Indianapolis hosted the 100^th Anniversary Convention for Kiwanis International these past few days. As is the norm, I represented my Valley Park [Missouri] club. At the convention, an organization which didn’t allow women members until the Reagan administration voted in their first woman president, and insured that the second woman president is just a year away.

The local Indy news didn’t say much about Kiwanis.  The hot story: on Wednesday, the first effective day of Indiana’s new religious freedom law, services will be held at the First Church of Cannabis.   http://www.indystar.com/story/news/2015/06/26/officials-hold-church-cannabis-press-conference/29327331/

Yes, a law by an extremist state legislature, signed by a right wing-nut governor, promoted to “protect” Christian churches from clouds of oppression, allowed creation of a church dedicated to pot smoking.

Some were not amused.  The Indy police chief and city prosecutor held a news conference where they competed to see who would be first to have an on-camera stroke as they spewed venom toward the new congregation.  The prosecutor, as seen on WISH-TV 4, promised that those who attended the service – even if not toking along – would be arrested for participating in a public nuisance.  They promised cops would be inside the church during services.

Meanwhile, the new church’s pastor (who looks like the sort of guy to head the First Church of Cannabis) explained that his church had been recognized by IRS as a religion and that the new state law protected his new congregation’s rights.  TV showed a cute red brick church, complete with steeple and wheel chair ramp.

So, on July 1^st look for the national news to cover police inside a church arresting parishioners…Probably not what the Indiana Legislature intended with their Religious Freedom Restoration Act.

It was great to see non-Missouri legislators dealing with unintended consequences.

The Show-Me State, alas, stands ready for tragedy.  In a few weeks we begin the process of having people too poor to get anti-poverty benefits.

As you probably recall, the Missouri legislature voted to override Gov. Jay Nixon’s veto of Senate Bill 24.  As a result, an adult with a dependent child but no income will no longer be entitled to receive the state’s ‘generous’ Temporary Assistance cash grant of up to $234 a month (less than $8 per day) unless screening shows them worthy of applying for aid.  To become eligible to apply they must sign – perhaps in blood – a contract to follow the program, meaning they accept that they are third-class citizens not to be trusted with doing what is in their family’s best interest without bureaucratic oversight.  They must also demonstrate a commitment to working 30 hours every week or otherwise engaging in 30 hours of “work activities” such as sitting at an unemployment office computer searching for jobs.

If a screening bureaucrat deems them unworthy, they don’t get the $8 per day Temporary Assistance grant.

The legislators were not totally without compassion: 20% of the total Temporary Assistance case load may be exempted from these rules.

That’s not as generous as is sounds.  As the rolls decrease (as they’ve been doing for a decade), that 20% “reserve” includes fewer people.  In a very short time the state will need to rescind the exemption for some moms, meaning even those state bureaucrats deems unable to comply must.

Likewise, adults without dependents or jobs may only get food stamps for three months out of every three years.  Until they reach age 65 or get certified as disabled and worthless, an unemployed adult can’t receive the average $4 per day in food stamps.

Add these new laws together and probably 100,000 Missourians will soon be too poor and needy to get help from basic anti-poverty programs.

This would be funny if it weren’t tragic.

In recent weeks I’ve kept busy warning food pantries that they must change the way they do business.  Traditionally, pantries provide from three days to a week’s worth of food each month – an amount meant to supplement government benefits and other income.

Yet, these now “too-poor to get help” folks need to eat more often than one day in ten.  Pantries, churches and other charitable groups must multiply their current aid by a factor of 10 for these “too poor” created by our elected legislature.

Not increasing aid isn’t an option.

You see, supporters of SB 24 claim people receiving government benefits get fat and lazy because $8 a day and $4 a day is too generous:  “I think it will be surprising to see the success rate with this bill, and the smiles on the faces of those folks that move out of the poverty trap…” Rep. Diane Franklin, R – Camdenton, told the Post Dispatch  http://www.stltoday.com/news/local/govt-and-politics/missouri-legislature-enacts-limit-on-welfare-benefits-over-nixon-s/article_22e44a54-b286-50e5-8236-fdaf93c1b2e3.html

The only option for food pantries and other charities is to empty their shelves and their bank accounts keeping families alive until they have no more to share – then turn to the media and ask, why aren’t these hungry and desperate people smiling and employed?

Then, perhaps, the media will ask the legislature Is this what you intended?

We have learned that common sense, reasoned compassion and thoughtful acts are no longer the Missouri way of governing.  The ship must sink before we talk about lifeboats.

Meanwhile, back in Indy, they await the great religious showdown.  Will people be arrested for going to church?  Stay tuned.

The post The First Church of Cannabis, and other unintended consequences appeared first on Occasional Planet.

Big banks lifted more than $19 million out of the wallets of poor people in California in 2012, by charging them unnecessarily high fees for withdrawing cash from their EBT [Electronic Benefit Transfer] cards.

That’s the conclusion reached by a just-released study of ATM fees charged to Californians who receive benefits under CalWORKS –the state’s public-assistance system. The study was conducted by the California Reinvestment Coalition [CRC], an organization that advocates for the right of low-income communities and communities of color to have fair and equal access to banking and other financial services.

From what I can see by reading the report, the ATM fee structure is bad on two levels: It nickel-and-dimes economically disadvantaged people out of nickels and dimes that are significant in their monthly budgets. And it constitutes a not-so-subtle form of corporate welfare, in which big banks reap undue profits by transferring public money to their private coffers.

Here’s how it works

In California, individuals who qualify for benefits under TANF [Temporary Assistance for Needy Families] can opt to receive their assistance via an EBT card, and 96.4 percent of them do. The average TANF allotment per family in California is about $510 month.

TANF recipients can use the cards like cash at supermarkets and convenience stores, or the recipient can withdraw cash from the card by using an ATM machine. Some ATMs charge only minimal fees, such as 50 cents per transaction. Some of the biggest banks—namely Bank of America, Wells Fargo, JPMorgan Chase, Rabobank and Union Bank—charge $2,  $3 or even $4 per use. Check cashing stores also charge a fee to withdraw money using EBT cards—usually 1 to percent of the amount withdrawn. [Do the math: For a typical recipient, that can be as much as $5.] The big banks have far more locations than the low-fee outlets, so they are more convenient and therefore are more frequently used by EBT card holders.

Together, these charges totaled over $19.4 million in 2012 going to fees instead of the intended purpose of the benefits.

According to the report:

The amount spent [on ATM fees] in just one month is enough to buy a year of school supplies, estimated at $688, for 2,349 children. In Alameda County alone, families lost $60,000 in CalWORKs funds a month to ATM fees in 2012- enough for over 25,500 round trip bus rides on [public transit]. In Los Angeles County, one month’s worth of ATM fees on EBT cards could cover the co-payment on 90,000 prescriptions.

“For families trying to escape poverty, these fees siphon away money that could be used for school supplies, transportation or medicine,” says Andrea Luquetta, the author of the report. “The current system leads too many people to pay fees just to access the very benefits they need to survive. It is a diversion of taxpayer dollars away from their intended use of supporting families.”

Subtler shenanigans

There’s also a lesser known, behind-the-scenes ripoff that the report doesn’t delve into:  When someone swipes an ATM card—whether it’s a bank card or an EBT card–the machine reads the information on the magnetic strip and knows which bank is the source of the money. If it’s a card from a different bank, Bank A charges Bank B a nominal fee for the money transfer and the cost of communicating. Usually, the charge is 25 cents or so. [This interbank fee is not seen by the customer, and is not part of the visible ATM fee.]

But here’s the twist: In California, all of the CalWORKS money is held by Bank of America. So, if someone goes to a Bank of America ATM to get cash from an EBT card, Bank of America doesn’t have to communicate with any other bank at all. Bank of America handles 12 percent of all EBT withdrawals in the state—making it the largest processor of EBT withdrawals. And yet, the bank is charging the state the interbank fee. Those 25-cent fees add up, too–or should I say subtract?–and it’s all pure profit for Bank of America.

Recommendations

CRC recommends that state and county governments work to increase CalWORKs recipient’s knowledge that they can opt to have their benefits direct-deposited into a bank account, thereby avoiding ATM withdrawal and check-balance fees.

In addition, says CRC, banks should offer inexpensive, safe bank accounts for recipients to receive their benefits via direct deposit without incurring fees, while also building a financial history.

Also, California can and should renegotiate its contract with vendors who provide EBT services so that beneficiaries are not losing money to ATM fees. This outcome is doable, said Luquetta, noting that CitiBank has already agreed to waive its ATM fees for EBT users.

The bottom line—and it’s a big one—is that big banks are reaping free profits by sucking up taxpayers’ dollars via ATM fees on EBT cash withdrawals. The CRC report focuses only on California, but EBT cardholders face similar issues in other states.

It’s another example of the massive, American corporate welfare system that politicians don’t want us to know about, while at the same time deriding public assistance programs and cutting supportive services and financial aid for people who actually need help. Worst of all, this form of corporate welfare is being financed by the poor people it directly affects.

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What would your life be like if you didn’t have a bank account? Ask a member of one of the 9 million American households who manage their money without access to a checking or savings account, and you’ll find that their lives can be quite inconvenient, requiring them to spend many hours and hundreds of dollars each month conducting transactions that you assume to be routine.

Many of America’s “unbanked” are families and individuals who receive public assistance. A recently released [March 11, 2012] report from the New America Foundation documents the disadvantages of being “unbanked” and offers some suggestions for public policy that could make things work better. The report comes from a qualitative study of the financial attitudes and behaviors of individuals currently receiving Temporary Assistance for Needy Families (TANF) cash assistance benefits—commonly known as welfare—in  California. The findings are based on in-depth interviews with 37 recipients in two major California cities. [To qualify for public assistance in California, a single parent with two kids must earn less than about $12,000 annually; the maximum benefit is just over $600 a month.

Some of the issues that emerged during interviews included:

The cost of getting cash

In many states, the mechanism for receiving public-assistance benefits is an EBT [Electronic Benefits Transfer] card issued by the state. The card is issued through a bank, but it doesn’t mean that you have an account. You can use the card to buy qualified items, by swiping it at the point of sale. You also can use the EBT card to get cash, but you’ll pay a fee—perhaps as much as $5 per transaction—for that service. That’s a lot, if you just want $25 to tide you over.

To avoid transaction costs, recipients commonly withdraw the entire cash value of benefits at one time. Another tactic is to get cash back at the point of purchase—for which there is no fee.

No bank account by choice or by blacklist

According to the study, “unbanked” people often choose to opt out of the banking system. Reasons include lack of trust, bad experiences with previous accounts and/or customer service, and unreasonable and/or hidden fees imposed for minor overdrafts or routine transactions. Others can’t get accounts because of previous problems they’ve had with banks, including being overdrawn—even by a very small amount—or refusal to pay fees and penalties—both of which can result in having your name placed on  Chexsystem’s banking blacklist, which can prevent you from getting an account at other banks for as long as five years.

Using pre-paid cards

Many of the people interviewed for New America’s study reported using pre-paid cards instead of bank accounts. Reasons for this strategy included a basic desire to stay away from banks, the ability to use MasterCard- or Visa-branded pre-paid cards to make purchases where state-issued EBT cards are not accepted, and safety. The downside of pre-paid cards are the associated fees, which tend to be high. But interviewees said that, even though the fees were high, they were predictable and transparent—unlike the fees they had encountered in traditional checking and savings accounts.

Emergency money

Without a bank account, the low-income individuals interviewed for New America’s study generally had nowhere to go for a conventional loan in an emergency. Without steady employment and a credit history, they couldn’t qualify for short-term credit, and they had no liquid cash to dip into. Many said they relied on friends or family to help them out in a pinch—a strategy that may avoid conventional-bank interest charges, but may involve an emotional cost and uncertainty.

When asked about alternative financial sources, such as high-interest payday and title loans, many interviewees said that those were the routes that had helped get them in financial trouble before they applied for state assistance.

Institutional barriers

Another reason cited by TANF recipients for not having a checking or savings account was the fear that their benefits would be reduced or revoked if they had savings. While there are asset-limit rules, they’re not well understood by recipients, says New America. Another strong impression among interviewees was that state agencies were monitoring TANF recipients’ bank accounts, as well as all of their financial transactions—an impression that made interviewees even more wary of maintaining bank accounts. In addition, TANF recipients said they stayed away from banks because they thought that state agencies could raid them for wage garnishments, child support payments and money owed to the state for restitution of crimes.

Policy changes that could help

Reading over that list of reasons for avoiding banks, it’s clear that, while some strategies are the result of choice, many others are problems created by a banking and public-assistance system that is sometimes less than user friendly, and often punitive toward low-income families and individuals.

So, New America’s report concludes with some suggested policy changes that could make financial life less cumbersome and potentially more stable for low-income families. Among these improvements are:

–Create basic bank accounts: States should work with banks to create accounts that are safe and affordable for low-income customers—accounts with “a transparent fee structure and stripped of many of the complexities—such as overdraft and its variants—that often ensnarl low-income families and burden them with tens to hundreds of dollars in fees.”

–Offer Automatic Savings Options: Provide those who receive assistance with the option of having a small percentage of their benefits withheld in savings. These savings can then be tapped when needed to cover an emergency expense or used to make a productive investment. Savings could be matched with public or private dollars

-Offer small loans for those transitioning off assistance: Current…recipients are rightfully wary of taking out a loan against their benefits, as current payments are already seen as insufficient to make ends meet. States could, however, consider creating a small-dollar loan program for those transitioning off assistance. This would provide these families with the flexibility they need to cover emergency expenses without having to fall back on assistance or turn to high-cost credit products such as payday loans.

The post The costly, inconvenient financial lives of “unbanked” Americans appeared first on Occasional Planet.

Missouri Republicans are on a roll, bringing back old ideas in the form of shiny new legislation. Making the rounds this year is H.B. 73, recently passed by the Missouri House 121-37. Sponsored by Missouri Rep. Ellen Brandom (R-160), the bill would require welfare applicants be screened for illegal drugs. If there is “reasonable cause” to believe said applicants are using drugs, that is. What is reasonable cause and why only welfare recipients?

Well, we know reasonable cause does not include prior drug convictions. Conviction for any drug-related crime is an automatic disqualifier for welfare in Missouri. However, proponents suggest the bill will help ensure government money is spent the way it was intended. The St. Louis Post-Dispatch quoted Rep. Ellen Brandom as saying, “I don’t know of any entry-level job where you don’t have to take a drug test. Taxpayers do not have any sympathy at all for using tax money to subsidize others’ drug use.”

If that is the case, I have to wonder why Republicans aren’t calling for regular and mandatory sobriety testing for other taxpayer subsidized institutions—such as our legislative bodies. We want our representatives in government making potentially life-altering decisions with clear, sober heads. Let’s face it: some of the decisions being made on the Hill boggle the coherent mind.

Former president Bill Clinton admitted to smoking marijuana in his youth. George W. Bush admitted to being a chronically heavy drinker and implied in taped conversations [later reported on by the media] that he too smoked marijuana. Even President Obama wrote [in Dreams From My Father] that he tried marijuana and cocaine. There have been numerous scandals involving public officials under the influence of alcohol, drugs, and the scantily clad. Should we just take their word for it that those days are gone? That the joints were smoked in a time of youthful exuberance, the partying is over? Or do we have reasonable cause to suspect they may be under the influence?

Debunking Welfare Myths, Why Mandatory Drug Testing is an Unnecessary Expense

According to the Missouri Department of Social Services website, 90% of TANF (Temporary Assistance for Needy Families or “welfare”) applicants are required to be employed within two years of assistance. The minimum hour-per-week rate for a single parent with children is 30 hours; both parents in a two-parent household must be employed to qualify.

There is also a 5-year lifetime limit on TANF benefits. In 1996, Bill Clinton signed the Personal Responsibility Work Opportunity Reconciliation Act (PRWORA). This effectively put a stop to open-ended “entitlement programs” like AFDC (Aid to Families with Dependent Children) and created the TANF program. If TANF recipients don’t meet the employment requirements laid out in PRWORA, Missouri loses federal grant money to pay for the program.

So when Rep. Ellen Brandom stated that she knew of no entry-level job that didn’t involve drug testing, she may have made this point for me. If we assume that a) 90% of TANF recipients are employed or will be at some point while receiving benefits and b) that drug testing is likely part of the requirements for obtaining said employment, we can also assume that retesting them is a waste of taxpayer money. Which brings us full circle in the discussion, at the point in which Republicans are just doing their part to ensure taxpayer money is spent wisely.

Who may slip through the cracks? TANF recipients who are exempt from the work rule include full-time vocational students, disabled parents, the unemployed actively [and provably] seeking employment, and those in unpaid on-the-job training. Each comes with its own set of limitations. For example, vocational training will only exempt a TANF recipient from the work rule for 12 months. Unemployed TANF recipients looking for work can receive aid for no more than six weeks per year. Of course, employed or otherwise, a person must fall under the income limit to qualify. Again, this is current law.

About 100,000 Missourians currently receive TANF benefits under these guidelines. According to the fiscal note attached to H.B. 73, only 7,096 TANF recipients are exempt from work requirements. The price tag for drug testing all work-eligible TANF recipients, including those currently employed: an exponential $1.6 million per year.

Under H.B. 73 if a welfare recipient should fail a drug test, they will lose their benefits for one year and be referred to a rehabilitation program. (Other forms of this measure would expand the loss of benefits to three years.) The fiscal note concludes that each drug test will cost about $55 but an individual kicked off the rolls would save the state $58 in previously allocated benefits. Including the extra staff necessary to hold related hearings and the administration of the tests, all those who are drug tested would need to fail and have benefits yanked for Missouri to break even.

In other words, this will cost us. Not exactly your fiscally responsible small government in action here.

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