Drink Your Milk NOW … Eggnog Too

Well, the U.S. House of Representatives certainly treated us to an egregious display of dysfunction, didn’t it?

One of the less reported aspects was its failure to pass a Farm Bill, i.e., a piece of legislation to renew, with revisions, a host of food and agriculture programs.

So what we have now is the last permanent version of the Farm Act, signed into law in 1949.

Anti-hunger advocates aren’t worried about this — yet. SNAP (the food stamp program) won’t expire because Congress put a temporary extension into the continuing resolution that will keep federal programs funded until March.

Advocates are worried because both the draft House Farm bill and the Farm Bill the Senate passed would cut benefits for about half a million households.

Perhaps I should say remaining households, since the House version would toss at least 1.8 million — maybe as many as 3 million — people out of the program.

Many farmers are unhappy because the various programs that protect them from losses depend on the Farm Act, as do other programs that benefit them, e.g., funding for their efforts to conserve natural resources.

Still, most of these were also extended until March — about the time crop farmers start planting.

But what about dairy farmers? They, of course, produce and sell milk year round.

One of the programs that supports milk prices has altogether expired because it was created after 1949 and not extended in the CR. The other program — the Dairy Price Support Program — has reverted to its 1949 form.

Under this program, the U.S. Department of Agriculture purchases milk — or more recently, certain products made with milk — when prices fall below specified levels. The latest Farm Act set these as fixed dollar values.

But back in 1949 and for some time thereafter, the target level was set as a ratio between milk prices and farm costs, including family living costs.

Failure to pass a new Farm Bill means that the Agriculture Department will have to use the 1949 formula, with adjustments for inflation and some other technical factors.

It will thus have to buy milk to support a price that’s roughly double the current market price.

So it’s reasonable to expect that dairy farmers will initially choose to sell to the government rather than to commercial sources. The old law of supply and demand will kick in, driving up retail milk and milk product costs.

The New York Times estimates costs as high as $6.00 — or even $8.00 — per gallon of milk. At the high end, this is nearly twice the average daily SNAP benefit.

But SNAP benefits will be lower before the new year ends — even if Congress decides not to make further cuts. Which, at this point, seems unlikely.

And WIC (the Special Supplemental Nutrition Program for Women, Infants and Children) will be cut by 8.2% if Congress doesn’t put the brakes on sequestration, i.e., the impending across-the-board cuts to programs that depend on annual appropriations.

More than 900,000 mothers and young children will be dropped from the rolls, according to Democrats on the House Appropriations Committee.

This figure, their letter indicates, was based in part on food prices projected last fall — presumably prices for foods that participating mothers can buy with WIC coupons.

Milk and cheese account for about a third of WIC food spending. Double the costs of these and we should expect to see many more low-income families denied the specially-tailored nutrition assistance and other services that help give children a healthy start in life.

Similar results, of course, if Congress replaces sequestration with a bill that shifts all the mandated savings to non-defense programs that are already subject to sequestration and/or to safety net programs the current law protects.

The latest House-passed bill does both. The SNAP cuts are even worse than what we’d seen before. And the radically-low cap on non-defense appropriations puts WIC at risk of a bigger cut than sequestration itself.

These — or some compromised version — seem to me a greater danger than a long-term lapse back to the 1949 Farm Act.

On the other hand, it’s hard to predict what this Congress will do — or more precisely, fail to do.

So we can only hope that members heeded the President’s advice and drank their eggnog because the price could skyrocket.

Suggest we all do the same to get our minds off these troubles for a bit.

Hunger Struck More Families Last Year, USDA Reports

September is Hunger Action Month — a campaign launched by Feeding America to get us involved in efforts to help end hunger in this country.

And hunger there surely is, as the latest food (in)security report from the U.S. Department of Agriculture shows.

Last year, nearly 174.9 million households sometimes — or often — didn’t have the resources to buy the food that all members needed “for an active, healthy life.” These are households USDA classifies as food insecure.

There were more of them than in 2010, but the percent increase isn’t statistically significant, USDA says.

The bigger news, I think, is that the number of households with very low food security, i.e., those in which at least one member sometimes scrimped on meals or skipped them altogether, rose to more than 6.8 million — 5.7% of all households surveyed.

This is statistically significant. And it puts the very low food security rate back up to where it was during the recession we’re still recovering from.

All told, nearly 16.9 million people sometimes didn’t have enough to eat. For adults, in the main, this typically meant hunger during seven months of the year — and for a few days during each of these months.

Drilling down a bit, we see that:

• Food insecurity afflicted 20.6% of households with children — nearly 8 million families.
• Children themselves were food insecure in slightly under half these households — and actually experienced hunger in 374,000 of them.
• Food insecurity rates were highest for single-mother families — 36.8% or more than 3.5 million families.
• More than 1.1 million of them — 11.6% — were so food insecure as to fall into the generally recurrent hunger category.
• Single-father households also had unusually high food insecurity rates — 24.9%. But there were far fewer of them.

The correlation with poverty is, of course, very high. So not surprisingly, we see significant race/ethnicity differences.

• Among black households, 25.1% were food insecure, as compared to 11.4% of white, non-Hispanic households.
• The very low food security, i.e., hunger, rate among black households was 10.5%, as compared to 4.6% for white, non-Hispanic households.
• The food insecurity rate for Hispanic households was 26.% and the very low food security rate 8.3%.
• Children themselves were food insecure in 14.6% of black households, as compared to 6.7% of white, non-Hispanic households.
• The child food insecurity rate for Hispanic households was 17.4%.

Well over 88% of food insecure households were poor enough to qualify for food stamps. The USDA report doesn’t tell us how many received them. It does, however, tell us how households below the program’s standard income eligibility ceiling fared.

On the one hand, a large majority managed to keep enough food on the table without food stamps for all of 2011.

The survey results don’t tell us how, though we might guess that free school meals played a part. Perhaps also the food pantries and other emergency sources that Feeding America’s network supplies.

On the other hand, nearly half (49.1%) of the households that received food stamps all year were nevertheless food insecure. And more than one in five (22.3%) were so food insecure that at least one member of the household didn’t always have enough — or anything — to eat.

The new Farm Bill the Senate passed would nevertheless reduce food stamp benefits for about half a million households.

The version pending in the House would do the same. It would also cut off all benefits for at least 1.8 million low-income people, plus free school meals for about 280,000 prospectively hungry children.

If we’re going to end hunger in America — a doable thing in this very wealthy country — the very least our elected representatives can do now is avoid making it worse.

Sad that anyone should have to say something so blatantly self-evident.

Brief Bits on Taxes and Entitlements

Like other bloggers of my kind, I spend a lot of time following issues I’ve seized on, while also dipping into others that look like my cup of tea.

I also try to exercise a certain amount of discipline about how much I pack into a post. So draft paragraphs fall on the cutting floor. And sometimes a new angle occurs to me after I’ve said, “enough already.”

All this certainly gives my mind a workout. But it’s also frustrating in a couple of ways.

On the one hand, I find new research on things I’ve already written about — not enough for a whole post, but meaty and relevant enough so I wish I’d found it before.

On the other hand, I identify issues that spark my interest. But I know I’ll have to spend considerable time learning about them before I’ll feel comfortable framing a post.

So I’m going to try an experiment — occasional posts that are more or less a scrapbook of supplements to posts I’ve written and first cuts into topics that are in my mental file.

Not a massive data dump. Just a selection of fragments of squirreled away, plus an occasional instance of what the French call l’esprit d’escalier (the smart thing you think of as you’re walking back down the stairs.)

This is the first of such posts. I hope you’ll let me know whether you’d like more.

Bush Tax Cuts: GOP v. Obama

Congressional Republicans and the President agree that the Bush tax cuts for households with incomes at or below $250,000 should be extended. As you undoubtedly know, the Republicans want the tax cuts for high-income families extended too.

Among these is the current version of the estate tax — a whopping $10 million exemption for couples, plus lower rates on the rest. The President wants to extend it, but exempt a mere $7 million.

Don’t think Republicans are all for lower taxes, however. Unlike the President, they don’t want to extend the expanded versions of the Earned Income Tax Credit and Child Tax Credit that were originally part of the Recovery Act. Both of these benefit low and moderate-income working families.

A new brief from Citizens for Tax Justice shows the contrasting results. Needless to say, very high-earners would do far better under the Republican approach. All but the top 5% would do worse.

Disparities increase as you move down the income scale. The bottom fifth would pay $150 more next year if the Republicans have their way.

CTJ provides similar state-level breakdowns for average tax cuts residents would receive.

Here in the District of Columbia, the bottom fifth would pay $120 more under the Republican approach. Only the top 20% would do better.

The top 1% would do a whole lot better — tax breaks totaling an average of $116,850 more than under the President’s plan.

Another Thought on the Millionaire Threshold

As those who follow this blog know, I’m not on board with making most of the Bush tax cuts permanent, as both Congressional Republicans and the President have said they want to.

Presidential hopeful Mitt Romney as well, of course, but with some extra sweeteners for high-earners and some bitter pills for low-wage workers who are barely getting by.

Raising the “middle class” threshold to $1 million, as House Minority Leader Nancy Pelosi proposed, would make things worse. I’ve already given some of the reasons I think so. Here’s another — not tactical like Pelosi’s recent retreat.

The millionaire threshold reinforces the notion that only the wealthy should have to pay higher taxes than they do now. To borrow from former Senator Russell Long, “Don’t tax you. Don’t tax me. Tax the rich fellow behind the tree.”

Yet in the long run we’ll need more tax revenues — both to curb our rising debt and, as the Center for Economic and Policy Research notes, to invest more in areas crucial for economic growth, e.g., education, infrastructure, research and development.

We can’t look only to millionaires and to large corporations — another favorite villain these days. As Adam Davidson at NPR Planet Money has argued, the middle class will have to pay more too.

Some People’s Entitlements Are Better Than Others

Hardly a day goes by without some public pronouncement about costly entitlements. I’ve yet to see calls for curbs on the food stamp program, Social Security and/or Medicare also mention farm subsidies.

Yet they’re entitlements too. Mainly benefits to large farm businesses — and people who own farm land but don’t grow anything on it.

Both the Senate’s new Farm bill and the House Agriculture Committee’s version would eliminate automatic cash payments to farmers (and non-farmers). But they would expand insurance against lower profits.

Farmers who grow certain commodities, e.g., corn, wheat, would be guaranteed 85-90% of their previous five-year returns — unless, in the House version, they’d rather get another layer of protection against steep, multi-year declines.

What other type of business gets taxpayer-funded underwriting against market price drops? What makes this affordable, but not funding to preserve food stamp benefits for low-income people who depend on them now?

House Agriculture Committee’s Farm Bill Is That Bad

The draft Farm Bill the House Agriculture Committee co-chairs released last week makes the Senate’s $4.5 billion cut in the food stamp program look like a nick.

The bill would reduce food stamp spending by about $16 billion over the same 10-year period — more than 45% of the estimated total saved.

By far and away the biggest bite — about $11.5 billion — comes from a “common-sense” reform that was among the crippling amendments the Senate defeated.

This so-called reform does away with what’s called broad-based categorical eligibility — an option that 40 states and the District of Columbia have adopted to extend food stamp benefits to more people in need.

With this option, households automatically qualify for food stamps if they receive a benefit funded by the state’s Temporary Assistance for Needy Families program — so long as their gross income is at or below a threshold the state chooses.

Federal law says it can’t be higher than 200% of the federal poverty line — currently $3,182 a month for a family of three. Most states, however, set the threshold lower.

The option doesn’t only allow households with somewhat higher incomes to participate. It also exempts them from the program’s regular assets test — if states decide to go this route. Not all states with categorical eligibility have.

The assets test is a separate part of the standard eligibility assessment. It disqualifies households if they have more than $2,000 in liquid assets, e.g., money in the bank — or $3,250 if a member is elderly or disabled.

The test also screens out households that have a car worth more than $4,650, even if they owe some port of it to the finance company. An exception if the car is used to earn income, e.g., as a taxi, but not if the breadwinner needs it to get to work.

The co-chairs draft wouldn’t just wipe out broad-based categorical eligibility. It would also nullify a modified form some states have adopted.

Households would automatically qualify for food stamps only if they receive cash assistance from TANF, the federal Supplemental Social Security Income program or a state’s general assistance program.

These are, by and large, households with incomes way below the poverty line.

As the Center on Budget and Policy Priorities observes, households with gross incomes above the regular 130% food stamp cut-off often have disposable incomes, i.e., money they can spend on things like food, that fall below the line after deductions for costs they must pay in order to work — notably child care.

No matter. The co-chairs see a “loophole” to close — or maybe just a way to get to their savings target while still preserving generous farm subsidies.

This shouldn’t surprise us. The Committee earlier offered the same savings as part of its contribution to the House budget reconciliation bill, i.e., the Republican majority’s alternative to the across-the-board cuts that are still on the horizon.

What’s noteworthy, however, is that Committee Chairman Frank Lucas (R-OK) reportedly wanted to replace categorical eligibility with a higher income cut-off and asset maximum than the current law establishes, plus an exclusion for one car.

But his Tea Party-type colleagues would have none of it. So the Committee will instead vote on — and almost surely pass — a measure that excludes even more people from the food stamp program than the Lucas proposal would have.

We don’t yet have a fix on how many people would lose their benefits.

When the Committee proposed the same provision for the budget reconciliation bill, the Congressional Budget Office estimated an average of 1.8 million a year.

The Office of Management and Budget put the figure at more than 3 million in 2013 — about two-thirds of them in households where at least one adult works.

We have a window of opportunity to save these folks from having to choose between eating and earning — or in  the case of the elderly, between eating and spending down money they’ve put aside for expected costs like medical co-pays.

Some are saying the House may not vote on a Farm Bill at all — at least not before the current law expires at the end of September.

If it does, the Senate’s Democratic majority will almost surely balk at the food stamp cut, as well as some other provisions, e.g., its extraneous attack on environmental regulations.

So like as not, we’ll have one of those kick-the-can-down-the-road extensions.

But that may be a short-term reprieve for low-income families who’ve had the prudence to save for a rainy day — or a car that’s not a 10 year old clunker.