Column: Give financial assistance, not cash

John Reilly

Would you give a stranger cash? Probably not. Most of us remember our parents explaining to us as children why we shouldn’t do so. This understanding is not controversial. Just a block from the state Capitol, a street sign reads: “Say no to panhandling. Contribute to the solution. Give to local charities.”

When the first food stamp program was implemented in 1939, it wasn’t even debated that the aid was to be distributed as stamps rather than cash. It would have been logistically easier for the government to simply write checks than create a new pseudo-currency, but policymakers recognized the obvious problem with doing so: much aid distributed as cash would not be used for its intended purpose.

Yet in 2018, Michigan’s state government distributes almost $90 million each year in what they openly call “cash assistance,” where recipients are literally able to obtain cash from ATM machines from state-issued Bridge Cards.

How much of this taxpayer money is spent for its intended purpose? Because cash cannot be monitored once it is given out, much less controlled, we cannot know.

But here’s a clue: In 2013, Michigan passed laws to prevent Bridge Cards from being used to obtain cash from ATMs located in casinos, strip clubs, and liquor stores. A state investigation found that a Michigan casino dispensed $87,000 from Bridge Cards. Certainly many times that amount had been withdrawn at other places where the money was most likely spent inappropriately.

Not to mention that an ATM’s location only tells part of the story. It’s hard to imagine the 2013 laws effectively stopped people from spending money at these places, for the simple fact that recipients can still get the money out of any other ATM. ATMs are everywhere. One only needs to stop at an ATM on the way to the casino.

I was surprised by pushback from some of my colleagues in a recent hearing on my legislation to reform Bridge Cards to specify that while they can be used like debit cards, they should not be able to receive cash from ATMs. Bizarre scenarios were conjured to justify why cash is so essential in a world where just about everything can be purchased with debit cards. “How will they pay the babysitter?” “What about farmer’s markets that only accept cash?”

These objections all contradict the essential premise of cash assistance: that welfare empowers those in need. It assumes those on assistance are so helpless that these unusual and avoidable occasions render a debit card insufficient. It’s a meager excuse to ignore the undeniable hazards in giving out hard money.

We must acknowledge that giving out cash encourages misuse to any recipient suffering from addiction, and not all those on cash assistance are free of these crippling problems. For them, cash assistance is not only wasteful but hurtful.

That’s why as individuals we don’t give strangers cash. Not because we are not charitable, not because we don’t care, but because we genuinely and rightly worry that we’re actually doing harm instead of good.

It’s also wrong to taxpayers, not all of whom are well-to-do, to so recklessly give away their hard-earned money.

It’s time we reform our cash assistance program to ensure that our dollars actually do provide assistance. That is how we genuinely empower those in need.

State Rep. John Reilly, R-Oakland, represents Michigan’s 46th House district.