Discussion of the House Republican budget has focused mostly on the transformation of three big health care programs: Medicare, Medicaid, and the Affordable Care Act. And that’s appropriate, given the magnitude of the changes and widespread impact they would have. But those proposals are obscuring some other proposed shifts that, in any other context, would be plenty troubling for their own sake. This week I'll highlight five of them. Here's the first.
The food stamp program isn't called food stamps anymore. It's called the Supplemental Nutrition Assistance Program, or SNAP. And the stamps no longer come in the form of colored paper coupons. Now they are virtual stamps, loaded onto electronic debit cards. But the program serves the same essential purpose it always did: Helping poor people to pay for food.
The Republican budget would make two changes to the program. First, it would transform SNAP from an entitlement to a block-grant. Instead of an open-ended federal commitment to the program, guaranteeing benefits for any Americans that meets the eligibility guidelines, the federal government would simply give the states an allotment of money, set by a pre-determined formula. It's the same change Republicans propose for Medicaid and, as with that program, the shift is no minor thing.
Today, spending on SNAP automatically rises during economic downturns, as more people lose jobs or see incomes fall. Not only does that automatic expansion help alleviate hardship. It also boosts the economy. In fact, most experts consider government food assistance among the quickest, most effective forms of economic stimulus. As the Wall Street Journal noted in July, 2009, near the peak of the recession:
Money from the program ... percolates quickly through the economy. The U.S. Department of Agriculture calculates that for every $5 of food-stamp spending, there is $9.20 of total economic activity, as grocers and farmers pay their employees and suppliers, who in turn shop and pay their bills.
While other stimulus money has been slow to circulate, the food-stamp boost is almost immediate, with 80 percent of the benefits being redeemed within two weeks of receipt and 97 percent within a month, the USDA says.
But the Republican budget wouldn’t simply convert the program into a block grant. It would also reduce the program's funding. The impact would likely be severe, as states either reduced the value of the subsidies, served fewer people, or some combination of the two. (Again, this is similar to what the Republican budget would to Medicaid.)
According to the Center on Budget and Policy Priorities, if the states decided to react primarily by thinning the benefits for everybody, the maximum benefit would equal 88 percent of the the “Thrifty Food Plan”--the government’s estimate of what a typical family would need to pay for a “bare-bones, nutritionally adequate diet.” In 2012, a family of three would lose $116 a month, while a family of four would lose $147 a month.
If, instead, the government implemented the cut entirely by reducing eligibility for the program, SNAP would serve 8 million fewer people over the next ten years. That’s an awful lot of people. In fact, the Center reports, it’s roughly equal to cutting off SNAP assistance for the 30 smallest states in the country over that time span. (In case you’re wondering, those 30 states would be Arkansas, Colorado, Connecticut, Delaware, the District of Columbia, Guam, Hawaii, Idaho, Iowa, Kansas, Maine, Maryland, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Rhode Island, South Dakota, Utah, Vermont, the Virgin Islands, West Virginia, Wisconsin, and Wyoming.)
And what’s the rationale for this cut? Republicans and their supporters say the program’s spending has gotten "out of control" and warn that it's fostering a culture of dependency, just like the old welfare system did. But the evidence for this is pretty thin. SNAP expenditures have unquestionably grown in recent years, but there are good reasons for that, starting with the fact that the economy is lousy. (Jason DeParle and Robert M. Gebeloff of the New York Times had an extensive look at this about a year ago.) As the Center on Budget notes, current projections suggest the program will return to pre-recession levels and grow no faster than the economy as a whole, which means it’s not really a net contributor to the deficits.
Fraud and waste aren’t issues, either. Last year the General Accounting Office found that program errors, which include underpayment of benefits as well as overpayments, were less than 4 percent. And “trafficking”--that is, the illegal trade of food stamps for other goods or money--had fallen to less than one cent on the dollar. Both were record lows. The GAO report suggested there was still room for improvement and, certainly, there is. But even if the government figured out a way to wipe out all of the errors and fraud, it’d be a fraction of the cut Republicans are contemplating.
Update: Harold Pollack supplies the appropriate video accompaniment.