Welfare Funds No Longer On Tap At Strip Clubs, Casinos, Liquor Stores?

welfare strip clubs casinos"California welfare recipients withdrew $1.28 million at casino ATMs..."

"Investigation finds tax dollars withdrawn at bars, liquor stores, strip clubs, casinos"

"Missouri, Illinois welfare money spent in Las Vegas"

"Betting on welfare"

Over the last 20 months, a string of media reports have drawn attention to the "questionable locations" where welfare recipients have withdrawn federal money. Now the government has taken action. Buried in the payroll tax cut extension, which Congress passed earlier this month, is a bill that would cut a state's access to federal funds if it fails to adopt policies that block welfare recipients from accessing their funds in liquor stores, casinos or strip clubs.

Proponents of the measure believe it's critical to curb abuse of taxpayer money. Critics counter that adopting such policies will be an excessive burden on state coffers, and that the bill stigmatizes welfare recipients, the vast majority of whom spend the money on necessities.


Millions Of Dollars Of Potential Abuse

The federal government provides cash support every month to over 4 million struggling Americans, including many single mothers and their children, through Temporary Assistance for Needy Families. The maximum monthly TANF benefit for a family of three is, on average, $428 a month, usually accessed through debit cards known as Electronic Benefit Transfer cards. Recipients are eligible for a total of five years of assistance in their lifetimes.

A series of media investigations over the past two years have found that thousands, and in some cases millions, of dollars have been withdrawn from locations that might suggest the money was used for things other than its mandated purpose: necessities like food, clothing, transportation, personal care products and baby needs.

A Michigan investigation found that more than $12,000 had been withdrawn from one Detroit casino over the course of a year. Fox 5 Atlanta found that $150,000 was accessed in liquor stores, bars and nightclubs in Georgia. King 5 News in Seattle discovered that 13,000 TANF recipients had taken $2 million out at casinos across Washington in 2010. Michigan, Washington and several other states have since taken action to prevent EBT card access at these kinds of locations.

"The abuse of funds on EBT cards must stop," said Rep. Charles Boustany Jr. (R-Louisiana), the bill's sponsor, in a statement. The bill passed Congress with overwhelming support from both parties.

Under the new law, states that fail to implement policies within two years could face up to a 5 percent drop in their TANF funding.


Not A Problem, Not A Solution

The Federal Funds Information for States, which reports on the impact on states of federal policy decisions, says that the few states that have studied the issue have found that less than 0.1 percent of TANF transactions took place at the targeted locations, reports the Stateline website. "This means that states could incur substantial costs to address an issue that does not appear to be a widespread problem," the group said in a February brief.

The Government Accountability Office, at the request of Congress, is currently surveying 10 states to see where welfare benefits are being withdrawn for a report that is expected in May or June.

Other advocates fear that the new law unfairly stigmatizes welfare recipients. "They hinge on the stereotype of welfare recipients as vice-ridden and wasteful spenders of taxpayer money," said the D.C.-based Center for Law and Social Policy, an advocacy group for low-income Americans, in a statement.

The organization further points out that an ATM in a liquor store may simply be the most convenient and cheapest way for many recipients to withdraw assistance. It also criticizes politicians who are focusing on this issue while failing to increase the TANF program, which hasn't been adjusted for inflation since its creation in 1996.

Last year, for the first time since the program's creation, Congress also didn't fully fund the supplement grants that 17 states receive. According to the Center on Budget and Policy Priorities, a nonpartisan think tank, in 34 states the real value of the cash assistance is now at least 20 percent lower than in 1996.

But the bill's proponents nevertheless see it as an important safeguard against waste and fraud. "It protects the public interest," said Boustany, "by ensuring money meant to help Americans get back on their feet is used for that very purpose."

Even with certain ATMs off-limits, however, it's impossible to guarantee how federal money is ultimately spent, when it's given out as cash.



Next: Retail Manager Fined For Underpaying Developmentally Disabled Worker



Don't Miss: Companies Hiring Now



Stories from Personal Branding Blog


Claire Gordon

Staff Writer

Claire Gordon has contributed to Slate's DoubleX, the Huffington Post, and the book Prisons: Current Controversies. While an undergraduate at Yale University and a research fellow at Yale graduate school, she spoke on panels at Yale and Cornell, and reported from Cairo, Tokyo, and Berlin.

Follow Claire on Twitter. Email Claire at claire.gordon@teamaol.com. Add Claire to your Google+ circles.

Add a Comment

*0 / 3000 Character Maximum

12 Comments

Filter by:
Charlie McPoyle

If this real? I had no idea that welfare funds could be used at casinos. This is something to think about because I was under the impression that the funds were for food. http://www.countrywell.com/Well_Pumps.html

April 11 2014 at 3:46 PM Report abuse rate up rate down Reply
Stacey Beck

Thanks for sharing, this is a great article. People need to be smart about what they're spending their money on. If they are going to gamble I think it's good to only go in a with a certain amount of money so they don't get themselves in debt.

http://www.hartchirocenter.com/spinal-decompression

April 02 2014 at 3:48 PM Report abuse rate up rate down Reply
jleavitt84

I didn't know that you could use welfare funds for things like this. I thought that the government sent you stamps that could only be used at certain stores. How are people able to get money from those stamps if they technically don't have any monetary value?

http://www.rollonrolloff.net/dumpster.html

March 24 2014 at 9:39 PM Report abuse rate up rate down Reply
Bill Stewart

I'm glad to hear this. I don't want my tax money going to strip clubs and alcohol. This wont completely fix the problem but at least it's a step in the right direction.
Bill | http://www.kaupaswater.com/maintenanceservice.htm

March 05 2014 at 8:53 PM Report abuse rate up rate down Reply
Ron Johnson

Jackwhitey2 knows what's right. This just isn't it. The welfare program needs to be fixed if it is or has ever been used on these things.
http://www.halsglass.com/emergency-service

February 10 2014 at 8:28 PM Report abuse rate up rate down Reply
jackwhitey2

I can definitely stand for this. It wouldn't be right to get money from the government and use it for personal use like this. That would be missing the whole point behind the welfare program. http://www.nocavitybug.com/treatment.html

February 04 2014 at 7:10 PM Report abuse rate up rate down Reply
spencer shawn

I hadn't known that you could even withdraw the money from those kinds of places. You'd think that the distributors of the funds would make sure that the recipients couldn't waste it on pointless things that would never help them.
Spencer | http://www.campbelltruss.com

February 04 2014 at 10:52 AM Report abuse rate up rate down Reply
Ron Johnson

Welfare should never be used for such things. The program has the potential to help many people in need. The government needs to find a better way of distributing funds. -Ron Johnson | http://www.servpronortheastmonroecounty.com/fire-smoke-damage-restoration

January 30 2014 at 8:36 PM Report abuse rate up rate down Reply
DRW trading co.

and not a single word on the government wasting 86 billion dollars a month giving it to the rich people i wonder where they cash there welfare checks

January 16 2014 at 1:45 AM Report abuse rate up rate down Reply
khampton009

Interesting post. I had no idea that they had a way of tracking the welfare funds and where they are spent. However, it is definitely an eye opener. I think many people on welfare do deserve it but some people might take advantage of it. It is sad, but that is life.

Kenya | http://www.mcateers.net/products.htm

January 13 2014 at 1:59 PM Report abuse rate up rate down Reply

Search Jobs

In Partnership With
Keywords:
Location:

Search Articles

Top Companies Hiring

April 13 - April 20

Looking for work? See what companies added new openings this week.