding by cracking down on state governments’ antifraud measures. The administration is seeking to compel California, New York and Texas to cease requiring food-stamp applicants to provide finger images.

• The food-stamp poster boy of 2011 is 59-year-old Leroy Fick. After Mr. Fick won a $2 million lottery jackpot, the Michigan Department of Human Services ruled he could continue receiving food stamps. The Detroit News explained: “If Fick had chosen to accept monthly payments of his jackpot, the winnings would be considered income, according to the DHS. But by choosing to accept a lump sum payment, the winnings were considered ‘assets’ and aren’t counted in determining food stamp eligibility.”

Decades after liberals derided Ronald Reagan’s reference to a Cadillac-driving “welfare queen,” Obama administration policies could easily permit Trust Fund Babies driving Rolls Royces to get free food courtesy of Uncle Sam.

• Perhaps the biggest fraud of all is the notion, which the USDA has been touting lately, that the food-stamp program is a nutrition program. (The program’s name was formally changed in the 2008 farm bill to the Supplemental Nutrition Assistance Program—SNAP—to make it sound more wholesome and attractive.) What is really does is boost caloric intake, which is why numerous studies (including a 2009 Ohio State University report) link food stamps to the worsening obesity epidemic among low-income Americans.

The USDA has vetoed all proposals from local or state governments to prevent food stamps from being used for junk food. With the feds’ approval, food stamps are increasingly being redeemed at fast-food restaurants—one of the primary culprits in ballooning American bellies.

But the Obama administration doesn’t deserve all the blame. Food-stamp enrollment surged before Mr. Obama took office. The number of food-stamp recipients on George W. Bush’s watch rose by more than 50%, even before the recession hit in 2007. As Slate reporter Annie Lowrey wrote for the online magazine last December, President Bush and his food-stamp chief Eric Bost “went on a quiet crusade to expand eligibility, increase enrollment, and reduce stigma around nutrition aid.”

H.L. Mencken quipped that the New Deal divided America into “those who work for a living and those who vote for a living.” The explosion in the number of food-stamp recipients tilts the political playing field in favor of big government. The more people who become government dependents, the more likely that democracy will become a conspiracy against self-reliance.

Mr. Bovard, the author of “Attention Deficit Democracy” (Palgrave, 2006), is working on a memoir.

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33 Responses to Wall Street Journal: Food Stamps for Millionaires

  1. Tom Blanton June 22, 2011 at 11:53 pm #

    Jim, I found the food stamp program to be one government program that worked well for me. A group of winos used to hang out in front of an establishment I frequented and every month they would sell me food stamps for half-price.

    I did in fact use them to supplement my nutrition by buying expensive food that I otherwise wouldn’t have bought. So, it was a win-win-win situation. The winos got their booze, producers of gourmet food increased their sales, and I got to eat good on the cheap!

    As for the taxpayers, well there’s a sucker born every minute. Let’s just hope they felt good about themselves when they voted for the welfare/warfare state candidates.

    I don’t think the winos voted at all. But it might be interesting to know what agri-business interests lobby for food stamps. I have heard of fast food businesses lobbying to be allowed to accept food stamps and soda makers lobbying to make sure that food stamp recipients can continue buying sodas.

  2. Bart June 23, 2011 at 5:56 am #

    Very cool.

  3. John Puma June 23, 2011 at 6:11 am #

    Apparently the “Obama administration policies could easily permit Trust Fund Babies driving Rolls Royces to get free food courtesy of Uncle Sam.”

    No, this simply can’t happen because ONLY the unemployed are shiftless scum!!!

  4. Jim June 23, 2011 at 7:47 am #

    Tom, your comment almost restores my faith in the Food Stamp Program.

  5. Dirk W. Sabin June 23, 2011 at 5:11 pm #

    What the liberal State fails to comprehend is that it needs a truncheon welding nanny to curtail it’s own nannying proclivities . Government is a vacuum rich environment always in search of a pocket to suck clean in order that our finest aspirations might be stroked with dutiful pride.

    The principle issue at stake today is that our brute imperialist desires are running smack up against a deteriorating domestic realm and the principle victim of our imperial project does not yet realize they are being gutted for the benefit of a few. Safety against a bearded nut hatched in the pampered Madrassas of the Saudi oil-socialist State matches the interests of the Walmart shopper with the goat herding indigenes
    of the Hindu Kush. Needless to say, there is no connection between the two aside from the rich income of fear.

  6. Tom Blanton June 23, 2011 at 11:14 pm #

    I hope people will realize that food stamps to help the poor is like TARP was to prevent an economic collapse or like attacking Iraq was to preserve our freedom and destroy WMD.

    The SNAP program is just part of the giant pork laden farm bills and tons of welfare for big agribusiness. It’s not the welfare queens writing those farm bills.

    JP Morgan processes the SNAP cards in 26 states. Food producers and processors push for food stamps. Retailers benefit. And they all lobby for SNAP. The whole thing is a fraud and creates distortions in the market.

    How do you think large employers of low-wage workers view SNAP? A large percentage of the “working poor” are in the program. It is not unlike a wage subsidy for some employers as it serves to depress wages. Certainly an unemployed worker may not accept a wage that would be too low to feed his family, but knowing he can qualify for SNAP, he would be more likely to accept less pay.

    SNAP may also cause an upward pressure on food prices, assuming that it is increasing demand at least marginally.

    You can bet the real welfare queens don’t use a SNAP card. My guess is a lot of those who do use them don’t vote, don’t make political contributions, don’t hire lobbyists, and would probably prefer to not use them so they wouldn’t have to deal with the government.

    Helping the poor, indeed. If they want to help the working poor, the politicians should get out of the food business.

  7. Michael June 25, 2011 at 7:35 pm #

    Jim,

    What are the food stamp removal requirements? How long will the millionaire legally remain on Food Stamps?

    Personally, the food stamp joining rules seem harsh (only $2k in assets, when a car is a necessity). But it’s the exit rules which are more important. The more society hears about millionaire’s on food-stamps, the less likely they’ll be will to support individuals and families who have fallen on hard times.

  8. Jim June 25, 2011 at 8:29 pm #

    Michael, the $2k asset rule you mention has been abolished in most states. Plain and simple, there is no asset test.

    The millionaire can legally remain on food stamps as long as he structures his finances to minimize his apparent monthly income.

  9. Alpon February 10, 2012 at 7:01 pm #

    Thanks Mr. James Bovard – you got it correct.

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