Rob Undersander is a millionaire. He also received taxpayer-funded food stamps. His story illustrates an absurd – and intentional – loophole in America’s welfare system that taxpayers need closed immediately.
Rob applied for food stamps in 2016. A Minnesota resident, he clearly exceeded the program’s asset limits. But in the application process, he was deemed eligible to receive a brochure on domestic violence services, which under state policy allowed him to receive food stamps. Three weeks later, his first food-stamp benefits arrived in the mail. The taxpayer cash arrived like clockwork for the next 19 months, ultimately amounting to more than $6,000. (Rob only did this to prove the system was broken, and instead of keeping the money, he donated every penny to charity.)
It’s no accident that despite being a millionaire, Rob received welfare payments that are supposed to be for the truly vulnerable. The federal government and states have conspired to create a system that intentionally bypasses the program’s eligibility standards. Call it fraud by design.
Federal law establishes two ways to qualify for stamps – either by meeting the income and asset limits, or by qualifying for a cash welfare program. But in 1999, the Clinton administration issued guidance that lets states decide what qualifies as a benefit under those programs. States have responded by offering benefits that are nothing of the kind, in a deliberate attempt to bypass the asset and income limits for food stamps. The domestic violence brochure that Rob received is a good example. States routinely print pamphlets or establish hotlines that have nothing to do with food stamps, yet states deem them as benefits that let ineligible people get on the program anyway.
The Clinton administration frankly admitted the guidance violated congressional intent. The Obama administration later encouraged as many states as possible to use this loophole, while giving it a formal name: “Broad-Based Categorical Eligibility.” Today, 43 states and Washington, D.C.. have embraced this fraud. Our organization estimates that at least 5.9 million otherwise ineligible people are enrolled in food stamps through this loophole. They are also a major reason why at least one out of every $10 spent on food stamps is improper.
Hellbound and Down 