Skip to content
Link copied to clipboard

Asset test for food stamps a sound idea for Pennsylvania

Regardless of where you stand on taxpayer-funded entitlements, few Americans argue against the maintenance of temporary safety nets or modifications aimed at ending welfare fraud, waste, and abuse.

Regardless of where you stand on taxpayer-funded entitlements, few Americans argue against the maintenance of temporary safety nets or modifications aimed at ending welfare fraud, waste, and abuse.

In hopes of protecting both interests, the Pennsylvania Department of Public Welfare recently re-implemented an asset test for food stamps. An asset test looks at the total wealth of an individual before granting taxpayer assistance. Until 2008, Pennsylvania was using such a test.

Asset tests represent an important first step toward preserving limited taxpayer resources for the truly needy.

The measure is necessary because welfare eligibility and spending - including for food stamps - have exploded, threatening to crowd out everything else in the state budget.

Despite indisputable evidence that welfare fraud and waste are alive and well, many politicians in Harrisburg and Washington have downplayed it, while actually expanding welfare benefits to the detriment of the truly poor.

In Pennsylvania, food-stamp expenditures have climbed from $750 million in 2002 to $2.5 billion this fiscal year - an increase of more than 300 percent. Not surprisingly, abuse has climbed, too.

Last year, 178 grocery and convenience stores in Pennsylvania were banned from the food-stamp program - now called the Supplemental Nutritional Assistance Program (SNAP) - for trading cash (not food) for food stamps.

Last month alone, eight individuals were found guilty of welfare fraud within the food-stamp program and sentenced to return nearly $50,000 in stolen benefits.

It's impossible to determine the full extent of errors because the state doesn't actively search for mistakes. However, these numbers likely represent a mere trickle for a hemorrhaging system with few legislative surgeons willing to stop the bleeding.

Enter the asset test, a tried and true tourniquet made from common sense. Pennsylvania's proposed reestablishment of this measure would limit SNAP benefits to nondisabled adults under 60 with assets up to $2,000 and senior citizens with assets up to $3,250. The test excludes one's home, car, a second car worth less than $4,650, and retirement savings.

By applying this simple test, DPW has stated the change will remove benefits for only 2 percent of current, undeserving SNAP beneficiaries, saving Pennsylvania taxpayers about $50 million.

Moreover, 11 states already maintain the federal minimum asset test of $2,000 for adults under 65 (with various exceptions for nonliquid assets) and four states have an asset test of $5,000. Without any such protection, billionaires such as Bill Gates could actually be eligible for food stamps if their income was low enough for a year.

Sound far-fetched? Consider the case of Leroy Fick, who won a $2 million lottery jackpot but still legally collected food stamps. This fall, Michigan enacted a $5,000 asset test to keeping exploiters such as Fick from taking advantage of the system.

Like Michigan, Pennsylvania is once again facing a budget deficit, and the state cannot afford misuse of one dollar. Since 2002, total public-welfare spending, including all state and federal funds, has increased 52 percent. Shortly after the 2001 recession, expenditures for the state's SNAP program totaled $750 million. By 2006, costs had risen to $1.2 billion.

Even though many act otherwise, taxpayer dollars are a limited resource. If government chooses to do nothing, at its current pace welfare spending will crowd out dollars for education, transportation, and every other priority in the state budget.

Under significant budget restraints, the state must do everything in its power to protect benefits for those most in need. DPW's intention to restore the SNAP asset test is a small step toward the greater goal of helping Pennsylvanians while not handing out tax dollars to those who don't need them.