Debunking the .2-percenters


welfare-1Following The Maine Wire’s exclusive investigation into Maine’s Temporary Assistance for Needy Families (TANF) cash welfare program, liberal media pundits and left-wing activists quickly glommed on to the preposterous notion that abuse and fraud in the welfare system equals less than one percent of all welfare transactions. Those who propagate such fiction are either being intellectually dishonest or engaging in journalistic malpractice. In either case, they could benefit from a better understanding of the program, the data, and what it tells us about welfare in Maine.

First, the spinners.

Robyn Merrill of Maine Equal Justice Partners: “The governor identified less than three-tenths of 1 percent of all the transactions made using EBT cards during a particular period as suspicious.”

Ethan Strimling, progressive pundit: “Last week Gov. LePage released data showing that out of 1.8 million welfare-related transactions, there were only 3,701 instances of possible fraud. This is two-tenths of one percent.”

Steve Mistler, Portland Press Herald: “That means the inappropriate transactions accounted for about two-tenths of 1 percent of all EBT use during that period.”

Now, the facts.

Fraud vs Abuse

Much of the conservation about problems in Maine’s welfare system has used the terms “abuse” and “fraud” interchangeably. This is unhelpful and obscures the problem. Fraud is a legal term that must be determined in a court of law. For example, if an applicant lies to the state about their income or marital status – both things that materially affect benefit amounts and eligibility – that is fraud. But it must be investigated thoroughly – not just from a computer. An investigator must travel to the persons home, interview neighbors, collect photographic evidence, etc. It is a long and involved process. Fraud investigators don’t have desk jobs in Augusta.

Abuse, on the other hand, may not be illegal but is recognizable by every reasonable person. Working Mainers see abuse at grocery stores and gas stations on a daily basis. It can be as heinous as dumping out water bottles to cash in on the 5 cent bottle deposit or as simple as a twenty-something buying Slim Jims and a Coca-Cola with his EBT card, and cigarettes with cash. In both cases, a reasonable person can recognize that the safety net is being used in a manner not likely to fulfill the goals of the TANF program. Although proven fraud rates may be relatively low, owing in part to a deficient investigation and prosecution, a candid review of the TANF data confirms that abuse of cash welfare is rampant.

The 0.2 percent fiction relies on oversimplistic math. The liberal pundits and spinners reason as follows: LePage issued a press release pointing to some 3,700 questionable transactions; total transactions exceed one million; therefore, welfare abuse and fraud are nearly non-existent. The problem with this calculation is that it ignores limitations inherent in the available data and the practical uses of these programs. Those who propagate the 0.2 percent fiction demonstrate a remarkable ignorance of how the TANF program actually works.

Lifeline vs Life-style Enhancement

When an EBT card is used not as a lifeline but as a life-style enhancement, that is abuse.

According to the data, Maine TANF cash has been spent in all 50 states, Puerto Rico and the U.S. Virgin Islands. Now, as I wrote in my initial reporting on the subject, there are some legitimate reasons why an EBT card could be used outside of Maine. But those legitimate reasons cannot possible explain the volume of out-of-state spending that has occurred over the last three years.

What does explain out-of-state spending? In some instances, we see transactions occurring at popular vacation destinations – resorts, amusement parks, five-star hotels, and beaches. (Far away Florida is the fourth favorite out-of-state destination for TANF recipients.) In others we see EBT cardholders using the cards exclusively outside of Maine for more than 90 days. In the latter case, these individuals may be obtaining benefits from Maine though they no longer live in the state. In the former case, we can safely infer that TANF cash is being used not as a remedy to poverty but as a lifestyle enhancement. The data shows further that cash welfare has been spent at liquor stores, gambling venues, bowling alleys, tattoo parlors, smoke shops and strip clubs. In this instance as well, welfare cash is not lifting people out of poverty, but allowing poor individuals to maintain a certain lifestyle.

But these EBT card uses – the uses we can see in a data file and recognize as inappropriate – only scratch the surface.

A Transaction at Walmart or Hannaford may still be abusive

If George takes his EBT card to Disney World and makes a few $500 ATM withdrawals, we see this in the data and intuitively know there is a problem; most reasonable people would agree that riding roller coasters at Disney should not be a top priority for George. But when George returns from vacation, he continues to use his TANF cash at places like Hannaford and Walmart. Looking at the data, George’s Hannaford and Walmart transactions appear to be in line with how we want the program used; we can reasonably infer he’s buying food and necessary household goods. But the big question – the question the liberal media has ignored and the left-wing groups have sought to downplay – is this: if George can afford a trip to Disney World, should Maine taxpayers be subsidizing his grocery shopping?

Traveling to places like Hawaii, Alaska, Florida, California and the U.S. Virgin Islands is a luxury not many Mainers can afford. But from the data, we know that hundreds, if not thousands of TANF recipients are traveling all over the United States. Yes, we all have the right to travel. But we certainly do not have the right to have our vacation subsidized by non-vacationing taxpayers.

You Can’t Track Cash

TANF is a cash welfare program. The entire balance of a TANF benefit can be extracted at an ATM in cold hard cash. Given that the largest volume – both by transaction count and total cash flow – occurs at banks and credit unions, the vast majority of TANF money can’t be traced to its final transaction. To make this point in a more practical sense, consider the following: From the data DHHS provided, we can see when someone swipes their EBT card in a point of sale transaction at a liquor store or a smoke shop. We can infer from that information that the welfare cash is likely not being spent on winter jackets and babysitters. What we cannot see, however, is what a welfare recipient does with cash withdrawn from a bank ATM.

A liberal advocate from Maine Equal Justice Partners has claimed that cash welfare withdrawn from a liquor store ATM was not necessarily spent on liquor. If you accept that proposition, then you must also accept that cash welfare withdrawn from a Walmart ATM was not necessarily spent at Walmart. For all we know, that cash could be spent on school supplies, set on fire, or used to purchase heroin.

The untraceable nature of the majority of cash welfare spending only adds to absurdity of claiming that abuse amounts to only 0.2 percent. Those who make such an argument are either engaging in deceit or are fundamentally ignorant of how the TANF program functions. But in the end, the debate over welfare abuse comes down to opposing views of human nature. If you are predisposed to believing all individuals want to work hard and will quickly rebuke a free lunch, then welfare abuse might seem absurd to you. But if your view of human nature tells you that man is clever, slothful and exploitative, then you are probably more likely to disbelieve the 0.2 percent fiction.

Steve Robinson
Editor, Maine Wire


  1. Whether you like the percentage or not, how much money should be blown chasing down the fraudsters? No matter what the controls, people always figure out a way around the rules…like corporate America dancing around tax laws to avoid paying taxes…where’s the outrage over that behavior?


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