California’s sprawling welfare system carded, but not reformed 

Last year, a Los Angeles Times investigation revealed that California welfare “clients” were using their Electronic Benefits Transfer (EBT) cards to spend millions at casinos and on cruise ships to hardship destinations such as Rio de Janeiro. Californians will be interested to know what the state did to counter this fraud, and abuse of welfare in general.

According to Census data, California represents 12 percent of the U.S. population, but 32 percent of all welfare cases nationwide are in the Golden State. California has more welfare recipients than the next eight states combined, and California’s monthly cash welfare payouts are almost 70 percent higher than the national average. Those payouts are intended for the necessities of life, not casinos and cruise ships.

The revelations prompted Gov. Arnold Schwarzenegger to order the deactivation of ATMs for EBT cards at gambling venues and on cruise ships.

But the problem went beyond cruise ships and casinos. Senate Republican Leader Bob Dutton of Rancho Cucamonga proposed SB 417, which banned use of EBT cards to purchase alcohol and tobacco products. It failed to pass.



The California Department of Social Services proposed 10 measures to investigate fraud, but the actual number of investigations decreased. Out of a sample of 310 welfare cases, only five individuals participated in activities that moved their family toward self-sufficiency, according to a Department of Social Services study. Only 60 of the 310 cases participated in countable work activities. Taxpayers could be forgiven for believing that welfare fraud continues at unacceptable levels.

State government did not volunteer the information that welfare recipients were blowing millions of taxpayer dollars on casinos and cruise ships. Those revelations came from Jack Dolan of the Los Angeles Times. He and other reporters need cooperation, not opposition, from government. And taxpayers need a better accounting of how government spends their money.

Government agencies should practice “affirmative disclosure” by releasing information on welfare fraud, salaries, pensions and benefits as a matter of course. They should make that information public before anybody asks for it.

When California implemented EBT cards, they should have announced that the new policy empowered welfare clients to get their cash benefits in casinos, cruise ships, race tracks, tattoo shops and so forth. A better policy could well have emerged.

Ali Meyer is a contributor to CalWatchdog, which is associated with the Pacific Research Institute.

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Ali Meyer

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