House panel debates welfare soda fraud
Lansing — House lawmakers are debating whether to ban purchasing soda and other soft drinks with a supplemental nutrition program over an undocumented concern of widespread welfare fraud.
A panel of House lawmakers on Thursday considered a bill sponsored by Rep. Beau LaFave, R-Iron Mountain, that would stop Michigan residents from using their Supplemental Nutrition Assistance Program benefits — formerly known as food stamps and now accessed through the Michigan Bridge Card — to purchase soft drinks or pop.
More than 1.3 million Michigan residents have access to SNAP benefits, according to the Michigan Department of Health and Human Services.
Committee chairwoman Rep. Daire Rendon, R-Lake City, said she is sympathetic to the concern. But she said she has no concrete plans for the bill.
LaFave and Rendon say they have amassed anecdotal evidence that SNAP recipients are buying pop and other soft drinks to cash in on the 10-cent bottle deposit — essentially translating their food benefits into cash. LaFave acknowledged he has no data on the prevalence of the alleged practice.
“We are taking money that’s supposed to be used for food and using it as an incentive for carbonated beverages,” he said.
But opponents argue that there is minimal fraud, that changing the program would require a never-before-approved federal waiver because SNAP is a federal program and that it would end up costing taxpayers and businesses far more money to overhaul the system than the amount that might be saved from combatting any fraud that currently slips under the radar.
The program is also almost entirely federally funded.
Dawn Sweeney, the SNAP administrator for Michigan, said that enacting the legislation would require a waiver from the United States Department of Agriculture and “extensive changes” to the state’s Electronic Benefit Transfer, or EBT, program.
“It would be a long process,” Sweeney said, adding that there are not “a large number” of fraud cases reported to the Department of Health and Human Services.
Amy Drumm, a lobbyist for the Michigan Retailers Association, said it would “effectively punish retailers” in an attempt to address fraud because it would be cumbersome and costly to change their systems.
“So we’re really talking about a huge administrative burden,” Drumm said.
Rep. Sherry Gay-Dagnogo, D-Detroit, expressed outrage that the committee spent time debating the issue.
“I think it’s disingenuous to even have our time spent on talking about people who fraudulently buy a pop or milk to be crazy enough to go to the parking lot and pour it out to get 10 cents,” she said. “How many people in your district did you talk to that are receiving SNAP, and to ask them about nutritional value? What programs are you supporting to address nutrition in our schools?
“I’m very displeased that we’re spending our morning addressing legislation that would assert that people in poverty are stupid enough to waste their time going out to buy pop — (and) gas to get to the store —and to pour out pop that would probably cost a dollar or two dollars to get ten cents.”
LaFave apologized and said he wasn’t attempting to offend anyone.
“My intent is not to attack anyone,” he said. “My purpose for this bill is to go after what I think I was elected to do in the Michigan House, is to watch our tax dollars really closely and make sure it’s being used as it’s intended to.”