OP-ED: Trump's folly on food stamps

Karl W. Smith
Bloomberg News (TNS)
A sign advertises a program that allows food stamp recipients to use their EBT cards to shop at a farmer’s market in Topsham, Maine. A proposal to curtail the nation’s food stamp program would pinch families struggling to pay for groceries and ripple through other areas of the economy, including supermarkets and discounters.

The Department of Agriculture’s four-paragraph announcement in the Federal Register of a “revision of categorical eligibility in the Supplemental Nutrition Assistance Program” didn’t fool anyone: The government is proposing to kick 3.1 million people off food stamps. And while the proposal is being attacked for its cruelty, the better argument is that it’s unnecessary.

One of America’s oldest social-welfare programs is not really a social-welfare program at all. Begun in 1939, the original goal of the government’s food stamp program was to alleviate agricultural surpluses. During the Great Depression it seemed ludicrous that farmers were stuck with produce that they could not sell while the urban poor were going hungry. The Department of Agriculture thus created stamps that could be bought for $1 and used to buy $1.50 worth of agricultural surplus.

Over time, the program has increased its emphasis on alleviating poverty. The requirement that food stamps be used to purchase surplus food, for example, was dropped in 1964. In 1977, food stamps became a direct benefit — participants no longer had to buy them. Yet the tension between the program’s two goals, helping farmers and addressing poverty, remained.

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In its current form, the program (now called SNAP) is designed to provide families below and just above the poverty line with enough income to purchase a basic healthy diet. Both the farm lobby and poverty activists have pushed to expand those limits, and in response Congress has given significant leeway to states to determine eligibility. Some 40 states have adopted broad-based categorical eligibility standards, which means that any household receiving any type of welfare service can qualify for food stamps.

The Department of Agriculture’s proposal would tighten those guidelines, for example preventing people earning more than 130% of the poverty line from receiving SNAP benefits (in the District of Columbia, the limit is 200%). In total, these and other restrictions would save $2.5 billion, or approximately 10% of the department’s discretionary budget.

It’s understandable that the USDA is concerned about so much of its budget being spent on households that are not technically in poverty. Most of those 3.1 million households, however, are working-class families that are only now experiencing their first increases in real wages since the 1990s. As the economy improves, the number of people in this category will decline naturally. Indeed, since 2013 the number of people receiving food stamps has fallen from 47.6 million to 39.7 million.

More important, there is no need to cut spending now, especially on such a vulnerable population. The federal government can borrow money for 10 years at just over 2%. After accounting for inflation, that’s nearly free. Meanwhile, the U.S. is engaged in a trade war that is wreaking havoc on farm families.

Public opposition to austere policies that seek to trim the federal budget or increase economic efficiency without regard to the effects on working people helped fuel Trump’s rise. And blind adherence to this kind of ideology is why some conservatives prefer Trump, with all his flaws, to the Republican establishment. It’s worth pointing out that Agriculture Secretary Sonny Perdue has long been a member of that establishment.

It would be suicidal for Republicans to cut SNAP funding now, especially after 2017’s huge corporate tax cut and the expansion in military spending. It would also be economically reckless. The U.S. is not yet at full employment, and this type of cash-like spending boosts economic output. In short, there is little to be gained from this austerity plan.

— Karl W. Smith is a former assistant professor of economics at the University of North Carolina’s school of government and founder of the blog Modeled Behavior.