New welfare crackdown targeting booze, tattoos

BOSTON - Taking aim at what they call an abuse of the taxpayers' money, a growing number of states are blocking welfare recipients from spending their benefits on booze, cigarettes, lottery tickets, casino gambling, tattoos, and strippers.

"If you're not abusing the program, then you should really have no problem with these reforms," said state Rep. Shaunna O'Connell, a Republican pushing for restrictions in Massachusetts.

While the crackdown has strong populist appeal in Democratic and GOP states alike in this era of tight budgets and tea-party demands for fiscal discipline, advocates for the poor argue that the restrictions are based on stereotypes about people on welfare, and they say the notion of any widespread abuse is a myth. Most people on public assistance, they contend, are single mothers struggling just to get by.

The movement has been spurred in part by Congress. Under legislation signed by President Obama in February to extend a payroll tax cut and unemployment benefits, welfare recipients are barred from using their cash assistance in strip clubs, casinos, and liquor stores. States must change their own laws to conform by 2014.

States from Arizona to Maine have been going even further on their own, adopting or considering legislation to block the use of benefits to buy other items deemed frivolous. Among them: porn, cruises, and psychic readings.

In the last 12 years, at least 10 states passed laws restricting welfare purchases, three of them this year, while at least 14 others are proposing similar legislation, according to the National Conference of State Legislatures.

About 4.4 million people received about $30 billion in cash assistance in fiscal 2011 through the federal-state welfare program known as Temporary Assistance for Needy Families. States set their own eligibility requirements. (An estimated 44.7 million people received food stamps, and that program has long barred people from using their benefits to buy anything other than certain foods.)

Welfare recipients are issued their benefits via Electronic Benefit Transfer, or EBT, cards, which can be used like debit cards to buy things or to withdraw cash from ATMs. Some states have barred the use of the cards to buy certain prohibited products; others have banned cash purchases of such items, too.

But cash transactions are all but impossible to police. To make it more difficult for welfare recipients to simply withdraw cash and spend it on banned items, states such as California and Washington have reprogrammed ATMs inside certain businesses to automatically reject welfare benefit cards.

Under many of the new laws, welfare recipients and merchants alike can face fines and the loss of their benefits or their business licenses. Some of the states that have joined the trend say they have no figures yet on violations.

Supporters of the stricter laws have seized on media investigations that have uncovered potential abuses.

California, for example, enacted laws to prohibit ATM withdrawals at liquor stores, strip clubs, and gambling establishments after a 2010 investigation by the Los Angeles Times that found that $1.8 million in welfare benefits had been taken out of cash machines at California casinos over an eight-month period.

But Elizabeth Lower-Basch, a policy analyst for the Center for Law and Social Policy, a Washington-based nonprofit organization, said the regulations reflected "people's preconceived notions and stereotypes of low-income people." She said poor people have hardly any money left over for things like alcohol or tattoos after they pay for necessities.