Illinois House bill aims to end food stamp trafficking. But does the problem really exist?

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This week, the Illinois House Human Services Committee approved a bill to "get tough" on food stamp recipients. How? Rep. Chapin Rose proposed a bill that would to try and ensure that people can't sell their food stamps for money.

If his bill passes, every LINK card--the state debit card that food stamp recipients use to purchase groceries--would have a photo of the head of household. No one else in that household, not the person's spouse, child, parent or other relative, would be able to use that card.

The Shriver Center on Poverty Law is opposing the bill, saying it would create a huge hurdle for food stamp users. Of the 1.8 million Illinois residents who are in a family that receives food stamps, only 850,000 people would be allowed to use the card as a head of household.

But what I wanted to find out is this: Is food stamp trafficking really a big enough problem to warrant legislation against it and the cost to implement it, especially at a time when state coffers are practically empty?

Dan Lesser at the Shriver Center suggested I do some research into food stamp trafficking. Are that many people really hocking their food stamps to dishonest retailers or people to get money? Lesser said Representative Rose suggested people were doing it on a regular basis, mostly to buy drugs. But how accurate is that claim?

The federal government has done some research into it. Obviously, Uncle Sam wants to know if his money is being used to buy a wholesome dinner or illicit drugs. The U.S. Department of Agriculture did study food stamp trafficking over a period of 10 years--first in 1993, then between 1996 and 1998, and finally between 1999 and 2002. It conducted more than 14,000 undercover investigations to find out how big of a problem food stamp trafficking really was.

Food stamp trafficking does exist, they found. The good news is that it's going down. In 1993, about $815 million in food stamps were used illegally. Between 1996 and 1998, it was $660 million, and by 2002, it had gone down to $395 milliion. That still sounded like a lot to me, until they put the number in better context--by 2002, about 2 cents of every food stamp dollar was used fraudulently.

By 2005, that value had decreased to 1 cent on every dollar, according to the U.S. Government Accountability Office. Even more interesting, not only did it find that the majority of food stamps aren't used fraudulently, but food stamp fraud isn't evenly distributed among stores. It's concentrated in small corner stores and groceries, and occurs very rarely in big supermarkets, where the majority of food stamps are used. Small groceries account for just 5 percent of food stamp use.

Furthermore, there's some anecdotal evidence that Illinois is going out of its way to combat food stamp fraud. One Chicago grocery store owner was sentenced to 57 months in prison for a food stamp fraud scheme, according to the Wisconsin Policy Research Institute. When the U.S. Government Accountability Office looked at stores that were disqualified from the food stamp program, it found 35 percent of the stores concentrated in just four states--New York, Illinois, Texas and Florida--even though those states had only 26 percent of all food stamp recipients.

A recent amendment to Representative Rose's bill requires the Illinois Department of Human Services to do a cost analysis of the bill before it would be implemented it. Lesser told me he thinks the bill would cost the state millions. And, to implement the program, Illinois would have to get a waiver from the federal government.

So, millions of dollars to combat what is perhaps 1 cent on Uncle Sam's dollar, which is something that we already seem to be pursuing?

It reminds me of the headlines in Minnesota recently--politicians getting up in arms because of an investigation that showed welfare dollars being used to buy lottery tickets and alcohol. Even though the data have shown that the problem is extremely small, state officials are shaking their fists, demanding that something be done. They've proposed a similar bill, requiring photo identifications and prohibiting welfare recipients from using an ATM to withdraw cash.

"I'm fully aware that these kinds of misuses and abuses are probably less
than one percent of the people that are doing this stuff, but we just
want to make sure that it's not happening at all," said Minnesota Rep. Kurt Daudt. "These are
tax dollars. People expect that they're going to be used in a
responsible manner, and that's really what the intent of this is."

I guess it's like my third-grade teacher used to say--one bad apple spoils the bunch. But should 99 percent of poor people using public assistance honestly be considerably inconvenienced by the 1 percent who aren't?

That's the question our legislature will have to answer.

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