Food Stamp Abusers, Beware

by InvestorPlace Staff | August 10, 2012 11:03 am

investorpoliticsletters2 Food Stamp Abusers, Beware[1]Grocery stores looking to game the food stamp system, watch out. The Agriculture Department is coming for you.

The department just announced new guidelines[2] that will impose harsher penalties on stores violating food stamp rules, as well as give states new tools to root out ineligible applicants.

The move comes as Congress wrestles with a $100 billion-a-year bill that would fund food stamps and determine other agricultural policy for the next five years. The vast majority of the bill’s money goes into food stamps.

Of course, food stamps are the big sticking point in passing that bill. Republicans are demanding further cuts than those already included in the bill, and many worry about the cost of food stamp fraud.

Even though only about 1% of all food stamps transactions are fraudulent, that still has a total price tag in the millions of dollars. Shoring up food stamps from abuse is important to maintain confidence in the program, currently used by one out of every seven Americans.

The new sanctions will allow the Agriculture Department to both disqualify stores that break food stamp rules from participating in the program and levy fines against them based on how much business they do with food stamps. Currently, the department is unable to use both punishments on a store that violates its rules.

Additionally, the new guidelines require that states check a national database to verify food stamp applicants haven’t already been disqualified in other states, and confirm from Social Security records that the applicant is neither in jail nor deceased.

– Benjamin Nanamaker, InvestorPlace Money & Politics Editor

The opinions contained in this column are solely those of the writer.

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Endnotes:
  1. [Image]: mailto:letters@investorplace.com
  2. department just announced new guidelines: http://www.dailyherald.com/article/20120810/business/708109893/

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