Should EBT Cards Be Banned at Casinos, Liquor Stores?

NY Governor Cuomo says yes, they should be. Sounds like a no-brainer at first glance, but let's really take a look at what is going on here. Is this really meant to save taxpayers money, or is it just another government scheme to snag more revenue?

The Poughkeepsie Journal reports:

Cuomo: Ban public-aid cards at casinos, liquor stores

ALBANY — Want to hit the blackjack table, a strip club or the local liquor store? You can, but taxpayers won’t be footing the bill under a proposal by Gov. Andrew Cuomo.

The proposal would ban Electronic Benefits Transfer cards, or EBT, from being used at the prohibited venues, with a punishment system both for welfare recipients and the establishments that allow them to be used. It would put the state in compliance with the federal Middle Class Tax Relief and Job Creation Act of 2012, which extended certain federally funded benefits but required the state to clamp down on fraud.

“These reforms will help ensure that public assistance is used as intended: to ensure the least fortunate among us are able to access food, shelter and heat while limiting potential abuse and conforming with upcoming federal standards,” Cuomo spokesman Rich Azzopardi said. The welfare program delivers cash and food-stamp benefits provided to recipients in debit-card-like form. The money, in some cases, can be accessed at ATMs.

The real question is though, how will it actually ensure that public assistance is used as intended? Or for that matter, how do we actually decide how the money is really intended to be spent? It all seems rather arbitrary.

The article continues:

Cuomo’s proposal calls for suspending benefits to recipients who use the card at unauthorized locations, ranging from one month for a first offense to six months for the fourth offense and each one after that. For a recipient with a family, only the guilty party would lose benefits; the other family members still would receive benefits.

Liquor stores, gambling venues and strip clubs would face a small fine for a first violation. From there, the punishment would vary, with casinos and liquor stores potentially losing their licenses after a second offense and strip club owners facing a misdemeanor charge after a third offense.

How exactly would they determine who used the card at an unauthorized location? If the entire family uses the same account, it seems impossible to determine exactly who should lose benefits. Besides, if it was actually a case of fraud, shouldn't they lose their benefits permanently? The proposal doesn't actually try to root out fraud though, it would only serve to restrict and punish the weakest and most vulnerable segment of our society based on arbitrary standards. If a person doesn't actually need the benefits, then they should not get them at all. But for the person who does actually need them, a month, or six months without assistance could be devastating.

The SNAP benefit, also known as food-stamps, can only be used to purchase non-prepared food items. They can't be used to buy household essentials like soap or light bulbs, they can't be used to purchase prepared foods at restaurants, and they certainly can't be used for gambling, liquor or lap-dances. That system is already in place, and has been since long before benefits were even paid electronically.

The EBT system does also provide access to cash benefits accounts as well though, for those who qualify. Normally this would be how a person would access funds for other necessities like those non-food household goods, a cab ride to a job interview or doctor appointment, or whatever one might normally need cash for. To assume that a person is committing fraud simply based on the location of the machine from which they made a withdrawal is downright discriminatory.

What if the beneficiary happens to work at a dance-club, casino, or liquor store and needs to withdraw some cash for a cab ride home from work? Does that mean they are committing fraud? The same goes for a person that simply might access an ATM machine in a business of that nature, simply because the machine is in a convenient location that doesn't require a separate cab fare just to withdraw the cash benefit when needed. It doesn't mean they are spending the money on anything they "shouldn't."

There again too though, we see the arbitrary nature of this proposal. What purchases are actually illegal, and constitute fraud? Under this proposal there will be no penalty for the drunk who stops off at the grocery store ATM and then uses that cash to buy his bottle of Crystal Palace at the liquor store. Meanwhile, the single mother working for minimum wage at the liquor store will wind up starving for a month or more because she used the ATM machine at work to get cash for cab-fare to get home. 

The fact that someone can simply make a cash withdrawal from another "approved" location and then go spend the cash as they please, only highlights the futility of the measure. It might also be noted here, that half of all welfare recipients actually have jobs. So what is to stop them from using their own bank cards at casinos or liquor stores? The result of the governor's proposal will not be any reduction in fraud at all, but instead will wind up costing the taxpayers even more money. How you ask? Because the measure will require even more red tape and social workers to keep tabs on these reports. Someone will have to be sitting there reviewing the records of ATM machines, on the taxpayer's clock. Worse, the new restrictions could lead to all sorts of errors that would block innocent people from getting the benefits they need and deserve. Computer glitches, human error, even intentional badgering of low-income people.

Then we have the question of how exactly they intend to regulate exactly what businesses will or will not be approved for purchases or ATM machine locations. In New York State, we have both liquor stores, and beverage centers that specialize in selling discount beer. The beer stores also usually serve as a small local grocery, as well as a locations for check-cashing, Western Union, money-order purchases, and utility bill payment. Does NY State really intend to bar people from using a benefit card at any store that sells alcohol, or lottery tickets? That would even exclude regular supermarkets. Should a person be penalized with no money for food for a month, simply because they bought a bag of chips and a bottle of water at the smoke-shop next to the firehouse where they volunteer? Should a person be forced to starve for a month, because they paid their electric bill at a beer discount center?

Now we also have to look at the responsibility of the businesses themselves to enforce this. ATM machines are, after all, not manned by an actual worker, but usually serviced by an outside vendor. How would a strip-club owner, or casino operator manage exactly who did or did not use their cash machines? Would you submit to the demands of a store manager demanding to see your bank card and a photo ID before you made a withdrawal from an ATM machine?

The only way to really manage this effectively would be on an electronic level, in a way similar to how food-stamps are credited. If you purchase a basket of items at the supermarket, the SNAP benefit will automatically be applied for approved items, and there will be a balance that must be paid by another method for anything not approved such as toilet paper. So rather than imposing fines and suspensions of essential benefits to the needy, the machines would have to be programmed to either accept or decline a transaction, based on whatever location rules the state decides. Who will pay for that though? Again, the taxpayers will wind up footing the bill for that new infrastructure, in the same way they have with the SNAp food-stamp benefit.

Ah-ha! Now we finally come to the real reason behind all of this. It's not to stop welfare fraud at all, but rather to help the government itself actually defraud the taxpayers, for the ultimate benefit of elitist corporations such as JP Morgan/CHASE bank. This is a racket folks, predicated by the ignorant small-mindedness of people who will go along with anything that makes life more difficult for the poor. Don't fall for propaganda-driven schemes that are really nothing more than corporate welfare.

Ron Deutsch, executive director of New Yorkers for Fiscal Fairness, said the regulations are unfair and demonize low-income residents.

“I think it is a distraction from the real problem, which is New York is facing record hunger right now,” Deutsch said. “I say what’s good for the goose is good for the gander. If you want to prohibit people from using public money at establishments like this, then I think we should be prohibiting lawmakers from using their public money at the same establishments.”

Also see:

Drug Testing of Welfare Recipients Is a Bad Idea







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A Few Reasosns Why It Is Impossible to Get Ahead Being Poor

Visit Yahoo! Finance to see this article in the original format.

It’s a counterintuitive idea to say the least, but it costs a lot to be poor in the United States. When money is at its tightest, cost-saving choices are often impossible to make, digging impoverished Americans deeper and deeper into the pit of day-by-day living.

A common narrative in today’s political arena is that the nation’s least fortunate only need to pull themselves up by their bootstraps – that they’re just not working hard enough. What often goes unnoticed, however, are the overwhelming barriers that those living below the poverty line face on a daily basis.

A car, for example, is a necessity for many jobs but the down payment can be insurmountably high. And even after the down payment poor drivers still face monthly payments, high gas prices, and the fact that low-income car buyers pay 2% more for a car loan than affluent people. Low-income drivers can also pay up to $400 more annually than wealthier drivers to insure their cars (for a car of the same model and with the same driver risk).

Related: Here's how to win the War on Poverty

A lack of capital can also make it impossible to afford the security deposit on an apartment causing those in poverty to live day-to-day in expensive hotels. Chris Arnade, a friend of The Daily Ticker, has documented this phenomenon. Those in poverty who are able to rent or buy homes are also more likely to get household appliances through rent-to-own companies and end up paying more due to added interest.

Even saving money is a burden for the poor, as banks often charge large fees for those who don’t have a minimum amount of capital in their accounts—this makes cash checking establishments, who charge incredibly high interest rates on pay-day loans, the only choice for many.

Ben Hecht, CEO and president of Living Cities, an organization that works to revitalize impoverished areas, joined The Daily Ticker to discuss why it costs so much to be poor.

“Many of us are salaried employees and many poor people, if they’re working, are hourly employees,” explains Hecht.

If you’re an hourly employee who needs to apply for benefits or even see a doctor, you’re missing out on vital pay, Hecht points out.

Related: Abandon hope? Obama’s new poverty program needs help from Congress

Another challenge that low-income Americans face is a lack of services. “If you walk in many neighborhoods they’ll have one store—it may even be a corner store and not a grocery store,” Hecht says. The competition that neighborhood stores typically face doesn’t exist in poorer areas, allowing them to charge more for goods.

High quality food and produce is also often hard to come by. “You can’t find fresh broccoli…and if you think about it, it’s a logical, rational and economic choice for people to pick fast food in cheaper and larger quantities,” Hecht explains. This leads to obesity and other health issues that end up costing individuals more down the line.

“In many cities there are food deserts where you can’t even go to get the fresh food that we’re used to everyday," Hecht says.

Related: Poverty Is America’s “Only Growth Sector”: Howard Davidowitz

One of the biggest disadvantages that those in poverty experience is a lack of broadband Internet. “One of the fundamentals about poverty is a lack of access to economic opportunity,” says Hecht. “And we all know that the number one factor in economic opportunity is education and we know that in today’s world much education, even in public schools, is done online.” 

Furthermore, the Internet provides social networks where we can exchange vital information. Hecht gives this example: “I gave a speech years ago to 500 folks who helped people get jobs and I said to them -- how many of you got your job by a reference? All of them. How many of you got your doctor by reference? All of them. The power of those networks is being shut out in these neighborhoods and without the access to those types of technology.”


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