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TANF Dollars: Alcohol, Strippers and Tattoos, One Senator aims to put a stop to it

By Bill Britt

Alabama Political Reporter

MONTGOMERY—Senator Arthur Orr, (R-Decatur), is known as a problem solver so, when a constituent confronted him with a problem he went to work.

He receive a call from lady in his district who was a saying, “I am sick and tired of seeing people buy beer and cigarette using their EBT card.”

This short sentence set Orr in motion, “I called DHR and ask, ‘How can this be happening?’”

But according to the guidelines at DHR people could do that and a whole lot more.

According to the DHR website, “Electronic Benefits Transfer, or EBT, is a system that makes the issuance of state Family Assistance and federal Supplemental Nutrition Assistance Program (SNAP) benefits faster and easier through the use of electronic transactions. Clients can use their EBT card to access cash benefits (TANF) through automated teller machines (ATMs) that display the Quest™ or HonorlStar™ logo and at Point-of-Sale (POS) terminals at merchant locations that display the Quest 10go™. To access food assistance benefits, clients can use their EBT cards at grocery stores authorized by the United States Department of Agriculture (USDA) and also display the Quest™ logo.”

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What these people were doing was using the TANF dollars off the cards to make transaction for alcohol, tobacco, strippers, tattoos, lottery tickets and a host of other unintended uses.

“The sad part is this is money meant to help families,”  Orr said. “These people are taking money that is designated to help their children and blowing it on illegitimate uses.”

Orr has prefiled a bill in the Alabama State Senate that will began to put an end to these practices.

“This is not meant to be punitive towards the poor but we have a responsibility to bring accountability to the system,” said Orr. “If people are going to receive government assistance then they must use it in an accountable way.”

The bill covers a laundry list of prohibited purchases such as visits to psychic or buying lottery tickets.

Orr says, “With today’s technology we can limit what type of purchases are made on these cards. However, he admits that people will find ways to go around any system put in place.

“We can’t stop people from going to cash machine and pulling money out a using it for the wrong purchases but we can take steps to curtail abuse, using TANF dollars.”

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To better understand how these dollars arrive on SNAP and EBT cards it is important to understand where TANF dollars come from.

According to the federal government, TANF is a block grant program to help move recipients into work and turn welfare into a program of temporary assistance.  Under the welfare reform legislation of 1996, TANF replaced the old welfare programs known as the Aid to Families with Dependent Children (AFDC) program, the Job Opportunities and Basic Skills Training (JOBS) program, and the Emergency Assistance (EA) program.

These funds cover benefits and services targeted to needy families.

TANF was created by the Personal Responsibility and Work Opportunity Act instituted under President Bill Clinton in 1996.

To extend the TANF program through September 30, 2012, Congress passed the Middle Class Tax Relief and Job Creation Act on February 17; it was signed into law by President Obama on February 22. The TANF extension does not make broad changes, but two new provisions were added.

Following the lead set by several state legislators, the law now prohibits Electronic Benefit Transfer (EBT) cards from being used in liquor stores, casinos and adult entertainment venues. States will have to adopt and implement policies meeting the requirements to be spelled out by HHS, or risk losing federal funds. States face a five percent cut in their annual TANF funding for failure to create policies within two years.

Orr’s bill will meet and mostly exceed the federal guidelines.

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“I think there is a small minority misusing this money but we have to put an end to it,” said Orr. 
Under Orr’s bill, the penalties for using the card improperly include reimbursement and being disqualified from receiving public assistance benefits by means of direct cash payment or an electronic benefits transfer access card for one month. A second offense carries with it disqualification for 3 months and a third the person is disqualified from ever receiving public assistance benefits by means of direct cash payment or an electronic benefits transfer access card.

A business that is caught taking the card for such transactions will be fine, $100.00 for first offense, $500.00 for the second and a $1000.00 for the third with the possibility of losing their business license for a year.

Bill Britt
Written By

Bill Britt is editor-in-chief at the Alabama Political Reporter and host of The Voice of Alabama Politics. You can email him at [email protected] or follow him on Twitter.

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