Business Ethos Blog

Real Changes for Food Stamps?

Dr. David Mielke is the Retired Dean of the College of Business at Eastern Michigan University

Dr. David MielkeThe topic of the food stamp program is always a hot button issue.  Republicans are likely to once again try to reform the program.  Democrats will charge that they are hurting those that can ill afford to have cuts. But is it time to make changes now that we have come out of the recession and there is less need for the additional support passed years ago?  Are there legitimate concerns about food stamp cuts?  What is the “Right Thing to do?”  Let’s look at some issues:

1. The House Agriculture Committee will begin hearings on February 25th on food stamps, formally known as the Supplementary Nutrition Assistance Program or SNAP.

2. Under current limits, a family of four earning less than $2,584 in gross monthly income can qualify.

3. According to the Agriculture Department, the average recipient receives $125 a month.  The money is uploaded to a debit card that can be used at grocery stores, but can’t be used for alcohol, cigarettes or prepared food.  Some say the government should toughen nutrition standards to ban purchases of soda and other sweetened beverages.

4. Some 46.5 million people, about 15% of the US population receive benefits, double the number from a decade ago.  It is important to note that the US population has not doubled over this same period of time.  As a result, the increase is due to expanded eligibility.

5. Critics state that many recipients don’t want to work and would rather collect food stamps.  USDA data shows nearly 43% of recipients live in a household where someone is earning—that is 57% do not have a wage earner in the household.

6. The costs for the program have nearly tripled in that same time period, going from $27 billion in fiscal 2004 to $74 billion in 2014.  Given costs have increased substantially more than the number of people receiving the support, the increase per recipient has exceeded the rate of inflation.

7. As the economic recovery continues, the Congressional Budget Office projects the number of recipients will drop 30% to 33 million by 2025.  Already rolls shrank by more than one million between fiscal 2013 and 2014.

8. States, which manage SNAP, are already starting to cut back.  More than 20 are preparing to reinstate time limits that most states have waived in the recession.  Healthy adults without children will be restricted to 3 months of benefits every 3 years unless they are working or enrolled in job training for at least 20 hours per week.  The move to reinstate those limits could end benefits for about one million people.

9. This will not be the first time Republicans have addressed the issue of food stamps.  In 2013, they tried to cut the program by $40 billion as part of the farm bill authorization.  A compromise with Democrats yielded $8.6 billion in cuts over 10 years.  They also tried to carve out the food stamp program from the Agriculture Department budget.

10. Some states allowed people who receive at least $10 of heating assistance to automatically qualify for food stamps, a program called heat and eat.  The 2013 budget deal raised the amount of heat assistance from $1 to $10.

 

What has changed in the last decade that would cause the number of recipients to double?  Given the decrease of one million recipients in the last year and the CBO projection of a further 30% drop by 2025, is it really necessary to make changes?  Won’t this natural fall in the number of recipients fix the problem?  Should Congress follow the states’ lead by returning to the time limits that were waived during the recession?  Should the food stamp program be broken out of the Department of Agriculture budget?  What is the “Right Thing to do?”  The recession is over.  It is time to follow the states’ lead to re-impose eligibility requirements that were in place before the recession.  It is also time to eliminate the heat to eat automatic eligibility.  States have gamed the system to give the minimum $10 of heat assistance to allow more people to get food stamps.  It is time to provide appropriate transparency by pulling the food stamp program out of the Agriculture budget.