Issue: Food Stamp Reform
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The Food Stamp program (Supplemental Nutrition Assistance Program or SNAP) provides a monthly allowance of $134 per person to a low-income household to purchase food.1 Eligibility for the program has greatly expanded since its inception in 1964 as an outlet for surplus agricultural products — and has exploded over the last four years. It is now the fourth largest means-tested program for low income individuals, just behind Medicaid, the Earned Income Tax Credit (EITC), and the Supplemental Security Income (SSI) program. In 2011, one in every seven Americans was dependent on food stamp benefits and the number is continuing to grow at a rapid rate.2
Dependence on food stamps has now more than doubled since President Obama took office in 2009. In just the first three years of his administration, the federal government increased spending on the program by 107 percent, from $37.6 billion in FY 2008 to $71.8 billion for SNAP benefits in FY2011.3 The increase in spending coincided with a 58 percent increase in the actual number of individuals, and a 66 percent increase in the number of families, that received Food Stamps — from 28.2 million recipients in almost 13 million households in FY2008 to almost 44.7 million individuals in 21.1 million households in FY2011.4
The Administration's FY2013 Budget (submitted in February, 2012) reported that total federal government spending on Food Stamps, after including administrative costs, had risen to $77.6 billion in FY2011 (a 98 percent increase from FY2008) and estimated spending would balloon to $85.2 billion for FY2012 (a 120 percent increase over FY2008.)5 OMB also reported that between 2008 and 2012, the average SNAP/Food Stamp monthly benefit per individual had grown by over 30 percent — from $102.19 to $133.42.6
There are a variety of other federal food assistance programs, including the Special Supplemental Food Program for Women, Infants and Children (WIC) (increased 10 percent from 2008 to 2011);7 the Emergency Food Assistance Program (TEFAP) (increased 26 percent from 2008 to 2010);8 and the School Lunch program (increased 23.4 percent from 2008 to 2010).9 The Food Distribution Program on Indian Reservations and separate nutrition assistance grants for Puerto Rico, American Samoa, and the Northern Marianas added another $2.75 billion in federal spending in FY2011.10
The last few years have seen unprecedented legislative and regulatory expansions in the cost and scope of SNAP. The American Recovery and Reinvestment Act of 2009 (ARRA) and other regulatory and administrative directives have substantially increased the average household SNAP benefit by 13.6 percent11 and expanded eligibility for the program by: eliminating the 3-month time limit on benefits for able-bodied adults without children; increasing the household income dollar limits on eligibility; increasing income disregards (such as disregarding all refundable tax credit amounts from income for determining applicants' eligibility); and increasing official asset limits for eligibility purposes from $2,000-$3,000 in most states to a uniform federal limit of $10,000 — while at the same time administratively allowing most states to eliminate any asset limit whatsoever.12
Eligibility was also broadened by giving states greater discretion to skip the federal requirement for face-to-face interviews to determine initial eligibility and for recertification of a current recipient's eligibility. In addition, states are being encouraged (and most have agreed) to use so-called "Broad-Based Categorical Eligibility" authority to automatically qualify any household if it has received any assistance from the Temporary Assistance to Needy Families (TANF) program — EVEN if that assistance is the mere receipt of an informational pamphlet or a referral to an 800 information number. As a result, according to the Congressional Research Service, the changes in eligibility over the last few years "effectively allow states to make virtually any household eligible for the SNAP [program.]".13
In fact, a man who won $2 million from the Michigan lottery has maintained his eligibility for Food Stamps even after receiving his new found wealth. The income he receives from investing the remaining money (after purchasing an expensive home, car, and investing in other assets) still leaves him eligible under federal rules for Food Stamps. Michigan has been working with federal officials for some time to find a way to close the loophole. "We are actively seeking a change to the food assistance policy, which is a federal policy, to ensure that those who are truly needy qualify," stated a state human services department spokeswoman.14
Yet another man, also in Michigan, was able to buy six lobsters, two porterhouse steaks, and five 24-packs of Mountain Dew worth $141.78 using a Food Stamp program debit (EBT) card. A citizen who found the receipt showing such an extravagant purchase using Food Stamp benefits turned it into the Michigan Department of Human Services which tracked the man down. He was later arrested for having resold the food for 50 cents on the dollar — BUT the initial purchase violated no Food Stamp program rules. According to the Michigan DHS spokeswoman: "While federal guidelines allow for food assistance to be used to buy [lobster, steak and Mountain Dew,] these purchases go against the intent of the program, which is to provide help to those who are truly needy."15
What Would Reagan Do?
President-elect Reagan, as part of the transition process from the Carter administration, approved the following recommendation regarding the federal Food Stamp program for the poor:
"That a comprehensive nutritional block grant program be proposed to replace the 13 individual categorical USDA programs. That the program be administered by the states under broad federal guidelines with limited planning and reporting requirements."
The Food Stamp program began during the Great Depression as a means to distribute surplus agricultural production to the needy. In 1964, it became a permanent fixture in the federal budget with the passage and signing of the Food Stamp Act. Originally, states set their own eligibility rules and thus benefits varied by region, but in general — after meeting requirements for initial food purchases of their own — qualifying families were provided food stamps to buy what the Department of Agriculture deemed the "economy diet."
In 1971, the program underwent a tremendous transformation when it was nationalized and the initial food purchase requirement was eliminated. Over time, automatic Food Stamp eligibility for recipients of welfare cash assistance [Aid to Dependent Families with Children (AFDC) program then, now the Temporary Assistance for Needy Families (TANF) program], SSI, and Medicaid were added as well as some restrictions on participation by able-bodied adults. In 2008, the Food Stamp program was renamed the Supplemental Nutrition Assistance Program (SNAP) — ostensibly to alleviate the discomfort endured by recipients from the stigma that the term "Food Stamps" had gained over several decades.
Again, the Food Stamp program has seen unprecedented growth since 2008, with benefit rolls increasing from an average of 28.2 million recipients to 44.7 million recipients a month in FY 2011 — a 58 percent increase. And the dollar value of the Food Stamps that have actually been issued has grown 107 percent — from $34.6 billion in 2008 to $71.8 billion in 2011.16