Home » The growing social costs of welfare and entitlement fraud

The growing social costs of welfare and entitlement fraud

Feeding at the public troughIncome inequality seems to be all the rage today. But left unsaid is the growing social costs of welfare and entitlement fraud.

According to the U.S. government’s own estimates, 5.2 percent ($98.7 billion) of its social program payments are “improper”, meaning that the payment went to the wrong person, the payment amount was incorrect, there was no documentation justifying a payment, or the beneficiary used the payment on something for which it wasn’t intended.

Despite the huge amount of money involved there is also the social cost involved. This comes in the form of resentment. The ‘givers’ resent the ‘takers’ which in turn forms a type of class-warfare.

Remember the ‘Obamaphone’ program? It was one of the most abused government programs with recipients registering for two and three phones. Some of them weren’t even qualified for one phone. The average American’s response: “I have to work to have a phone! Why do you get one (or three) for free?” 

The food stamp program is another program that is rife with problems. When recipients pay for items that are clearly not life necessities it draws the ire of all those in the queue and makes for easy headlines that paint the entire program in an unflattering light.

The abuses of the food stamp program are myriad, from lobster tails to ATM withdrawals inside strip clubs. Some beneficiaries have also sold their EBT dollars through online forums in exchange for cash.

Then there are the abuses in the healthcare system. As an example there are people who call a $600 ambulance rather than call a cab or walk to the hospital. And the American taxpayers get to foot the bill.

Or the people who use the emergency room as a doctor’s office rather than it being used for its intended purpose, an emergency.

Each new story about abuses by ‘taker’ brings howls of protest and calls for cuts to programs. This is a simplistic solution that doesn’t solve any problems and quite often hurts those in the most need.

In a December 2013 National Journal poll, a 65 percent majority of Americans indicated that they are in favor of legislation to tighten eligibility, increase work requirements, and shorten the time limit for use of federal food stamp benefits.

In support of such changes were 79 percent of Republicans, 70 percent of independents, and 45 percent of Democrats. In an earlier Huffington Post/YouGov poll, more than half of respondents indicated that they did not believe food stamps should buy “expensive” food items.

Instituting these reforms and others targeted to address abuse, such as requiring photo ID with use of EBT cards (as only a small handful of states do currently) and restricting barcodes of luxury food items at the point of sale, would go a long way to reduce improper payments, close social fault lines, and bring American political discourse down from polemic yelling matches to reasoned dialogue.

Such reforms are simple common sense not because they are low-hanging fruit for deficit reduction, but because they are the right things to do


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Name: Richard Billies

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