The Center's work on 'Food Stamps' Issues


Improving the Odds for America’s Children

April 21, 2014 at 12:18 pm

The safety net has been more effective than critics suggest, the Center’s Robert Greenstein, Sharon Parrott, and I explain in a chapter for Improving the Odds for America’s Children, which Harvard Education Press has just published.

For our chapter, we reviewed the last 40 years of anti-poverty policies for children and offered ideas for future decades.

Here’s some of what we found, and some of what we proposed:

Household incomes have risen since 1973 for the poorest fifth of children if you include the value of non-cash benefits, as most experts favor (the official poverty figures omit them).  If you eliminated the safety net today, another 9 million children would fall into poverty.

Also, studies show that income from safety-net programs like the Earned Income Tax Credit (ETIC) and SNAP (formerly food stamps) has a powerful effect on children’s long-term success, in school and beyond.

Yet poverty and hardship continue to stunt many children’s futures.  To help families obtain incomes that are adequate to raise successful children, we recommend steps in three core areas:

  • Jobs:  Creating a funding stream similar to the successful TANF Emergency Fund — through which states placed more than 260,000 low-income adults and youth in paid jobs during the Great Recession — but one that was permanent and expanded in an economic downturn.
  • Income support:  For example, expanding housing vouchers (and making it easier for people with vouchers to move to neighborhoods with more jobs and better schools), while preserving recent improvements in the Child Tax Credit and EITC.
  • Support for work and higher earnings:  For example, raising the minimum wage and providing more funding for job training and child care assistance.

Other chapters provide analysis and policy ideas from noted experts such as Greg Duncan and Richard Murnane (on inequality), Sara Rosenbaum (health care), Deborah Jewell-Sherman (education), Jane Waldfogel and Michael Wald (child protection and family support), Joan Lombardi (child care), and others.

Ryan Budget Gets 69 Percent of Its Cuts From Low-Income Programs [Updated]

April 10, 2014 at 5:10 pm

Some 69 percent of the cuts in House Budget Committee Chairman Paul Ryan’s new budget would come from programs that serve people of limited means, our recently released report finds.  These disproportionate cuts — which likely account for at least $3.3 trillion of the budget’s $4.8 trillion in non-defense cuts over the next decade — contrast sharply with the budget’s rhetoric about helping the poor and promoting opportunity.

The low-income cuts fall into five categories:

  • Health coverage.  The Ryan budget has at least $2.7 trillion in cuts to Medicaid and subsidies to help low- and moderate-income people buy private insurance.  Under the Ryan plan, at least 40 million low- and moderate-income people — that’s 1 in 8 Americans — would become uninsured by 2024.
  • Food assistance.  The Ryan budget cuts SNAP (formerly food stamps) by $137 billion over the next decade.  It adopts the harsh SNAP cuts that the House passed last September — which would force 3.8 million people off the program in 2014, according to the Congressional Budget Office — and then converts SNAP to a block grant in 2019 and imposes still-deeper cuts.
  • Help affording college.  The Ryan budget cuts Pell Grants for low- and moderate-income students by up to $125 billion through such means as freezing the maximum grant (which already covers less than a third of college costs) for ten years, cutting eligibility in various ways, and repealing all mandatory funding for Pell Grants.
  • Other mandatory programs serving low-income Americans.  The Ryan budget cuts an additional $385 billion — beyond its SNAP cuts — from the budget category containing many mandatory programs for low- and moderate-income Americans, such as Supplemental Security Income for the elderly and disabled, the school lunch and child nutrition programs, and the Earned Income and Child Tax Credits for lower-income working families.  We estimate that about $150 billion of these cuts would fall on such low-income programs, as explained in the final paragraph of this blog.
  • Low-income discretionary programs.  The Ryan budget cuts these programs by about $160 billion, on top of the cuts already enacted through the 2011 Budget Control Act’s discretionary caps and sequestration.

Our estimates are likely conservative.  In cases where the Ryan budget cuts funding in a budget category but doesn’t distribute that cut among specific programs — such as its cuts in non-defense discretionary programs and its unspecified cuts in mandatory programs — we assume that all programs in that category, including programs not designed to assist low-income households, will be cut by the same percentage.

Chairman Ryan’s Obfuscation: Part 2

April 10, 2014 at 2:10 pm

I explained earlier today the hollowness of House Budget Committee Chairman Paul Ryan’s attempt to deny that his budget cuts low-income programs deeply.  Ryan’s defense was that since total federal spending grows under his budget, how can we say it contains cuts, rather than merely slowing the rate of growth?  We disposed of this in my earlier post, but I want to dig deeper here to expose a budget trick Chairman Ryan is playing.

Sure, total federal spending grows under his budget in nominal dollars.  But that’s driven in large part by increases in Social Security and Medicare — whose costs rise with inflation and the aging of the population, among other factors — and interest payments on the debt.  Ryan cites trends for overall federal spending to mask the fact that his budget contains hefty cuts — even in nominal (non-inflation-adjusted) dollars — in key low-income programs like Medicaid and SNAP (formerly food stamps).

In his attempt to deflect our finding that 69 percent of his budget cuts come from programs targeted on Americans of limited means, Ryan says that Medicaid would receive over $3 trillion during the coming decade under his budget and that its costs would grow in all years after 2016.  Here’s what his too-clever-by-half response conceals:

  • Under the Ryan budget, expenditures for Medicaid, the Children’s Health Insurance Program (CHIP), and a few small related programs (i.e., expenditures for “budget function 550”) would fall — not grow — in nominal dollars between 2014 and 2016, from $357 billion to $311 billion.
  • While this figure would grow in nominal dollars after 2016, that would be from this shrunken starting point.
  • And it wouldn’t return to its 2014 level, even in nominal dollars, until 2022 — by which time health care costs will be substantially higher than in 2014, the population will be considerably larger, and the number of poor, elderly people in nursing homes will have risen considerably given the aging of the baby boomers.  That’s partly why, as my earlier post explained, tens of millions of less-fortunate Americans would lose health coverage and become uninsured under the Ryan budget.

A similar pattern marks the Ryan plan for the part of the budget that includes SNAP, Supplemental Security Income (SSI) for poor people who are elderly or have serious disabilities, the Earned Income Tax Credit, and other such programs.  In this part of the budget, as well, nominal spending wouldn’t return to its 2014 level until 2022.

Chairman Ryan has every right to propose severe cuts in any program he chooses.  But he should be straightforward about what he is proposing.

SNAP Caseloads and Spending Continue to Fall

April 10, 2014 at 11:37 am

Participation in SNAP (formerly known as food stamps) has continued the downward trend that we described in our recent paper, new Agriculture Department data show.  About 240,000 fewer people received SNAP benefits in January 2014 than in December 2013, and about 1.2 million fewer people participated than in January 2013 (see chart).  This continued decline in participation shows that SNAP has functioned properly during the recession and the slow recovery:  it expanded to meet increased need, and it is gradually contracting as economic conditions improve.

SNAP caseloads grew dramatically during the recession and stayed high due largely to labor market weakness.  As the economy began to recover, caseload growth began to flatten and then fall, a pattern consistent with past recessions.  January 2014 was the fifth straight month that fewer people have participated in SNAP than in the same month the previous year, and the third straight month that the caseload declined from the previous month.  Most states’ SNAP caseloads are falling:  in January 2014, caseloads had fallen in 35 states compared with December 2013 and in 42 states compared with January 2013.

SNAP spending has also fallen, due to both declining participation and the November 2013 expiration of the 2009 Recovery Act’s temporary boost in SNAP benefits.  The Agriculture Department’s data show that as a result of these two factors, SNAP spending on benefits in January 2014 was about 9 percent lower than in January 2013.  SNAP spending fell slightly as a share of gross domestic product (GDP) in fiscal years 2012 and 2013, and is predicted to fall further in fiscal year 2014.  The Congressional Budget Office expects SNAP spending to return to 1995 levels as a share of GDP by 2019.

Chairman Ryan’s Response to the Center’s Analysis Doesn’t Hold Water

April 10, 2014 at 10:26 am

House Budget Committee Chairman Paul Ryan took exception to our finding that 69 percent of the non-defense spending cuts in his new budget come from programs for people with low and moderate incomes.  But he makes no attempt to refute our calculations, and his response both defies logic and conflicts with his own budget and even his own words.

For starters, we derived the 69 percent figure from the cuts that Chairman Ryan displays in his budget.  We added up his cuts in mandatory and non-defense discretionary programs, calculated how much of them would apply to low- and moderate-income programs, and derived the 69 percent figure.  Chairman Ryan was explicit that his budget makes substantial cuts in various programs — like SNAP (formerly food stamps), Medicaid, Pell Grants, and health reform’s subsidies to help people afford insurance — that are targeted on people with low or moderate incomes.

Responding to the 69 percent figure, the Chairman shifted direction in a new piece that he inserted this week in the Congressional Record.  He claimed these cuts aren’t really “cuts” at all; instead, they are simply smaller spending increases than would otherwise occur.  “A smaller increase is not a spending cut,” he wrote.

Well, two problems:

First, the Chairman is trying to have it both ways.  At the very start of his “Pathway to Prosperity,” he writes, “The House Republican budget cuts spending by $5.1 trillion over the next ten years.”  Apparently, he wants to brag to congressional budget cutters that his plan cuts spending deeply, while convincing critics of his budget cuts that they aren’t really “cuts” at all.

Second, the latter argument — that a cut isn’t really a “cut” — makes little sense.  For many programs, it costs more to provide the same services for its beneficiaries from year to year, because of inflation.  In addition, the population is aging and, thus, more people qualify for programs for elderly Americans each year.  For these reasons, the cost of providing the same level of benefits and services to people who qualify rises for various programs from year to year in nominal dollars — that is, in dollars not adjusted for inflation, population growth, or the population’s aging.

A budget allocation that doesn’t cover cost increases due to these factors means either that eligible recipients will see their services or benefits cut, or that some people who would otherwise qualify for those services or benefits are turned away.

For instance, Chairman Ryan claims in the piece he inserted in the Congressional Record that his budget spends more than $3 trillion in Medicaid over the next decade, with spending rising every year starting after 2016.  But his budget would repeal the Medicaid expansions that 26 states and the District of Columbia have adopted under the Affordable Care Act, thereby returning millions of low-income people to the ranks of the uninsured.  And his budget cuts Medicaid by $732 billion on top of that, relative to what the program would otherwise cost, which translates into a 26 percent cut by 2024.  An Urban Institute analysis of a similar cut in a past Ryan budget found that it would cause 14 to 20 million additional people to lose coverage.  Just ask the millions who’d lose Medicaid and end up uninsured whether they consider that a cut.

What’s true in government is true in life.  If a worker gets a 1 percent wage increase in a year in which inflation is 5 percent, that worker has suffered a 4 percent cut in living standards.  He or she has 4 percent less to cover the costs of food, housing, health care, and other necessities. Ask that person whether he or she has suffered a cut in living standards.

We stand by our analysis.