The purpose of this hearing is to receive testimony and written
statements reviewing the status of the electronic benefit transfer
system (EBT) for the food stamp program. The welfare reform bill
that we passed last year generally encourages states to implement
EBT systems for delivery of benefits - these systems use "ATM-like"
cards instead of paper coupons- and states are expected to implement
EBT systems by 2002. States have been given more control over
the design of their EBT systems (without prior federal approval),
and requirements for showing that systems are cost neutral are
eased. Their EBT-system expenses are limited (they may charge
recipients for replacing EBT cards). A Federal Reserve Board
rule, Regulation E, has been overridden, thereby increasing incentives
for states to operate EBT systems by removing potential financial
liability imposed by the rule.
I support the rapid implementation of EBT systems because I have
long been concerned about the integrity and dignity of the food
stamp program. EBT gives us a great opportunity to reduce the
waste fraud and abuse that costs the food stamp program and tax
payers millions of dollars a year . Also, it injects dignity
into the program by allowing participants to use the same point
of sale card swipe machine that credit card users employ. No
longer will food stamp beneficiaries have to use the unique and
sometimes embarrassing coupons.
I have heard several complaints and success stories about the
implementation process. Several issues will be discussed this
morning, some of which will include the security of the EBT cards;
the contracting practices which states have to employ; and interoperability
of state systems, and issue that is very important to me. Last
year the full committee accepted by sense of the Congress amendment
to encourage states to design their EBT systems to be interoperable
with each other.
I look forward to hearing the witnesses testimony today. We have
assembled uniquely qualified witnesses that will provide insight
into EBT implementation problems, successes and timelines.
I would now like to recognize the Ranking Member of the Subcommittee, Mrs. Clayton from North Carolina.