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.
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.