Dispatches From Moocher Nation
These columns have reported on the explosion in both the food-stamp and federal disability rolls since the recession ended. A new Cato Institute study shows that the full plate of welfare benefits—food stamps, housing assistance, Medicaid and so on—now pays more than a $12 an hour job in half the states. This, too, plays a role in the expanding number of people who are leaving the workforce.
The current welfare system provides such a high level of benefits that it acts as a disincentive for work. Welfare currently pays more than a minimum-wage job in 35 states, even after accounting for the Earned Income Tax Credit, and in 13 states it pays more than $15 per hour.
The federal government — under both George W. Bush and Barack Obama — has offered hundreds of millions of dollars in bonuses every year to states that increase and retain participants in food, medical and other assistance programs. The incentives are aimed at eliminating red tape and ensuring eligible people receive needed help.But workers who process the benefit applications say the well-intended changes have a dark side: The state and local agencies that distribute taxpayer-supported benefits are discouraged from rooting out fraud. They receive bonuses from the federal government for easing and increasing enrollment, while having to return to the federal government the majority of money they recover from fraud.
In the case of FoodShare and medical assistance, about 60% to 65% of any recovered overpayments are returned to the federal government. The state typically keeps about 20% to 25%, and local governments — which handle the bulk of the investigative work — usually get just 15%.
As the numbers of recipients hit record highs — more than doubling in the last five years — fraud investigators and Milwaukee-area front-line workers say fiscal safeguards are slipping.In May, a supervisor in Milwaukee instructed workers who process food benefit applications not to "hold up the benefits" for any reason other than if the applicant has no identification. Saying the agency was "taking a hit on timeliness," the supervisor, Dion Griffin, wrote in an email to workers that applications need to be processed "even if a person is from out of state."
He added people will respond to incentives and disincentives."We have addicted Americans to the government," he said. "The enormous challenge we have is how do we wean off those that don’t really need it before we are bankrupt. The reason we have sluggish economic growth and unemployment stuck at 7 percent is the growing size and influence of government."