The State of Massachusetts is having difficulties with EBT cards. EBT stands for “Electronic Benefit Transfer” and it is being used in the US in place of Food Stamps along with some other residual benefits.
The first problem, according to the State Auditor Suzanne Bump ( I looked her up to make sure she really existed, and found her nomination for “Democrat of the Year”), is that the State seems to have lost track of about 30,000 cards. The audit identifies security lapses and there are some indications that the key problem is fraud by staff. There were indications that some retailers were giving cash on the cards. Some claimants had multiple cards issued. It also seems that sums are being paid on cards issued to people who have subsequently died. The wonderfully named Ms Bump claims that the Department of Transitional Assistance – this is getting too Dickensian – paid $2m to more than a thousand people who had been dead for more than six months.
It’s always dangerous to generalise from a faraway country that we British don’t begin to understand, but this has the taste and smell of a policy that doesn’t work. Some parts of the problem, certainly, seem to be due to lax administration. But part of the reason for that laxity is the attempt to introduce financial systems that don’t and can’t take advantage of the security that regular banking and accounting offer. Part, too, may be that people don’t treat the cards in the way they’d treat a cheque – for example, looking for replacements because it’s just a bit of plastic, or trying the card in shops to see if it still works.
The main purpose of using cards rather than regular financial payments is to control the way that benefits are spent. I’ve previously argued that this is pointless, and it seems that those who are operating this system are coming to a similar conclusion. The Governor of Massachusetts recently vetoed legislation that would have outlawed using the cards in various locations – casinos, tattoo parlours, gun shops and ‘adult entertainment’ centres, whatever they are – on the basis that it was ‘political grandstanding’. Apparently the Commission responsible for managing the cards has said that it has no practical way of controlling how they are used.