Summary: The Food Stamp Program provided $16 billion in benefits to about 18 million recipients in 1999. As one of the nation's largest assistance programs, it is vulnerable to a type of fraud and abuse know as "trafficking" exchanging food stamps for cash or nonfood items. About 70 percent of all food stamp benefits are now provided electronically through a card used like a debit card at the grocery checkout counter. Under federal law, agencies may use electronic benefits transfer (EBT) data to act against traffickers who violate the Food Stamp Program. This testimony suggests that (1) EBT data be used alone, without the added expense of an undercover investigation, to take action against traffickers; (2) better debt collection activities be developed by the Department of Agriculture's Food and Nutrition Service to improve its collection of financial penalties imposed on traffickers; and (3) all states delivering benefits electronically analyze EBT data to identify recipients who may have been trafficking food stamp benefits.
