Welfare Fraud

1. Thank you for weighing in.

   The Senate President has defined the issue of welfare abuse as a top priority for this session. I expect that we will take it up shortly and give it a thorough treatment.

   No one thinks that fraud is OK. All ideas are on the table and I’ll share details soon on how the package looks.

   One other thing that you should know is the Governor replaced the head of the Department of Transitional Assistance after the original report by the Inspector General came out in January. The new Commissioner, Stacey Monahan, has been making many changes to improve program integrity. You can view her 100 day action plan here.

   Looking forward to continuing this dialog and addressing the concern fairly and squarely. Many are concerned about the issue.

   Click here to view the recent auditor’s report. For a little counterpoint, click here to read Adrian Walker’s comment.

   I’ve also heard from some concerned about votes that we in the Senate took during the budget process — votes against requiring photo ID on EBT cards. The evidence we had before us was that that particular measure would cost much more than it would save. Those were not votes against reform. We will take up much fuller reforms shortly.

2. Hi, Will, David. I’m reading David’s ideas today and though I’m a proponent of welfare and poverty relief, I think that these are almost all really good points. Point well-taken about the prohibitive cost of fingerprints and photos, OK. All other items are worth some more discussion. It is great to see some of those in the 100-day plan you referenced. Where possible, high-profile legislative action on these issues would have great buy-in across party-lines as everyone frustrated by poverty and welfare fraud. The fact that some of these are federal issues is important to remember.

   Anyway, my 2 cents on the matter is that poverty is an insipid and self-perpetuating cycle that just can’t be ‘solved’ by throwing allowances at people. I have a lot of family and friends surviving this way and I hate to throw them under the bus like this but having this as a fall-back means that they are less motivated to change their situation. Some tough love with an emphasis on the ‘love’ part is really necessary. Education and training programs exist that can take on some of the ideas that David mentions (highway & cemetary work crews, etc). Let’s bolster those while taking a real and ‘surgical’ look at the specifics that David mentions. As you’re thinking about plans for a possible Washington job, this could be an excellent bargaining chip in the debate over immigration reform which concerns a lot of people because immigrants ‘take our jobs’.

   Adrian Walker’s article is good. I guess my thought on this don’t come from a money-saving standpoint, though, who can argue with the benefit of that!? –I’m concerned with poverty and I just don’t think that a lifetime of welfare checks is enough to solve that problem.

   Thanks for considering my thoughts on the issue, too. This is my first foray into your website discussion boards here and happy to contribute something.

3. Will,

   Fraud and abuse are a matter of degree. Unfortunately, MA seems to be a place where none of that registers until the level is so egregious that it can’t be ignored. Your post gives a great example.

   Why does the legislative culture in MA tolerate votes against photos on EBT cards? I’ve seen “We accept EBT” stickers on gas pumps. We finger print citizens who want to exercise certain rights but it’s not ok to finger print those being supported by the state (I find it hard to believe the cost is that high on this and the fraud reduction would be worth it)? Reading the action plan you link to, why are ATM withdrawals allowed at all?

   The department has the name “transitional” in it. Where are the stats on how many people actually transition off EBT? Where’s the analysis on why there’s an increase demand for it?

   Contrary to what you may assume from the above, I’m not against state assistance altogether. I know a number of people with family members afflicted with serious disabilities and I don’t begrudge them some help. However, David has some excellent points which if implemented, would certainly lower the resentment felt by taxpayers in the commonwealth.

4. Welfare — almost always addressed through the frame of welfare fraud or “support for people who don’t deserve it or should be taking more responsibility for themselves” — is such a lightening rod that it repeatedly gathers more energy than it deserves. We all hate the idea that someone is getting something for nothing, and we all think that its coming out of our own pockets. I think, however, that we all benefit from a strong welfare system.

   We too quickly forget that welfare (along with other safety net programs) are the foundation that holds up our own higher levels of wages and well-being. We all like to think that we earned our rewards, and our own efforts are obviously part of the process. But business will race to the bottom of every cost ladder it can, as we New Englanders should know based on the move of our textile and machine industries to lower-wage areas in the South (and from there to Mexico and now to Bangladesh). Welfare sets the height of the bottom rung — the higher it is the better off everyone above it.

   It’s true that some people and families are caught in a multigenerational “cycle of poverty” and definitely need help and support to escape the brutal limitations of such a life. “Tough Love” programs are part of the answer, but anyone who thinks simply kicking people off welfare will result in higher employment is woefully ignorant of how the economy really works. For example, given the paucity of “legitimate” jobs being created by American business these days, people have a high motivation to move into the “under the table” economy — forcing the rest of us to make up for their missing tax payments and leaving them vulnerable to mistreatment by their employers.

   Finally, We forget that for most people welfare is a vital safety net. Given our cultural denigration of recipients, people generally avoid collecting even the benefits they are entitled to. Welfare “reform” too often ends up making life even harder for these people.

   Fraud and incompetent bureaucracies are bad and should be dealt with — if only to prevent the further undermining of public confidence in the work of our public sector. But we should never pretend that “fixing” welfare won’t end poverty or create jobs or end the hard lives of so many people. In the absence of effective efforts to address all those other issues, anti-welfare outrage is a scandel-mongering diversion.

5. If this was 1970, I would acknowledge that the cost of putting pictures on EBT cards and tracking purchases in seconds based on SKU#’s would have been technologically formidable and too costly, but this is not the case. It is 2013, people frequently have their pictures on credit cards, pass cards, Facebook, employee cards, retailers regularly track everyone’s purchases, the cost of a program to manage this is minuscule in the scheme of things, and it will be a deterrent against fraud. If a cost benefit analysis was done on the current situation the recommendation would be clear.
   As citizens, we should help the disadvantaged purchase essential items i.e. food, medicine, etc., but that does mean allowing the EBT cards to have cash access.
   The fact that the legislature is so out of touch with technology and do not seem to care about how hard, millions of taxpayers work to contribute money to pay for this program is disheartening. It is my feeling that our politicians have a fiduciary responsibility to their constituents. It is situations exactly like this that cause people to say that they aren’t going to vote for tax increases when our politicians are shirking their responsibilities on something as basic as this.

6. “Ripe with massive fraud”? I added up the numbers the auditor came up with — bearing in mind that all of them were for a five-year period — and concluded that they found 1-2% of benefits paid incorrectly. Note that that is before the DTA’s response that half of the people the auditor claimed were dead weren’t.

   I expect there are ways the DTA can improve, but the preceding comment suggests reaction rather than thought.

7. Correction: “first comment”, not “preceding comment”.

8. Yes, we must try to eliminate fraud, but Mr. Benoit seems to think all recipients of assistance should be treated as criminals. That’s not acceptable. I also question the assumption that any unskilled person off the street can work in libraries, schools, and other public service jobs.

9. People who have pushed welfare over the passed 40 years as a way to alleviate poverty should look honestly at what they have created. It is very obvious the corrosive effect it has had on entire communities. Instead of lifting people up with real opportunities, training, knowledge we denigrate their abilities and intelligence by making them dependent on a system and a small check. The effect on families has been horrendous. Disincentives on marriage and family planning are built into the system. No longer do you need to rely on family, friend or community – the State will take care of you. Work ethic has also been denigrated with a growing contingent of people who feel society “owes” them free housing, food and cash. You inevitably feed resentment and discord among the folks who are working hard and just getting by.

   I understand the economy has changed dramatically with the introduction of NAFTA and other legislation that has globalized our economy and shifted jobs to foreign lands, but masking a problem with state dependency is only a short term fix. We need feel the results of poor economic decisions made by our business leaders and politicians. A hungry and deprived population would demand correction.

10. Dear Mr. Hitchcock,
    I am anything but reactionary. I have been an aggressive advocate for public safety and public well being for 33 years. Problem solving is a specialty of mine. I try and prevent and deter. The State Auditor’s findings confirmed my suspicions. They did not surprise me. My only shock was that a State Agency went against the political grain and investigated the DTA. It is only fair that the taxpayers be able to set guidelines to see that their money is not wasted by fraud. My proposals would eliminate the problem and make the taxpayers very happy.
    David Benoit

    Dear Mr. Hostage,
    I sincerely doubt that the people who are legitimately on welfare would have any objections to the fraud protection proposals I made. The proposals would surely weed out the unworthy applicants. It would be up to a Welfare Job Placement Coordinator to determine what job would be best suited to have a capable recipient perform while receiving benefits.
    David Benoit

11. In this proposal, I see problems added (oversight and its cost, unfairness – permanent residents pay the same taxes that you do), I am not still not yet sure which problem it is trying to solve (cost? you do not provide the cost associated to your measures. Sins? I can’t help with those…), and surely a conception that as a tax payer I do not share with you: your proposal outlines welfare as a charity granted by your/taxpayer generosity, I see it as an insurance. Anyone of us can find himself in hardship. I support the idea to help members (maybe you, me or a close one) of the community through it when it strikes.

    I see in your proposal a fancy way to create modern slaves – with reduced right and added obligations. Attributing the nation surge of unemployment to individual sins rather than the result of our banking system collapse and using it to promote a slave for everyone – with a hotline: cool for sure and nice touch – unless it ends up to be your kids…

    Should the welfare distribution monitored for fraud and fairness. Of course – no one is arguing against this: but then with the welfare goal in mind, its cost in mind and preservation of each one civil liberties.

12. First, I agree that fraud, any fraud, is egregious and shouldn’t be tolerated. But is there not already a disparity between those legitimately marginalized and those, be they corporate entities and/or individuals that contributed to the continuing recession? And to those questioning why “welfare rolls” continue to swell, one has to take into consideration that larger economic picture. According to the Globe, (March front page) those 50+ now chronically unemployed has increased 400% since 2007, and includes those who are skilled and depleted their own resources to get retrained on a meaningful level (not the nominal, “learn how to type and use a mouse” offered through state training that affects an insignificant portion of the population in the first place). These people are ineligible for retirement, with up-to-date skills and often advanced degrees, and certainly ready and able to work, yet don’t get hired. They’ve flooded benefit rolls , including Mass Health and food stamps. They may also be driving subsidized housing needs, due to losing their homes they’ve had for 20+ years, but can no longer afford.

    Welfare fraud itself is an inflammatory, catch-all phrase. The working poor, perhaps less skilled than the above, also qualify for any number of benefits, particularly food stamps, Mass Health and subsidized housing. And some of them may engage in fraud, for reasons I’ll enumerate later. It also includes those on disability, the elderly who have depleted their savings, etc.

    But let’s get to the facts, albeit limited, as there are variables that aren’t generally known.

    1. There are limits to receiving actual welfare. If you are able-bodied and between 19 and 59, you can only receive welfare for a maximum of 2 years out of 5. Yes, this can be extended under special circumstances. For this, a person without dependents receives a princely amount of $388 if living in subsidized housing to $428 if living in unsubsidized housing. I defy anyone to find unsubsidized housing in the Boston area, including utilities, for $428/month. And remember, this amount must also cover phone, transportation, clothing, etc., necessary to get to various organizations to either get free food/meals or so much as a job interview, however ill-clothed.

    You are simultaneously expected to work 20-30 hours/week, unless in school or job training. You can either work for free at a not-for-profit, or get $1/hour in additional funds for doing the types of services mentioned by Mr. Benoit. Another commentator mentioned creating a “slave class” and this is a perfect example. In Boston and Cambridge, at least, there are minimum hourly wages ($13 and $14 plus, respectively) for any job that does business with the city. The mentioned jobs certainly qualify. My math may be flawed, but $13/hr x 20 x 4 = 1040, with you getting only $80 either added to or subtracted from that $388.

    If someone is good at one of these menial city jobs, why aren’t they then hired? Economics. Imagine what would happen if (having been trained for nothing more than picking up litter or shelving books) they proved good at it and the city hired them at the city-mandated minimum livable wage? It would mean a massive increase in city budgets, from a system that’s an amalgam of city, state and federal subsidies? It is to various cities’ advantage, to keep these people as a “slave class” and on welfare.

    And why don’t they instead get a MacDonald’s or Walmart’s job? $8/hour times 40 X 4 = 1280. 10% off the top for SS, etc. (1160). In the meantime, their subsidized housing costs have tripled (approximately $150 to $450), their food stamps has been reduced significantly and if an individual, they’ve lost Mass Health, as they’re just over the 130% over poverty level. They are now working a job with no future for a net gain of about $250-300/month more disposable income, which has to be put aside for health insurance or illegally avoiding it, ultimately adding indirect cost through community health centers and emergency rooms. They have also lost any tax credit for working on ANY LEVEL (a bell curve system) which varies greatly according to family size.

    And then you wonder why some people engage in Welfare fraud or don’t go out and “get a job?” Or turn to underground economies and illegal activities, harmful in different ways? I’ve met beggars here who average $200/day – tax free. And they then get to keep the maximum benefits.

    2. There already is a fraud hotline.

    3. Getting back to economics: even when fraud has been committed, is there a true cost/benefit beyond a point in terms of gateways? On the face, apparently as already structured, the state fraud system saves $2.50 for every dollar spent. What’s not factored in are ensuing prosecution costs, jail time costs, cost to someone now out on the street and using homeless shelters and food pantries, because they’re now ousted from the system? I suspect that the true cost with all factors is a loss for the state and city, with the exception of the most egregious offenders. And the most enterprising will just stay ahead of the curve, just as hackers continue to be able to stay ahead of electronic security.

    This ignores something I’m personally suspicious of: how many TA people are in collusion with the worst offenders? Anecdotal experience tells me that there are kickbacks and diversion of funds for mutual benefit by the TA people with those benefitting from fraud.

    4. Drug testing – I nominally agree, but again consider the cost/benefit. There’s the up front cost, and if someone gets caught, they can then plead dependency. This earns them a stint in rehab, then NEW subsidized housing and the opportunity to be considered disabled, restarting the whole cycle, except now they’re on disability and exempt from workfare. A great way to scam the system indefinitely, if you like living below poverty level. We are extremely punitive towards the poor and drug usage in this country, to the extent of already sometimes disallowing housing on this basis. Perhaps instead we should be exploring “reduced harm” incentives such as are broadly used in Canada and Europe. The more marginalized, the more incentivized to find ways to exist an awful existence. And where are the cut offs? Do we test for alcohol and nicotine or just illegal drugs? Do we penalize for doing something legal as well as illegal, creating a different punitive structure for the poor over the affluent?

    5. Pictures on EBT cards – ridiculous! How many of you ever go through automatic check-out at the grocery store? And how discriminatory is it for a truly disabled person who can’t do their own shopping? Would (various) caretakers need ID also to determine that they’re legitimately buying food for that person? Or the neighbor who runs out for someone home sick with the flu or broken leg? It’s not workable.

    6. I agree with the limitation on new children. However, the miniscule amount added as a benefit for a new child makes me suspect of anyone who’d do so to stay on welfare. And we’re now into individual religious beliefs, etc. Do we impose mandatory abortions and/or adoptions for those who get pregnant? Are adequate contraceptive opportunities available to prevent pregnancy, unless religion proscribes it?

    Maybe we should just consider mandatory sterilization for those on welfare – as long as we start with snipping the men!

    7. I also agree that even legal aliens shouldn’t have welfare rights, especially as it impacts benefits US citizens are legally entitled to. But it’s a tricky wicket; this also disqualifies political refugees, etc., arriving with nothing and no language skills. Do we just dump those legitimately granted asylum onto the streets, adding to homelessness and the underground economy?>

    There are many things I’m in favor of: not least of which is fingerprinting. You go in to get state/federal benefits only by agreeing to be fingerprinted. New York State does this and prevents replicated use of the system, as fingerprints can be run each time someone makes a new application, preventing multiple applications for housing (sublet one), food stamps (sell), etc. The NY system has its own flaws, of which I’m personally cognizant, having been a direct 9/11 survivor, but why can a state that has more residents in NYC alone than all of Massachusetts have a streamlined, connected system and Massachusetts doesn’t. Yes, fingerprinting gets into individual rights, but at least it’s not as restrictive as some states. In Indiana, where I subsequently got an MBA, I had to be fingerprinted, with them sent to Homeland Security before getting a driver’s license! Fingerprinting has the added benefit of a cross-state system that would prevent fraud occurring in multiple states. If you want state/federal benefits, being fingerprinted is perhaps a small cost to pay.

    I also would like to see food stamps limited to nutritional items. For that matter, why isn’t there a general tax on non-nutritional items here? Illinois does this – although to an extreme. I’m personally not in favor of a graduated tax, so that even meat, eggs and milk have a small tax, and non-nutritionals much more? And why is there no liquor tax? By adding taxes to non-essentials (and not allowing food stamps to purchase these) everyone’s discretionary income will be tilted towards healthier eating patterns. This will ultimately have a potential positive impact on healthcare costs. Yes, the dedicated alco/foodo/drug/aholic can still go to an ATM (where picture IDs are again useless) and withdraw cash, but it’ll demand an extra step and an added thought process – do I really need/want this? However, some level of cash beyond food/medicine is necessary – how else do they buy toiletries, clothes, etc.

    It would also be great if there were valid work programs beyond basic skills. I have in mind a single mother I know personally, with two teenage daughters. She was once homeless, now has subsidized housing and food stamps, along with a job paying her $400/week, with zero benefits. She has an Associate’s degree and superior managerial skills, along with beyond average Word Office skills. Once her daughters age out, she’ll lose her Mass Health, her housing cost will go up and her food stamps down. But there are no training programs out there that will teach her medical billing or Quickbooks to move up economically. Just programs that teach her basic skills on things she already knows.

    Similarly, there’s now an incentive to get those 50+ people back to work through something called A.B.L.E. The state will pay them $8.50/hour if they work at various not-for-profits, etc., so that they can learn basic skills and become employable! These people have worked for 20-30 years and have up to date skills, including advanced degrees. Now they’re supposed to be paid a nominal amount to “learn” how to dish out food at a food pantry? Maybe, instead of spending more money on welfare fraud, it should instead go in to an analysis of actual job skill need in this state and offer appropriate job training commensurate with background, experience and education for those marginalized for whatever reason.

    This could go on and on. I only hope that my personal input has created some insight into the fact that it is a complicated issue that goes far beyond a small percentage consciously scamming, a percentage certainly tolerated and built in to private enterprise’s cost analysis. Maybe the money is better spent elsewhere, especially after you factor in real cost in the prosecution process. And I’d like to reiterate: if you want to help balance the budget, don’t do it on the backs of the poor! Put a tax on liquor. A 6% tax will have the more affluent groan – until they visit Chicago (10-1/4%) or NYC (8-1/4%) and then shrug and shell out. And it might influence the more impoverished to make more thoughtful choices.

    Sincerely,
    Lina Sorenson

13. I just want to thank all of you for weighing in this issue. I appreciate everyone’s contributions.

    The discussion here raises a number of questions that deserve fuller answers. Over the weeks to come, the legislature will be holding hearings on welfare and many of the questions here will be considered in greater depth. As legislation is developed, I will report back to this forum.

14. All Govt. programs and agencies, be it welfare, social security, or the IRS, just to name a few, will only work successfully if there is trust, faith, and transparency in the operation. Govt. cannot exist without taxpayers who contribute their earnings to fund the Govt. The taxpayers justly demand and the Govt. is obligated to take all steps necessary to ensure those funds are not wasted or obtained by fraud. If having to do that preventive work comes at a cost, than at least those costs will generate more jobs instead of ending up in the pockets of thieves. As in any business, the paying customer needs to be satisfied with the product or the product will cease. The majority of taxpayers/customers are not happy with most of the products the Govt. has right now!
    David Benoit

15. Jun 6, 2013

    By Erin McClam, Staff Writer, NBC News

    Two decades after President Bill Clinton promised to “end welfare as we know it,” Americans blame government handouts for persistent poverty in the United States more than any other single factor, according to an NBC News/Wall Street Journal poll released Thursday.

    Given a list of eight factors and asked to choose the one most responsible for the continuing problem of poverty, respondents in the poll chose “too much government welfare that prevents initiative.”

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