With the recent Trump administration discussing ways to “drain the swamp” of Washington, some people are looking for ways to cut programs that have waste or fraud. Along with this issue, because of the large deficits, those same people are looking to cut programs or send money down to the state levels to reduce federal administration costs. One program that has been mentioned in both issues is SNAP- the Supplemental Nutrition Assistance Program. This is the program that most people recognize by the term “food stamps”.
First, let’s agree what SNAP is and how it benefits people. It was started in 1964 under President Johnson and is a federal program administered by the US Department of Agriculture. It is a rules-based program designed to provide benefits and assistance to households with low incomes, typically those at or below the 130% poverty line, in order to help them purchase groceries and food. Today it serves roughly 40 million Americans (22 million households) which represents about 14% of the US population. The program also is very important in that almost half the people receiving aid are children and the elderly.
The average monthly benefit to all households is $254 or approximately $1.40 per meal. Along with it being a needs-based program, it is also one that will have fluctuating funding based on economic conditions. When the economy is in a recession and more people are out of work, then more people can apply and receive food stamps. Likewise, when an economic recovery occurs and people are getting back into the workforce, and earning good wages then eligibility declines and the funding goes down. This is what we are starting to see now that the recovery is occurring.
Despite the good intentions and benefits of the program, SNAP critics often complain about it in several ways. Some people view the 40 million number of recipients as too large a number and therefore it must be a program that is creating a disincentive to work and creating lazy people. Other critics say the cost of the program, which is on average $75 billion per year is too high and the total administrative costs of the program run almost $4-5 billion. Their belief is that there must be lots of waste in a program this expensive. Along with the large cost, there is also a history of food stamp fraud. It is estimated that fraud may account for almost $3 billion per year that the taxpayer is funding. The other major problem often debated is the recognition that the recipient may spend the food stamp money in non-nutritional ways. The US Dept. of Agriculture published a report that showed that the number one purchase by SNAP households was soft drinks (10% of the dollars spent on the food total). This makes many people feel the US taxpayer is subsidizing the soft drink industry and the Government should prevent people that get food stamps from purchasing these kinds of items.
All of these negative issues with the food stamp program have led some people and law makers to suggest that the government should change the structure of the program to save money, cut costs, and reduce fraud. They are proposing changing SNAP from a federal run program that fluctuates its funding based on needs and economic cycles to a state- run program. The states receive a fixed dollar amount from the government and then each state administers and runs the program based on what each state wants and needs. This method of fixed funding is called block grant programs.
This block grant proposal for SNAP has raised strong response from the proponents of the program. They respond to the criticisms in many ways based on facts, data, and studies. First, the program serves the needs of many people and helps many families and children avoid poverty and malnutrition. It has proven to be successful both in the short term and long term as the following charts illustrate.
Second, proponents of SNAP show that 93% of the money for the program goes to the recipients. They say that a 93% number would be considered a very good number if the program was a charity. The data also shows that the error rate when administering the program is near an all-time low and therefore is run efficiently. Finally, regarding the soda issue, the proponents are quick to point out that the 10% number is not significantly different than what the entire US population spends on soda even if they are not in the program.
On the issue of turning the SNAP program into a block grant program, proponents of SNAP raise several serious issues. Data shows that going from a federal funded program to a block grant program eventually leads to significant declines in funding and the number of recipients goes down. Often the block grant funding method allows each state great flexibility to use the federal money in ways the state feels it will be best utilized. The problem with this is that history shows that in some cases the states will use the money for other programs or even use the funds to reduce state deficits and not even go to the programs intended purpose. They often will cite the TANF (Temporary Assistance for Needy Family) block grant program that replaced AFDC (Aid to Families with Dependent Children) which had been a federal program before it was changed and gave states a fixed amount of money. Data shows that TANF has lost more than 1/3 of its value to recipients since the switch to block grant status. This is proof that sending money to the state level does not always create more efficiency and success.
The SNAP program is not broken and does not need to be altered in any serious manner. Let’s hope that politicians look at the data and realize that SNAP does not nor should not be changed to a block grant format. The long run economic benefits to families and children are too important for this to become a political decision.