Ag Dept unveils new steps to stop food stamp fraud

WASHINGTON — The Agriculture Department says it is going to impose tougher penalties on stores that violate food stamp rules and give states new tools to root out applicants who are ineligible for the benefit program that now covers about 1 out of every 7 Americans.

The move to shore up integrity in the program comes as Congress struggles to pass a $100 billion-a-year bill that will fund food stamps and determine farm policy for the next five years. Some 80 percent of the money in the farm and nutrition bill goes to the food stamp program.

Department Undersecretary Kevin Concannon stressed that the Supplemental Nutrition Assistance Program already has one of the best track records among federal programs in fighting violations, with a trafficking or abuse rate of only about 1 percent of total transactions.

But in a program where even a small amount of abuse can amount to millions of dollars, “we are very mindful of public confidence” that only those who qualify for benefits will receive them, he said.

That confidence is particularly important now because of growing pressure on Congress to pass a farm bill that includes the food stamp and other nutrition programs.

The farm bill, which sets policy on crop subsidies and conservation, has made it through Congress in the past because the link with food stamps has made it popular for lawmakers with both rural and urban constituents. With the current bill set to expire at the end of September, The Senate passed a new bill in June and the House Agriculture Committee approved a similar version in July.

But House GOP leaders have declined to bring the bill to the floor for a vote, fearing that disputes over food stamps would lead to its defeat. The House bill would cut current food stamp spending by about 2 percent, or $1.6 billion, a year, mainly by cracking down on policies making it easier for states to bestow benefits. But House conservatives are demanding further cuts in the program while some Democrats say they are excessive, resulting in several million people being removed from food stamp rolls. The Senate-passed farm bill reduced food stamp spending by about $400 million a year.

The food stamp program has seen participation climb from 28 million at the start of the recession to 46 million today and has become a focus of fiscally conservative lawmakers critical of government spending.

The new sanctions announced by the Agriculture Department on Thursday would allow the department to both disqualify a retailer who traffics and assess a monetary fine proportional to the amount of business the store does with the Supplemental Nutrition Assistance Program. Currently the department cannot do both and too often the penalties “may have been viewed as a slap on the wrist,” Concannon said.

States would also be required to check a national database to verify that applicants haven't been disqualified in other states and confirm from Social Security Administration records that the applicant is not in jail or deceased.

The Agriculture Department says that the trafficking rate has fallen from about 4 cents to the dollar in 1993 to about 1 cent in the 2006-2008 period and that in 2010 only 3 percent of payments went to ineligible households or to eligible households in excessive amounts.

Concannon said that in the third quarter of this budget year the department fined or temporarily disqualified some 574 stores for violating program rules and permanently disqualified 1,016 stores for trafficking in food stamp benefits.

The department has also sent letters to the heads of Craigslist, Ebay, Facebook and Twitter to seek their help in preventing the illegal sale of food stamps online and proposed rules giving states the option to contact recipients when there have been an excessive number of requests for the electronic benefit transfer cards used in food stamp transactions.

That has not satisfied critics such as Sen. Jeff Sessions, R-Ala., who says tens of billions of dollars could be saved by tightening up eligibility standards and changing a system where states are encouraged to increase their food stamp budgets. He has pointed to an agreement, made in 2004, in which the Mexican Embassy and consulates in the United States cooperate in disseminating information about food stamp eligibility to Mexicans working in this country and a program that allows states to provide benefits to people whose assets exceed the food stamp limit if they receive some other federal welfare benefit.