Expert Report Indicates Need for Larger Food Stamp Benefits

SNAP (the food stamp program) is protected from the across-the-board cuts that will soon kick in. But benefits will be cut anyway, come November, because Congress has twice raided the funds it provided for a temporary boost.

A family of three will lose at least $20 a month, according to new estimates by the Center on Budget and Policy Priorities. Still-eligible families would lose considerably more under the Farm Bills the House Agriculture Committee and the full Senate passed last year.

Yet we now have new, credible evidence that food stamp benefits are already too low for a great many participating families. This, at any rate, is a reasonable inference from an analysis jointly produced by the Institute of Medicine and the National Research Council.

The core of the problem is the assumptions built into the Thrifty Food Plan — the collection of market baskets that provide the basis for setting food stamp benefits.

Basically, the TFP assumes that families will make many of their meals from scratch, using low-cost, processed ingredients — a stew of potatoes, carrots and cut up chuck roast, for example, or chili made from slow-cooked dried beans.

In other words, someone in the family will have plenty of time to go grocery shopping, with pauses and backtracks for price comparisons, and the time to peel, chop, braise, bake, etc.

The family will live relatively near a full-service grocery store. And it will have the transportation to get there — and home with bags full of groceries.

It will also live in an area where food costs are relatively low, since we know from previous studies that the bill for a TFP-based food selection in a high-cost city far exceeds the maximum food stamp benefit.

And — something the IOM panel doesn’t mention — the family will have a good-sized refrigerator with ample freezer space. We see this assumption in the recipes and tips the U.S. Department of Agriculture has published for “healthy, thrifty meals.”

The IOM panel concludes that the from-scratch assumption is “out of synch with the practices of most households today.” Surely true for the 62% of food stamp households with children who’ve got at least one working member.

The IOM panel doesn’t come to such firm conclusions about the other assumptions. It merely identifies factors USDA should examine in determining whether food stamp allotments are adequate.

This is what USDA asked for. What it will do with the answer remains to be seen.

What our federal policymakers should do seems to me obvious enough. Beating a dead horse here, I know, but they should first and foremost give up the notion of reducing the deficit by cutting food stamp benefits.

Though the recession and lingering labor market ills have driven SNAP spending upward, it’s expected to drop to nearly the same share of GDP — a common measure of federal spending –as it represented in 2007.

The total cost of our primary nutrition safety net would then be somewhere around one-third of one percent of the value of everything our economy produces.

Beyond this, our policymakers ought finally to come to grips with the fact that the TFP doesn’t provide a suitable basis for determining food stamp benefits.

We’ve got scads of evidence that a large number of recipients can’t stretch them till the end of the month — let alone purchase the foods they’d need for a healthful diet.

A fairly recent study for USDA found that food stamp households had used, on average, 90% of their monthly benefits by the end of the third week — this despite the boost that’s due to expire.

The latest reported results of an annual survey conducted for the agency show that nearly half of households that received food stamp benefits throughout 2011 experienced food insecurity, i.e., were at risk of hunger or even sometimes didn’t have enough food for everyone because they couldn’t afford it.

No wonder that, as Feeding America has reported, 58% of the people who regularly or recurrently visited the food pantries in its network were food stamp recipients.

The Food Research and Action Center has repeatedly recommended that food stamp benefits be based on USDA’s Low-Cost Food Plan instead of the TFP — for reasons fully explained in a report it issued last December.

FRAC offers some additional recommendations in a statement triggered by the IOM report, e.g., a change in the outdated assumption that eligible households can spend 30% of their own income to supplement their benefits.

Congress will presumably again address the need for a new Farm Bill this year. So it’s got an opportunity to go back to the drawing board and create a food stamp program that will, at long last, end hunger and malnutrition in this country.

At the very least, it should do no further harm. Doesn’t seem like a lot to ask, but in this political environment, it is.

One Hand Clapping for Last-Minute Milk Price Save

No quick spike in milk prices after all. The “fiscal cliff” package the House and Senate passed includes an extension of most, though not all provisions in the 2008 Farm Bill, including the dairy price support programs.

Many dairy farmers are unhappy in part because they want the programs replaced with a voluntary program that would insure participants a formula-based profit margin.

This was part of the new Farm Bill the Senate passed and also in the new Farm Bill that languished in the House — reportedly because House Speaker John Boehner couldn’t count enough votes for it.

Not all dairy farmers wish the new Farm Bill had become law, however. Some are fine with the existing programs, assuming positions their associations have taken are a reliable indicator.

The milk and food manufacturers are also relieved because the insurance program would have conditioned full payouts on production cuts — thus presumably driving up the prices they would have to pay.

So we’ve still got dairy subsidies, but their costs aren’t offset as they would have been in the revamped Farm Bill. Congress instead took the money out of SNAP (the food stamp program).

Benefits are intact, for the time being. The $110 million needed to protect dairy farmers from profit losses came out of the portion of SNAP that funds nutrition education programs. (Anyone else see the irony here?)

Would that this were the end of SNAP cut issues. But it won’t be.

The current benefits provisions might seem protected through the end of this fiscal year, since Congress extended them along with the dairy price supports.

But it will be looking for significant savings to replace the briefly-suspended across-the-board cuts.

Perhaps even larger savings — and all on the spending side — since Republicans say they won’t raise the debt ceiling unless the additional borrowing authority is matched, at least dollar for dollar, with spending cuts.

And they’ve got their eyes set on entitlements, e.g., programs that guarantee benefits to everyone who meets the eligibility criteria. Though their pronouncements often name Social Security and Medicare, SNAP falls into that category too.

Whether SNAP cuts become part of the next “fiscal cliff” deal remains to be seen. So does what happens when the extended provisions of the Farm Bill expire at the end of September — whether SNAP falls under the spending-cut knife before or not.

What we see already, however, is that the Farm Bill picks winners and losers — not only among dairy farmers, but within the agriculture industry as a whole.

We consumers win and lose also — mostly the latter, I think.

In the narrowest sense, we were winners in the last-minute milk price fix, since without it, milk prices could have more than doubled.

In the larger sense, however, we’re losers because we pay for the dairy subsidies twice over — both with our taxpayer dollars and in the prices we pay at the grocery store, though the latter are also jacked up by other price-manipulating mechanisms.

Maybe not a big deal for those of us who can afford a bit extra for milk, yogurt, cheese and a variety of other processed foods, e.g., bread, soups, lunch meats.

But for SNAP recipients trying to get along on a per-person average of about $4.46 a day, those extra pennies make a difference.

Learning how to eat healthfully on the cheap too, but Congress picked them as losers on that.

Census Bureau Reports 16.1% Poverty Rate

Another round of news on poverty in the U.S. — this time from the Census Bureau’s latest report on the results of analyses using its Supplemental Poverty Measure.

Once again, the national poverty rate is higher than the rate the Bureau earlier reported, using its official measure — 16.1%, as compared to 15.1%.

In other words, about 3 million more people — a total of nearly 49.7 million — were living in poverty last year.

On the other hand, the percent of people living in extreme poverty, i.e., below 50% of the applicable threshold, is 1.5% lower than the official measure shows.

We get a mixed picture for state-level poverty rates, for which the Bureau uses three-year averages. Some of the rates are higher than the official rate. Some lower.

The rate for the District of Columbia rises sharply — from 19% to 23.2%. This is higher than the rate for any state except California.

As I’ve written before, the official measure sets poverty thresholds at three times the annually adjusted costs of what used to be the U.S. Department of Agriculture’s cheapest food plan.

The SPM starts from the costs of basic living expenses, adjusted for differences among major geographic areas and also differences in living situations, e.g., renting versus owning.

To these, it adds some other “necessary expenses,” e.g., payroll taxes, health care co-pays and other out-of-pocket costs.

On the other side of the ledger, it takes account of not only cash income, but some “near-money” federal benefits like tax credits and also some in-kind benefits, e.g., food stamps, two forms of child nutrition assistance, housing subsidies.

And it uses actual household size, rather than counting only household members who are related to one another, as the official measure does.

These differences explain not only the difference between the overall SPM rate and the official rate, but shifts in rates for different age and race/ethnicity groups.

We see, for example, that:

• The child poverty rate drops from 22.3% to 18.1%, reducing the number of children in poverty by about 3 million.
• The poverty rate for seniors rises from 8.7% to 15.1%, increasing the number of poor people 65 and older by somewhat more than 2.6 million.
• The poverty rate for blacks drops from 27.8% to 25.7% — still far higher than the non-Hispanic white rate of 11%, but now 2.3% lower than the rate for Hispanics.
• The poverty rate for Asians rises from 12.3% to 16.9% — the largest percent change for any race/ethnicity group reported.
• For children, the extreme poverty rate is less than half what it is under the official measure — 5.1%, as compared to 10.3%.
• For seniors, however, the extreme poverty rate rises — from 2.3% to 4.3%.

This year’s report is unusually timely because it gives us a read on the anti-poverty effects of some benefits that are at immediate risk. It tells us that:

• Food stamp benefits lifted more than 4.6 million people, including  about 2.1 million children, out of poverty last year.
• Well over 8.6 million more people, including nearly 4.7 million children, would have fallen below the poverty threshold if their family’s disposable income hadn’t been boosted by refundable tax credits.
• Unemployment insurance benefits kept nearly 3.4 million people out of poverty — mostly adults, but about 963,400 children too.
• And Social Security — the single most effective anti-poverty program we’ve got — accounted for 25.6 million fewer poor people than there would have been without its benefits. Poverty rates for all age groups would have been higher. The rate for seniors would have soared to 54.1%.

So there are the benefits. Now here are the risks.

The farm bills now pending in Congress would cut food stamp benefits for at least half a million households — 1.3 million if the House version prevails. The House bill would also mean no more food stamps at all for as many as 3 million people.

As you’re well aware, the Bush-era tax cuts are expiring. We can be quite confident that most will be renewed.

But Congressional Republicans want to extend earlier versions of the refundable Earned Income Tax Credit and Child Tax Credit, not the expanded versions that have made a significant difference to low-income working families.

The federal program that funds unemployment insurance benefits for longer-term jobless workers will also soon expire. Some two million workers and their families may face the new year with no source of cash income.

Lead Republicans in Congress are about to sit at the bargaining table with their Democratic counterparts and White House officials to thrash out an alternative to the so-called fiscal cliff.

They say they’ll be amenable to increased revenues (not to be confused with higher tax rates for the wealthiest 2%).

But the deal must also include “real changes to the financial structure of entitlement programs” — apparently something along the lines of the recommendations in the plan produced by the co-chairs of the President’s fiscal commission, a.k.a. Bowles-Simpson.

These recommendations would cut Social Security retirement benefits in several different ways. With the average benefit now only $1,230 a month, we could see more seniors in poverty if the Democrats don’t hold firm to the position they’re taking now.

NOTE: A couple of the benefits impact figures reported by the Center on Budget and Policy Priorities are a bit higher than mine. This is also true for figures reported by the Center for American Progress. I’m at a loss to explain the discrepancies.

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.