Welfare recipients take out cash at strip clubs

New report claims people on welfare are partying on your tax dollars

This is a RUSH transcript from "The O'Reilly Factor," January 08, 2013. This copy may not be in its final form and may be updated.

Watch "The O'Reilly Factor" weeknights at 8 p.m. and 11 p.m. ET!

O'REILLY: "Personal Story Segment" tonight. The "New York Post" reporting that some welfare recipients in New York State have accessed their benefits in strip clubs. "The Post" filed a Freedom of Information Act request to find out where cash withdrawals were being made by welfare recipients.

Now there is a bill that would make withdrawing money from certain entertainment facilities illegal. With us Jimmy McMillan who ran for Mayor of New York City. And from Washington, Diana Furchtgott-Roth, senior fellow at the Manhattan Institute.

So how bad do you think the problem is, Diana? Is it just a little thing or is there abuse going on here?

DIANA FURCHTGOTT-ROTH, SENIOR FELLOW, MANHATTAN INSTITUTE: Well even if it is a little thing withdrawing these funds in casinos and liquor stores gives a lot of temptation to spend it right there. Unfortunately the government, the state government, the federal government doesn't keep data on where people withdraw that cash benefit.

(CROSSTALK)

O'REILLY: How does that work? They have a little card have right you get.

FURCHTGOTT-ROTH: They have a little card. They put it in an ATM machine.

O'REILLY: Right, right.

FURCHTGOTT-ROTH: They get the cash out. The cash is supposed to be spent on rent, on utilities and on household purchases.

O'REILLY: And they can access almost any ATM machine anywhere right, there's gazillions of them.

FURCHTGOTT-ROTH: That's right. Exactly. There are gazillions of them.

O'REILLY: All right, so Mr. McMillan "The New York Post" found out that you know strip clubs, liquor stores, some gambling establishments they were using the card in there. That's not good.

JIMMY MCMILLAN, CANDIDATE FOR NYC MAYOR: Well ATM machine across the street. The ATM machine where I went to doesn't work. So ironically it's in the strip club. But you can't assume that a person withdrawing money from an ATM machine is spending it in a strip club.

O'REILLY: I don't know -- I don't know if you can assume it but why would you go into a strip club when there are ATM machines everywhere. Why wouldn't you go to a Dunkin' Donuts. I mean come on.

MCMILLAN: Temporarily out of service, it could have all sorts of fees. You have $1.75 at some machines and also $2.50. So you might, you wouldn't want to go to one that's $2.50 you try to find the cheapest one.

O'REILLY: Do you think -- really seriously do you think somebody is going to walk into a strip club just because they want to get some of their welfare benefits and then walk out? I mean, come on?

MCMILLAN: Well, I'm a former stripper.

O'REILLY: You are a former stripper?

MCMILLAN: I'm a former stripper.

O'REILLY: Here in the United States or in some other country.

MCMILLAN: In the United States. And being a former stripper --

O'REILLY: Yes.

MCMILLAN: And 100 percent of the strippers are welfare recipients.

O'REILLY: Wait, wait, wait you are telling me that the strippers are welfare recipients?

MCMILLAN: Yes.

O'REILLY: Aren't you getting paid.

MCMILLAN: They are -- they need that money Bill, because they have someone babysitting their children so when they get off from work they may have to get money from that machine.

O'REILLY: All right. So let me get this straight but you get paid to strip, right?

MCMILLAN: You get paid.

O'REILLY: But you're on welfare too.

MCMILLAN: And you're on welfare, yes.

FURCHTGOTT-ROTH: Because they don't get paid enough. They don't get paid enough.

MCMILLAN: Thank you, thank you so much. The benefit. You need -- this is something that we're -- I ran for governor for state of New York last year.

O'REILLY: Yes.

MCMILLAN: And this was a part of my platform in the beginning.

O'REILLY: So you think it's ok then for people to access both strippers and people watching strippers?

MCMILLAN: It's baseless for the state legislative body to get up and talk about this matter because there's many things you have people on Wall Street with businesses entire family is on welfare. So if you won't --

(CROSSTALK)

O'REILLY: Well, that's not right.

MCMILLAN: Well how could the federal -- how -- what do you call sinful -- what do you call it sinful -- sinful -- sinful spending.

O'REILLY: Yes I mean, you want to spend the money the way the taxpayer is allotting it to you on rent and food. Not entertainment, gambling and liquor, come on.

MCMILLAN: It's being abuse and being abuse when I ran for governor.

O'REILLY: So you are admitting that welfare is abused.

MCMILLAN: It's being abused. It needs to be reformed.

O'REILLY: Ok, all right, I'm glad so I think you, me and Diana agree that this needs to be reformed. How big a problem do you see at the Manhattan Institute of abuse of welfare? Look, we just came off the thing where I said I wouldn't print the names of welfare people but I would print the names of welfare cheats, people who get money from the public and then spend it on frivolous things, narcotics or booze or whatever.

I think that's a horrible abuse of the taxpayer how prevalent is that Diana.

FURCHTGOTT-ROTH: We -- well we have the eligibility for food stamps as being expanding rapidly, we have about 47 million people on food stamps. It expanded in 2002, 2008, it expanded again under the stimulus bill. And so what we need to make sure is that the benefits are going to people who really need them.

O'REILLY: But do you have any idea on the -- on how much of the stuff is being used legitimately or illegitimately. Is there any study on that, any stats on that?

FURCHTGOTT-ROTH: We -- we do not have any good data on that. Undoubtedly some of it is -- undoubtedly some of it is but we don't have good data on that.

(CROSSTALK)

O'REILLY: All right, now you look at this issue.

MCMILLAN: And that is one. That is my problem, my problem is that the states should not go by a media report without conducting their own investigation.

O'REILLY: I agree with you. I want the stats.

MCMILLAN: You cannot -- you cannot assume and they are assuming. So I would leave it alone until you conduct a full thorough investigation before you draw any assumption on why you are spending this. Why you are getting this money from a strip club.

O'REILLY: All right. We do need a law.

FURCHTGOTT-ROTH: No. I think that these people really --

(CROSSTALK)

MCMILLAN: No, no.

O'REILLY: You don't need a law?

MCMILLAN: No, I think she may agree with me not without a thorough investigation. When you find out that it's being abused in that way then you can take the best step --

O'REILLY: Well, why not pass the law anyway because you know some people are doing it?

FURCHTGOTT-ROTH: Yes.

MCMILLAN: Constitution laws where you are (inaudible) violating constitutional law.

O'REILLY: You know some people are doing it you pass a law you have to use it for staples. And you can't use it.

MCMILLAN: There is a bad apple in every bunch.

O'REILLY: Right. So let's have the apple be held accountable there Jim.

MCMILLAN: You can't throw the entire bunch away because you've got bad apple.

O'REILLY: I'm not throwing anybody away. Just have rules.

MCMILLAN: You find a way to --

FURCHTGOTT-ROTH: And it's also very easy to be tempted --

MCMILLAN: I agree.

FURCHTGOTT-ROTH: -- it's very easy to be tempted if you get money out of the machine at the casino or the liquor store to spend it there. And it's much easier to have a law that says you just cannot get it out of a machine right there.

O'REILLY: And I think we should. I think it will happen here. Well it's a very interesting discussion. And Jim, I was a little taken aback by the revelation that you were a stripper at one time.

MCMILLAN: For a reason.

O'REILLY: Yes that was below 1950?

MCMILLAN: I'm exposed to Agent Orange and I have a deformed daughter the government told me we can't help you with your children. My daughter has spinal bifida and I need money to get my daughter's surgery.

(CROSSTALK)

O'REILLY: And that's what happened. You know you have to write a book, Jim. You've got to write a book. You got to get all of this out.

MCMILLAN: Yes, thank you.

Content and Programming Copyright 2013 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2013 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.