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Food Stamps: A Microcosm of Out-of-Control Government

Too generous, duplicative, and fraud-riddled — yet ever-expanding.

by
Tom Blumer

Bio

September 15, 2011 - 12:22 am

As I showed earlier this month, the economy has been extraordinarily and historically unimpressive since the recession as traditionally defined ended in June 2009. Nevertheless, during the intervening 26 months, according to the more comprehensive Household Survey at the government’s Bureau of Labor Statistics, seasonally adjusted employment, since bottoming out in December 2009, has grown by 1.67 million, or about 1.2% of the workforce.

This degree of job growth should have caused the number of those enrolled in the Supplemental Nutrition Assistance Program (SNAP), still popularly known as food stamps, to level off or at least grow only slightly, right? Dream on. Food stamp enrollment during the eighteen months ending in June of this year increased by 6.2 million, or 16%. In the past 3-1/2 years, food stamp enrollment has grown by 72%, from 26.3 million to June’s 45.2 million. In 2007, about one in eleven Americans was receiving food stamps; now it’s about one in seven.

The food stamp program is a case study in good intentions gone wild, and a direct rebuke to those who believe we can’t reduce spending on government welfare and entitlement programs, and reduce or eliminate many other federal programs and departments, without harming the vulnerable.

The original 1964 legislation creating the program was a result of a classic “win-win” logrolling arrangement between urban politicians who wanted to feed poverty-stricken families and rural reps who sought increases in farm subsidies. Predictably, both groups got what they wanted, while taxpayers lost. Uncle Sam’s Agriculture Department originally predicted that the program “would eventually reach 4 million, at a cost of $360 million annually.” By the end of 1974, the number of participants (15 million) and the cost ($2.7 billion, or $1.6 billion in 1964 dollars) had both essentially quadrupled those original estimates. The tab in calendar 2011 will easily top $70 billion.

Individual and family benefits have recently skyrocketed for no defensible reason. During the last few years of the Bush administration, leftists ramped up an orchestrated PR campaign called the Food Stamp Challenge. It was designed to prove how absolutely impossible it was to survive on the program’s average benefit of $21 per person per week. Among those who agreed to participate in what they claimed was the grocery-store version of Mission: Impossible were several congresspersons, Oregon’s governor, and many journalists.

But the $21 benchmark was a fraudulent figure. It was the average net benefit after legally mandated deductions from gross benefits for family income and assets, the reasonable idea being that the government would make up the difference between 30% of a household’s income and what recipients could afford to pay for food from their own resources. Depending on household size, individuals and families deemed as having no available resources were getting $27-$36 per person per week in benefits — amounts that roughly coincided with what the U.S. Department of Agriculture at the time considered to be the cost of its “thrifty” but adequately nutritional meal plan. Rather than argue the merits of the income- or asset-based deductions, Food Stamp Challenge promoters refused to even recognize their existence, falsely insisting that the net benefit was all recipients had to spend on food. Meanwhile, during August 2007, Colorado activist Ari Armstrong and his wife demonstrated that they could live within even the artificially low Food Stamp Challenge amount without undue hardship, and spent a whopping 44% less than the gross benefit amount.

Even though benefits were already adequate, and even though the cost of food at home increased by a bit less than 5% during the two years involved, Nancy Pelosi and Harry Reid’s Congress, with George W. Bush acquiescing, increased gross benefits in fiscal 2009 by 9%. Once Barack Obama became president, gross benefits went up two times in just over eight months by a total of 13%. These increases, combined with rules changes in many states easing income, asset, and other eligibility tests, caused the average net benefit over those two years to explode by 40%. Gross benefit levels have stayed the same since October 2009, but they’re still way above the reasonable levels of three years ago. The bottom line is that we no longer expect recipients to be thrifty with their taxpayer gifts.

What ordinary people would see as obvious abuse is clearly on the rise. In Southwestern Ohio in early 2009, a couple with $80,000 in the bank and a paid-off $300,000 home qualified; it was not an isolated incident. Colleges have actively encouraged their students, no matter how well-off their parents might be, to get with the program. In a sign of how widespread student abuse of food stamps might be, Michigan has removed 30,000 of them from the rolls so far this year.

Duplication of benefits between other federal programs is rampant. Children in food stamp-eligible families are often if not usually getting free lunches and/or breakfasts at school. It’s not mean or nasty to observe that such families are getting 21 meals’ worth of benefits each week their kids are in school, but only have to figure out how to feed their kids 11 or 16 times. Many college students on food stamps are receiving financial aid based on their school’s officially published cost of attendance, which includes tuition, fees, room — and board.

Thrift being no longer necessary, the next stage is apparently removing the expectation that recipients prepare their own meals. The program’s new frontier is permitting the purchase of restaurant meals. This “feature” is currently limited to four states and is in theory only available to the elderly, disabled, and homeless. If you believe that every fast-food cashier is verifying whether every person paying with their SNAP card really qualifies, I’ve got a Microsoft Sweepstakes-winning email to forward to you. It should be no surprise that lobbying efforts to expand restaurant merchant eligibility are well under way. I sense that another “win-win” at taxpayers’ expense, which will also serve to cement currently too-high benefit levels, is on the horizon.

Finally, the food stamp program, like so many other federal efforts, is riddled with fraud. Ohio alone replaces 200,000 supposedly “lost” food stamp cards per year out of a current pool of 1.6 million recipients, or perhaps 500,000 households. Many if not most of the cards are being sold for cash or drugs.

To contend that this and other federal programs and departments can’t be cut — real cuts, not just reductions in projected, artificially jacked-up spending — is absurd. Unless we’re gunning to be the next Greece but without anyone who will bail us out, we can’t afford not to.

Along with having a decades-long career in accounting, finance, training and development, Tom Blumer has written for several national online publications primarily on business, economics, politics and media bias. He has had his own blog, BizzyBlog.com, since 2005, and has been a PJM contributor since 2008.
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