At the end of May, convenience store clerk Jackie Whiton took a public stand against the unrestricted use of public assistance cash-benefits by refusing to sell cigarettes to a customer using an EBT card. Last week, House Speaker William O’Brien took up the cause. We want to know – how big a problem is this?
Right now, needy Granite Staters can receive both cash assistance and food stamps on a debit-like EBT card. Food stamps, however, are much more widely received than cash assistance: 56,962 New Hampshire households receive food stamps from the federal government, while only 13,950 households also receive cash benefits. That’s 2.7 percent of the state’s households receiving cash assistance, about 60 percent of which comes from state funds.
Who is Speaker O’Brien talking about here?
How poor is poor?
In order to be eligible for any assistance including federally funded food stamps, a mother with two children must be earning less than $675 per month. That $675 is the magic number – the equilibrium between what the state believes is necessary to live, and the resources it has to provide assistance. Thus, $675 is also the maximum aid a family of three can receive if they have no income or assets.
How much cash are these folks really receiving?
Recently, some states have passed laws prohibiting use of EBT cards at liquor stores, casinos and adult entertainment venues, including the use of ATM machines at such venues. This year’s Middle Class Tax Relief and Job Creation Act – known as the 2012 payroll tax cut extension — continues the TANF appropriation, but includes a new provision requiring all states have such a prohibition. This means New Hampshire will have to create some kind of process for regulating the use of cash assistance money. Robert Ek, an analyst at the American Public Human Services Association, says he found the federal provision “odd,” since some states may find that enforcing such a law would cost more than the actual capital lost to inappropriate purchases.
Could Washington state be a model for New Hampshire?
Washington State began restricting EBT cards in certain venues this past January. Steve Lowe, executive director of Washington’s Office of Fraud and Accountability, explained that enforcement has not been easy. His state placed the responsibility with the licensing authority, so the enforcement ends up like the typical enforcement of under-age drinking: If a vendor allows clients to use EBT cards at the cash register or with an ATM in their facility, they put their license at risk. Lowe says it’s not hard to program an ATM to reject an EBT card. The problem is that ATMs are rented from unregulated contractors, and usually don’t belong to the establishment — or the bank responsible for it. Although Lowe says the overwhelming majority of casino or strip club owners he’s met are keen to obey his state’s new law, it can be difficult for them to perform the necessary service on their machine.
JP Morgan has the contract with Washington State’s Department of Social and Health Services. And although JP Morgan provides a list of addresses where EBT withdrawals have been made, Lowe says it can be difficult to determine which purchases are really illegal – since an ATM in a strip mall may have the same address as a nearby liquor store. To enforce their new laws, Lowe has members of his 40-person staff along with staff from the licensing authority visiting addresses provided on the EBT statements, in order to prosecute actual offenders. Lowe couldn’t say whether the department was saving enough to warrant the extra resources required by the EBT restrictions. However, he is confident the process will improve as his new department and the public become more familiar with restrictions and streamline enforcement.
What happens next?
At the moment, the federal government is reviewing guidelines for the 50 states as to how they might go about restricting access at liquor stores, casinos, and adult entertainment venues when the federal EBT restrictions become law in 2014. In the meantime, there appears to be bipartisan support for more restrictions on cash assistance, as lawmakers observe similar legislation in nearby states of New York and Massachusetts.