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Food stamp fraud: big problem or exaggeration?

Published: Wednesday, Aug. 28 2013 9:45 p.m. MDT

Food stamp use has skyrocketed since the 2008 recession and held steady since the recovery. A new Department of Agriculture report shows that fraud has climbed as the program has grown, but defenders dispute its significance.

Damian Dovarganes, AP

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Since 2008, the federal Supplemental Nutrition Assistance Program, popularly known as food stamps, has doubled in size, with 49 million Americans now on the rolls. The cost of the program has also jumped dramatically. The federal government now spends $75 billion a year on food stamps, compared to $36 billion in 2008, according to a new Department of Agriculture report focused on the problem of "trafficking."

"Trafficking of Supplemental Nutrition Assistance Program (SNAP) benefits occurs when SNAP recipients sell their benefits for cash to food retailers, often at a discount," the report said.

While the report did not find that the problem was escalating in proportional terms, the enormous growth of the program itself means that relatively small ratios of fraud produce sizable losses for the government. The value of trafficked food stamp cards was estimated at $858 million a year in this study, "up from $330 million annually in the 2006-2008 study."

The report found that 10.5 percent of participating stores had engaged in trafficking, and that 85 percent of those were small outlets, which are more difficult to police.

The significance of the report lies in the eye of the beholder. Ellie Sandmeyer at the left-leaning Media Matters took Fox News to task for failing to provide context, citing only the raw numbers of increased fraud. "Kilmeade's misleading report is just another example of how Fox News has shamelessly misrepresented the SNAP program and its beneficiaries in an effort to demonize food assistance and malign low-income Americans," Sandmeyer wrote.

But Fox News online did note that "despite the increase [in raw numbers], trafficking has declined since the 1990s, when the rate was nearly 4 percent of food stamps, also known as Supplemental Nutrition Assistance Programs benefits."

Meanwhile, states are struggling to manage oversight on a program grown much larger in scope, such that even percentage-wise small losses become fiscal and political headaches.

Oregon, for example, has established a legislative working group to explore mechanisms to control fraud that are cost-effective and not overly burdensome for the benefit recipient.

Email: eschulzke@desnews.com

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