Legislator wants welfare restriction
A New Orleans legislator wants to prevent welfare recipients from spending their government benefits on alcohol, strippers and gambling.
Republican state Rep. Cameron Henry said he decided to act after seeing a news report on recipients using their federal assistance program debit cards to withdraw money from ATMs in strip clubs, the New Orleans racetrack and liquor stores.
Henry filed legislation that would prohibit cash withdrawals from the cards issued to dispense the federal benefits.
House Bill 95 also would prohibit gambling establishments, liquor stores and sexually oriented businesses from accepting the cards.
The legislation will be considered in the session that starts March 12.
The bill would apply to money received through the Family Independence Temporary Assistance Program, once commonly known as welfare. Money is placed on cards that are similar to debit cards.
Henry said Monday that FITAP recipients in Louisiana accumulated $50,000 in ATM fees in a single month. He said transactions were made at strip clubs, casinos, daiquiri shops, bingo halls and bars.
“There’s just a tremendous amount of waste. Currently on the books, none of this is illegal,” he said.
Henry said he is working on the bill’s language to prevent unintended restrictions such as forbidding recipients from using their cards at a gas station that also sells alcohol.
Trey Williams, spokesman for the state Department of Children and Family Services, said 7,000 households in Louisiana receive FITAP benefits.
He said the benefits serve as a temporary bridge for 60 months and are reserved for single parents or families in which one spouse is disabled.
Williams said the typical case is a woman with two children receiving $200 a month in FITAP assistance.
He said recipients receive cards thst can be used to withdraw cash from automatic teller machines or to make purchases at stores that accept electronic benefit transfer cards.
“There are no federal guidelines on how the cash can be spent,” he said.
Williams said states can put restrictions in place.
He said Henry is reacting to a New Orleans news report that found a handful of questionable usages out of 300,000 transactions.
Williams said people might withdraw cash to pay an electric bill since the cards cannot be used liked a credit card to pay expenses over the Internet.
Williams said recipients can use ATMs located at strip clubs, casinos and bars but cannot make charges there.
“We believe the vast majority of those people are utilizing the benefits as intended,” he said.
Henry said $50,000 in ATM fees in a single month implies that the abuse is not isolated.
“If you have one person doing it, it’s too much,” he said.
Henry is not alone in pushing for restrictions on FITAP benefits.
U.S. Reps. Charles Boustany, R-Lafayette, and Steve Scalise, R-Metairie, recently sponsored the Welfare Integrity Now for Children and Families Act.
The legislation, now pending before a U.S. Senate committee, would force states to implement policies to prevent federal assistance funds from being spent in strip clubs, casinos and liquor stores.
The penalty for failing to implement policies would be a 5 percent loss of the funding.
Boustany did not respond to a request for comment Tuesday.
In a prepared statement earlier this month, Boustany said Congress must ensure that taxpayer dollars are spent appropriately.
“Providing access to welfare funds on EBT cards in strip clubs, liquor stores, and casinos was never the intent of the program. This bill holds states responsible for protecting taxpayer funds while continuing to provide the support many American families need during these difficult times,” Boustany said.