California on Track to Decriminalize Welfare Fraud

A new proposed law in California would decriminalize welfare fraud up to $25,000, making it easier than ever for criminals to cheat taxpayers out of millions. (Yes, it really is as crazy as it sounds.)

California Senate Bill 560, which Democrat Lola Smallwood-Cuevas introduced earlier this year, would specifically raise the bar for criminal prosecution of welfare fraud from $950 to $25,000. The legislation has already passed two committees without a single Democrat objection and continues to work its way through the legislature.

During the bill’s most recent hearing before the California Senate Appropriations Committee on May 5, the only person who spoke out against the bill was Glenn Allen with the California Welfare Fraud Investigators Association (CWFIA). He warned the bill would cost the state tens of millions of dollars, harming those who actually need help.

While the state has estimated the bill will cost $21 million, Allen called this a “superficial” projection. “This bill would divert millions of dollars away from our most vulnerable parents and children. It would waste taxpayers’ money to change a system that is functioning properly,” he said.

According to The Daily Caller and U.S. Department of Agriculture data, California had an error rate of 13.4 percent for Supplemental Nutrition Assistance Program (SNAP) payments for 2023, equating to $1.3 billion in waste. SNAP benefits are a major component of welfare and are particularly vulnerable to fraud and abuse.

“Although food stamps are federally funded… they are administered by the state, meaning taxpayers nationwide are on the hook for any fraud or mismanagement,” Floyd Buford pointed out in an opinion piece for the Caller.

California’s own government data suggests that SB 560 would dramatically worsen fraud. In Los Angeles County, for example, “investigators find fraud in around 5,000 to 8,000 cases” annually, according to Fox News. “Of that, 200 cases are sent to the Los Angeles County District Attorney’s office and 95% result in a conviction.”

Under SB 560, those numbers will almost certainly skyrocket, but authorities will be powerless to punish offenders unless the fraud rises above $25,000.

But according to a fact sheet released by Smallwood-Cuevas, the bill is necessary to stop law enforcement from “wasting” resources “by unnecessarily criminalizing people who are unable to consistently meet the rigorous demands of the confusing public benefits reporting process.”

Smallwood-Cuevas further argues that welfare fraud, which she terms “benefit overpayments,” is “overpoliced due to a sordid history that includes the intensely politicized and racist ‘welfare queen’ stereotype.”

In other words, Smallwood-Cuevas says, prosecuting welfare cheats is racist. Those defrauding the system aren’t dishonest actors looking to take advantage of generous social safety net policies; they’re just poor, confused minorities who can’t understand a complicated system. It’s a line that will sound all too familiar to Americans who have been told for years now that Voter ID laws are racist because minorities can’t figure out how to obtain a photo ID.

“California’s safety net should lift families up, not trap them in poverty,” Smallwood-Cuevas previously told Fox News. “Right now, a missed deadline or paperwork mistake can lead to felony charges that tear families apart — even when there’s no intent to deceive. SB 560 offers a smarter, more humane approach by allowing counties to resolve most overpayment cases administratively, holding people accountable without criminalizing poverty.”

California Republicans have unsurprisingly vocally opposed the bill – but with Democrat supermajorities in both chambers of the legislature, they are virtually powerless to stop it. Assemblyman Carl DeMaio said the legislation “illustrates exactly what’s wrong with California: Democrats yet again jeopardize the solvency of programs designed to support the most vulnerable in California in order to protect and reward those who break our laws and game the system.” The California District Attorneys Association also opposes the bill, according to Center Square.

Other observers of statehouse politics also see clear problems with the proposal.

Reporter Evan Symon noted Smallwood-Cuevas did not answer “if there would be any heightened or criminal punishments for repeat welfare fraud offenders, leaving even more room for the [likelihood] of repeat offenders and for trying to get away with not reporting income, reporting non-resident children, and other forms of welfare fraud.”

“Worries over a greater amount of uncollected welfare fraud overpayments could lead to some more amendments, as the state is still in a massive deficit and needs to eliminate fraud to help keep more state funds intact,” he wrote for the California Globe.

Indeed, as recently reported in AMAC Newsline, the state borrowed more than $6 billion in March and April to help subsidize expanded health insurance for illegal immigrants. This is on top of the $273 billion in existing debt held by California taxpayers.

Furthermore, California has experimented with decriminalization in the past, with disastrous consequences.

In 2014, the state passed Prop 47, which made shoplifting a misdemeanor instead of a felony if the value of the goods stolen was less than $950. Predictably, shoplifting has surged in the past decade, a problem only made worse by left-wing prosecutors who have virtually stopped enforcing the law.

By a wide majority, voters undid some of the damage of the past 10 years this November and passed Prop 36, which increased some penalties for retail theft.

But California Democrats clearly aren’t taking the hint and appear poised to double down with an even more radical policy. This time, criminals will be allowed to get away with stealing $25,000 from taxpayers, not “just” $950 from retail stores.

The biggest question may be how much more abuse voters are willing to take before they finally demand a change in leadership.

Matt Lamb is an AMAC Newsline contributor and an associate editor for The College Fix. He previously worked for Students for Life of America, Students for Life Action, and Turning Point USA. He previously interned for Open the Books. His writing has also appeared in the Washington Examiner, The Federalist, LifeSiteNews, Human Life Review, Headline USA, and other outlets. The opinions expressed are his own. Follow him @mattlamb22 on X.