[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]




 
 SNAP: EXAMINING EFFORTS TO COMBAT FRAUD AND IMPROVE PROGRAM INTEGRITY

=======================================================================

                             JOINT HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                         GOVERNMENT OPERATIONS

                                AND THE

                      SUBCOMMITTEE ON THE INTERIOR

                                 OF THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 9, 2016

                               __________

                           Serial No. 114-100

                               __________

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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                     JASON CHAFFETZ, Utah, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, Jr., Tennessee       CAROLYN B. MALONEY, New York
JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of 
TIM WALBERG, Michigan                    Columbia
JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
BLAKE FARENTHOLD, Texas              MATT CARTWRIGHT, Pennsylvania
CYNTHIA M. LUMMIS, Wyoming           TAMMY DUCKWORTH, Illinois
THOMAS MASSIE, Kentucky              ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina         BRENDA L. LAWRENCE, Michigan
RON DeSANTIS, Florida                TED LIEU, California
MICK MULVANEY, South Carolina        BONNIE WATSON COLEMAN, New Jersey
KEN BUCK, Colorado                   STACEY E. PLASKETT, Virgin Islands
MARK WALKER, North Carolina          MARK DeSAULNIER, California
ROD BLUM, Iowa                       BRENDAN F. BOYLE, Pennsylvania
JODY B. HICE, Georgia                PETER WELCH, Vermont
STEVE RUSSELL, Oklahoma              MICHELLE LUJAN GRISHAM, New Mexico
EARL L. ``BUDDY'' CARTER, Georgia
GLENN GROTHMAN, Wisconsin
WILL HURD, Texas
GARY J. PALMER, Alabama
                                 ------                                


                   Jennifer Hemingway, Staff Director
                 David Rapallo, Minority Staff Director
            Ryan Hambleton, Senior Professional Staff Member
    Katie Bailey, Subcommittee Staff Director, Government Operations
                           Willie Marx, Clerk
                 Subcommittee on Government Operations

                 MARK MEADOWS, North Carolina, Chairman
JIM JORDAN, Ohio                     GERALD E. CONNOLLY, Virginia, 
TIM WALBERG, Michigan, Vice Chair        Ranking Minority Member
TREY GOWDY, South Carolina           CAROLYN B. MALONEY, New York
THOMAS MASSIE, Kentucky              ELEANOR HOLMES NORTON, District of 
MICK MULVANEY, South Carolina            Columbia
KEN BUCK, Colorado                   WM. LACY CLAY, Missouri
EARL L. ``BUDDY'' CARTER, Georgia    STACEY E. PLASKETT, Virgin Islands
GLENN GROTHMAN, Wisconsin            STEPHEN F. LYNCH, Massachusetts
                                 ------                                

                      Subcommittee on the Interior

                  CYNTHIA M. LUMMIS, Wyoming, Chairman
PAUL A. GOSAR, Arizona               BRENDA L. LAWRENCE, Michigan, 
BLAKE FARENTHOLD, Texas                  Ranking Minority Member
KEN BUCK, Colorado, Vice Chair       MATT CARTWRIGHT, Pennsylvania
STEVE RUSSELL, Oklahoma              STACEY E. PLASKETT, Virgin Islands
GARY J. PALMER, Alabama

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 9, 2016.....................................     1

                               WITNESSES

Mr. Kevin Concannon, Under Secretary for Food, Nutrition, and 
  Consumer Services, U.S. Department of Agriculture
    Oral Statement...............................................     5
    Written Statement............................................     8
Ms. Kay Brown, Director, Education, Workforce, and Income 
  Security, U.S. Government Accountability Office
    Oral Statement...............................................    19
    Written Statement............................................    21
Ms. Mary Mayhew, Commissioner, Maine Department of Health and 
  Human Services
    Oral Statement...............................................    43
    Written Statement............................................    45
Mr. Mike Carroll, Secretary, Florida Department of Children and 
  Family Services
    Oral Statement...............................................    59
    Written Statement............................................    61
Ms. Stacy Dean, Vice President for Food Assistance Policy, Center 
  on Budget and Policy Priorities
    Oral Statement...............................................    65
    Written Statement............................................    67

                                APPENDIX

April 26, 2016, letter from Connie Derr, Council 18 Exeutive 
  Director, American Federation of State, County, and Municipal 
  Employees, to Bill Ludwig, Southwest Regional Director, U.S. 
  Regional Director, Submitted by Rep. Lujan Grisham.............   126
October 13, 2016, Letter from Kevin W. Concannon, Under 
  Secretary, Food Nutrition and Consumer Services, U.S. 
  Department of Agriculture, to Chairman Mark Meadows of the 
  Government Operations Subcommittee, Submitted by Chairman 
  Meadows........................................................   128
Florida State Agency Notification of Major Changes in Program, 
  Submitted by Chairman Meadows..................................   130


 SNAP: EXAMINING EFFORTS TO COMBAT FRAUD AND IMPROVE PROGRAM INTEGRITY

                              ----------                              


                         Thursday, June 9, 2016

                  House of Representatives,
 Subcommittee on Government Operations, joint with 
                  the Subcommittee on the Interior,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittees met, pursuant to call, at 2:05 p.m., in 
Room 2154, Rayburn House Office Building, Hon. Mark Meadows 
[chairman of the Subcommittee on Government Operations] 
presiding.
    Present from Subcommittee on Government Operations: 
Representatives Meadows, Jordan, Walberg, Massie, Palmer, 
Carter, Grothman, Connolly, Norton, and Plaskett.
    Present from Subcommittee on the Interior: Representatives 
Lummis, Palmer, Lawrence, Cartwright, and Plaskett.
    Also Present: Representative Lujan Grisham.
    Mr. Meadows. All right. The Subcommittee on Government 
Operations and the Subcommittee on the Interior will come to 
order. And without objection, the chair is authorized to 
declare a recess at any time.
    I want to thank you for coming, and I thank my other 
chairman here and ranking members for their willingness to 
embark on this topic.
    For many individuals and families, the SNAP program is a 
vital lifeline to ensure that there is food on the table. And I 
think we can all agree that no one in America should go hungry. 
While most individuals and retailers in the SNAP program are 
honest participants, unfortunately, some do indeed take 
advantage of the system.
    We will hear examples today of various ways individuals and 
retailers commit fraud in trafficking such as swapping SNAP 
benefits for other cash or illegal drugs. There was a raid in 
the Florida flea market just last month that was the largest 
SNAP trafficking bust in the program's history. And so far 22 
owners of SNAP retailers at that flea market have been arrested 
or charged with over $13 million in fraud just for the past 
year.
    We will also hear about the connection between SNAP 
trafficking and the ongoing opiod epidemic in Maine and across 
this country. American taxpayers deserve to know that their tax 
dollars are being spent effectively and wisely, and when 
someone abuses a system, they defraud the American taxpayers. 
They hurt individuals and families that are truly in need. 
Despite improvements in prior years, OMB designated the SNAP 
program as a high-error program due to the estimated $2.6 
billion in improper payments for fiscal year 2015.
    So we are here today to examine how the SNAP program can 
better serve families, more efficiently utilize taxpayer 
dollars, and prevent fraud and trafficking of SNAP benefits. 
Innovative efforts to leverage technology and analyze data such 
as Florida's identity verification process and Maine's effort 
to analyze out-of-state SNAP usage can provide real helpful 
insights.
    And so I look forward to hearing from our witnesses about 
how we can improve the SNAP program to better ensure that the 
right benefits get to the families and individuals that need 
them most.
    Mr. Meadows. I now recognize my good friend, the ranking 
member of the Subcommittee on Government Operations, Mr. 
Connolly, for his opening statement.
    Mr. Connolly. I thank you, Mr. Chairman, and welcome to our 
panel. And I want to thank you for holding this hearing.
    I support the Supplemental Nutrition Assistance Program, 
which I think has proven to be an effectively managed program 
that does, in fact, reduce fraud and misuse. Individual and 
isolated examples of problems notwithstanding, there is very 
little evidence of widespread SNAP fraud. Actually, the 
evidence suggests that the Department of Agriculture 
investigates potential fraud pretty aggressively. State 
antifraud efforts are also functioning as effectively as 
possible, despite difficulties in conducting fraud 
investigations due to reduced funding and staff levels. Those 
antifraud efforts are important because SNAP benefits are a 
vital part of the national safety net.
    SNAP provides people at or below 130 percent of the poverty 
line, which is currently an annual income of $26,100 for a 
family of three--good luck in living on that--$127 a month 
toward an affordable, adequate diet. About 70 percent of SNAP 
participants are families with children, and 25 percent are in 
households with seniors and people with disabilities.
    SNAP also protects the overall economy. Because SNAP is an 
entitlement and provides money to people who need it, they 
spend it directly on food. CBO found that among policies 
implemented by Congress to stimulate economic growth and create 
jobs during the economic recession, SNAP had one of the largest 
increases in economic activity and employment per budgetary 
dollars spent. That is to say if you want a direct injection 
into the economy to stimulate, this is a great way to do it.
    According to the Census Bureau, SNAP kept 5 million 
Americans out of poverty during the recession, which followed 
the 2008 financial crisis. That is an extraordinary number. 
Since then, SNAP spending has fallen--as you would expect as 
the economy recovers--by 7 percent in 2014, and the Center of 
Budget and Policy Priorities reports that reduced caseloads 
will continue in 2016 because of the growing and stronger 
economy.
    I understand the concerns my friends on the other side of 
the aisle to ensure the SNAP program continues to work 
efficiently, and I think we have common ground on that. I too 
want to eliminate the small percentage of bad actors who 
misrepresent facts about themselves and cheat people in need.
    In fiscal year 2012, over 100 FNS analysts and 
investigators around the country reviewed more than 15,000 
stores and conducted nearly 4,500 undercover investigations. 
Over the last 10 years, more than 8,300 retail stores were 
permanently disqualified because of fraud.
    I find the House majority's recent proposal in the war on 
poverty troubling. The answer to completely eliminating fraud 
in the SNAP program is not by converting it into a block grant 
program. Actually, block granting step is probably the first 
step to eliminating SNAP. That could be the fate of a number of 
safety-net programs such as child welfare services and elderly 
services. They were put together into the social services block 
grant. This year, the Republican budget eliminates them.
    I would welcome the opportunity to work with my friends on 
the other side of the aisle to find ways to improve the SNAP 
program seeing as it actually serves more constituents often in 
their districts, rural districts than actually their Democratic 
counterparts. The absence of widespread fraud and the tiny 
potential savings from SNAP belie the purported interest 
sometimes in oversight.
    So I look forward to the common ground. We want to make 
sure this program is effective and as clean as possible, but we 
don't want to harm in the process the people who rely on this 
program and use it to get back up on their feet and become 
productive citizens.
    With that, I yield back.
    Mr. Meadows. I thank the gentleman.
    The chair now recognizes the chairwoman of the Subcommittee 
on Interior, Mrs. Lummis, for her opening statement.
    Mrs. Lummis. Thank you, Mr. Chairman.
    I want to waive my opening statement so we can listen to 
our witnesses, and I want to especially thank you all for being 
here today. The representatives and witnesses from Maine and 
Florida, I believe, are particularly to be recognized for 
traveling all this way to provide their guidance and expertise 
on this subject. Having come from the executive branch of State 
government, I know how hard you work, and you are on the 
frontlines. We really appreciate what you do, so thank you for 
being here today to share your expertise, one and all.
    Thank you, Mr. Chairman. I yield back.
    Mr. Meadows. I thank the gentlewoman from Wyoming.
    The chair recognizes the gentlewoman, Mrs. Lummis, for her 
opening statement, the ranking member of the Subcommittee on 
Interior--Lawrence, I am sorry.
    Mrs. Lawrence. Sister from another mother.
    [Laughter.]
    Mr. Meadows. My apologies. Twins separated at birth. Mrs. 
Lawrence, go ahead.
    Mrs. Lummis. Go ahead, sis. Give them a good one.
    [Laughter.]
    Mrs. Lawrence. Thank you, Mr. Chairman. I would like to 
thank our witnesses for being here today.
    The Supplemental Nutrition Assistance Program, SNAP, is our 
country's most effective and important tool for fighting 
hunger. In 2015 there were over 45 million SNAP participants. 
While this number sounds extremely high, the Great Recession 
drove many to depend on SNAP.
    My home State of Michigan was hard-hit by the recession, as 
many of you know, and SNAP was there to help. Michigan received 
over $2.5 billion in SNAP benefits, 198 percent higher than the 
national average. And 1.6 million residents depend on SNAP 
benefits to survive.
    In my district, 49 percent of SNAP participants were in 
families with children, 27 percent were families with elderly, 
and 48 were working families. Ladies and gentlemen, understand 
the qualification income levels to receive SNAP, and 49 percent 
were working families. In other words, they were working poor.
    SNAP is not easy to get. The average monthly benefit is 
$126 per person. That is less than $32 per person a week. How 
many of you can live on $32 a week to feed yourself? Not a 
luxury, food is a human basic need.
    Recipients must go through a rigorous application process 
where they meet specific qualifications and prove their 
eligibility. SNAP recipients must reapply every 6 to 12 months 
and inform the State of their income changes. There are even 
minimum periods of disqualifications ranging from 1 to 6 
months, which may be increased by the State SNAP agencies. 
States even have the option to disqualify an entire family for 
up to 180 days if the household head fails to comply with work 
requirements. So a child could be penalized if the parent does 
not comply.
    I would like to enter into the record the Michigan 
Department of Health and Human Services application booklet, 
which includes the types of forms families must fill out to get 
public assistance. And I want you to look at this. This is what 
a person is given in Michigan, 40 pages they must fill out in 
order to apply for SNAP.
    The SNAP benefit can only be used to purchase approved 
foods sold by authorized SNAP retailers. There is a restaurant 
option for populations that have difficulty preparing food such 
as elderly and veterans, and in a few States, including 
California, Arizona, and Michigan.
    I feel the allegations of fraud and abuse are overblown. 
SNAP has been one of the lowest fraud rates in any Federal 
program. Of the past several years, USDA has taken aggressive 
steps to improve SNAP oversight and to work with States in 
rooting out waste. USDA have seen declines in the rate of 
trafficking from 4 percent down to a little over 1 percent of 
benefits in the last 20 years. While no amount of fraud or 
waste is acceptable, we must not throw out the baby with the 
water. You would not shut off the water for an entire street or 
entire city if a few households leave their hoses on for an 
entire day. You would not stop buying groceries for your family 
because the oldest child drank up all of the milk or spilled 
it.
    We should not make the majority suffer for a few bad 
apples. But this is exactly what we are dealing with today. 
This year, Speaker Ryan's Task Force on Poverty, Opportunity, 
and Upward Mobility is proposing to transfer SNAP into a block 
grant. The 2017 budget, ladies and gentlemen, call on 
eliminating another block grant of social services for children 
and elderly. I am worried that some future actions by my 
colleagues on the other side of the aisle will call for 
eliminating a block grant that they are now trying to put into 
SNAP.
    And I yield back my time.
    Mr. Meadows. I thank the gentlewoman from Michigan, Mrs. 
Lawrence, for her opening statement.
    Mrs. Lawrence. Thank you, sir. But my sister and I, we are 
still good.
    Mr. Meadows. Well, we appreciate that.
    And I will hold the record open for 5 legislative days for 
any members who would like to submit a written statement.
    I will now recognize our panel of witnesses, and I am 
pleased to welcome Mr. Kevin Concannon, Under Secretary for 
Food, Nutrition, and Consumer Services at the U.S. Department 
of Agriculture, welcome; Ms. Kay Brown, director of Education, 
Workforce, and Income Security at the U.S. Government 
Accountability Office. Welcome, Ms. Brown. Ms. Mary Mayhew, 
commissioner of Maine's Department of Health and Human 
Services. Thank you, Ms. Mary Mayhew for your traveling and 
your willingness to be here. Mr. Mike Carroll, the secretary of 
the Florida Department of Children and Family Services. Thank 
you, Mr. Carroll, for making the special effort to be here. And 
Ms. Stacy Dean, vice president for food assistance policy at 
the Center on Budget and Policy Priorities.
    Welcome to you all. And pursuant to committee rules, all 
witnesses will be sworn in before they testify, so I would ask 
that you please rise and raise your right hand.
    [Witnesses sworn.]
    Mr. Meadows. And let the record reflect that all witnesses 
answered in the affirmative. And in order to allow time for 
discussion, I would ask that you please limit your oral 
testimony to 5 minutes. However, your entire written testimony 
will be made part of the record.
    And I would go ahead and now recognize Mr. Concannon for 5 
minutes.

                       WITNESS STATEMENTS

                  STATEMENT OF KEVIN CONCANNON

    Mr. Concannon. Thank you very much. Chairmen and members of 
the committee, I appreciate the opportunity to explain directly 
FNS's efforts to assure the integrity of the SNAP program. 
Integrity is essential to SNAP's success, and so it's paramount 
to me personally and to the agency. And as I've said many 
times, we have zero tolerance for fraud in SNAP.
    SNAP provides essential food assistance, nutrition 
education, work-support services to 44.3 million low-income 
individuals. In 2014, 64 percent of recipients were children, 
seniors, and those with disabilities, and 42 percent lived in a 
household with earnings. To those who claim that SNAP 
discourages work, I say that the data clearly states otherwise.
    In SNAP, those who can work must register to do so and 
accept a job if offered. This core program requirement cannot 
be waived by a State. In 2015, 13.6 million SNAP recipients 
were registered to work. USDA funds SNAP's employment and 
training programs to support States in helping recipients find 
and keep good-paying jobs.
    In 2015, SNAP EBT served more than 1 million recipients. 
Unfortunately, some State agencies do too little to use the 
Federal funding, technical assistance, and support available. 
So USDA has expanded its capacity to help States meet their E&T 
responsibilities through the newly established Office of 
Employment and Training, staff of the team with long experience 
at both the Federal and State level. They're building a more 
robust foundation of monitor, improve, and promote SNAP EBT.
    I believe strongly that the public's concern over high SNAP 
participation must be resolved in the right way, by getting 
people jobs. The wrong way is to reduce cost, is to kick people 
off SNAP, or worse, block grant it, which would also erode the 
national standards and accountability that helps make SNAP 
effective.
    Let me turn now to program integrity. USDA's focus on 
identifying, penalizing, and excluding those who seek to 
defraud SNAP has reduced trafficking from 4 percent to 1.3 
percent over the last 20 years. While this is real progress 
when almost $70 billion total are involved, there's no 
acceptable level of fraud, and complacency is never an option. 
Continuous attention, energy, and diligence are required.
    This administration is pursuing an energetic anti-
trafficking strategy. First, we've organized SNAP retailer 
management into a single centralized business structure that 
targets resources to high-risk areas. Second, we use data 
analytics to closely track EBT transactions and identify stores 
most likely to traffic. Third, we've upgraded our alert system 
with state-of-the-art technology to better detect suspicious 
activity and are strengthening policies to combat misuse of 
benefits and impose stronger penalties against retailers who 
break the rules. Store owners that traffic are disqualified for 
life.
    And on the GAO report, we're in mutual agreement and 
support both the findings and the recommendations of the GAO 
audit. These efforts bring real results. In 2015, we issued 
almost 2,700 sanctions against violating retailers, a 21 
percent increase over the prior year. More than 1,900 store 
owners were permanently disqualified for trafficking or 
falsifying applications, and over 700 are sanctioned for other 
violations.
    We believe that predictive data analytics, combined with 
related information such as excessive requests for card 
replacements can be real game-changers in targeting the most 
likely trafficking recipients. Unfortunately, very few States 
really take advantage of this option, so there's much room for 
improvement.
    While the Federal Government is responsible for controlling 
retailer trafficking, action against recipient trafficking, the 
other side of the same crime, is a State agency responsibility. 
States conduct investigations of recipient fraud, disqualify 
violation of SNAP, and make claims to recover improperly 
received benefits.
    That said, I must caution that while some States see photo 
EBT cards as a solution to trafficking, it does not work as 
well as they may think. Let me explain. SNAP is a household 
benefit, so any member of that household may legally use that 
card. Putting one person's photo on the card simply creates 
confusion at the point of sale. A card with a photo cannot and 
will not prevent two bad actors from breaking the law, case-in-
point, the 2001 audit in the State of Missouri. But it is an 
option for States, and our main concern is that States that 
implement photo EBT comply with Federal law and regulation. 
That's part of our oversight duties.
    One final but very important point I want to make, the 
majority of SNAP recipients honor the rules, play by the rules, 
as is true of the majority of retailers as well. The Nation 
entrusts USDA and our State partners to administer SNAP with 
accountability and integrity. Americans expect and deserve 
their government to manage hard-earned tax dollars. Without 
that, we simply cannot sustain public confidence. That's why we 
are committed to tough action to find and punish fraud.
    Thank you.
    [Prepared statement of Mr. Concannon follows:]
    
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    Mr. Meadows. Thank you.
    Ms. Brown, you are recognized for 5 minutes.

                     STATEMENT OF KAY BROWN

    Ms. Brown. Chairman Meadows, Ranking Member Lawrence, and 
members of the subcommittees, I'm pleased to be here today to 
discuss our work on Federal and State efforts to combat fraud 
by SNAP recipients. My remarks are based on our 2014 report 
with updates on USDA actions on our recommendations.
    We studied the efforts of 11 States to prevent recipient 
fraud and detect recipient trafficking. First on preventing 
recipient fraud, States are responsible for investigating 
possible intentional program violations such as whether 
applicants have made false or misleading statements in order to 
obtain benefits. All 11 selected States were using well-known 
tools either required or recommended by USDA for detecting 
fraud. States were operating fraud hotlines and comparing 
information provided by applicants with data from various 
sources to check for accuracy. Some States were performing 
additional checks such as paying private companies for data to 
confirm the income information provided by applicants.
    However, most of these States reported difficulties in 
conducting fraud investigations in part due to steady or even 
reduced staffing levels at a time when the numbers of SNAP 
recipients had grown significantly. Further, the size, range of 
duties, and programs covered by the investigative units varied 
widely by State. We recommended that USDA explore ways that 
Federal financial incentives could better support cost-
effective State fraud prevention efforts.
    Regarding detecting recipient trafficking, concerns had 
been raised that recipients may be trafficking their benefits 
by exchanging them for cash or goods and services on e-commerce 
and social media sites. In response, USDA recommended States 
use certain free Web-based automated tools to help detect such 
trafficking. However, State officials reported problems with 
these tools, and upon testing them, we found them to be of 
limited use. In fact, we found that manually searching e-
commerce Web sites produced more positive results than were 
detected by the automated tools. We recommended that USDA 
reassess its guidance.
    We also reviewed USDA's guidance to States regarding 
recipients who requested multiple EBT card replacements. This 
can be but is not necessarily an indication of trafficking. We 
found that States had limited success detecting fraud using 
USDA's approach. Instead, using data we obtained from three 
States, we developed a more targeted and efficient approach. By 
combining data sources, we identified households that had 
requested multiple replacement cards and, at around the same 
time, had also made purchases considered to be potential signs 
of trafficking. This type of approach can help identify 
households at higher risk of trafficking for benefits. And we 
recommended that USDA revisit its guidance in this area.
    Finally, we also studied USDA oversight of State antifraud 
activities. We reported that USDA had increased its oversight 
in recent years. It issued new regulations and guidance and 
commissioned studies on recipient fraud. Also, in fiscal year 
2013 for the first time, the Department examined all 50 States' 
compliance with Federal requirements governing SNAP antifraud 
activities.
    Despite these efforts, we found that USDA did not have 
consistent and reliable data on States' activities. Its 
reporting guidance lacked specificity, and States did not have 
a uniform understanding of what should be reported. As a 
result, USDA could not compare activities and performance 
across States. We recommended the Department take steps to 
enhance the consistency among State reports.
    USDA officials agreed with all of our recommendations and 
are taking substantive steps in response. As you have just 
heard, they have made progress in studying improved anti-
trafficking approaches, and they have redesigned the forms 
States used to report investigations. However, they have yet to 
finalize actions that would fully address all of our 
recommendations. Given the significant size of the program, the 
reality of constrained public resources, and the constant 
advances in technology, it's particularly important that USDA 
make every effort to make sure SNAP funds are used for their 
intended purposes.
    This concludes my statement. I'm happy to answer any 
questions.
    [Prepared statement of Ms. Brown follows:]
    
    
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    Mr. Meadows. Thank you, Ms. Brown.
    Ms. Mayhew, you are recognized for 5 minutes, but before 
you start, I wanted to just say it was interesting to hear from 
your Governor about really leaving the home in an unbelievable 
age of 11 to go out and--so someone who has experienced poverty 
firsthand and now has raised to the highest level of the 
executive government in the State of Maine is a great story 
about American greatness. So, Ms. Mayhew, you are recognized 
for 5 minutes.

                    STATEMENT OF MARY MAYHEW

    Ms. Mayhew. Thank you, Chairman Meadows and members of the 
subcommittees. I appreciate the invitation to be here today to 
share some of our key welfare reforms that have helped to deter 
fraud, protect benefits for the truly needy, and guard against 
waste of precious taxpayer dollars.
    When Governor LePage took office in 2011, he prioritized 
reforming Maine's welfare programs to help lift families and 
individuals out of poverty and away from welfare dependency. 
Program integrity and accountability are critical to those 
reforms. There is no doubt that fraud exists in these programs, 
and every dollar that is diverted through fraudulent and 
criminal activity is a dollar taken away from a child or a 
family in need. The programs we have put in place to reduce 
fraud and abuse help to ensure that taxpayer dollars are 
reaching those in need, not fueling criminal activity.
    Our program integrity efforts have focused on data 
analytics, engagement with law enforcement, and commonsense 
measures to guard against fraud and abuse. I want to share a 
few of our efforts and make some suggestions for further 
improvements in the SNAP program. We have provided a number of 
recommendations attached to my testimony.
    Working with local law enforcement officials, we found 
regular instances of multiple EBT cards recovered in drug 
busts. In most cases, the cards are not issued to the suspects 
who are holding them. We know there is an unfortunate 
connection between benefits trafficking and the drug 
trafficking world, but current Federal SNAP regulations often 
create barriers to pursuing these traffickers. FNS rules 
provide that if someone has the EBT card and the PIN, they are 
considered an authorized user of the card. Regulations should 
require authorized users to register with the welfare agency 
and be limited to no more than three per case, similar to WIC.
    Under Federal law, States have the option of placing photos 
on EBT cards. Maine pursued this option to help address the 
trafficking in EBT cards for drugs or cash. When someone's 
picture is on their card, it follows that they are less likely 
to sell it or trade it. Maine's photo EBT program is voluntary, 
and we currently have about 60,000 cards with photos out of 
101,000 SNAP cases.
    While this is a legal option for all States, myriad 
regulations and rules place a chilling effect on States that 
may be considering photos. This basic protection against fraud 
and abuse should be streamlined so States can implement this 
reform without undue burden. It would also be a reasonable step 
to require States to place photos on their EBT cards to deter 
fraud.
    In 2011, Maine had more than $15 million in welfare 
benefits spent outside of Maine, including significant amounts 
in places like the Bronx, Brooklyn, Philadelphia, and 
Worchester, Massachusetts. Our drug enforcement agents in Maine 
have been clear that these cities are hubs for heroin 
trafficking and other drugs which flow up the I-95 corridor to 
Maine.
    Our data system identifies anyone using a Maine EBT card 
exclusively in another State for 2 consecutive months. We then 
follow up to confirm Maine residency and appropriate use of the 
benefit. Our efforts have reduced out-of-state use, but the 
data still shows uses of SNAP benefits in places all over the 
country like New York, California, and Florida. Federal 
regulations don't currently allow States to restrict SNAP 
benefits to certain geographic areas. We believe there should 
be some reasonable restrictions on the mobility of EBT cards.
    Often, what SNAP benefit cards are trafficked, it is in 
conjunction with a SNAP-approved retailer who's helping turn 
the card to cash that can be used to purchase things other than 
food. In a recent Maine case of suspected retailer fraud, a 
small store with just one cash register had SNAP reimbursements 
totaling nearly that of a large local Hannaford grocery store 
with 18 cash registers. We found numerous purchases of $300 and 
above in this small store that had no grocery carts. This same 
store is suspected of trading cash for EBT cards and helping 
SNAP participants commit tax fraud.
    States do not have the authority to remove noncompliant or 
fraudulent stores from SNAP participation. To assist with this 
problem, States should be given the authority to investigate 
and remove offending retailers similar to WIC. All States 
should operate robust welfare fraud investigation units. To 
incentivize this, States should be allowed to retain 50 percent 
of funds collected from welfare fraud overpayments instead of 
the current 35 percent.
    Additionally, Federal rules should require that recipients 
cooperate with State welfare fraud investigators if there is a 
credible allegation of fraud or risk losing their benefits. 
Maine is determined to address the issue of fraud and to 
protect benefits for our neediest residents. States need 
additional tools. Federal laws and rules should allow and 
encourage States to pursue meaningful program integrity efforts 
without unnecessary barriers.
    Today, policies that combat fraud are too often sacrificed 
in the name of convenient and expeditious access to welfare 
benefits. We hope that Congress and the Federal Government will 
give serious consideration to our suggested reforms and will 
work to ensure that laws and regulations give States a fighting 
chance against fraud and criminal activity. Thank you.
    [Prepared statement of Ms. Mayhew follows:]
    
    
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    Mr. Meadows. Thank you, Ms. Mayhew.
    Mr. Carroll, you are recognized for 5 minutes.

                   STATEMENT OF MIKE CARROLL

    Mr. Carroll. Thank you, Chairman Meadows. It's an honor to 
be here with you today and share some insights from Florida.
    The SNAP eligibility process has changed significantly over 
the past 20 years. Today, Florida is a leader in the 
modernization of our social services system. Virtually every 
State in the Nation has come to Florida to study our model. 
Today, we receive 93 percent of our applications online. 
Eligibility staff was reduced from 7,000 to 4,000. Cost-per-
eligibility transaction dropped from $30 per application to $7, 
all while maintaining accuracy rates at or above 99 percent. 
All of these are at benchmark levels on a national level. Our 
experience is testament to how government can run an operation 
that is cost-effective, efficient, and optimizes access to 
services in a simplified way for customers.
    We do have a new fight on our hands, however, and it's 
identity theft and EBT trafficking. Our challenge now is to 
balance the need to continue being efficient with the need to 
maintain the integrity of this program going forward, and I am 
not talking about the individual who may fudge their income or 
their household composition. We're talking about major criminal 
enterprises with ties to drug sales, prostitution, and human 
trafficking. We have to work together and we have to work 
quickly to invest in the right technology, integrate fraud 
detection in every level of our process, and coordinate more 
effectively a response that's much more urgent than we 
currently have.
    In Florida, we've implemented effective front-end detection 
systems and commonsense legislation to address obvious fraud 
and abuse at the roots. We banned EBT card transactions at all 
adult entertainment and gambling venues and in the purchase of 
alcohol, we've created a fraud reward program, we've enhanced 
criminal penalties for fraud, and we've revised the definition 
of EBT trafficking in Florida law to include swapping food 
benefits for weapons or controlled substances. Last year, our 
Office of Public Benefits Integrity conducted more than 23,000 
investigations, which resulted in cost avoidance of $27.6 
million of benefits that would have been otherwise administered 
to folks who were not eligible.
    How can we improve the system? Florida has demonstrated the 
success of advanced technology with our automated identity 
verification tool and the complete automation of the system. We 
think we need to continue to invest in technology like this 
both at the front end and the back end of the system. We also 
would like to work with our Federal partners to build on these 
capabilities and eliminate the one-size-fits-all approach. We 
have to give States the flexibility and the space to implement 
and execute these programs and policies while still being able 
to come up with innovative solutions that meets the needs of 
the citizens in their State.
    We also suggest that we consider changing the current 
burden of proof of recipient fraud from a clear-and-convincing 
standard to a preponderance of the evidence, the same standard 
that's used for retailer fraud. Right now, it is easier to 
arrest a recipient than to disqualify them from the SNAP 
program.
    When it comes to retailer fraud, and this is where we feel 
a real sense of urgency in Florida, we need a much more 
comprehensive and urgent approach. FNS must start immediately 
suspending a SNAP retailer upon a criminal arrest. We need to 
require that retailers repay trafficked amounts in 
administrative sanctions that rarely happens now. SNAP retailer 
applications must be scrutinized more closely before vendors 
become authorized retailers. And we have to change the way we 
provide incentives to States and move away from a pay-and-chase 
model and start focusing on an upfront prevention model.
    I do want to talk briefly about the case that you 
mentioned, Opa-locka. It was the largest food stamp trafficking 
bust in Federal programs history. Twenty-two retailers were 
arrested. Investigators found cash and guns. They found 
storefronts that were actually drug sale operations, human 
trafficking, and prostitution operations. They found empty 
storage rooms, rotten produce, empty display boxes, plastic 
fruit and vegetables on display. One store owner was an illegal 
alien who used someone else's Social Security number to get FNS 
authorization. Another owner was here on a work permit. Another 
failed to disclose they were a convicted felon.
    Since 2011 when DCF first reported the fraud, nearly $89 
million in SNAP transactions have taken place at this location. 
DCF now has to review 41,000 SNAP recipients just since July, 
and that number is growing, to find cases that might rise to 
the level of clear and convincing evidence. And today, we've 
not been able to disqualify one SNAP recipient who was involved 
in that. The trafficking continues. At least eight retailers 
continue to operate in that location. In fact, the 2 weeks 
following the arrest, they did over $163 in EBT redemptions.
    Clearly, we can do better than this. In the State of 
Florida we're absolutely committed to making sure that folks 
who are eligible to receive these free services receive them in 
the most accurate and timely fashion possible, but we are 
equally as committed to making sure that we maintain the 
integrity of this program. And we do want to work with our 
Federal partners to make sure that happens.
    [Prepared statement of Mr. Carroll follows:]
    
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    Mr. Meadows. Thank you, Mr. Carroll, for your illuminating 
testimony.
    Ms. Dean, you are recognized for 5 minutes.

                    STATEMENT OF STACY DEAN

    Ms. Dean. Thank you. Chairman Meadows, Ranking Member 
Lawrence, thank you for the invitation to testify today. I'm 
Stacy Dean, vice president for Food Assistance Policy at the 
Center on Budget and Policy Priorities, a nonpartisan policy 
institute.
    I'm really pleased to have the opportunity to talk to you 
today about program integrity in SNAP. I've worked on SNAP for 
more than 20 years, and one of the most rewarding parts of my 
job is to work directly with State officials on improving the 
program at the local level, and that includes policy and 
operations related to program integrity.
    SNAP is the Nation's most important anti-hunger program. It 
currently helps about 44 million low-income Americans, or 1 in 
7 Americans, to afford a nutritionally adequate diet each day 
at the more than 200,000 retail store outlets that take the 
benefits.
    Despite its modest benefits which average only $1.41 per 
person per meal, it has powerful short- and long-term impacts. 
It helps family and communities weather tough economic times, 
it reduces poverty and food insecurity, it improves health, and 
it does support work. SNAP's successes can largely be 
attributed to its national entitlement structure, it's 
relatively uniform eligibility standards, its standards for 
program administration and integrity, and the fact that it's a 
food-based benefit.
    SNAP does operate with efficiency and has relatively sound 
program integrity. As I've outlined in my testimony and as you 
heard from Under Secretary Concannon, SNAP has a strong track 
record on issuing benefits accurately and identifying and 
preventing fraud. Critics who claim that caseload growth in 
recent years has been driven by waste, fraud, and abuse are 
just simply incorrect.
    Program integrity has two fundamental components. One is 
reducing errors, which is ensuring that benefits are issued to 
the correct people in the correct amount, and most error in the 
program resulting under--around error is a result of human 
error meaning basic mistakes, not fraud. States actually report 
that the majority of error in--that occurs through payment--
through payment accuracy measurement is their fault and not 
clients'.
    By contrast, fraud is when clients or retailers collude to 
exchange benefits for nonfood items or some of the unfortunate 
activities you've heard of already today, or intentionally lie 
to the program for personal benefit. Each of these issues, 
error and fraud, merits their own solutions. Identifying and 
proving a retailer is trafficking is quite a different problem 
than ensuring State workers throughout the country understand 
program rules and are applying them correctly.
    We support the ongoing effort to maintain and improve 
SNAP's program integrity. As new technology becomes available 
and as awareness of how problems are arising, there will just 
continue to be opportunities to improve SNAP accuracy and 
prevent fraud, and that's why the most recent farm bill 
included several new initiatives.
    We encourage you to assess new ideas against several 
criteria. The first question is always does it work? USDA and 
States have a strong history of testing and trying new ideas to 
assess impacts in order to determine the potential 
effectiveness nationally, and I think the Florida demo is a 
great example of that.
    This--another question is what's the scope and scale of the 
problem under discussion? Some of the most egregious examples 
of fraud are highly isolated incidences. They are completely 
unacceptable, but they may be so infrequent such that they 
shouldn't drive the programs fundamental approach to addressing 
more common everyday program integrity issues. Building 
processes based on the assumption that everyone who uses this 
program is a criminal just simply isn't an effective way to run 
the program.
    Obviously, we need to look at what are the proposed--or 
proposed solutions, projected costs, and benefits. I do think 
it's important to--even though this seems obvious, when a 
proposal is promoted as an anti-fraud activity, some are really 
reluctant to rigorously weigh its benefits and costs out of 
fear of being perceived as soft on fraud. And data-matching, I 
think, is a very good example. High-quality focused matches to 
test the veracity of client statements against available data 
is a terrific tool both for access and integrity, but expanding 
matches to--against data that may be completely irrelevant to a 
household's current circumstances is a waste of resources and 
could undermine integrity.
    Will the proposal have any negative consequences? Any new 
program integrity proposal needs to consider the implications 
on access and whether all individuals, particularly individuals 
with disabilities or other special needs, could navigate them.
    And finally, who's promoting the change? Often, private 
vendors selling program integrity solutions are some of SNAP's 
biggest critics. Their self-interest in promoting the 
perception of a program in crisis really has to be considered.
    Cost, not a lack of interest or new ideas, is often our 
biggest obstacle to addressing fraud and error. While the 
Federal Government shares in the cost of administering the 
program, State budgets are often the limiting factor to 
ensuring the best systems and technology are deployed 
nationwide. Many States have downsized their program operations 
during the recent recession and have not yet rebuilt the 
capacity to take full advantage of new technology options or 
the staff resources that could improve their efforts.
    So I look forward to the discussion today. Thank you very 
much.
    [Prepared statement of Ms. Dean follows:]
    
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    Mr. Meadows. Thank you, Ms. Dean.
    The chair recognizes the vice chair of the Subcommittee on 
Government Operations, the gentleman from Michigan, Mr. 
Walberg.
    Mr. Walberg. Thank you, Mr. Chairman, and thanks to the 
panel for being here.
    This week, my colleagues on the Republican side of the 
aisle began unveiling a policy, as was mentioned earlier, an 
agenda that is intended to tackle some of our country's biggest 
challenges. The first plank of our initiative looks at ways to 
address poverty, and SNAP is a key part of our safety net to 
serve and support the most vulnerable and make sure that that 
is the population we really and intentionally meet the needs 
of.
    Our initiative is aimed at lifting people out of poverty 
and onto the ladder of opportunity, and so, Commissioner 
Mayhew, I was especially struck in your testimony, your 
personal testimony, about the lessons your family passed on to 
you about the value of hard work, depression-era, not you ----
    Ms. Mayhew. Thank you.
    Mr. Walberg.--though my parents had the same story, but 
they were the ones in the depression era, so I came from that. 
And they had similar lessons, again, from that experience that 
I think have benefited me well and apparently you also.
    If you would be so good, Commissioner Mayhew, as to talk in 
more detail about the Federal SNAP regulations that create 
barriers, as you mentioned, barriers to your efforts to pursue 
those who traffic in benefits. Give us some more insight on 
that.
    Ms. Mayhew. Thank you. I appreciate the opportunity to 
elaborate. Certainly, we care deeply. The Governor cares deeply 
about the success of these safety net programs. And it is 
critical that we are constantly evaluating whether or not our 
limited resources are being used effectively to support 
vulnerable individuals and families.
    I also have the privilege of overseeing our child welfare 
agency, and I want to make a point and a connection about what 
we are seeing in terms of the challenges and truly destruction 
of our families when 60 percent of the children today who are 
coming into protective custody are doing so as a result of 
parental substance abuse. We know we have a serious challenge 
in our State with drugs, with substance abuse, and certainly, 
as I mentioned in my testimony, we know there's a connection 
with trafficking and EBT cards for drugs and for cash.
    So as we look at ways in which to deter, we do feel 
strongly that the opportunity to use photos on EBT cards, we've 
been very clear that the photo on the EBT card is to discourage 
fraud, that when we speak and work with local drug enforcement 
agents and they tell us about the number of EBT cards that they 
are confiscating from drug raids, and since we have implemented 
photos, they have not confiscated an EBT card with a photo on 
it.
    The challenge has been, as we have implemented, we've 
received numerous concerns and communications from the USDA 
regarding our implementation of this federally permitted 
option. And again, we've done it on a voluntary basis.
    Mr. Walberg. I was going to bring that up again. I think 
you mentioned it was voluntary.
    Ms. Mayhew. It is voluntary. Okay. We certainly offer to 
individuals the ability to put their photo on the EBT card ----
    Mr. Walberg. So what is the problem the Federal Government 
is giving on that then if ----
    Ms. Mayhew. They have raised a number of barriers. When we 
first decided that we were going to implement, we had provided 
a number of documents to the USDA to provide all of the 
background to how we intended to implement responding to all of 
their questions. We were told to stop, to not go forward. We 
felt very strongly, the Governor felt very strongly that, 
again, this is federally permitted, that we had addressed the 
questions that had been asked of us, provided detailed plans of 
how we were operationalizing this and again felt strongly that 
this was a significant tool.
    More recently, we have developed a partnership with our 
Bureau of Motor Vehicles to more conveniently access the 
driver's license photos. We are getting authorized consent from 
each of the individuals to use their driver's license photo, 
and we recently received another letter telling us to basically 
cease-and-desist between two State agencies that have agreed to 
do this, and we now have the USDA asking us to stop.
    Mr. Walberg. To not do it even though you were permitted to 
do it by law?
    Ms. Mayhew. We are. And again ----
    Mr. Concannon. They must do it, though, within the 
framework of Federal law and regulations, and that was the 
issue in Maine.
    Mr. Walberg. Well, I guess that is ----
    Mr. Concannon. Poorly implemented, and I want
    Mr. Walberg. Excuse me. Excuse me.
    Mr. Concannon.--the record to show that.
    Mr. Walberg. Excuse me. Excuse me. I was asking Ms. Mayhew. 
I would like a full or description then if I could, Mr. 
Chairman, of what the pushback was. It indicated in the 
constraints of the law itself, but what were you violating 
according to them?
    Ms. Mayhew. We have not--in all of the letters and the 
back-and-forth we have not seen any verified, documented issues 
where we have poorly implemented or--you know, we can make a 
lot of these issues complicated. I oversee a large State 
agency. I know how quickly government can make things 
complicated. We are trying to protect this safety net program. 
We see the trafficking in these cards that is taking away a 
vital resource for a vulnerable child, from a family, and we 
have identified this as a meaningful tool to discourage 
trafficking.
    It has felt as though--you know, and I struggle a little 
bit with hearing that it's an option and then hearing all of 
the reasons why they don't believe that it's an effective tool. 
So it does feel as though we're constantly receiving all of the 
reasons why we can't move forward. And this is an option that 
we have elected to pursue. We have done it in consultation with 
the USDA. We have responded to their questions. We have met 
with their staff. This dates back to the spring of 2014 that we 
have been working with the USDA, responding to their questions, 
but we want to do it in partnership with the shared goals.
    Mr. Walberg. I appreciate that. My time is expired, but, 
Mr. Chairman, I appreciate you giving me that extra time 
because it is frustrating to hear of a State that is attempting 
to do something that seems to be having some positive impact, 
trying to do an option that they have available from Federal 
Government, continually push back. And again the perspective 
seems to have come already even in testimony that while it is 
an option, yet the feds don't want it to be an option. So I 
hope we get further information as we move along, but thank 
you.
    Mr. Concannon. Mr. Chairman, I'd like the opportunity to 
respond ----
    Mr. Meadows. Hold on just a second.
    Mr. Concannon.--to some of that.
    Mr. Meadows. We are going to go to the ranking member real 
quickly, and he probably will give you a chance to respond. If 
not, when I get my time, I will, okay?
    Mr. Connolly. Mr. Concannon, we just heard the State of 
Maine, my goodness, all they are trying to do is make sure 
there is not fraud and trafficking, and they are trying to do 
the right thing while preserving the program and the benefits 
and the safety net. And Ms. Mayhew runs a big program in a 
small State and a big bad Federal Government is just 
apparently, for no reason whatsoever, preventing them from 
doing this commonsense thing. You weren't given an opportunity 
to respond. I want to give you that opportunity.
    Mr. Concannon. I very much appreciate that. And just 
incidentally for the record, I'm a legal resident of the State 
of Maine, very familiar with what goes on ----
    Mr. Connolly. You sound it.
    Mr. Concannon.--in that State and ran this very same 
department for a number of years. So it's not news to me. First 
of all, it is an option to the State. We want the State, if 
States so elect, to adopt it, perfectly fine, but it has to be 
done in ways in which, for example, Maine, the business 
community was advised and trained on what to expect. There was 
a lot of confusion right at the outset by various--some other 
people in the retail business in Maine. They felt they were not 
really adequately trained, addressed about it. Consumers were 
confused about it. Was it--we sent people up to a regional 
office. They were unclear whether it was an option or 
mandatory. So we simply want it done properly. We're not 
opposed to it. So some of what I've heard today, you know, 
really greatly overstating some of these things.
    Mr. Connolly. So there is another side to the story?
    Mr. Concannon. There's a considerable other side to the 
story.
    Mr. Connolly. And did at any point your office of the 
Federal Government preclude Maine from pursuing this option?
    Mr. Concannon. No, we did not.
    Mr. Connolly. Did you advise them they should not use the 
option even though ----
    Mr. Concannon. We did not.
    Mr. Connolly.--it is an option?
    Mr. Concannon. We asked them, though, before they proceeded 
to make sure that they had done their training and so on, and 
they insisted on going ahead.
    Mr. Connolly. Okay.
    Mr. Concannon. And so we had a problem.
    Mr. Connolly. Let the record show, Mr. Chairman, that we 
had contradictory testimony in that matter. Apparently, there 
is another side to the story.
    Mr. Connolly. Ms. Dean, what would happen if we took this 
program and just made it a block grant? What is wrong with 
that?
    Ms. Dean. Well ----
    Mr. Connolly. Please, please microphone.
    Ms. Dean. Thank you. I think the single most powerful 
element of the program is its entitlement structure. It 
responds to increased need whether that's at the national level 
when we have the kind of significant and deep recession that we 
had several years ago, the State level due to a downturn, or a 
community or even an individual family household level. When 
folks, when their income goes down, they can apply for 
benefits, and the program is available ----
    Mr. Connolly. Why couldn't they do that if it were a block 
grant program so that Ms. Mayhew or Mr. Carroll could manage it 
and decide ----
    Ms. Dean. Across the board ----
    Mr. Connolly.--who qualifies?
    Ms. Dean.--block grants come with capped funding and that 
funding ----
    Mr. Connolly. With what?
    Ms. Dean. Capped funding, fixed capped funding that does 
not increase every year.
    Mr. Connolly. Oh, so the fine print in block granting is we 
also cut the program?
    Ms. Dean. Absolutely, both in terms of ----
    Mr. Connolly. Ah.
    Ms. Dean.--erosion due to inflation, not responding to 
need, and ----
    Mr. Connolly. Well, let me ask a different question 
because, you know, I come from northern Virginia, and while we 
love all Virginians and we love our General Assembly, we do 
tremble when our fate is in the hands of Richmond. And we 
sometimes describe Richmond as 300 years away. And when someone 
wants to block grant something or give the authority to 
regulate to Richmond rather than directly to the recipients, 
say, in my corner of the world, northern Virginia, we get 
nervous because formulas change and urban and suburban 
populations often end up paying a price.
    Now, if we block grant this program, could it also affect 
who receives benefits, not only the finite amount but could we 
find that States start finagling with who qualifies and who 
might receive what benefits?
    Ms. Dean. Absolutely. I don't actually think you even need 
to describe it as finagling.
    Mr. Connolly. I can't hear you.
    Ms. Dean. Yes, you don't need to describe it as finagling. 
States would--typically, under a block grant they're given the 
authority and power to set eligibility rules and standards.
    Mr. Connolly. Which is different than the current--the 
status quo today?
    Ms. Dean. Yes, it's a national program.
    Mr. Connolly. So the feds under the national program decide 
who is entitled and who qualifies?
    Ms. Dean. Yes, the Congress sets the rules.
    Mr. Connolly. Right. And so if we block grant it, that 
transfers that right and that authority to the States?
    Ms. Dean. Yes, it does.
    Mr. Connolly. And that is a mixed bag from a recipient's 
point of view?
    Ms. Dean. Yes, it is, and we've seen it be a mixed bag 
under cash assistance. Flexibility allows States to try and 
test new things, some of which can be terrific positive 
innovations, but the other--the incredible downside with 
flexibility is the fact that States have balanced budget 
requirements, and frequently, when they face a test against 
their budget, they need resources, say, because they've had a 
downturn. We've seen them turn to block grants as a way to 
divert funds from those--that core purpose, which in the case 
of SNAP is food, to other purposes to meet their shortfalls.
    Mr. Connolly. Thank you. Votes have been called, and I 
thank your indulgence, Mr. Chairman.
    Mr. Meadows. I thank the gentleman. They have called votes, 
which is an unfortunate aspect for each one of you. 
Unfortunately, it looks like we have got three votes. I don't 
anticipate that we will be back before 3:30, so that will give 
you--you know, you can go get coffee, do whatever you need to 
do, but we will stand in recess until 3:30.
    [Recess.]
    Mr. Meadows. The joint committee will reconvene. Thank you 
all for your patience. We apologize. They were actually 
swearing in a new Member, so it took a little longer than 
normal. We are now up to an official 435 and so--the chair 
recognizes the gentleman from Alabama, Mr. Palmer, for 5 
minutes.
    Mr. Palmer. Thank you, Mr. Chairman. I want to go back to a 
couple of things that were brought up earlier.
    Mr. Concannon, in your written testimony you say that 42 
percent of SNAP benefits lived in a household with working 
adults. Can you positively affirm that the working adult in the 
household is the SNAP participant? That is a yes or no.
    Mr. Concannon. The earnings ----
    Mr. Palmer. No, sir. Let me rephrase it.
    Mr. Concannon. Okay.
    Mr. Palmer. Can you positively affirm that the working 
adult in those households is the SNAP participant? It is a yes 
or no.
    Mr. Concannon. Yes.
    Mr. Palmer. You can positively affirm that? I find that 
answer ----
    Mr. Concannon. Yes, because anybody living in the 
household, their income is included in the SNAP benefit.
    Mr. Palmer. Well, it doesn't indicate that the income is 
from that participant because it could be another adult in the 
household. And I bring this up because ----
    Mr. Concannon. Anybody in the household is included in the 
benefit.
    Mr. Palmer. Excuse me. Your own information says that in 
2013 three-quarters had no earned income meaning they were not 
working at all. That is from USDA. That is your number.
    Mr. Concannon. I'm not sure what number you're referring 
to.
    Mr. Palmer. I am referring to the food and nutrition 
service characteristics of supplemental nutrition assistance 
program households, fiscal year 2013, U.S. Department of 
Agriculture.
    Mr. Concannon. Yes. So your--if you're talking about 
children, for example, almost half of the folks on food stamps 
are children, then seniors and people with disabilities ----
    Mr. Palmer. No, I am talking about ----
    Mr. Concannon.--and parents working for ----
    Mr. Palmer.--you said ----
    Mr. Concannon.--very young children.
    Mr. Palmer.--42 percent of SNAP participants lived in a 
household with a working adult, and then your 2013 report says 
that 75 percent had no earned income, and I just want to point 
out that inconsistency for the record.
    Ms. Mayhew ----
    Mr. Concannon. I would be happy to provide you with 
clarification.
    Mr. Palmer.--you may be aware that in some--I beg your 
pardon?
    Mr. Concannon. We'd be happy to provide you with 
clarification on that in writing.
    Mr. Palmer. I would appreciate that, and I believe the 
committee would, too.
    Mr. Palmer. Ms. Mayhew, earlier when Mr. Concannon 
indicated that he had run the Maine program, it appeared that 
you wanted to make a clarification. Would you like to do that 
now?
    Ms. Mayhew. No, I appreciate ----
    Mr. Palmer. Would you turn on your ----
    Ms. Mayhew.--Mr. Concannon's response. Clearly he was a 
commissioner of the--of a Department of Human Services. Since 
that time, the agency has certainly changed somewhat. It 
merged. It created a much larger agency. But certainly I 
appreciate the history that Mr. Concannon has particularly with 
this program in Maine. Thank you.
    Mr. Palmer. I appreciate that. I am staying with you, and 
we touched on this a little bit before we had to break away. Do 
you believe there is a growing epidemic of SNAP benefits 
exchanging their cards for drugs?
    Ms. Mayhew. I do. And it is--certainly as we look across 
all of our programs within the Department and our desire to 
evaluate holistically our efforts to improve the lives of the 
individuals that we're serving, and certainly as I said, both 
looking at these welfare programs and their support of 
vulnerable families in my oversight of child welfare, I am 
incredibly concerned about the impact of drug abuse in Maine 
and the role that EBT cards are playing, being trafficked in 
for drugs and certainly for cash.
    Mr. Palmer. This past February, my own State of Alabama 
started to allow individuals with previous drug convictions to 
be eligible for benefits such as food stamps, and it is coming 
at a time when Alabama's monthly average SNAP enrollment has 
almost 20 percent more Alabama enrollees than we have in K 
through 12 public education system. So we are giving out food 
stamps, SNAP benefits faster than we are educating children to 
prepare them to join our workforce. Why shouldn't we be able to 
require drug testing in the program to ensure that taxpayer 
money is going toward the recipients it was intended, and why 
should the State be obligated to fund those programs if the 
individual engaging in activity that is harmful to them is not 
conducive to their reintegration into society?
    Ms. Mayhew. Congressman, we support drug testing. We have 
worked to increase drug testing in Maine. We have been met with 
resistance. We share your observations that these safety net 
programs are in fact intended to certainly help individuals out 
of poverty onto that pathway of prosperity and employment and 
that any amount of substance abuse is detracting from their 
ability to succeed and to be self-sufficient and again on that 
pathway to employment. It is clearly counterproductive to those 
goals.
    Mr. Palmer. Mr. Chairman, with the indulgence of the 
committee and the chair if I may, I would like to make one 
other point and that is in regard to Ms. Dean's comment that we 
went through a recession and apparently believes that our 
economy has recovered. I would wonder if our economy has 
recovered why there are almost 5 times as many people on food 
stamps as there were in 2008 and three times as many as in 
2009. I yield back.
    Mr. Meadows. I thank the gentleman.
    The chair recognizes the gentlewoman from the District of 
Columbia, Ms. Eleanor Holmes Norton, for 5 minutes.
    Ms. Norton. I just want to mention that the issues you are 
running into with drug testing is we can't just drug-test 
people. There has to be some predicate laid in a constitutional 
system to doing that, and that is why I think courts have cast 
some doubt on doing drug testing as drug testing.
    I do want to note, especially the GAO report where no new 
recommendations were made, I put them in that the program is 
making some progress. And I note that the GAO report does note 
some continuing challenges, and the first one it notes is 
inadequate staffing levels. You know, if we want more of 
something, then we have to do more of something else.
    So I want to congratulate all of you involved in the 
program for what you have been able to do at a time of 
sequestration with what resources you have. Congress is quick 
to chastise programs for what they haven't done but offers very 
little self-criticism of what its obligation is, so I do want 
that for the record to be known.
    I also want to say for the record some of us have a 
tradition of trying to live for a week on SNAP benefits. All I 
can tell you, it took me close to starvation when I tried to 
adhere to it for a full week, so I am pretty convinced that 
they are not extravagant rewards here for needing what we used 
to call food stamps.
    I was interested in this very low fraud rate because it is 
among the lowest if not the lowest in the Federal Government. 
You might expect it to be the highest given what we have just 
gone through in the Great Recession and the like. And so I am 
trying to get to the bottom of what is left. I am not sure 
anybody can get it to zero, and I compliment you for trying to 
do that.
    But I want to know if the main part of SNAP's improper 
payments are administrative or are they fraud?
    Mr. Concannon. If I may, Congresswoman, on the improper 
payment rate for the SNAP program, this refers to when 
consumers come into the program, 60 percent of that problem are 
mistakes made by State or county ----
    Ms. Norton. So give me examples of the kind of mistakes in 
the course ----
    Mr. Concannon. Well, they may not correctly record the 
income of the consumer. Forty percent is on a--the mistake is 
made by the consumer, occasionally deliberately but often it 
may be, hey, I didn't properly report my income or my spouse or 
somebody else considered in the household had some part-time 
income. So--but 60 percent of it is a State mistake.
    When we look at improper payments, the chair referenced the 
$2 billion or so estimate. That's the combined underpayment as 
well as overpayment because about two-thirds of it is an 
overpayment on the part of the State, but about one-third of it 
is we underpay consumers based on the--and the convention has 
been the requirement--this used to drive me crazy when I was a 
State director--we have to count both of them as though they 
were aggregated together.
    Ms. Norton. I don't know why you have to count both 
numbers. They are not the same numbers. I tell you one thing, 
if you are undercounting, you never get that money back, so I 
don't even understand how it helps us to understand what is 
happening to say lob it all together, who cares? But that ----
    Mr. Meadows. Will the gentlewoman yield for just a second? 
I will be glad to work with her on that particular issue.
    Ms. Norton. I thank the chairman very much for his 
intervention, and he is in a position to do it. I know he means 
it when he says it, my good friend.
    I understand when you see this low level, wow, that the 
program has very strict eligibility requirements and a rigorous 
application process. You know, people don't like what you have 
to go through to apply for anything in government, but is that 
the case? And how do you facilitate people getting their 
benefits when the eligibility requirements are so strict and 
apparently adhered to?
    Mr. Concannon. Well, I might point out something that was 
referenced earlier to the deep recession we have just come 
through. Prior to that deep recession, again, I spent 25 years 
as a State director in different States. Across the country, 
typically, about half of the people who are eligible for the 
program were receiving it. They met the income eligibility, 
they were citizens of the United States who are here legally. 
Only about half were receiving it.
    During the deep recession, more people came forward but 
also States on a bipartisan basis, Democrats and Republican 
Governors, simplified the process still within the law. And 
now, about estimated 85 percent of people who meet the 
eligibility requirements receive the benefit.
    Ms. Norton. Well, it took a recession to do it but I 
congratulate you for bringing forward people who are hungry and 
apparently needed the program all along.
    Look, I don't see a lot to complain about in this program 
with your low eligibility rate, with the GAO who loves to tell 
people what they are doing wrong, saying they don't have any 
current recommendations at this time, so you deserve the 
commendation of the committee as well.
    Thank you very much, Mr. Chairman.
    Mr. Meadows. I thank you.
    The chair recognizes the gentleman from Wisconsin, Mr. 
Grothman, for 5 minutes.
    Mr. Grothman. Thanks much. I think we are eventually going 
to call on Ms. Mayhew to ask questions, but I will just make a 
little comment first. I think there is probably no program in 
my district that people come up and talk to me about more. 
People are aware almost anywhere that they sell food stamps or 
whatever, SNAP, for 50 cents on the dollar, and of course if 
you needed every dollar on food, you wouldn't be selling your 
food for 50 cents on the dollar, so that by itself indicates 
that there is--you know, people are getting these things who 
don't need them at all.
    You know, I know somebody whose sister runs a grocery 
store, and she says you can tell just by what is in the cart 
who has got the SNAP and who is paying their money, and I think 
that is routine, which also shows there is something 
fundamentally wrong program. It is one of many welfare-related 
programs that our employers attribute to having a hard time 
getting employees to work because of course the more you work, 
the more you lose the benefits.
    And finally, it is something more and or we are hearing 
over time that discourages people from raising children in 
wedlock because, of course, if you raise children in wedlock, 
like many other welfare benefits, you lose your SNAP. I think 
that is probably, of all the bad things about the program, the 
worst. It is one more inducement to raise children out of 
wedlock, which is unfortunate.
    But we are going to start with Ms. Mayhew. Could you 
comment on after you went through the wonderful things you did 
are SNAP benefits still being sold for 50 cents on the dollar 
in Maine? What is the going rate as far as you know?
    Ms. Mayhew. Well, certainly, we have, as I indicated, 
partnered with local law enforcement to both train them on the 
misuse of EBT cards to provide assistance with them. We 
certainly continue to have cases where EBT cards are trafficked 
in. It's unfortunate for the Congressman from Alabama. There 
was a very high-profile case about a year ago where--very 
similar to what you are describing, rampant trafficking and EBT 
cards selling at 50 cents on the dollar, significant engagement 
with retailers.
    I think, you know, certainly, we all have shared the same 
goals of improving the integrity of this program. There are 
need--there was a need for additional fraud investigators. For 
the New England region there's one fraud investigator for the 
USDA. I mean, I think that alone would indicate that we're 
under-resourced.
    Mr. Grothman. Right. I will just give you the question. In 
Maine what is the going rate for SNAP right now? Are they 
selling it for 50 cents on the dollar, 60 cents on the dollar? 
What is the going rate?
    Ms. Mayhew. I honestly can't comment on--I think that just 
varies on the individual who's trying to get cash.
    Mr. Grothman. Okay. Well, I will ask Ms. Dean. Do you live 
here in the Washington, D.C., area?
    Ms. Dean. I do.
    Mr. Grothman. When you ask your local ----
    Mr. Meadows. Put your mic on, please.
    Mr. Grothman. What is the going rate for SNAP benefits in 
the Washington, D.C., area?
    Ms. Dean. I'm not sure that that--like Commissioner Mayhew, 
I don't think that there is a common understanding or a shared 
understanding of it. It is a very rare occurrence.
    Mr. Grothman. Wait a minute. Whenever I talk to people in 
the food stores or people of the class that good food share, 
they don't think it is uncommon. They tell me about these 50-
cents-on-the-dollar sales all the time. In Florida, Mr. 
Carroll, what is the going rate for SNAP in Florida?
    Mr. Carroll. I can't answer that definitively. I will tell 
you what made the Opa-locka flea market so popular to draw 
folks not only from Florida but around the Nation was they were 
purchasing food stamps at 80 cents on the dollar. And we know 
that because on several of the stores that were rated, they 
actually--it was like a sale sign that you go in and you would 
see all the things and then you would see the 20 percent off 
sale. It was right on the registers, how much $30 would be 
converted into, how much $600 would be converted into, so it 
was right there. Folks saw it. It was posted.
    Mr. Grothman. Okay. Mr. Concannon, when you get out and 
talk to people in the underclass, what are they selling their 
SNAP benefits for?
    Mr. Concannon. I travel across the country, including 
Florida, Maine, I was in Michigan earlier this week. As has 
already been noted, it is a rarity. I want to be very clear on 
that, that there are 44 million people in the country. The vast 
majority of them abide by the rules. Just as there are 260,000 
authorized retailers, most of them abide by the rules, but we 
have a proposal out these days to strengthen the requirements 
for convenience stores. That's where much of this happens.
    I do want to make a comment on something you mentioned 
because I think it's a misunderstanding. One, there is no 
penalty in the SNAP program if you're married or not married. 
If you live in the same household with somebody, you share the 
meal, we count that whether you're married or not, so there is 
not a marriage penalty. And I just want to be clear about that 
because when that's expressed, people don't understand that. 
They think, hey, that's a problem.
    Mr. Grothman. No. No, no, no.
    Mr. Concannon. It's not part of the SNAP program.
    Mr. Grothman. No, can I finish up because he is just saying 
something I don't think is true or he is ----
    Mr. Meadows. Well, we will save that for a second round --
--
    Mr. Grothman. Okay.
    Mr. Meadows.--if we can at this ----
    Mr. Grothman. You want to give me a second round.
    Mr. Meadows. Okay. So the chair recognizes the gentlewoman 
from Michigan, Mrs. Lawrence, for 5 minutes.
    Mrs. Lawrence. Thank you, sir. SNAP provides critical 
support to people seeking to enter into the workforce by 
providing services to people who are looking for employment or 
training to become self-sufficient in contrast to the 
stereotype that if you are on SNAP, you are at home not 
working.
    Mr. Dean, some critics of SNAP believe that participation 
in SNAP discourages work, yet your testimony states that the 
SNAP participants want to work and do work. Can you explain in 
more detail how SNAP helps people when they are unemployed and 
how it helps to support and encourage work? I am sorry, I am 
sorry. Mrs. Dean, I am sorry.
    Ms. Dean. That's all right. Well, first of all, one of the 
core elements of the program that allows participants who 
aren't working to obtain and maintain a job is that the 
eligibility limits, while restrictive, are set significantly 
higher than, say, a cash--the cash-assistance programs most 
States offer. So participants who are not working can get a 
job, their benefits are reduced, but they can maintain 
eligibility.
    There's also an earnings disregard built in the program so 
that income coming from work is treated more favorably than 
income, say, from Social Security or other unearned sources.
    We see a significant share of participants working. If you 
look at working-age adults who aren't disabled, over half of 
them are working, and if you look at the year before or the 
year after a typical month of receipt, that goes to above 80 
percent.
    The bottom line is that you cannot--it is nearly impossible 
to be poor in this country and not be working. There's very 
limited forms of assistance available to struggling unemployed 
families. The unemployment insurance program is an open door 
for low-income workers who are in and out of the workforce. 
TANF cash assistance is incredibly restrictive. SNAP is the 
benefit that is available to all low-income individuals, 
nonworking and working like.
    Mrs. Lawrence. I just can't pass up an opportunity to make 
a statement here. There are many who debate Planned Parenthood 
and contraceptives and say that the life of a child is 
precious. How can we debate that once a child is born that we 
would not ensure that the child would not be hungry? In 
America, SNAP program feeds poverty, those who cannot provide, 
those who are working poor so that they can have food.
    And I continue to say food is not a luxury, it is a human 
basic need. And so it troubles me when you have this conflict 
of philosophies. Once a child is born in this world and they 
are in America, we don't have a choice of whether we are born 
or not, we are born, and that in America this program, SNAP, 
says that if you are in America, you will be able to get food 
to eat so that you can live.
    Just one last point, Ms. Dean. Many States have suspended 
the limited due to high unemployment rates during this recent 
recession, but that is now changing. I understand that some 
States are kicking hundreds of thousands of people off SNAP 
this year. Can you discuss why this is happening in some States 
and not in others?
    Ms. Dean. Sure. The 1996 welfare law included a provision 
that limited SNAP to 3 months out of every 36 months, so 3 
months out of every 3 years, for childless adults unless they 
are working 20 hours a week. It's a little bit more 
complicated, but that's the gist. States have the ability--and 
this--there's no obligation on the State to offer a job slot or 
test the individual's willingness to work. It is truly a time 
limit in most States that apply the rule.
    States have the ability to waive that rule in periods or in 
areas of high unemployment, and during the recession, virtually 
every State availed themselves of that opportunity to suspend 
the time limit so that food assistance could go to unemployed 
needy people.
    As the unemployment rate has fallen, areas no longer 
qualify, and this year happens to be a year where over 20 
States had to re-implement the rule either because of their 
unemployment rates or they chose to, and as a result, we 
estimate a minimum of half-a-million people were removed from 
the program in April and May of this year. And we'll see data 
to confirm that in a month or so.
    Mrs. Lawrence. Thank you. In closing, I just want to say 
that the SNAP program, 1 percent fraud, I wish I could sit and 
look every Federal agency in the eye and say that your fraud or 
your mismanagement is at 1 percent of everything that you do. I 
don't want any fraud, but I want to applaud this team and 
individuals who are in this program knowing that you are there 
to feed people in America. In today's world there are Americans 
who are going hungry every day.
    Mr. Meadows. I thank the gentlewoman.
    The chair recognizes the gentleman from Ohio, Mr. Jordan, 
for 5 minutes.
    Mr. Jordan. Thank you, Mr. Chairman, for having this 
hearing and for our witnesses and the chairman for his work in 
this area, extensive work in this area.
    Mr. Concannon, how much money is spent annually on the food 
stamp program both--well, how much is spent annually?
    Mr. Concannon. Total expenditure including administration, 
$75 billion.
    Mr. Jordan. Seventy-five billion dollars. You know what it 
was 8 years ago?
    Mr. Concannon. No, I do not.
    Mr. Jordan. The chart I am looking at says it was less than 
half of that.
    Mr. Concannon. Well, that was before the ----
    Mr. Jordan. Thirty-seven ----
    Mr. Concannon. That was before the deep recession the 
country went through, so I'm not surprised by that.
    Mr. Jordan. A lot of people would say we were in a 
recession in '07 and '08. I am looking at that, so 2008--well, 
even if you go 2009, it is 50 percent greater, more than 50 
percent greater. It was $53 billion just a few years ago.
    How many people are getting this benefit today?
    Mr. Concannon. Forty-four point three million people 
receive the benefit each month.
    Mr. Jordan. And do you know how many of that 44.3 million 
are able-bodied adults?
    Mr. Concannon. Yes, we can give you that. I know that just 
under half are children, another 10 percent are people with 
disabilities, another close to 10 percent are seniors, some 
adults, but we can give you the actual percentage, a very small 
percentage ----
    Mr. Jordan. So half ----
    Mr. Concannon.--of them.
    Mr. Jordan.--are kids, 10 percent are individuals with 
disabilities, 10 percent are seniors, so is that 30 percent are 
----
    Mr. Concannon. No, it isn't 30 percent. It's another--it's 
about 10 percent are adults without dependents, able-bodied 
adults without dependents.
    Mr. Jordan. So over 4 million?
    Mr. Concannon. Correct, in that range.
    Mr. Jordan. Okay. And, Ms. Mayhew, my understanding is you 
have taken that population you just talked about, at least the 
ones who live in the State of Maine, and you have put back in 
place a work requirement for able-bodied adults, able-bodied 
adults, I assume, with no dependents, is that accurate?
    Ms. Mayhew. Yes. We're talking ----
    Mr. Jordan. Okay. And what has been your experience with 
that program?
    Ms. Mayhew. So these are individuals between the ages of 18 
and 49 not disabled, no dependents. And we reinstated the work 
requirements from the 1996 reforms. We did ----
    Mr. Jordan. Exactly the same requirements that were working 
fine back then ----
    Ms. Mayhew. Correct.
    Mr. Jordan.--20 hours a week, got some work requirements, 
20 hours a month or ----
    Ms. Mayhew. Twenty hours a ----
    Mr. Jordan. Twenty hours a week, excuse me. That is right.
    Ms. Mayhew. But there are other options. It's 20 hours a 
week or--working or being in a vocational training program ----
    Mr. Jordan. Got you.
    Ms. Mayhew.--or volunteering one hour a day.
    Mr. Jordan. So some options. All right. And what happened 
when you did that?
    Ms. Mayhew. When we did that, we also reached out to all of 
these individuals through our Department of Labor career 
centers to offer them slots in programs to help them with work 
skills development, resume writing, opportunities to identify 
employment. We made over 12,000 phone calls to that population.
    Mr. Jordan. Hold on one second. Back up a second. What was 
the number in Maine when you--able-bodied adults 18 to 49 in 
the program? What was that number?
    Ms. Mayhew. Fifteen thousand.
    Mr. Jordan. Fifteen thousand. What is the number--and you 
have implemented this program now several months?
    Ms. Mayhew. We implemented that in the--October 1, 2014.
    Mr. Jordan. Okay. So a year-and-a-half. And what have you 
seen happen? Is it 12,000 you said?
    Ms. Mayhew. Yes. The vast majority did not come forward to 
demonstrate and comply ----
    Mr. Jordan. So they are no longer in the program?
    Ms. Mayhew. They're no longer in the program, but what is 
more important ----
    Mr. Jordan. No, I am asking, is that--I would view that as 
a good thing. My guess is what happened is they said, you know 
what, if I got to do all this job training, job requirement, 
da, da, da, why don't I just get a job?
    Ms. Mayhew. Exactly.
    Mr. Jordan. Imagine that.
    Ms. Mayhew. And then we looked at their wages ----
    Mr. Jordan. Right. And that is a good thing, wouldn't you 
say?
    Ms. Mayhew. Yes.
    Mr. Jordan. Yes.
    Ms. Mayhew. And their wages have increased by over 114 
percent from prior ----
    Mr. Jordan. So you followed them up?
    Ms. Mayhew.--to implementing--yes, we did.
    Mr. Jordan. And, Ms. Dean, is that not a good thing?
    Ms. Dean. Is it a good--I think the question is what's the 
counterfactual? How many of them would have gone and gotten 
jobs anyway because we know that there's a high ----
    Mr. Jordan. But they did get a job so that is a good thing 
and they are no longer living off the taxpayer ----
    Ms. Dean. But there's ----
    Mr. Jordan.--so it is good for the taxpayer and it is good 
for the individual, and you are somehow implying in questions I 
have heard from the other side somehow that is not a good 
thing?
    Ms. Dean. There's also a group of people who lost food 
assistance without a job. That's ----
    Mr. Jordan. Ms. Mayhew, what is that number?
    Ms. Mayhew. I'm sorry, what was the comment? Which ----
    Mr. Jordan. She is saying that there is some of that 12,000 
who are no longer getting food stamps who didn't get a job. Do 
you know what that number is?
    Ms. Mayhew. We can get you that ----
    Mr. Jordan. But the point is they can still get food stamps 
if they are willing to do the three options you gave them, 
correct?
    Ms. Mayhew. Correct.
    Mr. Jordan. Okay. Ms. Dean, how is that negative?
    Ms. Dean. I think there are many parts of the country where 
there are not ----
    Mr. Jordan. In--okay.
    Ms. Dean.--part- to full-time jobs available.
    Mr. Jordan. I am asking you about Maine. I am asking you 
about Maine because Maine has done it. That is the one 
experiment we have that I think is working win-win-win. Either 
they can do the job training, which is going to help them long-
term to stay on food stamps or they can do what most people did 
in Maine and say, you know what, I don't want to do that. I am 
just going to get a real job, right? And if they decide to opt 
out and can't get a job, they can always come back and go to 
one of those three options. So tell me what is negative about 
that. That seems to be helping that individual who was in the 
system get to a better position in life, and just as 
importantly, help treat taxpayers with the respect they deserve 
so someone is not living off their tax dollars who is able-
bodied. Why is that wrong?
    Ms. Dean. Representative Jordan, you're not characterizing 
the rule correctly across the country. States are not ----
    Mr. Jordan. I am talking about the State of Maine.
    Ms. Dean. I cannot speak to whether Maine genuinely offered 
every single individual--whether a slot was available for them 
to participate in and whether those individuals were 
appropriately screened. Commissioner Mayhew can best do that. 
But the problem is that across the country that's not 
happening. It's operating as a time limit, so individuals 
living in high unemployment areas or individuals who face 
barriers to work. For example, in Florida there were disabled 
veterans who didn't have 100 percent disability rating who were 
terminated from the program. They were not exempted.
    Work requirement is ----
    Mr. Jordan. Well, wait, wait, wait ----
    Ms. Dean. Work requirement is very different than ----
    Mr. Jordan. We just heard that this was not about people 
with--there is a big difference between able-bodied individuals 
between 18 and 49 with no dependents and someone with a 
disability and someone with children and some who is a senior. 
There is a big difference. If I could, Mr. Chairman, one last 
question.
    What is the number today, Ms. Mayhew, that is in that 
category in Maine? What is the number? It was 12,000. What is 
the number today?
    Ms. Mayhew. It is less than ----
    Mr. Meadows. Your mic, please.
    Ms. Mayhew. We can get you the final number, but obviously 
----
    Mr. Jordan. Less than what?
    Ms. Mayhew. Less than 1,000 individuals.
    Mr. Meadows. Okay.
    Mr. Jordan. That is unbelievable. Thank you, Mr. Chairman.
    Mr. Meadows. I thank the gentleman.
    The chair recognizes the gentleman from Pennsylvania, Mr. 
Cartwright, for a generous 5 minutes.
    Mr. Cartwright. I thank the generous chairman. Mr. 
Chairman, our colleague from Wisconsin just lately made a 
comment to the effect that the current SNAP program, the food 
stamps program has the effect of encouraging women to bear 
children out of wedlock. And to respond to that, I would like 
to recognize and yield to the gentlelady from the District of 
Columbia for 30 seconds.
    Ms. Norton. Well, first of all, I think that the error rate 
speaks for itself and answers much that was raised in that 
regard.
    And I must say, at a time when we have reduced among poor 
people as well as middle-class people the birth rate, it is 
inconceivable to me that somebody says, you know what, why 
don't I go out and get pregnant so I can get some food stamps.
    I yield back to the gentleman.
    Mr. Cartwright. Mr. Chairman, I would like to thank you for 
holding this hearing today. It is shameful when women and 
families go hungry in the United States of America, and I will 
not be part of a system that forwards the chance that we will 
have that in this country. I strongly support the food stamp 
program, SNAP, among other food assistance programs for this 
reason, and I would like to thank the witnesses for their work 
to relieve hunger in this country.
    I would like to also point out two numbers related to fraud 
and waste in the SNAP program that have been touched upon here. 
In 2014 less than 3 percent of SNAP benefits had error 
associated with them, and the trafficking rate is down to 1 
percent. And it occurs to me that the SNAP program is improving 
at its good job of ensuring the limited resources it is given 
are being used properly. We can and should do more to relieve 
hunger.
    That is why I am reintroducing the SNAP Healthy Incentives 
Act, and this expands a pilot program nationwide in which SNAP 
participants receive a 30-cent rebate for every SNAP dollar 
they spend on fruits and vegetables. Now, this pilot program 
proved to be successful, and it proved a 25 percent increase in 
the consumption of healthy foods.
    Now, Under Secretary Concannon, can you tell us a little 
bit more about the types of people who are aided by the SNAP 
program?
    Mr. Concannon. Thank you very much for the question. Thank 
you for introducing that act, the health incentive pilot was 
highly success. And early this week I was in Michigan. I've 
seen firsthand discussions with community leaders around the 
country on the impact of SNAP now.
    As has been mentioned earlier, nearly half of the 
recipients on SNAP--it's 48 percent plus--are children, another 
10 percent are people with disabilities, another seniors and 
other parents looking after young children. But I also want to 
emphasize again something that's been mentioned already. Forty-
two percent, two out of every five persons living in a SNAP 
household, at least one of the adults is in--currently in the 
workforce. And that income is counted in the benefit.
    And to me, the--that's the highest rate of people working 
in the history of the program and it, to me, reflects the fact 
that across the country more and more people are getting part-
time jobs or they're struggling with low wages that still 
qualify them for the benefit. So I think that's something that 
ought to be really more fully discussed by Congress now. 
There's--say what can we do about that?
    In places across the country, economists tell us the 
recession is over for many but it's not over for tens of 
millions of people in places like Maine to be perfectly frank 
or just about any State in the country. And so the program has 
very much become a supplement. That is by intent to--for wages 
and health for families.
    And I think it gets very stereotyped in some quarters I 
think very unfairly. There's a very low fraud rate, there's a 
very low rate of misuse of the funds. We don't tolerate it. But 
poor income people, whether they're from Florida, Maine, or any 
other State shouldn't be painted as though they are among that 
small minority who are misusing the program. That's not the 
history of the program across the country.
    Mr. Cartwright. Thank you, Mr. Concannon.
    And, Ms. Dean, I wanted to also thank you for your 
testimony today and all of your work in your adult life in 
support of nutrition assistance.
    You know, Republicans in the House are proposing turning 
SNAP into a block grant and eliminating the social services 
block grant, and I wanted to get your input on the wisdom of 
that approach and whether you think it would do anything to 
eliminate the low percentages of errors and fraud that we're 
hearing about today.
    Ms. Dean. Just very briefly, we think it would be very ill-
advised, and the experience and history of block grants would 
suggest that converting SNAP into a block grant would increase 
hunger and hardship amongst low-income Americans because less 
food assistance would be available to them over time.
    It's also highly likely, as you're pointing out, that error 
and fraud would become a more serious issue because you would 
start to have 50--well, in SNAP there are 53 States, Ms. 
Plaskett representing one of them, 53 States with different 
rules, different criteria, and lots of complexity and 
duplication on which stores to bring into the program and how 
to administer and ensure that everyone is adhering to the 
rules.
    Mr. Cartwright. Thank you. And, Mr. Chairman, I yield back 
to you in your generosity.
    Mr. Meadows. I thank the gentleman from Pennsylvania.
    The chair recognizes himself for a series of questions.
    We talked a lot about fraud rates and what it is and what 
it is not, and yet I hear a lot of testimony that shows a lot 
of ambiguity in that area. So, Ms. Brown, let me come to you. 
Do we really know what the fraud rate is? Do we have good data?
    Ms. Brown. Well, the rates that we're hearing about with 
fraud I believe are the trafficking rates for retailers. That's 
the ----
    Mr. Meadows. Right, and ----
    Ms. Brown.--1 percent ----
    Mr. Meadows.--those are 3 years old, aren't they?
    Ms. Brown. Yes, there's--they--there've been--a number of 
questions have been raised about the estimate, but I don't want 
to underplay the fact that it's very difficult estimate to 
make.
    Mr. Meadows. So to suggest that that 1 percent or 2 percent 
is accurate would be very difficult with any degree of 
certainty to ascertain that based on the reporting and the way 
that we track fraud and abuse at this point ----
    Ms. Brown. In ----
    Mr. Meadows.--is that correct?
    Ms. Brown. In--yes, and it doesn't include what--we don't 
really know what the rate of trafficking or fraud is for the--
on the recipient side. So ----
    Mr. Meadows. Right.
    Ms. Brown.--you know, the question--put percentages that we 
talked about with the 60 percent that's the fault of the States 
when they're making mistakes and the third--one-third that's 
the problems with the recipients, some of that can be 
intentional error that would be fraud, and then in addition to 
that, once they receive the benefits, if they traffic, that 
would be fraud.
    Mr. Meadows. Right. And so that number and being able to do 
that--Mr. Concannon, I will come to you. Hold on just a second. 
You are always ready to jump in. I can see your rebuttal. I 
tell you, it is--but as we look at that, I will come--because 
here's my concern. When we talk about fraud--and for me I want 
make sure that every single person that deserves the benefit 
and is starving gets the benefit. But the bad actors, I want to 
make sure they go home and they go home for good.
    And so if anything is said here is when we--it is not just 
about fraud and abuse for an individual. It is taking away 
finances from those that are deserving. And that can be a 
bipartisan issue. I mean, if we put forth that any saving from 
fraud actually went to increase the benefits for some of the 
others that are receiving it, we would find some real uniform 
bipartisan support for that. So I guess, Ms. Brown, we need to 
do a better job, so how can we do that?
    And let me come to you, Mr. Carroll, because one of the 
things that you said really concerned me. We have got a flea 
market where there was trafficking going on, and there have 
been no arrests for fraud at that particular point? We have not 
been able to prove it? Did I hear you correctly?
    Mr. Carroll. No, there ----
    Mr. Meadows. You need your mic.
    Mr. Carroll. There have been arrests. What we have not--the 
process involves--it's a pretty complex process, but our 
investigation into that flea market began in 2011 when we saw 
----
    Mr. Meadows. And you were doing it from the recipient side, 
not from the ----
    Mr. Carroll. We were doing it from ----
    Mr. Meadows.--retailer side, is that correct?
    Mr. Carroll.--recipient side where we got information that 
food stamp cards kept coming back to us in the mail, the EBT 
cards. We checked up on it. That address didn't exist. We did 
some further exploration and we found out that that was 
probably identity theft. We then tracked where that card was 
used, and it led to the flea market, so we started surveilling 
that flea market, and at that time in 2011 there were five 
authorized vendors. It took 2 years, but after 2 years, two of 
those five authorized vendors were arrested. But within a 
matter of days, the three vendors that were left absorbed that 
business because business continued to grow at that flea 
market.
    Now, at that flea market we have 48 authorized vendors with 
four more pending, and that flea market has done $79 million 
worth of business. Now, to put that in perspective, they have 
done more business than the six super box stores that are 
within a 5-mile radius of them combined. They have done more 
business in that flea market during that time period than the 
16 major supermarkets that are in a 5-mile radius combined. So 
to say that our fraud rate is 1 percent I think is 
underestimated.
    But here's what concerns me about this, and this is what I 
think confuses folks because I think your point is well made. 
I'm not here to demean recipients of public assistance. I 
strongly support public assistance programs, and we do that in 
Florida. We have done everything in Florida to make it easier 
for folks who are eligible to apply. We've gone to an 
electronic system. Folks don't have to take off from work. They 
apply online.
    Even the automated identification system, it wasn't made to 
keep people out of the system. It was made to--so that we 
didn't have to bring people into the office because if we could 
authorize--if we could authenticate your identification without 
you coming into the office and taking time out of work, why not 
do that? That's why we did it.
    And so we have done everything we could to make it easier 
to apply. Since 2008, the number of recipients in Florida has 
gone from 1.3 million to--we have currently 3.3 million 
recipients on food stamps in Florida, and our food stamp 
redemption numbers have gone from 2.8 to 5.6. So to say that 
our concern around fraud is about some--somehow pointed at 
trying to demean folks who are on public assistance or to limit 
access I think is misguided.
    I do think the numbers that you talked about are difficult 
to come by. I think with the automated system in Florida, we do 
a better job of preventing what I would call recipient fraud in 
terms of--because what we used to battle years ago was folks 
coming in and quite frankly not being truthful about their 
situation. We see less of this.
    This is not--in Florida, this is not about the folks who 
walk through our door and apply for assistance. It is not about 
how they use their food stamp card. I wish my family ate 
healthier. I wish I didn't put so many Mountain Dews in the 
carriage, okay? And I think the more we put together 
legislation like that, we just go down rabbit holes and we 
spend administrative cost chasing after things we shouldn't 
chase after.
    But I will tell you there is an element that is organized 
that is--where their intent is to defraud, and it starts with 
folks who come into the system and get benefits and they're not 
who they purport to be. Part of this--the authentication 
process identified 2,800 people, for instance, last year that 
applied that were dead, another 2,800 people that applied that 
were incarcerated. Without doing the things that we did from an 
electronic standpoint, we would have never been able to prevent 
that. We can now.
    But our big challenge now is with authorized vendors. The 
number of folks who were authorized--and I understand--I 
don't--I am not here to impede small business. We want to grow 
small business, but we have got to make sure that when we are--
it's got to be more than taking a snapshot of the front of a 
store, putting a driver's license together, sending it in, and 
asking that I be an authorized vendor. And we have to do some 
work around is that a real legitimate business because some of 
these businesses that we're authorizing as retailers are not 
legitimate businesses.
    And I do agree with Secretary Concannon that the 
overwhelming amount of people on food stamps are there rightly 
so and are using their benefits appropriately, overwhelmingly, 
but I will tell you that small percentage, when you look at a 
program like ours that does $5.6 billion worth of business, 
even a small percentage is in the hundreds of millions of 
dollars, and it grows a stigma for the rest of the folks who 
are out there who need these benefits, who need the hand up, 
and who we're trying to provide these assistance--this 
assistance for.
    Mr. Meadows. And that is precisely why we are having this 
hearing because it shouldn't be a stigma that everybody is 
cheating the system. And sometimes that gets a default. That is 
where we run. I appreciate your heart.
    Mr. Concannon, I gave you your rebuttal time. I am way 
over. You go ahead, and then I am going to recognize the 
gentlewoman from the Virgin Islands. Go ahead.
    Mr. Concannon. Thank you, Mr. Chair. I'll try to be brief. 
I just wanted to mention the way we derive that figure of 1.3 
percent. When we take a small store out of the program, and 
last year, it was like 2,300 stores--most of the trafficking, 
by the way, happens in small stores. Supermarket chains won't 
tolerate it, Walmart, Hannaford Brothers up in Maine, they're 
not going to tolerate that.
    So when we take a small store out, we ascribe 90 percent of 
the annual use of food stamp benefits or SNAP benefits in that 
store as though it were trafficking. And if it's a larger 
store, we ascribe 40 percent. That's how we get to the 1.3 
percent. If anything, it's a conservative estimate, so I want 
to be clear on that. We're not just counting ----
    Mr. Meadows. Well ----
    Mr. Concannon.--you know, individuals. So with that, point 
one. Point two, we currently have proposed strengthening the 
requirement especially for these small stores because I fully 
agree with Mr. Carroll that some stores are in the program that 
absolutely shouldn't be. That's where we have our problems.
    Mr. Meadows. Well, we will get ----
    Mr. Concannon. We're getting pushback on that issue.
    Mr. Meadows. We will get to that.
    Mr. Concannon. Okay.
    Mr. Meadows. We will get to that because that is one of the 
areas that honestly I want to drill down on on exactly what we 
are doing there. Let me tell you my concern with what just 
said. You only know what you know, and so fraud is only to the 
point of where you actually have inspectors going out. I would 
assume you have a limitation on the number of people who can 
actually follow that or are you fully staffed--you have got as 
many people as you ever would want?
    Mr. Concannon. Interestingly enough ----
    Mr. Meadows. Yes or no, as many people as ----
    Mr. Concannon. Most of our fraud is coming from data 
analytics. It's not coming from ----
    Mr. Meadows. That is not the question. Do you have as many 
people inspecting as you really need?
    Mr. Concannon. We can never say we have enough.
    Mr. Meadows. All right. Thank you. I thought that would be 
the answer.
    The gentlewoman from the Virgin Islands is recognized.
    Ms. Plaskett. Thank you. Good afternoon.
    And I guess if you don't have as many as you need and this 
committee is concerned with you stopping fraud, they will be 
very helpful to increasing the budget for the SNAP program so 
that you can have the funding to be able to enforce it, because 
although I think the chairman is sincere and, you know, is one 
of the people who is concerned about the right individuals 
having this, my concern is that I don't think everybody on his 
side really thinks that way as well.
    I sit on the House Committee on Agriculture and I sit on 
the Subcommittee on Nutrition, and in the last 17 months we 
have had 14 hearings on SNAP, 14 hearings on SNAP. And the 
purposes of those hearings is in my mind being to say why SNAP 
should be cut back, why it is not effective, why we need to 
stop this, why we need to stop feeding the people that we are 
feeding. Why do we need to stop feeding people? I mean, my 
mother would lose her mind if you denied someone a plate of 
food because it was painful for you to give it up.
    This program, we say, is about lifting people out of 
poverty, and I think the indictment is on us as a body, this 
Congress, who has not lifted enough people fast enough as we 
should. And in turn what is happening I think more often than 
not is that we have these hearings to indict the people who are 
recipients of SNAP program, the recipients of those individuals 
who are still living in poverty.
    So we have said that SNAP is a program that we would like 
to focus quite a bit of our time on for the abuse and the fraud 
that it has. From the statistics it seems that there is only 1 
percent of the 45 million recipients and 1 percent of the money 
that is going is going for trafficking. Would we like to see 
that those numbers are corrected? Of course. But we need the 
funding to be able to do that because are we going to take the 
funding out of the people that are receiving the money or are 
we going to add additional funding for the administrative 
portion? That is the question that I would like to pose on the 
other side.
    You know, and one of the other issues that I am very 
certain about is it seems that the legislative proposals are 
really to eliminate the ability of States and territories to 
request waivers from the strict work requirements already 
contained in the SNAP laws. And the reason that is a concern is 
that because there is a chronic rate of high unemployment rate 
in many of these areas.
    We talked about people going to convenience stores rather 
than going to the big box or the grocery stores. More often not 
it is because they can't afford to drive to those other places 
because they live in food deserts. And, you know, it is not 
that people don't want to work but there are no jobs for them 
to work. And are we going to keep these time restrictions and 
cut out the waivers for this so that people now don't have a 
meal?
    The majority of people who are on SNAP are not able-bodied 
individuals. They are women and children and elderly people who 
cannot work.
    Ms. Dean, do you think elimination of work waivers, 
especially in high areas of unemployment, would impact--how 
would that impact on those places that have unemployment?
    Ms. Dean. Well, I think the Virgin Islands would be a good 
example. Currently, the Islands waive the time limit so the 
time limit is not in effect. If it were to elect to drop it, 
given your relatively high unemployment, the shutdown of 
certain businesses in recent years, that would mean that there 
are individuals willing to work who cannot find work.
    There are also individuals working less than 20 hours, say, 
18 hours, who would lose the food assistance as a wage 
supplement to them. So it just means increased hunger and 
hardship, more demand on local charities. It's ill-advised 
given that there is this terrific program available to help 
feed people that supports and encourages work.
    Ms. Plaskett. Now, when you are a recipient of SNAP and you 
have the EBT card, can you buy every piece of grocery or every 
need in your household from that?
    Ms. Dean. The benefits are based on a food plan called the 
thrifty food plan, and it is meant theoretically for someone 
with perfect information in an extreme environment to be able 
to purchase enough. But we believe and actually have a paper 
coming out next week that suggests that it really is 
insufficient to purchase a healthy diet.
    Ms. Plaskett. So what are the things that you would not be 
able to purchase?
    Ms. Dean. Well, the--I think there are tradeoffs. Fresh 
fruits and vegetables, whether you can buy foods with 
sufficient--low levels of sodium versus highly processed foods. 
A lot of participants substitute in starches versus protein 
and, as I said, fruits and vegetables.
    That having been said, SNAP participants do purchase very 
consistent with how the average American purchases. They do an 
incredible job with the benefits that they have, but we think 
they'd do much better if they had sufficient resources.
    Ms. Plaskett. A woman who is a single parent and has a 
child, have you ever seen instances--because I know I have--of 
that individual, as my colleague talked about, using the SNAP 
money to purchase other things, to use it to buy diapers or to 
use it to buy things that are necessities that we have not as a 
country been able to supply them the resources to be able to 
take care of? Have you seen some of the fraud based on that?
    Ms. Dean. To be clear, that is also not legal and it is 
unacceptable, but yes, some mothers with young children face 
extraordinary choices, just extraordinary choices, and taking 
care of their children, as you're, I think, trying to 
illustrate with the question, is always going to come first.
    Ms. Plaskett. Okay. Thank you. Thank you for the additional 
time.
    Mr. Meadows. The chair recognizes the gentlewoman from New 
Mexico, Ms. Lujan Grisham.
    Ms. Lujan Grisham. Thank you, Mr. Chairman, and thank you 
very much for this hearing.
    And frankly, I agree with my Democratic colleagues in 
recognizing that the SNAP program as a policy is a very 
important policy to protect seniors and children and families 
in poverty and folks in the military with a focus on making 
sure that they don't go hungry. And like many of my colleagues 
on this committee, I want to make sure that we address the 
fraud issues and we also, as Ms. Plaskett, my colleague from 
the Virgin Islands just identified, that there are issues that 
we need to address that don't meet the requirements of the 
program but still shine a light on the extraordinary 
circumstances that so many of these families face.
    And I want to point out that even when we have fraud where 
someone is selling their food stamp benefit, they are in 
collusion with the grocery store in the private sector, and so 
we really need to be thinking about that. And I want everyone 
to know, and I think they do, that SNAP I think is one of the 
most important policies and programs in this country and that I 
believe, based on the evidence that I have seen, that generally 
speaking it has a very low fraud rate, and I think that that is 
a remarkable standard. What I wish for every program is that 
there was a zero fraud rate.
    But I do want to talk about the integrity of the program as 
a whole, and I am very, very concerned about that on two 
levels. I have very deep concerns about the integrity of the 
SNAP program in my State in New Mexico. I believe that these 
problems are clearly being caused by the way the State is 
administering the program and the fact that I don't believe 
that the Federal Government has been providing sufficient 
oversight, and the results are that many eligible New Mexicans 
who need emergency benefits are not getting them, and the 
overall result of course is that they are going hungry, which 
is why New Mexico has some of the hungriest children and 
families in the country still.
    Now, Mr. Concannon, in your testimony you are very clear 
that FNS needs to take a look--and I think I am quoting you--
look carefully at States that are pushing recipients off SNAP 
programs or are not processing SNAP applications or application 
re-certifications in a timely manner. And I know that you are 
aware that the State of New Mexico has been doing just that 
because we are in court, we have sent you letters, we have 
asked you to do an investigation. We have been very involved.
    And that these New Mexico advocates that you and I have 
personally spoken about have been raising this issue in fact 
with your office for years. In fact, our office received a 
formal letter in April from the American Federation of State, 
County, and Municipal Employees, which represents many of the 
State employees involved in this issue who administer the SNAP 
program. And, Mr. Chairman, I ask for unanimous consent to 
enter the letter into the record.
    Mr. Meadows. Without objection, so ordered.
    Ms. Lujan Grisham. I was pretty sure that was going to 
occur. Thank you, sir.
    Now, these employees, as you know, allege that the State 
has failed to provide training and staff support and all true, 
so that what is occurring in New Mexico is that in order to 
meet the time request to deal with emergency applications, they 
are adding assets to falsify those applications so that people 
don't get the benefit that they deserve and need, and that is a 
very serious integrity program.
    But just as terrible and heinous as that is that current 
court records indicate that that has been going on since 2003. 
So in addition to the years that I have been asking the 
Department to look at this and in addition to the April letter 
where I asked for an investigation, it looks as if the 
Department has had information about this very issue since 
2003. And we can see that one of those results is the hungriest 
State in the country.
    Now, the most disturbing thing to me--I just want to repeat 
this--isn't these lapse of audits and integrity and issues 
between the Federal Government and State government. The most 
egregious issue here is that I have vulnerable families that 
aren't getting the support that they deserve it.
    And according to AFSCME, there is a pattern and practice of 
adding these assets that should have been counted as income or 
adding assets in order absolutely to prevent people in our 
State who are eligible for being eligible.
    So basically the State is lying to you, Mr. Concannon, and 
it is also clear to me that we have not been holding them 
accountable since at least July of 2014. Now, I need to 
understand why your office didn't know about these violations 
since 2003 and hasn't responded to us and others when you had 
clear knowledge of what is going on. So before the AFSCME 
letter, given all these issues, why didn't your office take--
and then after, why didn't your office take immediate action?
    Mr. Meadows. The gentlewoman's time is expired, but please 
answer the question.
    Mr. Concannon. Well, thank you very much for the question. 
Let me just, in support of the Congresswoman's concerns, 
confirm that I believe New Mexico is probably the most fouled 
up SNAP system in the United States right now and has been, 
unfortunately, I think for years. There is a major Federal 
lawsuit that's been underway there for many, many years, and I 
think even the courts have been less than successful in getting 
the State to really fully respond.
    We have been engaged with the State offering them 
additional support, offering them additional technical 
assistance just as--we also are in receipt of that letter from 
AFSCME ----
    Ms. Lujan Grisham. And I am out of time ----
    Mr. Concannon.--on the 26th ----
    Ms. Lujan Grisham.--Mr. Chairman. I know that you are 
really patient with me, but you know what, giving them 
technical assistance when they are lying to you, they are 
cheating the beneficiaries, they are not protecting the 
beneficiaries, they are in Federal court, this requires 
investigatory action and audits, which is exactly what this 
entire committee wants for all of these ----
    Mr. Concannon. It is being investigated ----
    Ms. Lujan Grisham.--programs.
    Mr. Concannon.--right now by the inspector general of ----
    Ms. Lujan Grisham. Because in a letter from your office, we 
don't have that. They are being investigated for this issue?
    Mr. Concannon. The--since that letter from AFSCME, the 
State--the State IG in New Mexico is investigating that--those 
claims. We also had a visit to several of their offices in May. 
We did not identify that in our management review of those two 
offices, but I--the State inspector general is currently 
investigating the State for those very claims.
    Ms. Lujan Grisham. As I yield back my time, and the 
chairman is being very generous, what I have in writing from 
your office, sir, is that you are going to hold beneficiaries 
accountable for overpayments and that there is not an ongoing 
investigation about this issue. So I am very happy to hear that 
what we have in writing is incorrect, and I am expecting you to 
put in writing your statements today so we get this rectified.
    I yield back, Mr. Chairman.
    Mr. Meadows. All right. So let me follow up on the 
gentlewoman's--while she is closest to this particular issue 
and I think that this is really why we have Maine and Florida 
here today is that we have a Representative from New Mexico 
that is up close and personal with a particular problem. So, 
Mr. Concannon, do I have your assurance that you will report 
back to this committee with a plan of action of how to address 
her concern within the next 14 days?
    Mr. Concannon. Yes, you do, but I ----
    Mr. Meadows. Just ----
    Mr. Concannon.--do want to be clear. The problem is on the 
part of the State agency ----
    Mr. Meadows. I didn't ask you ----
    Mr. Concannon.--not consumers.
    Mr. Meadows. Well, so you don't have any involvement 
whatsoever?
    Mr. Concannon. No, we have involvement.
    Mr. Meadows. Okay. Well, then ----
    Mr. Concannon. I'm just saying that it's the State agency 
that is at fault here, not the consumers ----
    Mr. Meadows. Okay.
    Mr. Concannon.--of the SNAP program ----
    Mr. Meadows. I understand. You made your point.
    Mr. Concannon.--in New Mexico.
    Mr. Meadows. She has made the point, but what she also said 
is that you haven't been forthcoming in following up with her, 
and what I am saying is from the other side of the aisle, that 
is inexcusable ----
    Mr. Concannon. Well ----
    Mr. Meadows.--wouldn't you agree?
    Mr. Concannon.--I don't accept that claim.
    Mr. Meadows. Okay.
    Mr. Concannon. I don't accept that, that we are not ----
    Mr. Meadows. Well, I ----
    Mr. Concannon.--forthcoming.
    Mr. Meadows. The gentlewoman has yielded back, so let me go 
ahead and recognize myself for a series of questions because, 
Mr. Concannon, you come and you are very quick to point at 
Maine and suggest that what they are doing is not adequate from 
a standpoint of the way that they are conducting it. And that 
was really early on. You were very quick to do that. But yet 
when my good friend and the gentlewoman from New Mexico points 
out a problem where you have not even respond properly, you are 
not willing to take and accept responsibility. I think that 
that is a double standard, wouldn't you?
    Mr. Concannon. No, it's not a double standard. I haven't 
said we haven't responded. I've said we've been doing 
evaluations of New Mexico. We're not happy with their 
performance.
    Mr. Meadows. But there is no investigation ----
    Mr. Concannon.--We have offered them ----
    Mr. Meadows.--going on at this point?
    Mr. Concannon. Yes, there is, the inspector general ----
    Mr. Meadows. By the State ----
    Mr. Concannon.--of the State.
    Mr. Meadows. By the State. By the OIG of the Federal 
Government for USAID ----
    Mr. Concannon. I can't ----
    Mr. Meadows.--or USDA, is there any ----
    Mr. Concannon. I can't speak for the OIG because I don't --
--
    Mr. Meadows. Would you ----
    Mr. Concannon. I know they're aware of it ----
    Mr. Meadows. Would you recommend ----
    Mr. Concannon.--but I can't tell you what they are ----
    Mr. Meadows. Would you recommend that there would be a 
Federal investigation?
    Mr. Concannon. I'd be happy to.
    Mr. Meadows. All right.
    Ms. Lujan Grisham. Thank you.
    Mr. Meadows. All right. So let me go on a little bit 
further. Ms. Mayhew, one of the things that I was perplexed by 
is a started looking at statistics of SNAP use by Maine 
recipients in other States other than Maine. And by the list 
that I got, it looks like they are using all over the country, 
indeed all over the world, and yet it comes from your State. 
Would you say your State is atypical? Is it unique that you 
have a lot of SNAP travelers?
    Ms. Mayhew. Maine is not unique.
    Mr. Meadows. Okay. So if it is not unique, I guess one of 
the questions I have is in just looking at one of the numbers 
that popped out happened to be in Mr. Carroll's State. And so I 
have got Maine recipients who are getting SNAP benefits that 
traveled apparently to Florida, and over the last 5 years, 
there has been over $3,700,000 and change benefits from Maine 
that get used in Florida. Is that correct, Ms. Mayhew?
    Ms. Mayhew. That is correct.
    Mr. Meadows. So how do you stop that? I mean, are they just 
traveling? So is this somebody that just happens to travel with 
SNAP benefits and go down there or are they going to the flea 
market where Mr. Carroll is doing--and cashing it in? I guess I 
am very concerned in that he is doing a great job and even I 
guess, Mr. Concannon, you would recommend that Florida is doing 
a job? In fact, there is a bonus--didn't you all get a bonus 
for good--have you all paid that bonus?
    Mr. Concannon. No, we have not paid the bonus ----
    Mr. Meadows. And why not?
    Mr. Concannon.--since 2015. No.
    Mr. Meadows. Why have you not paid the bonus?
    Mr. Concannon. Because we have some concerns about the ----
    Mr. Meadows. Well, you just said he did a good job.
    Mr. Concannon. Well, no ----
    Mr. Meadows. You can't have it both ways.
    Mr. Concannon.--Florida is doing a good job, but I'm not --
--
    Mr. Meadows. Well, that's Florida.
    Mr. Concannon. That's--I'm not translating that ----
    Mr. Meadows. I am talking about the $7 million ----
    Mr. Concannon.--to whether we should pay the bonuses.
    Mr. Meadows. So why are you holding up the $7 million 
payment on someone who is recognized as doing a great job? Why 
would you be holding that up?
    Mr. Concannon. Because I want to make sure that what we are 
getting are valid reports from States across the country.
    Mr. Meadows. So you are holding up his to make sure that 
you get valid reports from everybody else?
    Mr. Concannon. I'm holding all of them up.
    Mr. Meadows. Okay. When can we expect a response on his 
bonus money? And he didn't ask me to ask this, by the way. So 
when can we expect you to get it resolved?
    Mr. Concannon. As soon as I'm satisfied and others ----
    Mr. Meadows. How many days?
    Mr. Concannon.--are satisfied--no, it's not a matter of 
days because ----
    Mr. Meadows. Well, you are going to give me ----
    Mr. Concannon.--I want to be ----
    Mr. Meadows.--some days. When will you report back this 
committee? Thirty days, is that enough to evaluate it?
    Mr. Concannon. No, it may take longer than that because 
we're in the middle of investigating that right across the 
country right now, not just in Florida, in States right across 
----
    Mr. Meadows. So you are saying you don't owe it to Florida? 
Is that what you are saying?
    Mr. Concannon. I'm not sure if we do.
    Mr. Meadows. All right. You have 30 days to address that 
issue and make a compelling case on why you're not paying it to 
them to this committee. Are you willing to accept that, to make 
a compelling case?
    Mr. Concannon. I'm willing to report back to the committee 
within 30 days, but I'm not sure whether the matter will be 
resolved ----
    Mr. Meadows. Mr. Concannon, let me just tell you what 
concerns me is that you supposedly have the answers for all 
food stamp ailments, and yet what I am seeing are experts here 
that are on the ground that in my opinion know a lot more about 
what is going on in their States than you do, and now you are 
going to hold it up because Mr. Carroll has supposedly done a 
great job. You just admitted it under sworn testimony, and yet 
you are saying you are not going to give him a bonus for good 
performance?
    Mr. Concannon. I said he's doing a good job. I didn't say 
he deserves a bonus ----
    Mr. Meadows. Well, let me just tell you ----
    Mr. Concannon.--so ----
    Mr. Meadows.--this will not be the last hearing then, and 
we will have you back. If you are going to report back in 30 
days, I would appreciate that.
    Mr. Meadows. Ms. Mayhew, let me come to you. Why do you 
think there is so much use of Maine's SNAP benefits across the 
country?
    Ms. Mayhew. Well, certainly, as I indicated in our 
testimony there are no Federal SNAP regulations that would 
restrict the mobility of that benefit. We have concerns about--
around that. Now, certainly States have access to EBT card 
transactional data. We have invested in effort software 
applications to analyze that EBT card transactional data to 
look at that out-of-state use.
    We've established triggers when a card is used for a 
prolonged period of time, 2 months or more out of State, that 
is a red flag that certainly the individual may no longer be a 
resident of the State, but it may also be an indicator of other 
activity that's not consistent with the requirements of the 
program. That is an effort that we certainly believe all States 
need to be using, data analytics and tools, to analyze out-of-
state transactions.
    Mr. Meadows. So I show that there has been $64 million 
worth of Maine benefits used in other States. Is that correct?
    Ms. Mayhew. That is correct. And certainly this is across 
the country and including St. John and Las Vegas and California 
there have been Maine EBT cards used. Now, that is both food 
stamps but would also include other benefits on the card, 
including TANF.
    Mr. Meadows. All right. So as we look at that, Ms. Brown, 
from a GAO perspective, that type of tool that allows us to 
track those benefits and where they are being used and perhaps 
allow for better fraud prevention, is that a tool that you have 
or is that a tool that we could use, as Maine has used it, to 
give us a better picture of potential--and I say potential--
fraud?
    Ms. Brown. Well, the issue of people using their benefits 
in other States has been something that's come up many times 
both whether there were questions of fraud but also whether 
there are questions that recipients are applying for and 
receiving benefits from multiple States. And we do have and are 
looking right now at some data-sharing applications that would 
shed some light on whether they were actually receiving 
benefits from multiple States. And USDA has activity in that 
area, too.
    I don't know of anything ----
    Mr. Meadows. So could we get a report like this for every 
single State where we see the benefits that are being used in 
other States? Is that something that is easy for you to do, GAO 
to do?
    Ms. Brown. I'm not sure if it's easy for GAO to do it. We 
----
    Mr. Meadows. How about you at USDA, Mr. Concannon? Can you 
get us that?
    Mr. Concannon. We could certainly on SNAP, on food stamp 
benefits. As the commissioner mentioned, those benefits you're 
talking about in those several States include other functions 
that are on that same EBT card, so I'd caution against that. 
The majority ----
    Mr. Meadows. What do you mean ----
    Mr. Concannon.--of out-of-state benefits for Maine are 
actually ----
    Mr. Meadows. You can't get the information?
    Mr. Concannon. We can give you the information for SNAP, 
not for ----
    Mr. Meadows. For TANF?
    Mr. Concannon.--the TANF or for child support, as the case 
in many States, too.
    Mr. Meadows. All right. Mr. Carroll is wanting to weigh in. 
I saw the pencil go up.
    Mr. Carroll. I do. And I'm glad that Ms. Brown brought this 
up. We're in a collaboration right now with five southern 
States that border us so that we electronically up front when 
somebody applies for assistance can ping our data off of their 
data to make sure that they're not concurrently receiving 
assistance in two States. That's a pilot program we've been 
working with our Federal partners on doing that, and it's--
quite frankly, it's worked quite well.
    I hear there's another 15 States going to come in on that, 
and we hope at some point that all 50 States are up on it so at 
least we can stop folks from receiving in multiple States.
    The issue that we have with folks using food stamps in 
other States, it's like everything we deal with, it's complex. 
You've got to peel the onion back because in Florida when you 
look at the panhandle, it's usual for somebody to cross the 
border and use it at--the nearest grocery store may be in 
Alabama if you live in Pensacola. It may be in Georgia. It may 
be in Louisiana. So we see some of that. But I can tell you, to 
have folks from 6 or 10 or 12 States visiting the Opa-locka 
flea market, if you've walked through the Opa-locka flea 
market, that is not a tourist destination. So there's something 
going on there.
    And what we don't know is I don't think that folks 
physically came here from Maine to use their card or to sell 
their card here. I suspect it was more related to--we have ID 
thieves in southern Florida that we know are now applying for 
assistance in Missouri, that now are applying for assistance in 
New York. They'll probably apply for assistance in Maine 
because there's no way these folks are physically coming to 
Florida to go to the Opa-locka flea market.
    Mr. Meadows. Yes, I have been there. I can assure you, you 
have got to be going there to get there so ----
    Mr. Carroll. Right.
    Mr. Meadows.--I mean, as we look at that--Mr. Carroll, let 
me point out one thing, and, Mr. Concannon, I want to come back 
to you because I mentioned bonus things and it was really just 
a footnote. I want to make sure, Mr. Carroll, you have not 
asked me to address that, and I want you to hear that, Mr. 
Concannon. The relationship between the two of you I think is a 
very good one. It is one that I want to continue to support and 
applaud. And so my interaction here is more of frustration out 
of trying to make sure that we don't create a disincentive for 
good performance. And when you have someone who is performing 
well, I want to make sure that the compensation is there.
    And the other aspect, Mr. Concannon, and I will close with 
part of this, if you are asking the States to really look and 
police the recipients, would it not be prudent to allow them to 
police the retailers as well? And I am not asking for--you can 
comment on that if you would like.
    Mr. Concannon. Yes, I can comment on it because we have 
given--for example, Maine, we entered into a--what we call a 
SLEB agreement. We have one in Florida as well where we allow 
them to--the police agencies to--if you suspect something is 
going on, I'm aware that we have an agreement currently out on 
the West Coast with a State that States can come forward, one, 
report to us that they're--here's my complaint in all of this. 
I am confident we're going after stores across the country. I'm 
a lot less confident that States, with due respect, are going 
after the individuals who are using places like that Opa-locka 
market or whatever it's called. And we have urged States ----
    Mr. Meadows. You butchered that ----
    Mr. Concannon.--to take a store out ----
    Mr. Meadows.--but that is okay.
    Mr. Concannon. We--okay. Well, when we take a store out, I 
have urged States--these people have been at meetings when I've 
said to them look at the redemption history in the previous 3, 
6 months and you will see by--based on the amounts of 
redemption, the time of day, where people are from, you will 
identify, and yet it's a handful.
    Mr. Meadows. Okay.
    Mr. Concannon. I think in Maine last year, the year before, 
two people were taken out of the program for trafficking ----
    Mr. Meadows. Okay. Mr. Concannon ----
    Mr. Concannon.--so there's not much ----
    Mr. Meadows.--let me ----
    Mr. Concannon.--going on in this department.
    Mr. Meadows. Let me tell you, it is harder to go after the 
recipient and it is very easy for you to make statements about 
recipients when that is not under that purview when actually 
the retailers are under your purview right now. And here is 
what I am saying--and I will come to you, Mr. Carroll, because 
I think you wanted to--what I am saying is maybe let's look at 
a pilot and give all authority for policing the retailer to the 
States and maybe let's do it in two or three States.
    You know, part of the farm bill actually asked for you to 
come up with some pilots on fraud, and have you done any of 
those pilots?
    Mr. Concannon. Yes, we've actually ----
    Mr. Meadows. Your mic, please. Your mic, your mic.
    Mr. Concannon. We've made grants to these States, Maine 
including ----
    Mr. Meadows. No, no, no, no, no.
    Mr. Concannon. Yes, we have.
    Mr. Meadows. So in what form did you do a pilot because I 
haven't seen any results or even start of a pilot ----
    Mr. Concannon. No, they have started.
    Mr. Meadows.--in your other sworn testimony ----
    Mr. Concannon. They have started.
    Mr. Meadows.--so you may want to check with your staff 
behind it. What kind of pilots ----
    Mr. Concannon. No, we have ----
    Mr. Meadows.--have you done?
    Mr. Concannon. We have made grants to these States ----
    Mr. Meadows. That is not what I asked. The farm bill ----
    Mr. Concannon. Okay. Some of the ----
    Mr. Meadows.--was very specific. It said for you to set up 
pilots to do that. I voted for the farm bill, and so I know 
that it's there.
    Mr. Concannon. Terrific.
    Mr. Meadows.--there. So have you ----
    Mr. Concannon. Great.
    Mr. Meadows.--done any pilots?
    Mr. Concannon. Yes, we have.
    Mr. Meadows. In what States?
    Mr. Concannon. There are a list of them here. We'll give 
you a number--Maine is one of them on case management, for 
example, where we've given Maine money, and there are some 
other examples ----
    Mr. Meadows. Mr. Carroll ----
    Mr. Concannon.--on that line.
    Mr. Meadows. Mr. Carroll, you--let me ----
    Mr. Concannon. SLEB agreements with a number of States as 
well ----
    Mr. Meadows. What is that?
    Mr. Concannon.--so yes. We'll give you the list of States 
and what they're doing.
    Mr. Meadows. Mr. Carroll, is what we are talking about, 
does that go far enough to solve your flea market problem?
    Mr. Carroll. No. And, first of all, I want to say to Under 
Secretary Concannon that when we have partnered and they have 
gone after vendors, we'd have a very strong partnership. What 
I'm worried about is even using their definition of a high-risk 
vendor, we have over 16,000 authorized retailers in the State 
of Florida. Based on the definition that classifies some of 
those vendors as high-risk, 13,000 of our vendors are high-
risk.
    And if you use the statistic out of FNS in terms of what 
percentage of those might potentially be actively engaging in 
this activity, it would be about 2,300. FNS and the State of 
Florida gets to about 100 of these establishments, 
investigations per year. So based on that, it would take us 23 
years to get through that population. We ----
    Mr. Meadows. All right. So your--hold on. Your sworn 
testimony here today is that based on the potential for fraud 
in Florida of 2,300 retailers with the way that we are going 
after those, it would take 23 years ----
    Mr. Carroll. Correct.
    Mr. Meadows.--to evaluate all of those?
    Mr. Carroll. With the current--the way we do 
investigations, the current staff available to those folks ----
    Mr. Meadows. That is unacceptable. I am just telling you 
that is unacceptable. And so I am going to go ahead and come to 
the gentleman from Wisconsin, Mr. Grothman, for his second 
round, and we'll close up.
    Mr. Grothman. Well, thank you. A couple things. First of 
all, I want to respond to something one of the other 
Congressmen said where he I think intentionally 
mischaracterized what I said or lied about what I said. With 
regard to my exchange with Mr. Concannon, the question is when 
you have so many programs, the benefits of which disappear when 
you marry somebody with an average income, the question is 
whether it affects people's decision as to whether or not to 
get married. And when you add up the Medicaid and the SNAP and 
the low-income housing and the Pell grants and the disability 
for kids, you can wind up with huge amounts of money.
    So I think what I said was completely mischaracterized, but 
I will ask Mr. Concannon again because I think you gave me a 
wrong answer as well. There is a marriage penalty, I believe, 
associated with SNAP. And you sit there and shake your head on 
that. But if you marry someone who moves in with you and they 
are making, let's say, $40,000 a year, isn't it true that if 
the person who initially has some benefits that you will lose 
your SNAP benefits, as well as many other benefits which you 
are entitled to by your classification of being low income 
because no longer you and the father of the child are 
considered low income? Isn't that true, Mr. Concannon?
    Mr. Concannon. No. What's true is this. If somebody moves 
in with you, whether they are married or not, their income is 
counted in the SNAP program ----
    Mr. Grothman. That's exactly right ----
    Mr. Concannon.--period.
    Mr. Grothman.--Mr. Concannon. That's exactly right. So 
first of all, assuming you catch somebody has moved in, which a 
lot of times is not--I'd argue most times is not--but if you 
decide to move in with the father of your children and the 
father of your children is making $40,000 a year, will you not 
lose the SNAP benefit?
    Mr. Concannon. Yes.
    Mr. Grothman. That is what we call a marriage penalty. Very 
good.
    Now, a question for Mr. Carroll, and Congressman Meadows 
dealt with this a little bit, but we are going to talk a little 
bit more about the National Accuracy Clearinghouse, right? And 
that was a very successful program, correct?
    Mr. Carroll. Well, it's a pilot ----
    Mr. Grothman. It is a pilot but ----
    Mr. Carroll. Yes.
    Mr. Grothman.--would you say you discovered people who were 
getting SNAP benefits in more than one State or trying to get 
SNAP benefits in more than one State?
    Mr. Carroll. Yes.
    Mr. Grothman. A substantial number, right?
    Mr. Carroll. I'd have to get back to you the number. I 
don't have that number, but there is an active number, sure.
    Mr. Grothman. Somebody here put down on this thing they 
gave me currently Florida averages 162 matches a day. Is that 
possible?
    Mr. Carroll. That's correct.
    Mr. Grothman. Okay. I guess I would call that a successful 
pilot program.
    I will ask Mr. Concannon what you have learned from that 
pilot program and whether you think it would be a good idea to 
follow up with that pilot program all over the country.
    Mr. Concannon. Yes, I do. I support the program and I--
again, when I meet with commissioners, I tell them do data 
matches with other States. You can do it in batch. You don't 
have to do it exactly the way that was structured. The beauty 
of that particular pilot was it was real-time so they could 
identify people. But there are ways to identify people trying 
to enroll in other States by even doing simple match processing 
matches, and I highly supported that.
    Mr. Grothman. And will the program--you think the program 
will be expanded nationwide?
    Mr. Concannon. That I don't know at this time. If States 
come forward and say we want to do it, we're certainly 
interested in it.
    Mr. Grothman. Okay. I will just give you one more question 
because you really didn't answer before or I will give it to 
any of you, and I always wonder about this. Like I said, I get 
around my district, I even talk to people here in Washington, 
but certainly, you know, in Wisconsin we have big cities, we 
have little cities. Wherever I go, people are selling their 
SNAP benefits at 50 cents on the dollar.
    Now, that indicates to me that they must be getting food 
from somewhere else or that maybe they don't need the benefits. 
I would strongly encourage you who are not familiar with that 
to get out a little bit more and talk to people in the real 
world and, you know, deal with people in that income class and 
see how much SNAP benefits are being sold for in your area.
    But could anybody give me a reason as to why, if we have 
this huge food crisis in our country, people are selling their 
benefits for 50 cents on the dollar? Mr. Carroll?
    Mr. Carroll. I'd like to take that question. What we find 
the highest profile of somebody who's likely to engage in that 
type activity is--we go back to that able-bodied--it's usually 
a single adult that doesn't have kids because we very seldom--
unless it's identity fraud where it's not the person it's 
purported to be, we very seldom come across a mom unless 
there's a serious other issue like a drug addiction or 
something--but we very seldom come across a mom who is going to 
sell the lifeblood of that family for--no matter how much.
    So--and this is why I want to focus on the vendor rather 
than the recipient because if you're a recipient and those 
able-bodied folks make--or get about $111 a month or $114 a 
month. If you get 50 cents on the dollar, you're talking about 
they get maybe $60, but if you're a vendor in Opa-locka and you 
multiply that over and over, all of a sudden you get $7 million 
worth of redemptions off an EBT card that you're keeping 20 
percent of with no overhead.
    And so I agree it's an issue. I don't think that families 
that are on assistance are selling their food stamps like that. 
I do think that some of this becomes urban legend because we 
don't do a good job at curtailing it so it's difficult to put a 
number on it. But if we don't go after the vendor side of this, 
we're never going to stop it.
    Our focus is on the recipient side, and Under Secretary 
Concannon talked about how States don't go after the 
recipients. The difference of going after a recipient, you can 
go after a retail vendor and you can have preponderance of the 
evidence and you can use the EBT transactions to shut them 
down. Because we have a clear-and-convincing standard, I can 
bring that standard in. And most of the time when we get it, by 
the way, it has been under investigation for a number of years. 
It took 7 months to go through a disqualification. So when we 
get a lot of the transactions that are given to us, a lot of 
them are a year, 2 years old, we have to re-run more current 
transactions.
    But with a clear-and-convincing standard, we then have to 
prove they had the intent to commit fraud, and short of having 
a witness that saw them do it or having some type of admission 
from the person that they in fact, misused their food stamps, 
it's very difficult to overcome that hurdle, which is why we 
asked to have that standard reduced to the same as retail 
merchants where it's preponderance of the evidence because then 
we can do exactly what Under Secretary Concannon said and use 
the EBT usage data to begin taking some of these people off the 
rolls.
    Right now, they refer to us--because of the vendors--they 
shut down on average about 21,000. We have 41,000 folks that 
we're looking at just in the Opa-locka area. That's 62,000 
folks. I don't have enough folks to investigate at the level of 
investigation you need to disqualify 62,000 folks. I just 
don't. We've got to stop this at the vendor level, and we've 
got to reduce the standard on the recipient level.
    Mr. Grothman. May I have another question?
    Mr. Meadows. Last question and then you are out of time.
    Mr. Grothman. You gave yourself ----
    Mr. Meadows. Yes ----
    Mr. Grothman.--15 minutes.
    Mr. Meadows.--it is part of being a chairman.
    Mr. Grothman. Wisconsin we have PIN numbers. They have PIN 
numbers nationwide. Is that a nationwide thing now?
    Mr. Concannon. Yes.
    Mr. Grothman. Okay. And how about photo ID, photo on the 
card? Do you think we should be doing that, everybody have a 
photo on the card?
    Mr. Carroll. This is where Maine and Florida differ a 
little bit. We looked into putting photos on the card, and the 
initial up-front cost would be about $450,000 and then $1 per 
card, and with 3.3 million recipients, the cost of instituting 
that would be costly.
    But what we don't think would--this is why I think we need 
to target our prevention efforts. Most of the folks that are 
trafficking in EBT cards, there's a willing vendor who is 
openly breaking the law and buying these food stamp cards 
illegally. They're going to continue to do that whether there's 
a picture on it or not. For the vendors in big-box stores like 
you work at a Walmart and all of a sudden somebody hands you a 
card. If you checked the ID and it happens to be dad but mom is 
on the card, then what happens in that grocery line? We don't 
know. So we don't think it's a bad idea but it has to be 
fleshed out a lot further than that before we go down that 
road.
    We think you get a bigger bang for the buck in 
strengthening the data analytics portion of this looking at 
transaction history with vendors, and we think you get a bigger 
bang for the buck looking at folks coming through the front 
door, how they're using their EBT card and drilling down into 
that stuff to begin to prevent it.
    I do think--and I think Secretary Mayhew alluded to this--
that the fact anecdotally there's been less cards collected 
because I do think it would be a deterrent to folks who don't 
want it traded because their picture is on it. But the people 
that we see in Florida are intent. They could--I'm talking 
about a small segment that's accounting for a big chunk of this 
fraud. These folks are criminals. They don't care whose picture 
is on it. They're going to sell and they're going to traffic in 
that EBT card.
    Mr. Meadows. I thank the gentleman. I thank each of you for 
your testimony. Let me clear up two or three little leftover 
items.
    So, Mr. Carroll, is it my understanding that you believe 
that you need more authority as it relates to retailers to be 
able to go after those bad actors in terms of retailers and 
transfer some of that authority from USDA to the State to allow 
you to prosecute the fraud and abuse? Is that correct?
    Mr. Carroll. That is correct.
    Mr. Meadows. All right. And so if we gave you that, you 
believe that we would be able to not only make a more focused 
approach on those that are fraudulently trying to game the 
system without affecting those that Ms. Dean so eloquently put, 
the real people who need the benefits, that you can go after 
those bad guys if you had that authority, is that correct?
    Mr. Carroll. Absolutely.
    Mr. Meadows. All right. Mr. Concannon, let me come back to 
you. I mentioned pilots and I mentioned the 2014 farm bill. The 
kind of pilot that I want to see is to give the kind of 
authority that we just talked about with Mr. Carroll. It would 
be great if we took Ms. Mayhew, Mr. Carroll, and maybe somebody 
out West, you get North, South, and you get the West where you 
have three States that you give that authority, essentially 
give all of that authority to those States to be able to do 
that so that we can monitor, to have Ms. Brown, to have USDA 
monitor that to see if it is making a big difference. It may 
not.
    But here is what I am saying. As someone who will advocate 
on behalf of a new farm bill that is, as you know, already in 
the works, that the Ag Committee and that committee is doing a 
yeoman's job to do a great job to make sure that we have a good 
farm bill going forward.
    I want to give them the tools coming out of Oversight and 
from GAO and the others to say here is how we define the 
argument, because if not, the argument is always going to be is 
that there is somebody gaming the system. And what I want to do 
is narrow that to the ones who are gaming it and let's get 
them, and the ones who really need the help, that we actually 
look at increasing the ability to help those that are truly 
starving in our communities. Does that make sense to you?
    Mr. Concannon. I'm with you totally on that.
    Mr. Meadows. So are you willing to get back to this 
committee and maybe look at amore defined pilot program? And 
obviously, we would not be the only committee, but from an 
oversight standpoint, it would be ours. But the other is 
obviously work with the chairman of the Ag Committee to look at 
three pilots. I would suggest two that are here today and 
another one out West. I can tell that you are not buying into 
that, but as long as we get three States, as long as we get 
three States to give them that authority where we allow Ms. 
Brown to look at those numbers, are you willing to commit to do 
that today?
    Mr. Concannon. I'm certainly willing to work with you and 
with the committee on it. I want to make sure that what we can 
do is going to be legally okay by the Office of General Counsel 
----
    Mr. Meadows. Well, going after fraud is legal.
    Mr. Concannon. No, no--but they may say to us, look, you 
have that responsibility. You can't turn it over completely to 
the State.
    Mr. Meadows. Okay. If it needs a ----
    Mr. Concannon. Now, we may be able to give them more 
authority.
    Mr. Meadows. So if it needs a legislative fix, I think you 
have that in the 2014 farm bill the way that it was worded, 
maybe not, but if you need a legislative fix, if you will get 
your folks to get with us, we will work in a bipartisan way to 
step up that kind of thing so that Mr. Carroll doesn't have to 
try to track down 42,000 people individually and come up with 
probable cause later. Does that make sense?
    Mr. Concannon. Yes, but I think the point, though, he's 
making that the evidence standard is still a higher one. That 
hasn't solved that issue.
    Mr. Meadows. But that is a different thing.
    Mr. Concannon. That hasn't solved that.
    Mr. Meadows. If you give him the ability to go after 
retailers, some of the evidence standards are not as 
problematic because the timing of that and the ability to tie 
the two together where it is not you coming in on one--it 
allows him to do that. The time gap is certainly very 
different. Does that make sense?
    Mr. Concannon. It could. It could. We're doing variations 
on that with a Western State right now, so we'll have to see 
whether that works.
    Mr. Meadows. Okay. All right. So can you in the next 120 
days get me an updated report on the trafficking because it is 
3 years old, the 2015 report. Can you ----
    Mr. Concannon. We ----
    Mr. Meadows. You said you were working on it already.
    Mr. Concannon. They are working on an update of that ----
    Mr. Meadows. So what is a reasonable ----
    Mr. Concannon.--right now. I don't know what ----
    Mr. Meadows.--time? If 120 days is not reasonable, what is 
reasonable?
    Mr. Concannon. End of calendar year this year because 
that's--it's very complicated, but end of calendar year, 
December.
    Mr. Meadows. It is so complicated to figure out trafficking 
that it is going to take 6 months?
    Mr. Concannon. They are currently working on it right now, 
but they have just advised me, the people who are working on 
it, that we won't have it until the end of the calendar year.
    Mr. Meadows. So we will have the 2015 report in 2017?
    Mr. Concannon. Two thousand twelve to fourteen is the 
current time period they're working on.
    Mr. Meadows. All right. But can you include 2015 in that?
    Mr. Concannon. I think they're already working on it so I 
don't think I can.
    Mr. Meadows. So you can't include that? She is shaking her 
head no, you are saying yes.
    Mr. Concannon. Well, they are the researchers so ----
    Mr. Meadows. So we will have--let me make sure I 
understand. We are going to have 2012 through 2014 but no 
information on 2015 trafficking by the end of the year, is that 
correct?
    Mr. Concannon. Correct.
    Mr. Meadows. Okay. We will follow up with you on that.
    And my final issue is more of a comment, and it gets to 
something that you talked about earlier. You talked about a 
rule about addressing the retailers. There is a very big 
difference between going after fraud with retailers than 
telling them what they have to stock on a shelf. And you 
conflate the two, and I am here to tell you that I am going to 
be looking at that very closely. I want your first priority to 
be fraud. That is what the farm bill talked about. And what you 
are suggesting in your rules is something that perhaps is other 
than that, and I want to make sure that we are clear that I 
want you to focus and have your priority on fraud versus on 
what goes on a shelf.
    Mr. Concannon. Well, actually, the farm bill authorized 
depth of stock is the term ----
    Mr. Meadows. It did ----
    Mr. Concannon. So it isn't just ----
    Mr. Meadows. But I think ----
    Mr. Concannon.--on fraud. It's to improve ----
    Mr. Meadows. But I am telling you that ----
    Mr. Concannon.--the ----
    Mr. Meadows.--priority is fraud first.
    Mr. Concannon. Okay.
    Mr. Meadows. The depth of stock and where you are going 
with it I think you will find a very--your interpretation of 
what I voted on is very different than what I voted on. And I 
will yield back.
    And with that, I want to thank all of you for your time, 
and if there is no further business, this joint committee 
stands adjourned.
    [Whereupon, at 5:20 p.m., the subcommittees were 
adjourned.]


                                APPENDIX

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               Material Submitted for the Hearing Record
               
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