The Corner

Making It Rain at the Club With Taxpayer Dollars

According to a New York Post investigation, government officials have been turning a blind eye while some welfare recipients have been getting an eyeful at New York strip clubs and adult video stores. From January 2011 to July 2012, the Post found that dozens of Electronic Benefit Transfer (EBT) cards were used at a number of bars, liquor stores, tobacco shops, X-rated video stores and strip clubs to withdraw cash from approved ATM machines. These EBT-friendly ATMs are located at such fine establishments such as Hank’s Saloon, Drinks Galore, Club Heat, and The Boiler Room.

Food-stamp programs prohibit the purchase of products like alcohol and tobacco, but because the EBT cards are part of a cash-assistance program, recipients can access the cash from ATMs that accept the cards. Not only do these ATMs exist in these places, but New York’s Office of Temporary and Disability Assistance, which oversees the cash assistance program, even lists the locations of these nightclubs and gin mills on its website.

For the time being though, this is fully legal as “[t]he Middle Class Tax Relief and Job Creation Act, signed by President Obama last February, requires states to prohibit sinful welfare spending by 2014.” Cato senior fellow Michael Tanner put it perfectly: “This is morally scandalous. I have nothing against strip clubs, but that’s not what benefits are for. I don’t blame [recipients]. If you are poor, it’s a crummy life and you want to have a drink or see a naked woman. I blame the people who are in charge of this.”

Needless to say, this is not quite the taxpayer-funded “stimulus” we all had in mind.


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