Wichita lawmakers say they’re frustrated that the Kansas Department for Children and Families is moving forward with a plan to limit the amount of cash welfare recipients can withdraw from an ATM.
The Legislature passed a welfare reform bill in April, which was amended on the Senate floor to include a $25-per-day ATM limit for welfare recipients. Weeks later, policymakers grew concerned that the provision could conflict with the federal Social Security Act, putting federal grant money at risk.
Kansas receives more than $100 million in block grant money every year for Temporary Aid for Needy Families, the government program that provides short-term cash assistance to financially struggling adults with children.
In the final weeks of the session, Sen. Michael O’Donnell, R-Wichita, helped push through a “fixer bill” that authorized DCF Secretary Phyllis Gilmore to lift or eliminate the cap in order to ensure compliance with federal law, which requires that TANF beneficiaries have “adequate access” to their cash assistance “with minimal fees or charges.”
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However, last week the agency posted its new welfare rules with the $25 ATM limit intact, which shocked some lawmakers.
Theresa Freed, the agency’s spokeswoman, said that the fixer bill passed by the Legislature only authorized the agency to raise or eliminate the cap at the explicit instruction of federal officials.
O’Donnell, who carried both bills, disputes this. He said the bill was “absolutely” intended to give the DCF “unilateral control” over the ATM limit.
“It was so that they wouldn’t implement it at all, the $25 limit. It’s an amount that makes no sense,” O’Donnell said. “No ATM dispenses $25 increments. We realized that it seems punitive … and we needed to have reasonable access to the funds.
“I’m extremely frustrated with DCF when they know I used political capital to get legislation rushed through in the last week of the session so we would be in compliance,” he added.
Freed said in an e-mail that there “is only one situation in which the Secretary is allowed to raise or rescind the $25 ATM withdrawal limit,” and that’s if the U.S. Department of Health and Human Services informs the agency that the policy puts the state “out of compliance with federal law and thus threatens the TANF block grant.”
“Until we receive that guidance from our federal partners, DCF is obligated by Kansas state law to continue to work toward implementing the $25 ATM withdrawal limit for TANF,” Freed said.
O’Donnell said he worked on the wording of the bill – which was signed into law by Gov. Sam Brownback – with the department under the understanding it would empower the agency to lift the cap.
“Their actions don’t make sense to me,” he said about the agency’s decision to move ahead with the policy.
The bill states that the “secretary for children and families is authorized to raise or rescind the automated teller machine withdrawal limit established by this section in order to ensure continued appropriation of the TANF block grant through compliance with the provisions of the middle class tax relief and job creation act of 2012 which govern adequate access to cash assistance.”
Sen. Oletha Faust-Goudeau, D-Wichita, one of the policy’s most vocal opponents, agreed with O’Donnell that the second bill was meant to enable the DCF to act immediately and lift the cap.
“I think all of us thought that this would fix it,” she said.
“To move forward with it anyway … it’s almost criminal,” Faust-Goudeau said. “We are doing things that no other states are doing.”
Faust-Goudeau has repeatedly warned that the limit will make it difficult for some TANF recipients who lack bank accounts to obtain cash they need to pay rent and bills.
The language of the fix-it bill leaves some wiggle room for interpretation, said Liz Schott, senior fellow for the Center on Budget and Policy Priorities, a liberal-leaning think tank in Washington, D.C.
Gilmore probably could have lifted the limit if she had wanted to do so, Schott said.
“I could see how a secretary who wanted to lift it could certainly do that and say, ‘You know, there’s some uncertainty here, we want to ensure that there’s not a problem,’ ” she said.
“Or they could say, ‘Unless HHS tells us otherwise, we either don’t think we have the authority to raise it or we choose not the exercise this authority,’ ” Schott said. “You could say they’re choosing not to exercise it.”
If lawmakers really wanted the secretary to raise or eliminate the ATM limit, she said, they could have written language that gave her less restricted authority.
At this point, a crucial question is how the HHS will take into account the fact that Kansas’ new plan does not limit how much money welfare recipients can take out in cash-back withdrawals at stores, Schott said. Will the feds consider the cash-back option sufficient access to cash, even with the ATM limit in place?
“Not sure what the feds will say, and we may need to see how this all plays out over time,” Schott said.
The policy, which would be the first of its kind in the nation, has not gone into effect yet. The DCF said in June that the policy would take six to 12 months to implement. But the agency’s interpretation means it will proceed without action from the federal government.
The agency has had conversations with federal officials about the limit for months.
Sen. Caryn Tyson, R-Parker, who originally offered the amendment to limit withdrawals, said she’s not seen any documentation that proves the state has “received word from the federal government that they’re going to pull our funding.”
Tyson continues to stand by her amendment despite the controversy.
“This is only one way the users of these (electronic benefits) cards receive cash. There are several other ways … the grocery store, the post office, they can get money orders. Yes, there’s several ways they can get cash,” Tyson said.
Tyson said the policy was intended to curb impulse buying and ensure that the TANF money is used for its intended purposes. She added that the most frequent question she’s received from her constituents about the cap “actually is why we didn’t take it to zero.”
Contributing: Lindsay Wise of the McClatchy Washington Bureau