The Lottery Winner and Food Stamps

How do you determine economic need?
by | May 26, 2011

My recent column, The Ugly Side of Transparency, talked about the media frenzy surrounding food-stamp recipients' successful efforts in using their benefits for booze, tattoos and gambling.

Now comes this story: A man from Michigan, who won $2 million dollars in the lottery, was still using his Electronic Benefit Transfer (EBT) card a year later to enjoy taxpayer-funded dining.

Brian Rooney, the director of policy and compliance at the Michigan Department of Human Services (DHS) told a reporter that the recipient, Leroy Fick, is legally eligible for this food assistance, since under federal guidelines the state isn't allowed to count lump-sum payments.

Fick told a TV crew that the agency was aware of his lottery winnings, and had informed him he was still eligible. "If you're going to sit there and try and make me feel bad, you ain't gonna do it," said Fick, who reportedly lives in a new home and drives an Audi convertible.

With the Michigan economy in the tank, there are a lot of truly needy individuals who could use Fick's benefits more than Fick. But what can state officials do? Rules are rules.

On his blog, governmentisgood.com, Professor Douglas J. Amy of Mt. Holyoke College argues that impartial execution of the rules, regardless of the outcome, is a desirable feature of democratic government. "It is true that bureaucrats' treatment of us is often based on general rules and policies, rather than who we are as individuals. But what we fail to see is that this is actually a good thing.... Dealing with us impersonally is what guarantees that our treatment is not arbitrary, discriminatory, or abusive. It is what discourages police officers from handing out tickets based on your race or the political bumper stickers on your car...."

Professor Amy contends that it wouldn't be wise to allow public officials to exercise their discretion in who gets a benefit. "[W]e should not be so quick to condemn government officials for not dealing with us as unique individuals," writes Amy. "We should try to remember that this practice is an important political safeguard of the modern democratic state."

The outcome still offends common sense. Not surprisingly, when this news hit the papers many elected officials expressed shock -- even though legislators who created the program's guidelines in the first place.

This case also brings into focus another serious challenge for government: How do you determine economic need? In this case, this food assistance program simply looks at income. Other programs look at assets; some count pensions and insurance settlements.

Tricky cases make for difficult situations. Would you want a 26-year-old single mom earning $22,000 and deep in debt to qualify for aid? You would? Well, what if I told you she was just finishing up her med school residency program and shared a swank apartment with her brain surgeon boyfriend? Does that change things?

Now imagine how difficult it is to craft legislative rules that provides for the needy single mother and excludes the one with the stethoscope. Still want to blame the politicians?

Such circumstances aren't merely theoretical. News stories recently emerged that the mayor of Lawrence, Mass., with a salary of over $100,000, was living in his girlfriend's apartment while she was benefitting from federal heating fuel assistance.

The mayor and the lottery winner are atypically unsympathetic aid recipients. These stories are frustrating for taxpayers and public employees alike. We must resist the temptation to play a game of pin the blame on the bureaucrat, and instead rethink these programs so as to limit assistance to only the truly needy.

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