Committee Chairman Darrell Issa, a California Republican, asked the Agriculture Department official in charge, Kevin Concannon, to respond to a recent Scripps Howard News Service investigation that found numerous store owners accepting food stamp benefits after they had supposedly been barred from the program.
"These companies and these individuals behind these companies need to be punished on a consistent basis," Issa said. "If in fact they are suspended, it needs to be for a period of time, with an understanding of whether or not they are ever going to be able to sell again."
Concannon admitted that some dishonest retailers had slipped through the cracks. But he said it was rare and that, in fact, overall food stamp fraud is down from about 4 cents on the dollar 15 years ago, to 1 cent today. He credited, in part, today's use of plastic benefit cards, which are more traceable than the paper stamps recipients used to get.
"In the era of paper coupons it was much more widespread," Concannon said. "The electronic benefit card has considerably brought that down — that and other work with states."
Concannon cited a recent USDA study that showed food stamp fraud rates were down to 1 percent, which he called one of the lowest fraud rates in the government. But 1 percent of a $70 billion program is still a lot, and witnesses told the panel that those who seek to defraud the program are getting increasingly creative.
"Most recently we've seen situations where there have been runners employed who will take cards from recipients and take them to many different retailers and swipe those cards to get benefits," said USDA Inspector General Phyllis Fong. "There will be maybe a group of retailers who work together to do this."
Those retailers can sometimes make hundreds of thousands of dollars off the scheme. According to Concannon, the department is beefing up law enforcement and has barred more than 8,000 stores from the program. Still, he said, the overwhelming majority of participating stores are honest.
Rep. Gerry Connolly, D-Va., said that like other Democrats on the panel, he's concerned about fraud, but he questioned whether Republicans are trying to build a case for benefit cuts, which some have proposed.
"It's good that this committee is having this hearing to absolutely highlight there are still problems, and our goal should always be to get it to zero," Connolly said of the fraud rate. "But let's not overstate the problems, and let's not lose sight of the mission, especially at budget time when some people might be thinking of a $100 billion cut in the program."
Still, Chairman Issa said taxpayers need to know that their money has been well spent.