Tag Archive | Supplemental Nutrition Assistance Program

MLive Guest column: There’s little reason to fear that food stamp program is rife with fraud

Reposted from MLive,January 10, 2014 


By Terri Stangl

Now that the holidays are over, Congress is returning to discuss the future shape of the Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps).

During the recent Farm Bill debates, some have demanded cuts in the SNAP program, claiming that the program’s growth in recent years is the result of waste or fraud. In fact, the program is heavily monitored and enjoys exceptional program integrity.

A report released on New Year’s Eve by the United States Department of Agriculture (USDA) indicates that in FY 2012 SNAP had an accuracy rate of 96.58% nationwide, a record high. In Michigan, the accuracy rate was 96.45%. USDA estimates that 65.92% of SNAP payment errors are due to agency oversight, miscalculation of eligibility and untimely actions.

Even when the agency is at fault for overpayments, recipients are required to repay the funds. The overpayment can be collected from current benefit allotments and out of any tax refunds.

While SNAP fraud does exist, it is rare. Allegations of fraud are actively investigated by the state Office of Inspector General and the United States Department of Agriculture. As a result, SNAP fraud rates are among the lowest of any governmental program. Only $0.01 per dollar was used fraudulently from 2009-2011, down from a high of $0.04 per dollar in the 90s.

Historically, the most common forms of SNAP fraud are: trading SNAP funds for cash, selling purchases made with SNAP benefits and using SNAP benefits on a product with the sole intent of receiving a deposit back. In Michigan, however, SNAP benefits are distributed using Electronic Benefits Transfer – the Bridge Card. This makes tracking suspicious purchases easy, similar to how credit card companies flag suspicious spending patterns.
SNAP cards are accepted only at authorized retailers that sell food.

Retailers are not allowed to accept SNAP for cash or any product that is not food. Though it is a popular talking point, the purchase of controlled substances, such as alcohol and tobacco, is expressly forbidden. Retailers and recipients can face disqualification from the program – and criminal prosecution – for knowingly participating in SNAP fraud schemes.

Although SNAP spending has grown over the past 5 years, the expansion is tied to the lingering effects of the Economic Recession of 2008. Most recipients use the benefits during short periods of difficulty, such as unemployment, and participation in the program ends once income has been increased and financial stability has been achieved. According to USDA research, half of new participants in SNAP leave the program in under 10 months.

Most long-term SNAP recipients are seniors or disabled persons living on fixed income. SNAP recipients are not receiving exorbitant benefits either. For Fiscal Year 2013, the average monthly payment per person on SNAP was $133.08 a month. That’s roughly $1.48 per meal, hardly allowing recipients to buy steak and shrimp dinners. For many, the “S” in SNAP truly is supplemental, and SNAP benefits alone do not cover a month’s worth of groceries.

The SNAP program is tightly regulated and the rules are strictly enforced at both the state and federal level. Combined with low error rates, there is little reason for taxpayers to fear that SNAP is rife with waste and fraud. SNAP is a vital part of the United States’ social safety net and without it, many families, seniors and veterans will face hunger this winter. Congress should keep the facts about the program in mind when it finalizes a farm bill and ensure the program continues to help those in need.

Food Stamp Corporate Welfare

Reposted from Black Agenda Report, Wed, 10/16/2013 – 00:48 — Margaret Kimberley

If you think the SNAP food stamps debate is about poor people’s need to eat, you’re wrong. It’s about big corporations’ need to profit. “Xerox, JPMorgan Chase and eFunds Corporation have all successfully turned poverty into a profit center.” So have Coca Cola, Kroger, Wal-Mart, Kelloggs and a large slice of the rest of the Fortune 500 corporations.

by BAR editor and senior columnist Margaret Kimberley

Discussions about government spending are inherently bogus because the elephant in the room, big business, is absent.”

The federal and state governments operate under a system which is of the corporations, by the corporations, and for the corporations. Ordinary governmental functions which could easily be carried out with public money are instead privatized, depriving the public sector of revenue and jobs and making the neediest citizens unnecessarily dependent on the private sector. Governmental largesse on behalf of big business is focused primarily on poor people, the group most at the mercy of the system. Corporations collect child support payments and then imprison the poor people who can’t pay. While imprisoned, another corporation provides what passes for medical care. The crime is a perfect one.

When the Republicans demanded cuts to the Supplemental Nutrition Assistance Program (SNAP), better known as food stamps, the debate revolved around human need versus the call for fiscal austerity. Scarcely anyone mentioned that JPMorgan Chase, Xerox and eFunds Corporation make millions of dollars off of this system meant to help the poor.

It all came to light on October 12th, when many SNAP recipients in the states of Alabama, California, Georgia, Iowa, Illinois, Louisiana, Maine, Massachusetts, Maryland, Mississippi, New Jersey, Oklahoma, Pennsylvania, Texas and Virginia were unable to make purchases with their Electronic Benefits Transfer (EBT) cards because of a computer system malfunction at Xerox.

may at first have seemed odd for a Fortune 500 corporation to have anything to do with the SNAP program, but Xerox, JPMorgan Chase and eFunds Corporation have all successfully turned poverty into a profit center. Food stamps were once literally stamps until the 1996 welfare reform act required all state SNAP benefits to be digitized. At that point JPMorgan, Xerox and eFunds were quite literally in the money. Only the state of Montana administers its own SNAP program. Every other state pays one of these three corporations millions of dollars in fees to do what they could do themselves. Since 2007, Florida has paid JP Morgan $90 million, Pennsylvania’s seven-year contract totaled $112 million and New York’s seven-year contract totaled $126 million.

Every policy decision in state capitols and Washington DC is made with the needs of big business in mind.”

Food stamps are not the only government program that is administered by private corporations. WIC payments and child support collections are also moneymakers for Xerox and the rest of the financial services industry.

Like so many other debates in America, discussions about government spending are inherently bogus because the elephant in the room, big business, is absent. Millions of Americans are angry because food stamp recipients can use their benefits to buy junk food but don’t realize that they are able to do so because corporate America wouldn’t have it any other way.

Coca Cola, Kroger, Walmart, Kelloggs and other corporations have all lobbied the United States Department of Agriculture and congress to prevent any measures being put in place that would restrict SNAP use to healthy food choices. It isn’t difficult to understand why this is the case. They want to make as much money as possible and won’t abide anything that impedes their ability to keep turning huge profits. In just one year, nine Walmart Supercenters in Massachusetts received more than $33 million in SNAP revenues, which is more than four times the amount of SNAP benefits received at all farmers’ markets nationwide.

The recent congressional fracas about food stamp expenditures was like the shutdown debate, all for show. The Republican right wing advocates the most extreme anti-government positions in order to satisfy their base. Democrats rightly complain about cruelty to the poor but while the drama goes on the real welfare cheats keep cashing in, unlikely to be disadvantaged by either side after the dust settles.

If Americans knew that tasks easily carried out by their states were contracted out to big business, they would be very angry. That explains why no one tells them the truth. Governors, state legislators, and members of Congress are unlikely to expose their own timidity and corruption and the corporate media do as little reporting on serious issues as they can possibly get away with.

It is no exaggeration to say that every policy decision in state capitols and Washington DC is made with the needs of big business in mind. Wars against drugs and dead beat dads may resonate with the public, but the end result always includes a means of increasing corporate profits.

No matter what happens after the shut down kabuki theater ends, Walmart will not lose one penny of its food stamp revenues. No one on Capitol Hill will mess with the 1%. The business of America is still business.

Margaret Kimberley’s Freedom Rider column appears weekly in BAR, and is widely reprinted elsewhere. She maintains a frequently updated blog as well as athttp://freedomrider.blogspot.com. Ms. Kimberley lives in New York City, and can be reached via e-Mail at Margaret.Kimberley(at)BlackAgendaReport.com.