House Agriculture Committee’s Farm Bill Is That Bad

July 9, 2012

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 provisionse.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.

House Agriculture Committee Slashes Food Stamp Program

April 22, 2012

You can’t have both guns and butter. House Republicans have taken this old piece of federal budget wisdom seriously. They’ve opted for guns — not over butter, but over food assistance for poor people.

The guns at issue here are funds for defense. Sequestration, i.e., the annual across-the-board cuts required by the Budget Control Act, would reduce them by $54.7 billion a year.

Nobody in a position of power wants those cuts, including the President.

His proposed Fiscal Year 2013 budget would hit the total deficit reduction targets in the BCA by a mix of spending cuts and revenue increases. It would also, as the BCA does, protect certain key programs for low-income people, including food stamps.

House Republicans will have none of this. Their budget plan, among other things, charged six committees to come up with more non-defense savings — enough to hit the deficit reduction targets, but without touching defense.

The House Agriculture Committee had to save $33.2 billion over the next 10 years, beginning with $8.2 billion in the upcoming fiscal year.

It could have gone after the costly subsidies our government pays to farmers — actually, for the most part, large farming operations.

Some of these provide special benefits for producing certain crops, e.g., yearly payments (even if the farmer grows nothing), compensation to make up for lower market prices. Another subsidizes insurance against crop losses. Yet farmers also get compensated when droughts, frosts, etc. ruin their crops.

All told, these subsidies cost some $25 billion a year. Nice safety net, huh?

The House budget plan itself identifies some of these subsidies for “reforms.” But they’re for another day.

So the Agriculture Committee, heeding “assumptions” made by the Budget Committee found its mandated savings — all of them and more — in the food stamp program.

First, it would shave months off the expiring boost in benefits that was part of the Recovery Act. They’re now scheduled to end in November 2013 — thanks to earlier cutbacks Congress made to offset the costs of other measures.

Under the House Agriculture plan, the boost would end two months from now. For a family of four, this would mean $57 less per month, according to a new brief from the Center on Budget and Policy Priorities.

The bulk of the savings, however, would come from two changes in the food stamp law itself.

One of them would, in effect, require households to be poorer to qualify for food stamps.

Under current law, a household can generally have no more than $2,000 in assets — or $3,250 if any of its members is a senior or a person with a disability. Total household income must be no greater than 130% of the applicable federal poverty line.

But most states — and the District of Columbia — have used an option in the law to eliminate the asset test. They’ve expanded their definition of “categorical eligibility,” i.e., types of low-income households that automatically qualify for food stamps.

This not only allows low-income families to conserve what they can for unexpected expenses. It also lets states raise the income eligiibilty threshold up to 200% of the federal poverty line — the level that many analysts use for classifying the low-income population.

The House Agriculture Committee would put a stop to this. Only households in which all members receive cash assistance could be deemed categorically eligible.

No more categorical eligibility for those that receive other types of publicly-funded support for low-income people, e.g., child care subsidies, job training.

Nor for households where only the children receive cash benefits through the Temporary Assistance for Needy Families program or as Supplemental Security Income.

At least two million people — perhaps as many as three million –would be forced out of the program. More than 280,000 children would lose not only food stamp benefits, but free school meals.

The other change in existing law would permanently reduce the benefits some households receive — again by severely limiting an option a growing number of states now use.

Briefly, the complicated formula states must ordinarily use to calculate food stamp eligibility and benefits levels includes an income allowance for utility costs, based on those applicants actually have to pay for.

But if the family receives benefits from the Low Income Energy Assistance Program, it automatically qualifies for the maximum allowance.

Fourteen states — and the District — have given families in the food stamp program a small LIHEAP benefit. Some of the families get higher food stamp benefits as a result. No big windfall here, however.

The House Agriculture Committee would virtually eliminate the so-called “heat and eat” option — or so I infer, since it expects to save $14 billion.

All this would be in addition to, not instead of the $133.5 billion House Republicans intend to save by converting the food stamp program to a block grant.

Moral of this story: Some people’s safety nets are worthier than others.