Tag: food stamps

The Republican Food Stamp Plan is a Modest Step in the Right Direction

Republicans are expected to vote this week, possibly as early as today, on a proposal to cut the food stamp program by $39 billion over the next 10 years, while reforming the program to tighten eligibility and emphasize the importance of work. From the outcry among congressional Democrats and much of the media, you could be forgiven if you anticipated the outbreak of the Great Famine of 2013. In reality, the hysteria is just plain silly given how modest the Republican plan really is.

Note that as recently as 2000, just 17 million Americans participated in The Supplemental Nutrition Assistance Program (SNAP), the food assistance program formerly known as food stamps, at a cost of less than $18 billion. Today, roughly 48 million Americans receive SNAP benefits, costing taxpayers more than $82 billion per year. Yet according to the Department of Agriculture, nearly 18 million American households remain “food insecure.”

In the face of serious questions about whether the growth of SNAP has been justified and whether it successfully addresses hunger in America, Republicans are discussing cuts that simply trim around the edges of the program.

For example:

Aggregate Spending will still remain at elevated levels even with these cuts. Even with the additional cuts (totaling $39 billion), average outlays from 2013-2023 will be almost $73.5 billion, which is more than $5 billion more than outlays were in 2010 (they were $68.3 billion). In 2023, long after CBO projects the effects of the recession to have subsided, with unemployment declining to about five percent, outlays will still be $69.6 billion, higher than any year before 2011, and more than $1 billion higher than 2010.

Almost all of the savings come from returning to traditional SNAP rules or ending loopholes. For example, the Republican proposal would restrict so-called ‘categorical eligibility,’ restoring traditional categorical eligibility, which requires receipt of cash assistance for food stamp eligibility. Currently, there are several ways that low-income families can become eligible for SNAP. For instance, households can qualify for SNAP benefits if they meet the program’s income and asset test: a gross income below 130 percent of the poverty level and a net income below 100 percent of poverty, as well as less than $2,000 in assets (although there are some exemptions, such as the value of houses, a car, and retirement accounts). However, more often participants become eligible for SNAP because they are also eligible for other government welfare programs. Nearly two-thirds of households receiving SNAP qualify through this broader categorical eligibility and were not subject to asset tests or certain income tests. This has allowed eligibility to creep much farther up the income scale, allowing many non-poor Americans to receive benefits. The Republican proposal would dramatically scale back categorical eligibility, requiring more recipients to meet income and asset requirements. As a result, the program would be refocused on those most in need.

The Republican plan would also eliminate the so-called LIHEAP loophole, which allows states to increase benefits for individuals who also receive utilities assistance under the LIHEAP program. Approximately 16 states have used this loophole to leverage nominal (as little as $1) LIHEAP payments into an increase in households’ SNAP benefits. Republicans would require states to provide LIHEAP benefits of at least $20 in order to qualify for the exemption, preventing them from manipulating the system to increase federal payments.

The bill puts a greater emphasis on moving recipients from welfare to work. The Republican proposal simply ends waivers from SNAP’s traditional work requirements that were granted to states starting in 2010. Prior to 2009, able-bodied adult recipients between the ages of 18 and 50, without children, were required to work, participate in an employment and training program, or participate in a SNAP “workfare” program for at least 20 hours per week. Otherwise, they could collect SNAP benefits for only three months in a given 36 month period. That requirement was waived nationwide in 2009, and on a state-by-state basis after 2010. Currently, 44 states have such waivers, although some states have announced that they will voluntarily relinquish their waivers next year. (Oklahoma, Kansas, Wisconsin and most counties in Ohio). As a result of these waivers, in 2011, the most recent year for which data is available, only 27.7 percent of nonelderly adult participants were employed, while another 28 percent reported that they were in the process of looking for work. That means that fully 44 percent were neither employed nor actively searching for work. Looking specifically at working age, childless, able bodied adults, almost three quarters or 2.8 million SNAP households, had no earned income.

Yet we know that work is the key to getting out of poverty. Just 2.8 percent of those working full-time today are below the poverty line, compared to 24 percent of those not working. Far from being cruel, by restoring work to a primary component of the welfare system, Republicans would be nudging recipients onto a path out of poverty.

Moreover, it is worth noting that the Republican proposal actually increases funding for pilot projects designed to increase work effort and reduce dependency.

The food stamp program is long overdue for reform. The Republican plan is a very modest start.

Breaking: The (Possible) End of the Agri-Nutritional Complex

The Roll Call blog has just broken news that the GOP House leadership has decided to drop food stamps from the farm bill, in an attempt to get the farm subsidies passed by the House, presumably with Republican votes alone. Nutrition is quite an “appendage” to jettison, by the way: it usually accounts for about 80 percent of all “farm bill” spending. Here’s a great infographic on food stamp usage from the Wall Street Journal online.

I think this development could be very good news: I have long called for splitting the food welfare (or “nutrition”, as it is euphemistically called) portion of the farm bill from the subsidies part. Legislators should be forced to vote on all of these programs on their individual merits, not as part of some logrolling extravaganza. The costs and benefits of programs to feed poor people deserve to be considered separately from farm subsidies, and ideally belong at the state or, even better, local community level anyway. Do we really need the federal government specifying that our kids eat greek yogurt? But I digress.

The problem is that farmers just don’t have the political or demographic clout that they used to (and in any case are starting to squabble amongst themselves) so it has long been believed that you need to load up farm subsidies with other, somewhat related programs more palatable in urban and suburban districts. That’s why energy, environmental, and food stamps are included in the “farm bill”. If you include enough goodies for diverse special interests, you’ll cobble together the votes.

That cynicism was turned on its head, though, when the farm bill failed last month because the Republicans thought food stamp spending was too high (even after some cuts and tightening of eligibility criteria). The Democrats, on the other hand, thought the cuts were too severe. Votes were lost on both sides of the aisle.

So, by dropping food stamps, GOP leaders think that enough Republicans will vote for this new bill to pass, even without Democrats’ support. They might be correct: clearly, powerful people in Congress think that all of these hippy issues are distracting attention from more deserving welfare programs, like farm subsidies. But I am not too sure: without sufficient Democratic votes on a subsidies-alone bill, they would need every R vote they could get, and some of the Republicans aren’t too keen on farm subsidies, either.

Another, promising development in this new farm bill is the repeal of the 1949 Agriculture Act. I said in a blog post a few weeks ago (and, indeed, on many other occasions before) that the key to reforming U.S. agricultural policy is to repeal the permanent legislative infrastructure—of which the 1949 Act is an important part—that lies behind the deplorable farm bill circus to which the American body politic is subjected every five years. By taking this law off of the books, farmers and their political supporters couldn’t threaten us with dairy cliffs and other elements of farmageddon if we don’t pass farm bills.

A huge, important caveat to all of this hopeful thinking: the GOP leadership may be splitting the bills only so they can pass them piecemeal with the hope of rejoining farm subsidies and food stamps in conference with Senate Democrats (the Senate passed their bill, logrolling intact, already), then have the conference report pass the House with Democrats’ support. Certainly Majority Leader Eric Cantor (R-VA) is by all accounts disappointed that the farm bill failed to pass and is looking for another vehicle, or several vehicles, to push this puppy through. That’s not something to get excited about: death by a thousand drips of poison is still death.

The other problem, which is theoretically fixable, is that the new GOP bill doesn’t repeal the 1938 Act, which includes several commodity titles that aren’t covered by the Agricultural Act of 1949, including price supports and marketing quotas, and the establishment of the Federal Crop Insurance Corporation. So the 1938 Act has to go, too, if we are to be fully threat-free.

I am sure that others will disagree with my analysis of how the votes will break down, and my analysis of parliamentary procedure regarding conference, etc. I’m really not too interested in that, anyway. My main concern is to get American agricultural policy on the road to reform/elimination, and in my eyes these two developments could be helpful toward that end.

Time to End the Farmers’ Dole

Last week Washington enjoyed a miracle. Legislators failed in a high profile attempt to mulct the public.

Legislators were debating the Farm Bill, which mixes Food Stamps and agricultural price supports. Even though Washington is drowning in red ink, Republicans and Democrats wanted to approve a measure to spend nearly a trillion dollars over the next decade. 

The Democrats and Republicans disagreed only over details. The Democratic Senate approved $955 billion. The House Republican leadership wanted $940 billion. The president took no position other than to support more spending. 

However, last Thursday the House leadership miscalculated and lost support from Democrats as well as conservative Republicans, leading to the bill’s surprise defeat.

Of course, Washington was filled with recriminations. But the collapse of the legislation is very good news. As I pointed out in my latest Forbes column, the politicians’ failure creates a rare opportunity for real change. 

Indeed, both parts of the Farm Bill require transformation.

As I wrote:

The first step would be to separate Food Stamps from price supports. Debate the former in the context of the scores of overlapping and expensive welfare programs. Indeed, the Carleson Center for Public Policy recently counted an astounding 157 means-tested federal programs. Total government spending on general welfare runs about $1 trillion a year. It’s time Congress rethought and revamped the entire welfare industry.

As for the farmers’ dole, abolition is the only sensible policy. New Zealand successfully took this approach in 1984. 

Farmers are practiced businessmen who employ sophisticated scientific techniques to produce food and sophisticated financial tools to manage risk. Farmers are enjoying boom economic times. Wealthier on average than other Americans, farmer don’t need their own special welfare program.  Indeed, many operators already make a profit with little or no federal support. 

It is rare to stop the two major parties when they combine for a raid on the taxpayers. The task now is to make their defeat permanent. In recent years Americans have deregulated communications, finance, and transportation. Agriculture should be next.

Read the rest here.

And the Award for Most Hypocritical Performance by a Member of Congress Goes To…

During the House Agriculture Committee’s debate over a new farm bill, Tennessee Republican Stephen Fincher cited 2 Thessalonians 3:10 in defending relatively small cuts in food stamps after Rep. Juan Vargas’s (D-CA) cited Jesus’s call to feed the hungry: 

“For also, when we were with you, this we declared to you: that, if any man will not work, neither let him eat.”     

The federal government uses force and the threat of violence to obtain the money that is used to pay for food stamps, so I would argue that Rep. Vargas badly misunderstands what the Prince of Peace was getting at. But whereas Vargas was wrong, Rep. Fincher’s biblical counterpunch was breathtakingly hypocritical. As it turns out, Fincher has likely received millions of dollars in federal farm subsidy payments over the years. 

From the New York Times: 

Using Agriculture Department data, researchers at the Environmental Working Group found that Representative Stephen Fincher, a Republican and a farmer from Frog Jump, Tenn., collected nearly $3.5 million in subsidies from 1999 to 2012. The data is part of the research group’s online farm subsidy database, from which the group issues a report each year. 

In 2012 alone, the data shows, Mr. Fincher received about $70,000 in direct payments, money that is given to farmers and farmland owners, even if they do not grow crops. It is unclear how much Mr. Fincher received in crop insurance subsidies because the names of people receiving the subsidies are not public. The group said most of the agriculture subsidies go to the largest, most profitable farm operations in the country. These farmers have received $265 billion in direct payments and farm insurance subsidies since 1995, federal records show. 

During debate on the farm bill in the House Agriculture Committee last week, Mr. Fincher was one of the biggest proponents of $20 billion in cuts to food stamps in the legislation. At times he quoted passages from the Bible in defending the cuts. 

“We have to remember there is not a big printing press in Washington that continually prints money over and over,” Mr. Fincher said during the debate. “This is other people’s money that Washington is appropriating and spending.”

Yes, Rep. Fincher – and it’s other people’s money that’s been going into your back pocket. As another recent quote from Fincher indicates, the congressman either doesn’t recognize his hypocrisy or he doesn’t care. (I can’t decide which is worse.) 

From the International Business Times: 

“But more than that, the role of citizens, of Christians, of humanity, is to take care of each other,” Fincher said at a Memphis event last week. “But not for Washington to steal money from those in the country and give it to others in the country. Our role is out of control.”

Stunning. 

Rep. Fincher’s inability or unwillingness to remove the plank in his own eye is yet another example of how Republicans are generally lousy at making the case for spending cuts. They mock President Obama’s stimulus job creation claims, but turn around and argue that military spending cuts will kill jobs and hurt the economy. They complain about Solyndra and the White House’s crony capitalist schemes, but they work to secure the same handouts for companies back in the district. They rant against big government but continue to vote for it. Etc, etc. 

Both food stamps and farm subsidies should be cut, and preferably, eliminated. Unfortunately, there are too few members of Congress who are willing and able to make the case.    

Food Stamps and the House Farm Bill

Debate on the House Agriculture Committee’s version of the next farm bill will begin in the Republican-controlled chamber in June. One of the most contentious issues will be spending on the Supplemental Nutrition Assistance Program (SNAP, a.k.a, food stamps). The House Ag bill would cut SNAP spending by $20.5 billion over 10 years versus the Congressional Budget Office’s baseline. That’s too much for Democrats and it might be too little for conservative Republicans. 

Earlier in the week I wrote that the federal government should not administer or fund anti-poverty programs. Unfortunately, both Republicans and Democrats support big government so that isn’t an option. So let’s put the proposed cuts in food stamps in perspective.

The first chart shows the dramatic increase in inflation-adjusted SNAP spending since 2000. (See here for a quick background on what caused SNAP spending to more than triple since 2000).

 

The second chart shows the projected amount of spending under the House Ag bill versus the CBO’s baseline. Sum up the difference and you get the $20.5 billion over 10 years in cuts. On an annualized basis, it becomes clear that we’re hardly talking about major cuts to the food stamps program. Moreover, as the first chart shows, spending would remain near the elevated levels of recent years.

 

Food Stamps Growth Has Bipartisan Roots

Republicans are jumping on the news that participation in the food stamps program hit a new record of 46.7 million individuals in June (about one in seven Americans). In a sluggish economy, an increase in food stamps participation is to be expected. Thus, it’s fair to hold up the increase in food stamps usage as being emblematic of the Obama administration’s failed economic policies. In addition, the president’s 2009 “stimulus” bill increased benefits and eligibility.

What Republicans don’t want to acknowledge is the role they played in expanding the food stamps program before President Obama ever took office. The 2002 farm bill—passed by a Republican-controlled House and signed by Republican President George W. Bush—expanded the food stamps program. As the Wall Street Journal’s editorial page correctly noted yesterday, “The food-stamp boom began with the George W. Bush Republicans, who expanded benefits in the appalling 2002 farm bill.”

The 2008 farm bill further expanded the program. However, on this the Journal lets the GOP off the hook when it says “But the supercharger was a 2008 bill out of the Pelosi Congress that goosed eligibility and rebranded the program as the Supplemental Nutrition Assistance Program, to reduce the stigma of being on the dole.” Although Bush vetoed that farm bill (he didn’t cite the increase for food stamps in his veto message), congressional Republicans were instrumental in enabling the “Pelosi Congress” to override it. In the House, 99 (out of 195) Republicans joined most Democrats in voting to override the veto. In the Senate, only 12 Republicans voted to sustain Bush’s veto.

One of those Republicans who voted to override Bush’s veto—and who also voted for the 2002 farm bill—is Sen. Jeff Sessions of Alabama. Sessions, who is the ranking member of the Senate Budget Committee, has been a chief critic of the growth in food stamps under President Obama. Sessions has been particularly critical of the administration’s efforts to “recruit” new food stamps recipients. For example, a “Community Outreach Partner Toolkit” produced by the USDA in 2011 that suggests throwing a “great party”:

Host social events where people mix and mingle. Make it fun by having activities, games, food, and entertainment, and provide information about SNAP. Putting SNAP information in a game format like BINGO, crossword puzzles, or even a “true/false” quiz is fun and helps get your message across in a memorable way.

It’s probable, however, that the food stamps outreach is being driven by the bureaucrats at the USDA. To Sessions’s credit, he acknowledges as much in a press release on the USDA’s recent cessation of radio ads designed to attract Spanish-speaking individuals to the program. It’s important to note that these “radio novellas” were produced during the Bush administration. Similarly, a partnership with the Mexican government to make Mexican nationals more aware of U.S. welfare programs—including food stamps—was signed by Bush’s agriculture secretary Ann Veneman in 2004.

The Obama administration certainly deserves to be heavily criticized for the growth in government dependency. But attacks from Republicans (e.g., Newt Gingrich calling President Obama the “food stamps president”) have been too disingenuous. Yes, Republicans are now calling for the food stamps program to be cut, but given their culpability in its growth—and the fact that it’s an election year—it’s hard to view their sudden discovery of religion as anything more than standard politics.

Addendum: Here’s Chris Edwards’ recent chart showing the growth in food stamps spending under presidents Bush and Obama:

Pennsylvania Moves to Starve Poor People

That’s the message I came away with after reading an online article from a Philadelphia Inquirer reporter about a decision by the state of Pennsylvania to limit eligibility for food stamps. The article is a perfect example of the difficulty advocates for limited government face in communicating their ideas through the mainstream press.

At issue is the PA Department of Public Welfare’s decision to eliminate eligibility for food stamps for people under the age of 60 who have more than $2,000 in assets (the value of one’s house, retirement benefits, and car would be excluded). The DPW estimates that only “2 percent of the 1.8 million Pennsylvanians receiving food stamps would be affected by the asset test.” Indeed, the DPW’s website notes that “Because of changes to SNAP, most Pennsylvania households are not subject to a net income limit, nor are they subject to any resource or asset limits.”

(SNAP is the acronym for the federal Supplemental Nutrition Assistance Program, which was known as the Food Stamp program until 2008 when Congress changed its name to sound more palatable. The program is run jointly by the U.S. Department of Agriculture and state governments, but federal taxpayers pay for the direct benefits.)

One of the “changes” that the DPW refers to is categorical eligibility, which basically means that Pennsylvania households already receiving benefits from other welfare programs, including cash welfare and Supplemental Security Income, automatically qualify for food stamps. In recent years, both the state of Pennsylvania and the federal government have made it easier to qualify for food stamps benefits.

Unfortunately, the Inquirer reporter either wasn’t aware of these details or didn’t deem them important enough for inclusion. Instead, he quotes ten—let me repeat that, ten—critics of the DPW’s decision. The critics include a “national hunger expert,” the legal director of a “leading anti-hunger group,” the executive director of the Greater Philadelphia Coalition Against Hunger, the executive director of the “liberal Pennsylvania Budget and Policy Center,” and an older woman who says that she’ll “have to give up paying for my health insurance.”

It took me all of two minutes to get a quote from Nathan Benefield, the director of policy analysis at Pennsylvania’s pro-liberty Commonwealth Foundation:

Unfortunately for taxpayers, politicians in Harrisburg and Washington have for the past few years considered it a “success” to have more families on welfare. Pennsylvania welfare eligibility and spending—including for food stamps—has exploded, threatening to crowd out everything else in the state budget. Means testing for assets is a common-sense reform to ensure those who truly need aid get it.

There, was that so hard?

Of course, journalists who are interested in getting the pro-liberty take on welfare reform are welcome to contact my colleagues and me at the Cato Institute. Honestly, we don’t want people to starve in order to save a buck—we just believe that the federal government is an improper and less effective means for assisting those who are truly in need. Pressed for time? Here are Cato essays on food subsidies, welfare, and federal subsidies to state and local government.

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