Who's getting food?

Fraud is a risk to federal safety-net programs

January 23, 2012

Newt Gingrich revels in politics by hand grenade, and he tossed one last week when he said "more people have been put on food stamps by Barack Obama than any president in American history." Gingrich implied this was evidence of a White House that wants to expand public dependency on the government.

If Gingrich hadn't been so intent on scoring lusty cheers at a South Carolina presidential primary debate, he might have clued people into an important and unsettling issue.

Food stamp use has soared over the last decade, and now some 44 million people receive the assistance. You can call this a bipartisan phenomenon: Factcheck.org reports that the number of people using food stamps jumped by 14.7 million during RepublicanGeorge W. Bush's term and has risen by 14.2 million so far under Democrat Obama.

The nation's economic troubles explain much of that. Unemployment was just 4.2 percent in January, 2001. Even with three successive months of decline, it stood at 8.5 percent last month.

But joblessness doesn't explain all of what's going on with food assistance. Program costs have shot up from $16 billion in fiscal 2001 to $76 billion in the last fiscal year — far outpacing inflation, unemployment, poverty rates or any other relevant measure.

The federal government operates two-dozen food subsidy programs. The most important federal anti-hunger programs operate under the Agriculture Department, including school lunches and the biggest of them all: food stamps, known as the Supplemental Nutrition Assistance Program.

SNAP provides money to low-income households to buy food at approved retailers. In Illinois, recipients receive their benefit electronically on plastic "LINK" cards that work like debit cards.

The freefalling economy accounted for part of the spending increase between 2007 and 2010, but a bigger share of the increase came from rule changes, a University of Chicago study shows. Relaxed eligibility standards and a boost in maximum benefits accounted for much more of the additional spending than did the poor economy, the study shows.

More people eligible for food stamps are collecting them. In a meeting last week with the Tribune editorial board, Agriculture Secretary Tom Vilsack said his agency, which runs the program jointly with state governments, has worked diligently to raise participation rates.

A healthy economy producing more jobs and better wages will be the best antidote to rising food stamp demands. But the government does need to do a better job of oversight on eligibility. The government should assist the poor … but not everyone who figures out how to claim free food. We don't see enough scrutiny to separate need from fraud in government food programs.

A recent Chicago Tribune analysis of the federal free-lunch program in Chicago Public Schools uncovered disturbing signs of fraud. Far more students receive the benefit than would be expected, based on participation rates in related anti-poverty programs.

Apparently it's common and easy to fool Uncle Sam.

In one case, the Tribune reported, when an application for the program showed a student's family made too much money to qualify for free lunch, a school clerk provided a fresh form to be resubmitted with falsified information. "Nobody checks the applications anyway," the clerk explained.

Vilsack tells us that fraud in food-subsidy programs is at a record low. But he also tells us that his agency is cutting its staff, even as the number of Americans claiming food stamps has soared. The agency relies on state administrators to weed out recipients who don't belong on the program. States are cutting back staff sharply too.

Law enforcement tends to uncover food-stamp fraud in the course of investigating other crimes. Just before Christmas, for instance, a resident of East St. Louis, Ill., was sentenced to 37 months in federal prison in a tax-fraud case. Turned out she lied to obtain food stamps as well. In fiscal 2011, states disqualified 44,483 individuals for fraud. That represents one-tenth of 1 percent of program participants.

In December, the Agriculture Department announced "new tactics" to combat fraud, but they don't inspire confidence. Among them, for instance, was a "policy clarification" saying that offering food stamps for sale on Craigslist or Facebook is a no-no. The department claims that illegal trafficking in food stamps has fallen from four cents on the dollar in 1993 to a penny on the dollar between 2006 to 2008, which it refers to as the "current level," despite the huge numbers who have qualified for benefits since 2008.

If it took the agency until the end of last year to address the trafficking potential of social media, its claims about "current" fraud levels should be viewed skeptically.

The Agriculture Department and a lot of other government agencies are going to face significant constraints on spending in the coming years. They have to justify every dollar. The government can justify spending to provide sustenance to the poor … but it has to make sure that that sustenance goes to the poor.

We've seen enough reports about forms being falsified, LINK cards being bartered for cash and subsidies going to the deceased to conclude that oversight needs improvement. Taxpayers should have assurance that their money is going to those who need it. Continued support for these important safety-net programs depends on public confidence in their integrity.

Remember that school clerk: "Nobody checks ..." Start checking, and see what turns up.