Will photo IDs for food stamps prevent fraud?

Moderated by Rick Badie

Georgia officials say it will cost nearly $8 million to create food stamp cards that include recipients’ photographs. A state lawmaker who co-sponsored legislation to allow the IDs says it would be well spent money to curb the resell of benefits meant to help feed families. But a policy analyst contends such fraud is minuscule and calls food stamp photos an “untested hypothesis.”

IDs fight food stamp fraud

By Don Balfour

 Recently, I heard of a Supplemental Nutrition Assistance Program recipient who used a month of food stamps on an electronic benefit transfer card to buy $400 worth of two-liter sodas.

The grocer followed the customer around the corner to see where the recipient was going with that many sodas. The customer took the sodas down the street to a mom and pop store to sell them at half price for cash. The store owner received half-priced sodas, the SNAP user received cash, and taxpayers received the bill for this illegal transaction.

Each year, our state and federal governments lose a substantial amount of money to fraudulent activities in SNAP, a program in which nearly one in seven Americans participates. In 2014, the valued cost of food stamps issued in Georgia was $2.8 billion, but due to fraud, fraudulent cases the state lost approximately $36 million. As legislators, we must monitor SNAP to ensure taxpayers’ dollars are not used in a wasteful, abusive or fraudulent manner.For this reason, state Rep. Greg Morris and I worked on House Bill 772 during the 2014 General Assembly. The bill, signed into law by Gov. Nathan Deal in April, requires all food stamp EBT cards to contain a photo of one or more members of a household. HB 772 aims to reduce fraud by introducing new technologies to monitor, track and investigate those who abuse the system.

By implementing technologies such as photo IDs, we are working to recognize factors of fraud in the SNAP program, which has nearly doubled to 47.3 million recipients — almost 15 percent of the U.S. population — since 2006, according to CBS News.

The ambiguity of how these funds are fraudulently utilized makes it nearly impossible for regulators to track and monitor each instance. The U.S. Department of Agriculture estimates we lose about 1.3 percent annually due to underground food stamp trafficking. That’s down from 4 percent in the 1990s due to the introduction of EBT cards.

Many believe food stamp program fraud is more than 10 percent. If we could cut this rate in half through the implementation of photo EBT cards, this could save the state $60 million per year — an annual savings that more than justifies the $7.7 million one-time cost of the photo ID program.

Last but not least, I am aware a substantial majority of economically disadvantaged Georgians use this program correctly and as a means of temporary relief during hard times. According to benefits.gov, a Georgia family of four can qualify for the SNAP program if they make a maximum yearly income of $31,000. A primary provider can work day and night and still struggle to provide for a family of four on such a low income. Most Georgians registered with the program use these resources to put food on the table for their children and loved ones.

By reducing fraud, we not only ensure our hard-earned taxpayer dollars are spent responsibly, but strengthen the program and reduce the stigma for those who use the food stamp program correctly.

Fraud is an everyday occurrence in our country. Our federal and state governments should continuously work toward a solution to fraud. HB 772 is just one way our state is doing that.

State Sen. Don Balfour, a Republican, represents Georgia District 9.

Photo IDS are misguided

By Melissa Johnson

Remember the thorough legislative debate in Georgia last winter to decide if it’s worth $7.8 million to embed ID photos on food stamp cards?

No, you don’t — because that debate didn’t take place. The legislation that calls for Georgia to implement food stamp photo IDs did receive lots of attention and publicity during the 2014 Georgia General Assembly. Most people called it the “food stamp drug-testing law” because that’s the part that got all the publicity.

Gov. Nathan Deal signed the bill into law last spring, but shelved plans to enforce its much-debated drug-testing provision when the state’s attorney general advised against it. Left to live on is the equally ill-advised and quietly approved plan to put photo IDs on food stamp cards.

The lack of debate about the photo ID provision is a shame, because nobody pointed out it doesn’t make much sense as a means to prevent fraud through food stamps, formally known as the Supplemental Nutrition Assistance Program.

Georgia lawmakers signed off on this with no budget office estimate of the cost to create a photo ID system for fraud prevention compared to the state’s expected financial gain. These estimates are often created for laws with smaller costs to the taxpayer. The first public reckoning of the true cost came during a state department’s meeting in late summer, when it was disclosed it will cost $7.8 million to launch the program by January 2016.

Supporters of the photo ID requirement argue photos on food stamp cards will prevent recipients from selling their card and PIN for cash. But this untested hypothesis conflicts with the facts.Federal law says seniors, people with disabilities and other food stamp recipients who have trouble getting to the store are allowed to designate someone outside their household to shop for them. When one of these designated shoppers presents a food stamp card with someone else’s picture, cashiers will not know if the person is helping a home-bound senior or committing fraud.

Georgia’s misguided effort comes after years of progress by the U.S. Department of Agriculture to reduce food stamp fraud. The federal agency cut sales of food stamp benefits for cash by 75 percent over the past 15 years. Less than 1 percent of food stamp benefits are trafficked nationally.

Asking Georgia’s retailers to police food stamp fraud at the cash register demonstrates a fundamental misunderstanding of how the vast majority of fraud happens. It usually takes place on an organized scale in small stores with corrupt owners. Dishonest owners will not be deterred by photo IDs on food stamp cards, because they are a party to the crime.

The government in recent years replaced paper food stamp coupons with electronic debit cards, an essential tool to reduce fraud. Electronic tracking allows intricate computer programs to analyze food stamp transactions for patterns that indicate abuse. These systems alert federal and state law enforcement agencies to potential violations. When you see a headline about food stamp fraud, it is probably above a story that says the system worked to catch a criminal.

I’ve heard that one type of recipient fraud the food stamp photo ID is supposed to prevent is online sales that convert the benefit card into cash at less than face value. A quick check of a popular online classified website turned up two such ads in September, posted by people claiming to be from Georgia.

If that’s the problem we’re trying to solve, I think I have a better solution than the $7.8 million photo ID plan. Georgia can hire someone for the generous salary of $80,000 per year to monitor online classifieds for fraud.

There, we just saved $7.7 million.

Melissa Johnson is a policy analyst with the Georgia Budget & Policy Institute.

 


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