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It’s Not Really a Farm Bill

It’s a food stamp behemoth.

Oct 1, 2012, Vol. 18, No. 03 • By KATE HAVARD
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This week, Congress is under pressure to pass the 2012 farm bill before the current legislation expires on September 30. About every five years, Congress pushes through a farm bill, ostensibly a big bundle of agriculture subsidies that also funds food stamps. But the name is misleading. Nearly 80 percent of the $1 trillion the 2012 bill would spend over the next 10 years would go to the food stamp program. 

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The farm bill at work in California

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Food stamps originated in the Great Depression, when the federal government issued stamps to the poor and unemployed to “purchase” surplus foods. During World War II, the program was discontinued. Lyndon Johnson reintroduced it in 1964 as part of his War on Poverty. Starting in the late 1990s, paper stamps were phased out in favor of Electronic Benefit Transfer cards, essentially debit cards. In 2008, the program was renamed SNAP (Supplemental Nutrition Assistance Program) in order to help individuals avoid the stigma associated with the program.

Spending on food stamps has always increased steadily, but over the last decade it has exploded. From 2001 to 2006, the budget for food stamps doubled; by 2013, it will have quadrupled. And as of June, a record 46.6 million people were enrolled.

So, what’s going on? Although many people are poorer now than they were 10 years ago, the growth of the food stamp rolls can’t just be chalked up to an abysmal economy. Ten years ago, close to 12 percent of Americans lived below the official poverty line; in June, that number was 15 percent. While the share of the population in poverty increased only 25 percent, spending on food assistance grew 400 percent.

A recent analysis by economist Diana Furchtgott-Roth of the Manhattan Institute found that while use of food stamps has always increased during recessions, growth tends to drop off, or at least slow, during recoveries. The recoveries of the 1980s saw decreases in the food stamp rolls. Thirty-six months into the recoveries of 1990 and 2001, food stamp usage had grown, but only 1.6 and 2.1 percentage points respectively. By contrast, three years after the recent recession, the share of the population on the SNAP rolls was up 3.5 percentage points.

The analysis also found that unemployment and food stamp participation “do not appear to have a strong relationship.” Instead, “eligibility and other administrative standards,” which vary from state to state, are better indicators. One constant: The food stamp participation rate exceeds the unemployment rate in 48 states.

“Perhaps most troubling is that the expansion in the SNAP program means that even when our economy returns to full activity and much lower unemployment, the food stamp benefits will not decline commensurately,” wrote Furchtgott-Roth at Real Clear Markets. “Food stamps have become more of a permanent entitlement rather than a temporary stop-gap for the temporarily unemployed.”

The increase in food stamp enrollment comes after a decade during which federal guidelines for the program became ever more generous.

In 1996, welfare reform ended most legal immigrants’ eligibility for food stamps. The 2002 farm bill reversed that and created incentives for increased enrollment. The 2008 farm bill raised the minimum benefit and further expanded eligibility, allowing recipients to deduct the full cost of childcare from their incomes to qualify for benefits.

Under President Obama, this trend has accelerated. Between January 2009 and June 2012, America lost a net 1.3 million jobs and added 15.1 million people to the food stamp rolls. The 2009 stimulus bill raised maximum food stamp benefits 13.6 percent and suspended time limits for jobless adults without dependents. Indeed, the Department of Agriculture and Democrats often cite food stamps as a form of stimulus. “Everyone wins when eligible people take advantage of benefits to which they are entitled,” reads one USDA pamphlet.

Alabama senator Jeff Sessions, ranking member of the Senate Budget Committee, says SNAP is structured so as to maximize enrollment: “Right now under the program, all the money comes from the federal government, and the states administer it. That means the states have no incentive to curtail fraud and abuse.”

On the contrary, states get bonuses for enrolling more people in SNAP, not for helping them get off. The federal government spends about $50 million a year rewarding states for increasing enrollment. The extra cash doesn’t have to be used for administering SNAP.

Recent briefing materials instruct USDA employees in strategies for persuading people to sign up even if they are initially reluctant; recruiters are taught to “overcome the word ‘No.’ ” When one rural North Carolina office won a USDA “Gold Hunger Champions Award” for increasing enrollment, an employee was praised for “counteracting .  .  . mountain pride.”

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