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Lets keep welfare money out of the casinos


It’s tough being poor. It can be even harder when the state helps the poor by giving them an electronic benefit transfer card that can be used at liquor stores, casinos and strip clubs.

Temptations abound. There goes the rent, or a utility bill, or a child’s school supplies.

State senators and representatives recently received an email from the Department of Human Services advising us that folks who receive Temporary Assistance for Needy Families through an Oregon Trail Card will now be prevented from using it in liquor stores, gaming facilities and adult-entertainment businesses.

I was surprised to find this hasn’t always been the requirement.

Poor people are an easy target, and I’m not picking on them. The stereotype of the welfare queen driving a Cadillac does not represent most people receiving public assistance, which is supposed to pay for necessities. The lesson here is for those who want to help the poor get out of poverty.

Handing money — somebody else’s taxes — to the poor is only part of the answer to helping people escape poverty. Many of these folks need help changing self-destructive behaviors. They need to replace bad habits with good habits. Making it easier for them to waste what little public assistance they receive is setting them up for failure.

Common sense would tell you that if you allow people on public assistance to access cash through an ATM in a casino, it’s too easy for them to spend it in the casino. Or if they have used their benefits card to pull cash from an ATM at a liquor store, a bottle of whiskey suddenly looks affordable.

The L.A. Times reported in 2010 that California welfare recipients withdrew $1.8 million at casino ATMs. It also uncovered that for more than three years, beginning in 2007, $69 million in California welfare money was spent or withdrawn outside the state — including millions in Las Vegas.

Similar news stories in the past few years have uncovered other examples of misused public assistance cash. In Atlanta, $150,000 in public assistance benefits were withdrawn from ATMs in liquor stores and nightclubs. In Detroit, about $87,000 in public assistance was withdrawn from a casino ATM in a 12-month period.

A report by The Oregonian last year found that in a review of about 600,000 transaction records released by the state Department of Human Services, most were conducted at places like supermarkets, discount outlets and gas stations.

“But an analysis by The Oregonian also finds that the cards were used to withdraw cash or make purchases at casinos, bars, liquor stores and other venues that don't appear to meet the government's goal of helping struggling families,” the paper reported.

As a result of such news reports, when the Middle Class Tax Relief and Job Creation Act of 2012 was passed, it included a new policy requiring states to prohibit electronic benefits transfers in certain businesses. States who fail to do so will lose a portion of their federal family assistance block grants.

States must report how they are going to implement this new policy by Feb. 22, 2014 — a year from now. In Oregon, change is under way. DHS notified clients of the new policy in February.

Advocacy groups on behalf of low-income families complain that the new restrictions further stigmatize welfare recipients.

Nothing stigmatizes the poor like saying there’s a stigma to being poor. Nobody says that as often as some of these groups advocating on behalf of the poor.

Have they not noticed that during virtually every presidential race now, every candidate has a “poverty” story to tell? Being poor has become a campaign selling point. Some stigma.

A more credible complaint — but barely — is that for some people on public assistance, the closest or lowest-cost ATM is in a liquor store or other prohibited location.

If that really is a problem, the new policy also requires that welfare recipients have access to cash with minimal fees.

In Oregon, ATM cash withdrawals using a benefits card will cost 85 cents. Recipients can also get cash back at a point of sale, whether or not they make a purchase, although only the first two transactions without a purchase are free.

Opponents to the policy change also point out that the amounts involved in questionable transactions are peanuts compared to the vast rip-offs by banks and other corporations. True, but there is more at stake here than just misuse of taxes.

We are enticing the poor to engage in behavior that helps keep them poor. It feeds the stereotype of the welfare queen.

State Sen. Betsy Johnson, a Democrat from Scappoose, represents District 16, which stretches from the North Coast to Forest Park, and includes Gaston, Dilley, Gales Creek and Banks. She can be reached at 503-543-4046.