Wednesday, November 6, 2013

16th EBT- The Next Generation in the Books.

The initial reviews of the recently completed EBT-The Next Generation conference are looking very favorable. The theme this year was "managing change." And the conference took a 360 degree look at it. On to Clearwater Beach in 2014! 

Monday, November 4, 2013

16th Annual EBT-The Next Generation

Final attendance for EBT-NextGen: 239 attendees. Close to out pre-show estimates of 250. We survived the government Shutdown,which threatened our attendance. If you were there you saw a great presentation on the shutdown by Andrea Gold of USDA's Food and Nutrition Service.

Thursday, October 31, 2013

Federal Register Posting on Replacement EBT Cards

The U.S. Department of Agriculture is amending the rules for the SNAP program, sometimes known as food stamps, to give states more power over handing out replacement benefit cards.

The new rules let states deny “excessive” requests to replace an Electronic Benefit Transfer (EBT) card, which authorizes the EBT cardholder to purchase a specific dollar value of food and authorizes him or her to do so. 

The new rules will officially be published on Nov. 1 2013

The purpose of the new regulations is to enable state agencies, which issue the cards, to crack down on fraud, according to USDA.  The department says that the rule will not apply to elderly and homeless people who may often lose their cards. 

To view the new rules, available to the public on Nov. 1 click here.

Thursday, October 3, 2013

Contingency Planning for the Government Shutdown

We're now in Day 3 of the government shutdown. One of the issues foremost on the minds of advocates, EBT processors, and federal employees is what happens to nutrition programs, especially the EBT driven ones, as the shutdown continues.

USDA's Food and Nutrition Service has issued a lengthy memorandum from FNS Administrator Audrey Rowe to Under Secretary Kevin Concannon on the agency's contingency plans for operations. FNS' plans for the shutdown are described there in detail.

Monday, August 12, 2013

WIC Interview on CSPAN

CSPAN has aired an interview on the WIC program with Douglas Besharov, a professor at the University of Maryland. The link to the interview is

Tuesday, July 23, 2013

Taking a Bad Problem and Making It Worse

Disappointing. That's the only way to describe FNS' proposed rules for "streamlining" the WIC EBT planning process. It has been 19 months since the eGovernment Payments Council met with senior FNS officials regarding the unnecessarily lengthy planning process states must endure in order to obtain federal funding for WIC EBT projects. 

Instead of streamlining the process, FNS has unveiled a new process that will make planning even more convoluted that it is now. It does nothing to solve the current problems, but will only add to them.

Also dismaying is the fact that a federal agency has developed this plan without the private sector or states agencies at the table. Electronic benefits transfer has become a model for how states, the private sector and the federal government can work together to make government more effective and efficient for its citizens. FNS has ignored its own long-standing legacy of inclusion in this regard. Unfortunately, among FNS' WIC bureau there remains a distrust of the private sector, which threatens the continued success of EBT.

Tuesday, May 28, 2013

More on Cash Benefit Access Restrictions

There have been a ton of bills introduced this year at the state level restricting where recipients of various cash benefits can access their cash. At last count that list was over 40 and growing. There is a good rundown of exactly where those bills have been introduced, and what they seek do to. To access that list, go to and look in the lower left corner for the blog "The Lobster Shift." You'll find analysis on the bills. 

Wednesday, May 22, 2013

Retailer Fraud

Just posted to the EFTA website: Commentary to USDA by EFTA and its eGovernment Payments Council on proposed fixes to the problem of retailer fraud in the SNAP, formerly food stamp, program. Get it at 

Tuesday, May 21, 2013

Praise the Lord and Pass the Ammunition

Oh oh. When congressmen start dueling with Biblical quotes we're all in trouble. A couple of days ago, listening to satellite radio, I happened to catch that old Kay Kyser World War II big band song, "Praise the Lord and Pass the Ammunition." I thought about that this morning when I read an article from NBC News on the current debate. "A heated battle is brewing on Capitol Hill over cuts to the food stamp program," said the lead, "with lawmakers quoting Bible verses at each other and benefits for millions of people hanging in the balance." You could almost see the gathering black clouds and hear the guns in the far distance. All they were missing was Edward R. Murrow.

Not to make light of this, but we're talking about finding a spending number we can all live with. This used to be pretty routine in lawmaking. A few overwrought speeches from the floor, a couple of bourbons in the cloak room, and a new highway somewhere, and there  you go. Off to the president for his signature.

Not so much anymore. In the case of the latest (emphasis on the late) Farm Bill, we're talking about the House and Senate trying to bridge a $16 billion spending gap. That's like trying to jump the Snake River Canyon with a BMX.

If you believe the Senate's version, the House proposal would expose two million people to untold misery by throwing them off the program. Or, they should never have been on the program in the first place and we don't have the money to keep them there, if you favor the House's approach. Either way, this gap has to be closed.

Sticking the SNAP budget in the Farm Bill used to make sense  because it gave lawmakers safe harbor for their other spending initiatives in the bill. Maybe that's not the case anymore. It has been suggested that given the wrangling about the Farm Bill it might be time to break out the SNAP budget from the battle over ag subsidies and fight them separately.

All I know is that when lawmakers start thinking it's their job to do the Lord's work, we're all in trouble. I think the Almighty's can handle what's on His plate. I think with a Farm Bill months overdue and a budget process that's not worthy of the name anymore lawmakers should stick to their own work and figure out a way to close this gap and get a deal done. 

Wednesday, May 8, 2013

Farmers Markets

A bill introduced earlier this year in the Florida legislature would have gone a long way towards putting some muscle behind the drive to expand SNAP EBT to farmers markets in the Sunshine State. Senate Bill 778, titled "Transactions in Fresh Produce Markets," would have required farmers market operators and managers to let third party organizations operate EBT systems in those markets. The bill apparently died in committee and is off the calendar. 

No word on whether the bill's sponsor, Sen. Geri Thompson (D-Orange County), will reintroduce.

Monday, April 29, 2013

Some Hard Data on Farmers Markets

Whether you work with government-sponsored nutrition programs like the Snap program or not, you’ve probably heard the buzz by now about farmers markets. Every spring they sprout up in vacant lots in urban areas, in Yuppie neighborhoods, or in church parking lots anywhere in America. We know where they are and what they are. What we don’t know are the business issues underlying them.

The U.S. Department of Agriculture’s Office of Research andAnalysis has shed some more light on the inner workings of these markets with a new study, “Nutrition Assistance at Farmers Markets: Understanding Current Operations.” It provides a look into how these markets operate and what makes them sustainable.

The data for the study were gathered from a national survey of nearly 1,700 markets and 600 farmers who market directly to the public.  The survey results covered into four areas:

1.       Operations
2.       Funding
3.       Products
4.       Snap participation

The study showed a gradual evolution in market operations. For example, markets that were authorized by USDA for Snap EBT and were actively accepting that form of tender were more organized and tended to have more rules regarding market participation.

These markets also tended to partner with some other types of organization. They also required the vendors to report the value of their sales, and had operating expense greater than $25,000.

Direct sellers who actively sold to Snap program participants were likely to be long-time, full-time farmers.  Nearly two-thirds of them also sold in farmers markets. And, if a farmer was currently Snap-authorized and redeeming, he was more likely to have annual farm revenue above $100,000. That farmer was also likely to see more than 25 percent of his total revenue come from direct food sales.

Despite the focus on food, both markets and direct-from-the-farm sellers rely on other sources of income, according to the survey. Over four-fifths of farmers markets rely on vendor fees. Roughly 40 percent of farmers markets and 30 percent of direct sellers got outside financial or in some cases non-financial aid. Sources of this aid included non-federal government agencies, non-profit agencies or private businesses.

The Cooperative Extension Service was the largest provider of aid to direct-marketing farmers.

Both farmers markets and direct-from-the-farm sellers sold more fruits and vegetables than any other product. However, direct-selling farmers were less likely than markets to feature other products, according to the survey.

Snap Participation and Barriers to Participation
When an entire markets not authorized to accept Snap benefits it is still likely that some of the vendors in the market are Snap-approved. The converse is also true, according the survey. When the market is Snap-authorized, there may be some vendors within the market that do not participate in the program, according to the study.

Lack of infrastructure was the factor most cited by non-participating sellers and the reason for not participating in the Snap program.  Infrastructure could include a “card-accepting device,” that allows the seller to “read” the card data, or telecommunications connections that allow the seller to transmit the electronic card data for authorization.

The USDA survey is a valuable tool for understanding the business and operational issues of farmers markets. But questions remain, such as: Exactly how viable a business is farmers market? Is it sustainable for the long run? Could it survive without the subsidies and grants that 40 percent of markets and 30 percent of direct marketing farmers receive, according to the data?

And if the answer to the survivability question is no, then rather than looking market business models, we should examine whether there is a compelling public interest that underlies farmers markets. If the answer to that question is yes, then perhaps markets should be treated as another nutrition channel, similar to the School Lunch program or WIC, and federally supported as such.

But there is even a problem with that. According to the survey, just the process alone of becoming Snap-authorized may be problematic for sellers and markets. This includes the application process, the necessary end-of-day accounting, the potential need to hire staff to deal with the paperwork and the cost of equipment.  When direct marketing farmers who redeem the most benefits only see a quarter of their sales from the government program, there’s not a big incentive for other farmers to join in.

Nutritional Assistance of Farmers Markets” is a good piece of research. But we still have a long way to go before we figure out whether farmers markets will be a viable piece to solving our nation’s nutritional puzzle, or a Saturday morning curiosity for the Starbucks crowd. 

Friday, March 29, 2013

Minimum Income?

There has been a lot of buzz generated since yesterday's article in the Wall Street Journal about the explosive growth in the SNAP, formerly food stamps, program.

Now the Daily Beast has weighed in with a story by David Frum "Are Food Stamps Becoming a De Facto Guaranteed Minimum Income?" Like the WSJ article it discusses the effect of changing income and asset tests on caseload growth.

Read it at

Thursday, March 28, 2013

The Value of Electronic Benefits Transfer

EBT professionals talk among themselves about the advantages and scope of EBT. But it's nice to the work we've all done recognized by "civilians." The Fort Mill Times has a nice article on the advantages that electronic government payments, including EBT, bring to cardholders. The article recounts a recent study by the Center for Financial Services Innovation and Hudson Institute, "Double Duty: Payments Cards as a Doorway to Greater Financial Health."

 And you can read the article by clicking here.

Friday, March 1, 2013

Landmark Day in Government Payments: An Overnight Success in 17 Years

Today marks a landmark in electronic government payments. As of today, March 1, the U.S. Treasury will no longer make recurring check payments to consumers by way of those ubiquitous green checks. As of today the Treasury will only make recurring federal payments for programs like social security electronically. Consumers have the option of receiving their payments either by direct deposit or by a Direct Express card issued for that purpose.

There is a good explanation of the change in the Payment Trends portion of the Electronic Funds Transfer Association website. To access it, click here.

If you've been in this business for longer than 12 years you remember the battle over ill-fated EFT 99 program. The Debt  Collection Improvement Act of 1996 mandated that all federal payment with the exception of income tax refunds were to be made electronically by the end of the decade. By 1998 Treasury, which dubbed the new program "EFT 99") had published its final rule for how it was going to migrate millions of consumers to electronic payments.

Then the fun started.

Congress, which had mandated the program, walked back it support for mandatory electronic payments in the face of withering opposition from consumer groups. Treasury announced that federal check recipients without bank accounts would receive a waiver from the electronic requirement until Treasury could develop specifications for the EFT 99 card account, which it called the Electronic Transaction Account, or ETA. The program, which according to the final rules was supposed to be mandatory, suddenly became voluntary.

Then the program got caught up in millennium politics. What was then called the General Accounting Office was required to weigh in on whether it thought EFT 99 would impact the government's Y2K remediation efforts. The program languished. By 2002 the Treasury was still disbursing a quarter of payments (excluding tax refunds) via check.
Image Courtesy of Comerica Bank

That year the House Financial Services Committee's Subcommittee on Oversight and Investigations asked the GAO to look into the issue of electronic payments. The results were not pretty. GAO concluded that the "ETA has not been widely accepted by banks or unbanked beneficiaries, despite Treasury's efforts to promote it. Since the initiation of the program in 1999 36,000 ETAs have been opened, representing fewer than 1 percent of unbanked beneficiaries..."

Despite the Herculean effort by Treasury's Financial Management Service, the ETA had bombed with the public. The conclusion of the GAO report was the final blow: "Because less than 1 percent of potential unbanked federal beneficiaries have opened ETAs, it is uncertain whether the ETA will generate enough savings sufficient to offset the cost of maintaining and promoting the program."

In other words, a program designed to save the government money was hemorrhaging cash. The program was shuttered shortly thereafter.

Fast forward to 2013. We mark today the end of a nearly 17 year effort to replace the costly, fraud-prone process of printing checks with the relatively more secure and more convenient process of government-sponsored prepaid cards.

The mistake with  EFT 99, which was in trouble from the start, was probably trying to legislate such a mandatory change in an election year. Treasury's current Direct Express program was born of an executive order and regulation and did not face the same obstacles.

However, the rapid adoption of the Direct Express card is also a measure of how far we've come in our acceptance of electronic payments in 17 years. What once made for good theater in a series of Senate hearings is now largely forgotten.

Government, in conjunction with the payments industry, continues to look at new technology for the delivery of payments. It's important for both to remember that technology acceptance isn't guaranteed. Whether it's EBT cards for the WIC program, new form factors like smart phones for transaction authorization, or mobile payments, there will be detractors, naysayers and members of the Flat Earth Society blocking the street.

But Direct Express is only the latest in a payments migration that's taken us from barter to coinage to banknotes to checks to credit to debit to mobile and beyond. What lies behind here is anybody's guess. The certainty is that we'll get there. The uncertainty is when we'll get there.

Agenda Changes

There have been some changes to the agenda for the April 10-11 eGPC meeting in Fairfax. To view the latest agenda and to register for the meeting go to

Monday, February 25, 2013

TANF Restrictions, One Year On

A recently introduced bill in the Utah House of Representatives would ban the accessing of public assistance via EBT in liquor stores, gaming establishments and adult-oriented entertainment establishments. In this it follows section 4004 of the Middle Class Tax Relief and Jobs Creation Act of 2012, signed into law a year ago last week.

But Utah House Bill 209 has significant differences with the federal law which states now face.

HB 209 requires the Utah Department of Workforce Services to submit its compliance plan for restricting TANF benefits to the U.S. Department of Health and Human Services as required by the 2012 federal law. 
However, the state bill clearly claims the right of preemption over the federal statute. Preemption is the legal doctrine that allows a state law to trump provisions of a similar federal law, unless the federal statute specifically prevents it. Without preemption states like Utah can strengthen their approach to benefit diversion. There was no intent by Congress to preempt states on this subject, according to regulators.

Second, unlike a number of states that have passed their own laws restricting where public assistance benefits may be accessed, the Utah bill would allow the Division to temporarily or permanently disqualify an EBT cardholder if he or she accessed benefits in a location prohibited by the new law.

Third, the bill would also allow the Division to penalize a business in one of the proscribed merchant categories if it allowed access to public assistance benefits via EBT or POS terminals in its location.

This last provision of the bill is important because it places the burden of compliance on those businesses where benefits are diverted from their stated purpose.

As we have noted here many times the Colorado Department of Human Services has had positive results by working directly with casinos on restricting benefit access. CDHS claims a 98 percent compliance rate in getting Colorado casinos to comply its restrictions. No legitimate business wants to be on the wrong side of this issue, whatever the gain might be for doing otherwise.

We’ve also noted many times on these pages the near impossibility of gaining significant compliance with both the federal law and state laws. However, Utah HB 209 shows that the Beehive State is serious about taking a bite out crime when it comes to diversion of public assistance.

On the one-year anniversary of the federal law it is states like Utah in the absence of federal guidance that are taking the lead in tightening up on public assistance misuse. 

Friday, February 22, 2013

Suspension of SNAP Benefit Payments to Retailers

The U.S. Department of Agriculture's Food and Nutrition Service today unveiled a proposed rule that would allow it to hold back the payments to food stores that face disqualification from the SNAP, formerly food stamp, program because of alleged fraudulent activity like trafficking in SNAP benefits.

Interested parties have until April 23 to comment on the proposed action by FNS. The agency is interested in receiving comment from states and EBT processors on the impact this change may have on states and the companies that process EBT transactions for them, according to the notice of public comment.

In addition to other information, FNS is looking for comment regarding any system changes, the costs of those changes and the timetable for completing them.

Anyone interested in commenting on the proposed rule can access the notice in the Federal Register.

The proposed rule is the latest in a string of actions by FNS to target and eliminate fraud in the SNAP program.

Thursday, February 7, 2013

Uncomfortable in Someone Else's Skin

I received an email yesterday with a press release about a company called "Food Stamp Covers." The company is hawking an eponymous product called food stamp covers. Food stamp covers are thin "skins" designed to be applied over the obverse (front) side of your SNAP, or food stamp, card. They come, as they say in a wide assortment of colors and styles and prevent your card from looking like the food stamp card issued by the state in which you are shopping.

I'm all for American ingenuity. If there's money to be made, we're all over it. But something about this strikes me the wrong way. The business case for this product seems to be that you have 47 million people participating in program but they're ashamed enough about it that they don't want anyone to know? There are also technical and regulatory questions this product raises. For example, the requirements of the physical card are pretty closely defined in federal regulations. Does this violate these regulations?

Again, I applaud the creativity. But does it point to a deeper, more fundamental problem with entitlement programs like these? 

Monday, February 4, 2013

Georgia Lawmakers Introduce Bill Restricting Access to Cash Assistance

George has become the latest state to see legislation introduced that would restrict where Temporary Assistance for Needy Families payments, known as TANF, could be accessed electronically and how they could be used.

House Bill 138 would clamp down on the use of electronic benefits transfer cards, known as EBT, in certain types of businesses and for certain purposes.  not intended under the federal law that created the TANF program. The state law would also provide for reporting of suspected abuse, as well as investigations and sanctions against offenders.

The Georgia bill is just the latest in a parade of state legislative actions designed to cut down on misuse of TANF and other cash subsidies. A rash of media stories last month about abuse in the TANF program led to the introduction of restriction bills in states like New York, Indiana, Hawaii and now Georgia, industry analysts have observed. 

For more information visit the websites of the Electronic Funds Transfer Association and the eGovernment Payments Council. 

Thursday, January 31, 2013

F.A.S.T. Proving Anything But

The implementation of a new social services eligibility system in North Carolina dubbed F.A.S.T. has slowed the delivery of SNAP benefits for the program formerly known as food stamps.

State workers in Cumberland County have complained that they would spend hours working on a case, only to have the recipient call the next day to say that the SNAP EBT card issued by the system would not work in a grocery store.

Other workers have said that when technicians fix one glitch it causes another one to occur.

The state plans to extend the new system to the Medicaid program.

Wednesday, January 30, 2013

Hawaii Bill Would Convert Most State Payments to EFT

A bill introduced in the Hawaii Senate (S.B. 1331) would require the state to issue all recurring payments to consumers  by direct deposit or by the states electronic benefits transfer debit card.

Payments that would be covered under the new law include all public assistance payments, workers' compensation payments, state refunds, retirement payments and child support enforcement payment made through a court or other administrative tribunal.

If the bill becomes law the effective date would be July 1, 2015.

Tuesday, January 29, 2013

TANF Restrictions Redux

State legislatures have been very active in the first month of 2013 drafting bills to restrict where cash benefits like TANF can be used. Typical prohibited businesses include liquor stores, gaming establishments, adult entertainment venues, tattoo and piercing shops, fortune tellers and bingo parlors.

However, New York Assembly Bill 3050, introduced last week, goes a little further. Paragraph G of the bill states that the state will also prohibit benefit access in "[a]ny business providing services that have been deemed inconsistent with the intent of the Office of Temporary and Disability Assistance." OTDA is the executive agency responsible for the administration of public benefit programs in the State of New York.

The key word in this paragraph is "any." This is a big difference between what we've seen so far in benefit restrictions in other states where the prohibitions are targeted at specific businesses. This is more of an open-ended prohibition.

But this paragraph raises some important enforcement questions. Such as:

  • What exactly is the intent of the intent of OTDA?
  • What would make a particular business inconsistent with the OTDA intent? Take a race track, for example. We surely don't want beneficiaries turning into rail birds, gambling away their monthly cash benefits two bucks at a time. On the other hand, why shouldn't a groom, stable hand, or other low wage worker who might be eligible for a benefit access that cash through an ATM on or near the track property, provided the beneficiary doesn't gamble with them ?
  • Who within OTDA is going to decide what is a prohibited location?
  • How will OTDA set the rules for complying with this legislative directive?
  • Is the legislature punting its authority to set law in this area to the executive branch, and if so, why?

The problem with open ended prohibitions like this is that they raise more questions than they answer. We'll see how the Assembly and OTDA answer these questions going forward.

For more information on public benefit restrictions visit the Electronic Funds Transfer Association.

Tuesday, January 22, 2013

Oklahoma Lawmaker Introduces TANF Restriction Bill

Yet another state is moving to block the access and use of TANF benefits. Oklahoma State Sen. Rob Standridge has introduced a bill that mirrors the 2010 federal law that restricts were TANF EBT benefits can be accessed or used. 

Like the federal legislation the Oklahoma bill would prohibit TANF EBT benefits in liquor stores, casinos and "[a]ny retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment." 

Thursday, January 17, 2013

TANF Restrictions Update

Indiana and New York are the latest two states to introduce legislation that would place limitations on the use of public assistance benefits.

Indiana's bill (Senate Bill 413) would require the owner, the seller or third-party processor of an ATM  or POS terminal to "disable" access to cash assistance benefits in specified locations.

New York's bill, introduced earlier this week (Assembly Bill 2386), would prohibit the sale or purchase of alcoholic beverages, tobacco products or lottery tickets with public assistance benefits.

A similar bill was introduced January 9 in the state Senate (Senate Bill 966).

A separate bill introduced in the New York Assembly (Assembly Bill 461) would bar the practice of levying surcharges on ATM transactions that occur at ATMs on public university property.

Tuesday, January 15, 2013

Complete Agenda for the upcoming eGPC Spring Technology Meeting

The eGovernment Payments Council will hold its 2013 Spring Technology meeting April 10-11 in Fairfax, VA. The meeting will be hosted by the Electronic Funds Transfer Association. The focus of the meeting will be new technologies and their potential use in government payments delivery. Here is the complete agenda:

eGovernment Payments Council
Spring Business Meeting
Hosted by the Electronic Funds Transfer Association
4000 Legato Road, Suite 1100

Fairfax, VA 22033
April 10-11, 2013

Mr. Pfeuffer
Approval of last meeting’s minutes
Mr. Pfeuffer, Ms. Rosenak
Committee Reports

Ms. Vollinger

State Forum
Ms. Kagee

Technology and Policy Caucus
Mr. Sena

Rules and Practices Caucus
Ms. French
FNS Update

EBT—The Next Generation Recap
Mr. Pfeuffer
Head in the Clouds: Cloud Computing and EBT
Mr. Sena
Day 1 Adjournment

What, Me Worry? Will the implementation of EMV standards affect your EBT program?
Mr. Conser
EBT—The Next Generation 2013: Planning Update
Mr. Pfeuffer

Complying with Section 4004: How States Plan on Implementing TANF Restrictions
Ms. Kagee
New Business
Mr. Pfeuffer

To register, visit the Events and Registration page at Registration will be available the week of January 21.

Friday, January 11, 2013

Welfare Fraud: Let's Get the Story Right

By now you’ve probably heard or read the news stories about the use of state Electronic Benefits cards in vice locations like liquor stores, gaming halls, and strip clubs. Bill O’Reilly of Fox News, the New York Post the National Review and influential blogger Michelle Malkin have all weighed in on this misuse of taxpayers’ dollars this week.

Let me say from the start, I think it’s reprehensible that an adult would take money intended to help poor children—to provide clothing, shelter and the necessities of life—and use that cash for their own gratification-booze, broads and bingo.

But to read or see the stories this week you would think that 435 Congressmen, not to mention countless staff in multiple executive agencies, the White House, states, contractors and program regulators neither knew nor cared about what was going on. Nothing could be further from the truth.

The Electronic Funds Transfer Association and its eGovernment Payments Council have worked diligently with various government agencies over an extended period of time to solve this problem. Here’s the backstory you didn’t hear from the media this week:

In December 2011 EFTA and eGPC representatives met with the General Accountability Office to define the problem of misuse of welfare funds and talk about what solutions would be practical in solving it.

In January 2012 eGPC launched a survey of the 50 states to determine the extent of the problem and steps that states had taken to resolve it, since states are empowered by law to administer the electronic benefits programs.

In February 2012 eGPC began work on a white paper, Restricting Access to Tanf Funds at Specific Merchant LocationsTanf is the acronym for the program that distributes cash subsidies to poverty-stricken families.

Also, in February Congress passed, and the president signed, the Middle Class Tax Relief and Job Creation Act.  Section 4004 of that bill specifically made accessing or using Tanf benefits in liquor stores, casinos or strip clubs illegal.

On April 17 of last year EFTA met with regulators from the Department of Health and Human Services, the federal agency in charge of the Tanf program to discuss how DHHS would work with states to enforce the law. Chairing the meeting was Mark Greenburg, Deputy Assistant Secretary for Policy, Administration for Children and Families. ACF is the branch of DHHS responsible for Tanf.

A week later, EFTA hosted a webinar on the issue to explain to explain the new law and what states could do to comply with it. Mr. Greenburg, who would be in charge of regulating states’ compliance with the law, participated in the webinar, a sign that DHHS considered this a serious regulatory matter.

On April 25, 2011 DHHS published a request for public comment on the new law and how states should go about enforcing it.

Two days later eGPC released Restricting Access to TANF Funds at Specific Merchant Locations.
In May, the eGPC conducted another survey of states, this time to gauge exactly the extent of the problem on a state level.

On June 4, 2012 EFTA, on behalf of itself and its eGovernment Payments Council, responded to DHHS’ request for public comment with a 12-page reply. The comment letter included the results of the May survey of states, technical information, and recommendations on how to best enable compliance with Section 4004.
In addition, scores of interested groups, companies and individuals submitted commentary to DHHS on compliance with Section 4004.

Finally, in July of last year the GAO issued its long-awaited report, Tanf Electronic Benefit Cards: Some States Are Restricting Certain TANF Transactions, but Challenges Remain.

Since then DHHS regulators have been engaged in the federal regulatory process: drafting regulations to ensure compliance with the law, reviewing them, putting them out for public comment one last time, and issuing the final regulations. This isn’t bureaucracy. It is part of our system of getting laws enacted and enforced in a fair, transparent and democratic way. I’m sure enactment of laws is faster and easier in Cuba or China.

So images of pole dancing, cheap liquor and slot machine tendonitis  may make for good copy, but they do very little to inform the debate on welfare fraud. And while most sane people want these tax dollars spent the way Congress intended them, stories of Tanf-financed strip trips do nothing to advance that cause.

Next time one of these stories comes up let’s hope the media takes 20 minutes to dig in and find the real backstory.