Controlling how people spend their welfare money? Easier said than done

The money involved is not very much, nickels and dimes in a $6.6-billion welfare budget.

But it’s our money, and those people are blowing it on blackjack and lap dances.

That’s why the $4.8 million doled out to welfare patrons in gambling parlors and strip clubs has created such a buzz in Sacramento.

Politicians are up in arms over Times reporter Jack Dolan’s reports that welfare recipients have been using their state-issued debit cards to withdraw cash from ATMs in tribal casinos, poker houses and strip clubs.

Other states began policing their ATM networks years ago. But in California, until our stories, Electronic Benefit Transfer cards could be used almost anywhere.

Now Democrats are promising to make sure all families are spending only “on the children.” Republicans want to track the gamblers down and get the money back and to put ATMs off-limits in other “seedy” businesses.

The governor has issued an executive order making welfare recipients promise they will use the cash only for “subsistence needs.”

But what appears seedy to one person might feel like subsistence to someone else — to the dad, say, who stops for a beer on the way home from a long, humiliating day spent job hunting.

Strip clubs and casinos seem like no-brainers. State officials have already removed their 200 ATMs from the welfare network.

What’s stopping us from going further? How about beauty shops, liquor stores, bakeries? Cookies are not a subsistence need. And we certainly don’t want Mom getting hair extensions with the family’s rent money.

---

This isn’t really about ATMs; they are just the conduit. The issue is how poor people spend the money we give them. And, political grandstanding aside, that’s harder to control than we’d like to admit.

Are we starting down a slippery slope? How far can we reasonably expect to go placing limits on poor people’s spending?

I took those questions to Ron Haskins, a welfare expert at the Brookings Institution, a think tank in Washington, D.C.

He agreed that as a practical matter, trying to dictate how people spend their welfare grants is an exercise in futility. “Generally, once you give people cash, you probably can’t control very much,” Haskins said.

But that doesn’t mean we shouldn’t try, he added.

“I think people whose taxes pay for these grants do not intend for the poor and destitute to purchase cigarettes and liquor, massages and gambling,” he said. Declarations of indignation from elected officials are a way of reinforcing that message.

What I call political grandstanding Haskins considers a moral stand — one that reflects voters’ beliefs.

“There’s a sharp distinction between government deciding what people should do with their own money and what they should be allowed to do with taxpayer money…,” he told me. “Taxpayers have a right to expect people on welfare to be prudent.”

---

I understand the outrage over casinos and strip clubs. But I also worry, because welfare is an easy whipping boy and the controversy is likely to undermine support for programs for vulnerable families in our state’s collapsing economy.

Gov. Arnold Schwarzenegger has already proposed eliminating CalWorks, the state’s version of the federal Temporary Aid to Needy Families, which gives about $280 million in grants — the average is about $500 a month — to more than 563,000 needy families.

But the program doesn’t just hand out cash. Decades of welfare reform have imposed time limits and work requirements and have added educational benefits and assistance with such needs as child care and bus passes.

“We have set up a very tough welfare system in this country,” Haskins said. “Taxpayers expect people on welfare to do everything they can to work. And there are sanctions if they don’t.”

Still, the old caricature of the Cadillac-driving welfare queen seems to have stuck around, then morphed a little into the deadbeat dad, leaning back at the poker table to pop his benefits card into the cash machine.

Flipping channels on talk radio this weekend, I heard the stereotyping spill forth.

“Remember, it’s welfare, electronic welfare. They give you money for doing nothing,” KFI’s Tim Conway Jr. blared. He was trying to rouse the ire of folks “who drive two hours each day to jobs they hate, while the EBTers” are lounging around, living large.

I heard a few listeners bite, like Vicky, complaining that she works 40 hours a week for $2,100 a month while the welfare people “sit on their butts.”

But there were more callers like the 58-year-old man out of work for two years, who has exhausted his unemployment benefits. He said he puts in four job applications a day and volunteers at a food pantry, for monthly grants of $200 in food stamps and $250 in cash. “And I’m about to lose that.” The weariness was plain in his voice.

Haskins said studies around the country show that most welfare recipients approve of the work requirements and rules. The shutdown of casino ATMs — which made it too easy to squander diaper money on roulette — would probably also get their thumbs up. What wouldn’t is tossing the baby out with the bath water.

I understand why the politicians jumped. It’s a chance to blast waste, attack the bureaucrats and channel voter anger away from themselves. But I hope the revelations don’t put a bull’s-eye on welfare.

It would be a shame to toss struggling families overboard in a state where the safety net already is down to little more than a few flimsy strings.

sandy.banks@latimes.com