Many of us are concerned about fraud and abuse of government programs. But because there's often confusion about which programs cost us the most (and because our individual experiences have the potential to lead us to assume that small problems are really widespread epidemics), I thought I'd offer some info I've found about why food stamps are a good thing, how big the problem of fraud is, and some other (more significant) sources of governmental waste.

The Center for Budget and Policy Priorities reports that food stamps "are issued very accurately," and that while it's much harder to determine when and how food stamps are exchanged for cash or trafficked, such activity is low and on the decline.

A recent USDA study of the results of compliance investigations found that the extent of food stamp trafficking appears to be relatively small and to be declining from the levels present in the early 1990s. This reduction in trafficking may result from the Program's expanding use of Electronic Benefit Transfer (EBT) technology, which provides food assistance benefits through an electronic card (similar to an ATM card) instead of paper coupons. Over 40 states now issue food stamp benefits through EBT; every state is required to do so by October 2002.

As for nutrition and food stamps, I was surprised to see that "USDA studies have found that low-income consumers obtain more nutrients per dollar spent on food than any other segment of the population." But is this enough? Shouldn't we restrict food stamp purchases to only nutritious foods?

Limiting food stamp benefits to the purchase of "nutritious" foods would entail establishing a controversial and cumbersome regulatory process to determine which foods qualify and which do not. Such a process would inevitably be accompanied by intensive lobbying by various food companies and segments of the food industry seeking inclusion of their products on the approved list. The likely result would be a list of acceptable foods heavily affected by political influence. In addition, every time that a new food product came onto the market, it would have to be evaluated and added to either the "approved" or the "not approved" list, with those determinations potentially subject to dispute by the food's manufacturer. Retailers would have to mark all their shelves to let recipients know what they could and could not buy. Finally —- and of particular importance —- such a restriction would require check-out clerks to sort recipients' food purchases at the check-out stand, which would likely cause longer waits in check-out lines and require many food stores to add more check-out lanes and clerks. (EBT systems would provide no help with this task since those systems, like credit cards, only record the amount of each purchase, not what items were bought.) For this reason, the Food Marketing Institute, which represents grocers across the country, has strenuously opposed similar proposals in the past.

As Anitra Freeman notes, meanwhile, a recent study in Massachusetts found that 93% of welfare fraud was being committed by vendors, not recipients.

And how much does corporate welfare cost us? And what about corporate crime?

TimeWaster™

Channukkah may be over, but you can still play with the virtual dreidel. Thanks, comment on Jesse's blog!

Today I'm listening to: Cafe Del Mar!