California shadow welfare system exposed
Manhattan Institute senior fellow Christopher Rufo exposes California's shadow welfare system that allegedly spends billions on housing and healthcare for illegal immigrants on 'America's Newsroom.'
Beer. Liquor. Cigarettes. Porn.
This isn’t just a list of things that can be bad for you. This is a list of things that Americans are buying with cash welfare, thanks to a massive loophole in federal law.
Thankfully, states are finally taking action to prevent this abuse and protect taxpayers, with strong guidance from the Trump administration. It’s an overlooked — but important — new front in the ongoing War on Fraud.
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The latest state to close this loophole is Nebraska. On Oct. 9, Republican Gov. Jim Pillen directed the state to stop recipients of cash welfare from spending money on items like tobacco, porn, tattoos, psychic and fortune-telling services, luxury watches and much more. Going forward, if you receive money under the Temporary Assistance for Needy Families (TANF) program in Nebraska, you cannot spend the money on things the taxpayer shouldn’t be funding in the first place.
Nebraska Governor Jim Pillen speaks during a statue dedication ceremony for US writer and novelist Willa Cather, in Statuary Hall of the US Capitol in Washington, DC, on June 7, 2023. (JIM WATSON/AFP via Getty Images)
Americans may be forgiven for wondering why people in Nebraska — or anywhere else — were ever able to buy these things with cash welfare. After all, most people assume that government assistance is only supposed to fund specific things that families need. Cash welfare in particular is explicitly designed to help low-income families "achieve economic security and stability." So, how did cigarettes and smut enter the picture?
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It’s true that federal rules stop you from spending cash welfare at places like liquor stores. But you can still buy alcohol at plenty of other places, such as grocery stores. Similarly, you can’t spend cash welfare at casinos or strip clubs, but you can still gamble or buy pornography in plenty of other places.
This loophole has existed for roughly 30 years, since TANF began — and it’s so large, it’s laughable. Did lawmakers not realize that alcohol isn’t just sold at the corner store? Do our nation’s leaders not know that "adult entertainment" is available outside of seedy clubs?
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These are far from the only non-essential — and deeply questionable — things that cash welfare is funding. Taxpayers are also able to pay for things like concert tickets, streaming subscriptions, tattoos and luxury services like spa treatments. It’s enough to make you wonder: When Congress created cash welfare, did it put any meaningful restrictions on how the money could be used?
Unfortunately, closing this loophole in one fell swoop would require another act of Congress. But thankfully, the Trump administration has issued guidance explaining how states can close this loophole, one by one. States can’t change federal requirements for cash welfare. But they can ask the federal government to approve stronger requirements on a state-by-state basis, which explains the sudden and welcome progress.
Before Nebraska, Florida took the first meaningful action to stop this abuse. In August, Republican Gov. Ron DeSantis announced that he was blocking cash welfare from being spent on tobacco products, drugs, porn, tattoos, video games, fortune-telling services, and a slew of other obviously non-essential goods and services. The Trump administration quickly approved the Florida plan, which DeSantis rightly said will protect "Floridians who genuinely need assistance" while also guarding taxpayers from fraud and abuse.
What are other state leaders waiting for?
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It’s shocking that any state has allowed such blatant abuse of the taxpayer’s generosity for so long. Perhaps they’ve been waiting for Congress to act, but given the dysfunction in D.C., that was always a long shot. Regardless, now is the time for governors to act. The easiest thing to do is to follow Florida and Nebraska’s lead and simply amend their state plans for cash welfare. Governors could also work with state lawmakers if they want to ensure more permanent reforms, while holding retailers accountable for circumventing restrictions.
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Bottom line: Every state must close this cash welfare loophole. No one should be using the taxpayer’s money to buy pre-mixed cocktails and porn.
