If It Ain’t Broke, Don’t Fix It.

The Supplemental Nutrition Assistance Program (SNAP, formerly called food stamps) is the federal government’s largest food assistance program.  It is also one of it’s most successful, not that the average American realizes its success.  In 2012, the most recent year for which I could find statistics, SNAP prevented 10.3 million people from falling into poverty, 4.9 million of whom were children, and lifted an additional 5.2 million people out of deep poverty, including 2.1 million children.  In addition to aiding people at or below the poverty line, SNAP benefits provide a boost to the economy.  A USDA study, corroborated by work done by Mark Zandi, of Moody’s Economy.com, found that every SNAP dollar spent generates from $1.70-$1.80 in GDP increase.  Finally, the SNAP program is very efficiently run, with 90-95% of funding going directly to food assistance, and experiences very low fraud rates, roughly 1% of benefits.  If SNAP is so successful, why does the average American not realize its success and why is there a desire among many politicians to restructure the program and reduce its funding?  I can not answer the second part of that question definitively, but I can suppose that the average American does not know about the success of the SNAP program because several myths about how the program is run and who benefits exist and little has been done to dispel those myths.

 

Myth:  Individuals receiving SNAP benefits are unemployed, able-bodied adults, who are predominantly people of color or immigrants.

Some of that statement is correct.  Most individuals who receive SNAP benefits do not work, but not because they are lazy or gaming the system.  Almost half (44%) of the individuals who receive SNAP are children.  The elderly and disabled comprise another 20 percent, making two thirds of SNAP recipients individuals who would never be counted in any unemployment statistic.  Furthermore, almost 90% of all households getting SNAP benefits contain either a child under the age of 18, a person over the age 60 or a disabled person.  Additionally, in more than half of households receiving SNAP benefits, at least one person is steadily employed and in over 80% of households receiving SNAP benefits at least one person worked either in the year before or the year after receiving benefits.  Concerning households containing an able bodied adult without dependents (ABAWD), exemptions allowing an extension in the amount of time they can receive SNAP benefits expired in most areas of the country in 2016.  These individuals are now restricted to only three months of SNAP benefits during any 36 month period when they are not employed or participating in a work or training program for at least 20 hours per week.

As for the ethnic breakdown of individuals receiving SNAP, approximately 40% of those receiving benefits are white, 25% are African-American and 10% are Hispanic.   In 2010,  only approximately 7% of individuals receiving SNAP benefits were foreign-born individuals:  3% were naturalized citizens, 3% were legal, permanent residents, and about 1% were refugees. I will address the extent to which immigrants receive SNAP benefits later in this post.

Myth:  Individuals receive SNAP benefits for years and years.

The SNAP program, unlike Temporary Assistance for Needy Families (TANF, also referred to as welfare), does not have a life-time limit.  Consequently if an individual  wishes to reapply for benefits every 3-6 months, his/her household can receive benefits as long as they qualify, so in theory someone could receive SNAP benefits his entire life.  In reality, over half of individuals receiving SNAP benefits stop receiving benefits within 36 months.  One third of those receiving SNAP benefits no longer need the assistance within a year of initially receiving benefits.  The only exception, as already mentioned, are unemployed able bodied adults without dependents who can only receive benefits for 3 months in any given 36 month period.

Myth:  Many of the people receiving SNAP benefits are undocumented immigrants.

Undocumented immigrants are not now and have never been eligible to receive any form of government assistance, including SNAP benefits.  Children born in the United States to parents who are undocumented immigrants could, in certain circumstances, be eligible for benefits; however, the household would only receive the amount of benefit appropriate for the number of American born residents.  Any undocumented immigrant living in that household would not be counted in determining the benefit amount.  Furthermore, with regard to documented immigrants, they are eligible for SNAP benefits only after they have resided in the United States for 5 years.  The only exceptions to the five year rule are documented immigrants who are refugees, asylees, or veterans or active-duty military personnel.

Myth:  The amount of money recipients receive in SNAP benefits is  sizeable and these benefits are easy to receive.

 The SNAP program is a means tested aid program, which means that benefits are provided only to individuals or households which qualify.  Consequently, to receive SNAP benefits, individuals must apply and provide all required documentation of annual income level, deductions and household composition.  The application process must be completed every 3-6 months in order to continue receiving benefits.  To put that into perspective, imagine having to renew your driver’s license at the DMV every 3-6 months, providing all the original documents, like birth certificates, marriage licenses and proof of residency, each time.  Additionally, to be eligible to receive benefits, households have to have incomes lower than 130 percent to 200 percent of the Federal Poverty Line, depending on the state in which the applicant resides.

The dollar amount of SNAP benefits has decreased over recent years, with more cuts looming on the horizon.  Currently, the average SNAP benefit is roughly $126 per person per month, which equals about $1.40 per person per meal.  No one is living on delicacies on that amount.  As a matter of fact, one third of households receiving SNAP benefits still need to go to a food pantry to supplement their benefits.

Myth:  SNAP dollars can be used to purchase anything.

SNAP benefits can only be used to purchase food items and plants and seeds used to grow food.  These benefits can not be used to buy non food items, like personal care items, diapers, household paper products, pet food and certainly not any alcohol or tobacco product.  Even though SNAP benefits are to be used for food, not all food is approved for purchase.  For instance, no hot, ready to eat foods can be purchased with SNAP benefits.  This means EBT cards can not be used in restaurants, including fast food chains, nor can they be used to purchase ready to consume items in the grocery store, like a rotisserie chicken.  The SNAP Restaurant Meal Program, which is available in only a few states, allows disabled, elderly and homeless recipients of SNAP to purchase meals in approved restaurants using a SNAP EBT card.  Fast food eateries, like McDonalds are not eligible to apply to participate in the SNAP Restaurant Meal Program, so no fast food may be purchased by any one with SNAP benefits.  Finally, SNAP recipients can not purchase food items in just any store selling these items.  They can only use their EBT cards in establishments which have applied and been approved as participating stores or restaurants.  

Myth:  Fraud and waste is widespread in the SNAP Program.

According to a 2016 USDA report, fraud within the SNAP program is quite low, about 1 percent.  The incidence of fraud decreased significantly when plastic EBT cards began being used, instead of paper money.  This switch made the selling of SNAP dollars for cash dollars, trafficking, much more difficult.  In 2010 the Government Accounting Office determined that trafficking had decreased from 3.8 cents per benefits dollar to roughly 1 cent per benefit dollar, where it has continued to remain.  The SNAP program also contains little waste, with 93% of its funding going directly to providing food aid.

 

No federal government assistance program is problem free and often benefits from review and adjustments. As programs go, however, the Supplemental Nutrition Assistance Program has proven itself to be successful at providing needed assistance to many while keeping fraud and waste at low levels.  Every year the SNAP program helps keep millions out of poverty, while lifting even more out of deep poverty.  As the program is currently administered, it responds well to the ups and downs of the economy, expanding to help more individuals in tough economic times and shrinking, like it has the past 2-3 years, when the economic outlook brightens.  SNAP dollars carry the added bonus of providing a stimulus to local economies as well, since the spending of SNAP dollars generates an increase in the Gross Domestic Product.  The proven success of the SNAP program makes one question why many politicians are eager to both restructure it, thereby making it less effective, and reduce its operating budget.  This program is not broken.  It does not need to be fixed; it needs to be funded!

Opportunity For Whom and To Do What?

Several months ago, when I was reading about Paul Ryan’s poverty plan and the GOP’s 2017 proposed budget, I kept encountering references to block grants, or as they are called by some today, opportunity grants.  At the time, the GOP’s 2017 budget plan proposed shifting funding for the Supplemental Nutrition Assistance Program (SNAP, formerly called food stamps) to a block grant.  Many of the hunger fighting organizations, like the Food Research and Action Center (FRAC) were very much against this proposal.  Wanting to better understand the implications of changing SNAP’s funding structure, I decided to do some reading on block grants, especially with regard to the SNAP program.  What I discovered made me understand why many organizations engaged in fighting poverty are deeply troubled by this proposal.

First, understanding what a block grant is and how it works is an important step.  Block grants arestack-of-money large sums of money allocated by the Federal government to a regional government, usual states, for a specific program or project.  Unlike other types of funding block grant funds come with few guidelines about how the funds are to be spent.  Block grants are often touted as a way to run government more efficiently and save tax payer dollars.  The belief being that these grants allow local governments, who know best how to use the grant money to help their citizens, have the flexibility to provide services or benefits in a more cost effective way.  In theory, block grants sound like they might be just the way to help solve our budget deficit; however, theory and practice are often two different things.

In practice block grants have a host of negatives, that for many programs, have proven to be detrimental if not disastrous.  When the Federal government changes a program’s funding formula to a block grant the money the Federal government allocates for that program is usually set at a fixed amount, and will not fluctuate from year to year.  Unless that fixed amount periodically is amended, block grants have the to potential to lose their value over time.  A prime example is Temporary Aid for Needy Families (TANF, formerly AFDC or welfare).  This program was flat funded through a block grant in 1996 with the enactment of welfare reform and yearly funding for TANF has remained at that same level for the down-arrow-w-moneypast 20 years, including during the Great Recession, reflecting a 28% loss in value.  Another limitation of block grants, also tied to fixed funding, is their inability to respond to economic downturns, when more people may need assistance.  Due to fixed funding, programs that are block granted are forced to try and help more people with the same amount of money, resulting in either a reduction of benefits or decline in the number of people able to be assisted.  Finally, block grants are usually administered with very few guidelines and very little accountability as to how the funds are spent, allowing the potential for funds to be diverted to other purposes and the certainty that assistance provided under block granted programs will vary greatly from state to state.

The possibility exists that block grants may be the panacea they are promised to be for some programs, but to fund the SNAP program through a block grant would be disastrous for a program that under its current funding and administration is a very successful program.  There are two main reasons this change in funding would be ill advised.  First, SNAP functions so successfully because it is able to respond to the current economic situation.  When the economy takes a down turn, like it did in 2008, funding for SNAP increased and it was able to provide assistance to the extra Americans who were in need.  Were the funding for SNAP to be a fixed block grant, millions of Americans who would have needed help would have been out of luck.  The second reason SNAP is so successful is that 90-95% of the funding goes to providing food aid.  Due to the uniform manner in which the program is administered at the federal level, little funding is needed for administrative costs.  If funding the SNAP program is shifted to a block grant, with little oversight or guidelines on how the funds are to be administered, there is the possibility that a larger percentage of the funds could be diverted away from providing food aid to covering other costs, thus reducing the effectiveness of the program.

The SNAP program has been called the cornerstone of our safety net and nutrition assistance programs.  In its current state the SNAP program is extremely successful, reaching 75% of all eligible individuals.  The program is able to expand when economic times are difficult and shrink, as it is now, as the economy recovers.  The Congressional capitolBudget Office projects SNAP caseloads will decrease from 45.8 million people in fiscal year 2015 to 33.1 million in 2026.  Currently the program is run with little administrative costs and almost no fraud (<3% and most of that is on the part of the retailers, not the consumers).  Not only does SNAP help the individuals that receive the benefit, but economist, Mark Zandi, states that a well funded SNAP program produces a positive ripple effect in the economy as SNAP benefits are put back into the economy, helping to pay the salary of the grocery store clerk, delivery truck driver and farmer.  Changing the funding structure of the SNAP program, however, would alter much of what make this program a success.  Why legislators would want to make such a change, that will in essence cripple the program, is difficult to understand.  Unless maybe that is actually the plan.  One hopes not.