Opinion // The Return of the Welfare Debate
by Marshall Breger
The Jewish argument against turning a blind eye to fraud
As the Republican primary season gears up, we can expect additional focus on a familiar debate: whether, and how, to cut social services to reduce the budget deficit. The Republican-led House in March passed a budget that would cut $5 trillion in health, education and social programs over the next decade, and the Senate followed suit in May, so this issue is not going away.
With it should come a discussion that’s taboo for liberals and often dismissed as a dodge when conservatives take it up: the question of fraud. As the welfare state strains to provide services to an aging population, the practical results of social services fraud threaten to overshadow philosophical arguments over whether such support is desirable. One can make moral arguments for or against the welfare state. But there is also a specifically Jewish argument against tolerating welfare fraud. As a practical matter, if we want a social services system that works over time, the issue of social services fraud must be addressed, not ignored.
Social services fraud seems to be a universal human problem: Examples come from every country and program. Under British law, for instance, disabled persons until recently received a disability allowance based on medical reports filed by their own doctors. In 2013, the Tory government decided that all persons receiving a full (as opposed to partial) disability allowance should be reexamined by a government doctor. Only 10 percent of applicants chose to do so; the rest gave up their full payment rather than undergo an independent examination. It is fair to infer that they were hiding something.
Here at home, a 2006 Government Accountability Office report found that after Hurricane Katrina, more than a third of emergency payouts provided ex gratia (that is, without proof of damages) had been fraudulent. In 2008, investigators discovered that more than 90 percent of conductors on the Long Island Rail Road were retiring with a disability allowance. Numerous doctors, union officials and workers went to jail, and the number of disability claims overall dropped by nearly 50 percent. A 2011 Senate Permanent Subcommittee on Investigations study found reason for suspicion in nearly a quarter of Social Security disability claims they analyzed. And The Economist in June 2014 reported that Medicare and Medicaid fraud amounts to $272 billion a year, including false billing, overbilling, patient kickbacks and the use of clinics as “pill mills”—in other words, fraud by doctors and medical supply companies, not just by patients.
We can combat fraud by companies and health care providers with heightened enforcement (until recently, a provider kicked out of Medicare was not reported to Medicaid or vice versa) and heightened punishment, including jail sentences rather than just fines (Wall Street, take note). We must also increase both incentives and protections for whistleblowers.
Combating welfare fraud by individuals, however, raises different issues. Many argue that fraud is the price of doing business, so to speak—that we cannot provide large-scale welfare, food or health services without accepting a quantum of fraud. Others argue that social goods should be universally available and not means-tested—free college tuition for all, for example, or universal health care—so the question of fraud should not arise. The underlying ethical question is this: Does the giver, in this case the government, have a duty to ascertain that the applicant is not a fraud? I would think so, and Jewish sources suggest the same answer.
The Talmud records a dispute between Rav Huna and Rav Yehuda over the question of due diligence in charity. If a person requests food and another requests clothing, do you examine their bona fides? The rabbis differ as to when due diligence is required. Rav Huna argues that a request for clothing is sufficiently personally embarrassing that we can assume no one would so “demean” himself if he did not truly need it. In contrast, Rav Yehuda argued that no one would beg for food if he were not truly needy, so the beggar who asks for food should not be examined. (Baba Batra 9b). We understand the law to follow Rav Yehuda—“Ain bodkin li’mezonos”: We are not allowed to examine someone who asks for food. Most fraud, however, is not connected to food.
The moral obligations of those who administer charitable funds are different. They may have a stewardship duty that individuals may not have, and their money may be limited. Funds that a public charity gives improperly to “X” means less money for a deserving “Y.” Administrators of communal funds thus have a duty of due diligence and a duty to prevent fraud. The Shulchan Arukh says, “A person should not contribute to a charity fund unless he knows its management is reliable and knows how to conduct the fund correctly” (Yorah Deah 249.7). How much more so for government social services programs whose funds come from taxpayers.
Social services are the price we pay as a civilized society for living together in a social community. Those who defraud that community have chosen to take themselves outside of its ambit. It is hard to see how they can continue to lay claim to our duty of care and protection. There’s even a rabbinical source that suggests divine protection will be withdrawn as well: “One who binds his eyes or distends his stomach or hardens his joints” to gain undeserved sympathy “will not return from the world [that is, die] until that actually is the case.”
Marshall Breger is a professor of law at Catholic University.