You are here

Food Stamp Fraud Costs America Billions

Food stamp fraud is costing the taxpayers billions, notes the Heritage Foundation. Fraud levels were 39 percent in the District, 25 percent in Maryland, and 16 percent in Virginia, for cases investigated in 2011, according to data obtained by The Washington Examiner. Almost none of the people who committed fraud in Maryland or the District were ever prosecuted.

As the Heritage Foundation notes:

While the number of food stamp recipients has significantly increased (now up to a total of 45 million Americans) the percentage of cases investigated for fraud has not increased or even remained constant. The result is that fraudsters are duping taxpayers of millions, even billions, of dollars. According to fiscal year 2010 data collected by the U.S. Department of Agriculture, Maryland and Virginia distributed about $130 million in food stamps to individuals who were not eligible. For every $100 in benefits, those two states doled out $6.11 and $5.04, respectively, to those not eligible. The national average for that time was $3.05. Inefficiency in the food stamp program spending is costing taxpayers billions. Of the $64.7 billion spent on the program last year (a record high that is only slated to increase), an overall $2.5 billion was spent on improper food stamp payments. Another recent audit by the Department of Agriculture on the state of Kansas showed three major sources of inefficiency in the distribution of food stamp funds. While many recipients had invalid Social Security numbers and were double-dipping between federal and state programs, many of the recipients also happened to be dead. This has become a pervasive problem in the realm of government benefits. (The Social Security Administration also sends millions of dollars to recipients who are dead.)

“Millionaires are now legally entitled to collect food stamps as long as they have little or no monthly income. Thirty-five states have abolished asset tests for most food-stamp recipients. These and similar ‘paperwork reduction’ reforms advocated by the United States Department of Agriculture (USDA) are turning the food-stamp program into a magnet for abuses and absurdities," noted James Bovard in The Wall Street Journal. As he pointed out, the costs of the food stamp program have more than doubled since 2007 from $77 billion from $33 billion as fraud has soared:

Wisconsin food-stamp recipients routinely sell their benefit cards on Facebook . . . ‘nearly 2,000 recipients claimed they lost their card six or more times in 2010 and requested replacements.’ USDA rules require that lost cards be speedily replaced . . . Thirty percent of the inmates in the Polk County, Iowa, jail were collecting food stamps that were being sent to their non-jail mailing addresses in 2009 . . . The Obama administration is responding by cracking down on state governments’ antifraud measures. The administration is seeking to compel California, New York and Texas to cease requiring food-stamp applicants to provide finger images. The food-stamp poster boy of 2011 is 59-year-old Leroy Fick. After Mr. Fick won a $2 million lottery jackpot, the Michigan Department of Human Services ruled he could continue receiving food stamps . . . ‘the winnings were considered ‘assets’ [rather than income] and aren’t counted in determining food stamp eligibility.’ . . Obama administration policies could easily permit Trust Fund Babies driving Rolls Royces to get free food courtesy of Uncle Sam.

Alas, this sort of thing is nothing new for the Obama administration. The stimulus package backed by Obama largely repealed welfare reform, as Slate’s Mickey Kaus and the Heritage Foundation have noted. Obama ran campaign ads claiming to support welfare reform, even though he had actually fought against meaningful welfare reform as an Illinois legislator. This claim was as dishonest as his claim that he would enact a “net spending cut” (which he flouted as soon as he took office).

“The total number of U.S. food stamp recipients” surged “to an all-time high of 45.8 million people in May,” the most recent month for which data is available.  That’s “nearly 15 percent of the U.S. population.” “The average food stamp benefit was $133.80 per person” — which is more than I spent on food as a bachelor — “and $283.65 per household”  — which is more than my family typically spends on food in a month.

Earlier, I wrote about how it is not difficult to live on a food stamps budget. The Washington Post ran a story in its health section about how various people, such as the chef for a law firm and a natural foods store owner, were able to live quite well on a food stamps budget. For example, Rick Hindle, executive chef for the Skadden, Arps law firm “showed recently that you don’t have to spend hours in the kitchen to prepare healthful food for $1 or less per meal.”