New Food Stamp Cuts on the Horizon Again

May 20, 2013

Another session of Congress. Another chapter in the perils to SNAP (the food stamp program), as Congress tries again to pass a new Farm Bill.

Last week, the Senate Agriculture Committee finished a bill that cuts the program by $4.1 billion over the next 10 years. This is slightly less than last year’s proposed cut, but only because the Congressional Budget Office’s estimate has changed.

The House Agriculture Committee boosted its food stamp cuts to approximately $21 billion* over the same 10-year period. This $4.5 billion increase over last year reflects substantive changes in the proposed legislation.

Senate Agriculture Committee’s Cut

The Senate Agriculture Committee decided again to impose a restriction on a provision commonly known as “heat and eat.”

As things stand now, states can give households the maximum allowance for household utility costs if they receive any benefit from the Low Income Home Energy Assistance Program.

In some, but not all cases, this entitles them to a larger food stamp benefit because it reduces their adjusted income.

The Senate Agriculture Committee’s bill would restrict “heat and eat” to households that receive more than $10 a year from LIHEAP — directly or as a payment to their utility company.

CBO earlier estimated that this change would reduce benefits for nearly 500,000 households by an average of $90 a month.

Since then, sequestration has cut LIHEAP funding by nearly $270.8 million — this on top of cuts totaling $1.6 billion since Fiscal Year 2010.

So the 15 states and the District of Columbia that now use the “heat and eat” option will be hard put to protect all beneficiaries from benefits cuts, but not as hard put as under the House Agriculture Committee’s bill.

House Agriculture Committee’s Cuts

Last year, the House Agriculture Committee’s Farm Bill adopted the same “heat and eat” restriction as the Senate’s.

Its new bill raises the minimum LIHEAP benefit required to $20 in any given year. This would increase the number of households affected to about 850,000, according to CBO estimates reported by the Center on Budget and Policy Priorities.

Most of House Agriculture’s food stamp savings, however, come from a restriction it would again impose on an option known as categorical eligibility.

At this point, states can, in some cases, use the same gross income and asset limits for food stamp eligibility as they use for programs they fund out of their Temporary Assistance for Needy Families block grant or funds they spend to meet their maintenance-of-effort requirement.

The alternative cut-offs may be used for households that receive any TANF-funded benefit or service, as well as those that receive cash assistance from the Supplemental Security Income program or a state general assistance program.

They enable some low-income people — mainly working families and seniors — to receive food stamp benefits although the standard gross income and/or asset limit would disqualify them.

These are hardly people who don’t need food assistance, as CBPP explains.

A working family may have a gross income higher than 130% of the federal poverty line, but far less than the FPL after allowable costs are deducted.

A senior may have somewhat more than $3,250 in retirement savings to supplement a Social Security benefit that leaves him/her well below the FPL, as would be the case for a former minimum wage worker.

So-called broad-based categorical eligibility, i.e., eligibility based on receipt of any TANF benefit, enables people like these to receive food stamps.

All but 10 states use it to ease the standard, very restrictive asset maximum — $2,000, except for seniors. Fourteen states and the District use it to allow a somewhat higher gross income as well.

The House Agriculture Committee eliminates broad-based categorical eligibility by restricting cat-el to households that receive cash assistance from TANF or one of the other aforementioned programs.

CBO has estimated that 1.8 million fewer low-income people would receive food stamp benefits. The Office of Management and Budget put the figure at 3 million.

CBO also estimates that 210,000 children wouldn’t get free school meals any more because their eligibility depends on their family’s participation in the food stamp program.

So they’d be doubly deprived — as would their parents, who’d have to pay for all their kids meals, as well as their own.

The House Agriculture Committee’s bill also cuts funding for the nutrition education program that’s part of SNAP.

The $274 million cut would come on top of a $110 million cut Congress made in January — this to offset the costs of averting a milk price spike that would otherwise have resulted from its failure to pass a Farm Bill last year.

So families who don’t get dumped out of the food stamp program will get less help in learning how to make healthy food choices they can afford.

This is already a challenge. But it will soon get harder, even without any new “heat and eat” restriction, because earlier raids on the food stamp program will reduce benefits for all participants at the end of October.

To top off the savings, the House Agriculture Committee eliminates the bonuses USDA has been awarding states for outstanding performance and notable improvements in key aspects of program administration.

The bipartisan National Conference of State Legislatures told the Committee last year that the bonuses had proved effective, noting that the payment error rate was at a record low.

But the Committee’s bill would end them anyway, just as last year’s bill would have.

So we’ve got two very different bills — and an upcoming battle royal in the House.

What the end result of all this will be is anybody’s guess.

What’s clear, however, is that House Agriculture Committee Chairman Frank Lucas is spinning his bill when he says that it “won’t take a calorie off the plate of anyone who needs help.”

Even the Senate Ag Committee’s Farm Bill would. And it’s not nearly so bad.

* The somewhat smaller figure you may have read elsewhere is the total for all the changes that have budgetary impacts in the Nutrition title of the Farm Bill . Modest increases for The Emergency Food Assistance Program and several other items account for the difference.


One Hand Clapping for Last-Minute Milk Price Save

January 7, 2013

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.