States Move to Restrict Use of Welfare Funds

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States are taking action to stop welfare fraud, including loopholes that allow people to spend taxpayer dollars on guns and in liquor stores, casinos and strip clubs.

Last year, 4.4 million people on welfare received cash payments ranging from $200 to $1,000 a month.

Welfare cash comes on a card similar to a debit card that can be used to purchase non-food items and get cash at ATMs.

A recent report by the House Ways and Means Committee revealed unscrupulous recipients in at least eight states withdrew thousands of dollars at casinos, liquor stores, and strip clubs.

A new law forces states to close those loopholes by 2014 to prevent such abuses or they'll lose federal funds.

Ten states have already adopted laws restricting how welfare money can be used, and 14 others are considering new legislation.

Still, even supporters of the laws admit they will be difficult to enforce. Welfare cash is supposed to be for non-food necessities, but states find purchases difficult to regulate.

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