Months after the bill was signed, and one month before it was to go into effect, the US state of Kansas has passed revisions to a controversial new law that regulates welfare spending. The law, signed by Kansas Governor Sam Brownback, introduced a number of limitations in the way the Temporary Assistance for Needy Families (TANF), a state-managed federal welfare fund, could be spent. Some of the more notable restrictions include requiring that eligible adults be employed or take a job training program to receive benefits (an existing Brownback policy that will now exist in law after he leaves office), and preventing the welfare money from being spent at a variety of locations such as cruise ships, movie theaters, swimming pools, and tattoo parlours. By far the most controversial of the restrictions made to the welfare provisions is the one on ATM withdraws—prepaid debit cards being one of the ways in which people can access their payments.
The new law mandated that withdraws be limited to $25 per day, and any unused withdraw limit expires at the end of its day. According to state Sen. Caryn Tyson, who proposed the limit, many welfare recipients were spending their money on things like “strip clubs.” She goes further, singling out two separate individuals who “[withdrew funds] at a Rockies baseball game… [and] on a cruise” respectively. While it’s not clear over what time period these transactions occurred, those two particular anecdotes seem unsurprising given the 11 000 people who benefit from TANF every month. The ATM restriction raised a number of problems. For instance, it is a massive waste of time to force each welfare recipient to go to the bank every day for their cash, especially since banks tend not to set up in neighbourhoods perceived as poor or dangerous. There is also the issue that ATMs do not actually dispense $5 bills, making it effectively a $20 limit. The law also reflects a misunderstanding of the economy of impoverished people, where cash is a hugely important asset used to pay for things like utilities, which more well-off people pay electronically. However, the most incensing effect of the law is the massive fees that it will cause; every ATM transaction is subject to a one dollar fee, plus fees from the ATM’s operator. Forcing people to make many small transactions incurs huge fees. According to The Washington Post, “…to withdraw just $200 in cash could incur $30 or more in fees…”
The backlash to the ATM law was large, but that does not seem to have been the inspiration which caused legislatures to amend it. Instead, it seems to have been brought about by the realization that the change may cause Kansas to lose federal TANF funding. TANF is funded by the federal government, but states have a lot of leeway in how they implement the program. One of the restrictions placed on the states is that recipients must be able to access their benefits without excessive fees, which the withdraw limit may violate. To that end, the new legislation allows the Department for Children and Families, which manages TANF, to increase or remove the withdraw limit in order to maintain funding. Presumably, the intention is to maintain the limit as tightly as the federal government deems acceptable.
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