ELECTRONIC-BENEFIT cards, which offer convenient access to food assistance and other forms of public aid, are meant to provide low-income families with the necessities of life, and Massachusetts should prevent the cards’ use in establishments that sell nothing of the sort — liquor stores, casinos, gun stores, tobacco shops, rent-to-own stores, and the like. Sensible budget language approved recently by state House and Senate negotiators would do just that, and provide more money to the state auditor’s office and the State Police to step up investigations of benefit fraud.
Yet some legislators wanted to go further by putting stricter constraints on the use of electronic cards — by limiting the amount of benefits accessible via ATMs, and by imposing elaborate systems to keep the cards from being used out of state or for certain types of goods. To do so would involve significant technical barriers and require far greater bureaucratic oversight. Under the budget language, a new commission will study this issue further, but lawmakers need to be realistic: The Commonwealth will never be able to control, down to the penny, how poor people use state aid.
The instinct to tighten controls is understandable. In April, authorities arrested dozens of food stamps recipients, along with business owners in Boston and Quincy, in investigations of electronic-benefit-card fraud. The recipients were accused of selling their food-stamps benefits — which can legally be used only for nutritional purposes — in exchange for cash. Authorities say the merchants took a cut. In a separate case, a grand jury earlier this year indicted employees of a store in Lynn for illegally converting electronic benefits to cash and then selling cocaine to cardholders, who also faced charges. Meanwhile, certain welfare benefits are unrestricted; recipients can withdraw them in cash at ATMs — a capability that, critics say, makes it impossible to determine how the money is being used.
Yet there are legitimate reasons why people need cash at ATMs — and why every other state has some provision for such withdrawals. Poor families, like all families, often have housing, transportation, and school expenses that can’t be paid with electronic cards. Over time, ATM companies should be pressed to develop systems that keep benefit cards from being used for cash withdrawals from machines at places like casinos and liquor stores, but those systems aren’t readily available now.
Some lawmakers argue that welfare-benefit cards are receiving far more intense scrutiny than other government handouts. Piqued by revelations that Liberty Mutual built a $4.5 million executive suite with a lavish washroom while receiving $46.5 million in state and local assistance to build a new office tower, state Senator Sonia Chang-Diaz of Boston at one point proposed a cheeky amendment that would prohibit corporate recipients of tax subsidies from spending money on alcohol, tobacco, or pornography — or “luxury bathing quarters.” The amendment failed, presumably because it’s unrealistic to micromanage all spending by companies that receive tax breaks.
But the same is true of electronic benefits. The state can and should step up enforcement efforts to keep cards from going to the wrong people and being spent in frivolous places. To some degree, though, any public-assistance system has to trust that families receiving aid will use the money on their real needs.