Dean: SNAP Is a Successful, Influential Component of the Safety Net

July 25, 2014 at 9:46 am

SNAP is not only one of the most efficient and effective safety net programs, but it’s also helping improve other programs, CBPP’s Stacy Dean told a House Agriculture subcommittee yesterday.

Her testimony came as House Budget Committee Chairman Paul Ryan unveiled a plan that would convert SNAP (formerly food stamps) and ten other programs into a fixed grant to states (which, as CBPP President Robert Greenstein has written, would likely boost poverty and shrink resources for those programs over time).

SNAP’s targeting of benefits on those most in need and least able to afford an adequate diet helps ensure that the program provides the most assistance to the poorest families with the greatest needs, Dean explained:

These features make SNAP a powerful tool in fighting poverty.  A CBPP analysis using the government’s Supplemental Poverty Measure, which counts SNAP as income, found that SNAP kept 4.9 million people out of poverty in 2012, including 2.2 million children.  SNAP lifted 1.4 million children above 50 percent of the poverty line in 2012, more than any other benefit program.

SNAP is also effective in reducing extreme poverty.  A recent study by the National Poverty Center estimated the number of U.S. households living on less than $2 per person per day, a classification of poverty that the World Bank uses for developing nations.  The study found that counting SNAP benefits as income cut the number of extremely poor households in 2011 by nearly half (from 1.6 million to 857,000) and cut the number of extremely poor children by more than half (from 3.6 million to 1.2 million).

Dean also explained SNAP’s part in — and positive contributions to — the larger health and human services system:

Other programs can rely upon SNAP’s rigorous and high-quality assessment of a household’s financial circumstances.  These efforts can result in far more efficient application and enrollment systems as well as be the means to connect struggling families and seniors seamlessly to the benefits that can help them.  Moreover, because SNAP’s assessment of eligibility is robust, using its eligibility determination or verified information can increase program integrity and accountability in other programs.

Click here for the full testimony.

Ryan Adds Momentum to Expanding EITC for Childless Workers

July 24, 2014 at 4:56 pm

House Budget Committee Chairman Paul Ryan highlighted the Earned Income Tax Credit (EITC) today as one of the most effective anti-poverty programs and joined growing bipartisan calls to expand it for childless adults (including non-custodial parents), the lone group that the federal tax system taxes into poverty.  We applaud this step, though we encourage him to reconsider some of his proposals to offset the cost — which would hit vulnerable families — and his opposition to a much-needed increase in the minimum wage.

Ryan proposes lowering the eligibility age for the EITC for workers not raising minor children from 25 to 21, doubling the maximum credit to about $1,000, and phasing in the credit more quickly as a worker’s income rises.

Ryan’s poverty proposal makes a strong, and broadly shared, case for these changes:

  • It notes that young adults’ labor force participation has dropped precipitously in recent years and their unemployment rate is very high.  “[T]he sooner young adults join the workforce, the more experience they will gain and the stronger their attachment will be,” it points out.
  • It cites the findings by the University of Wisconsin’s John Karl Scholz, one of the country’s top EITC experts, that strengthening the EITC for childless workers could lower unemployment, promote marriage, and reduce incarceration rates.  (See our report for more on these issues.) 

President Obama has proposed a very similar EITC expansion, and Senator Marco Rubio (R-FL) has highlighted the need to increase wage subsidies for childless workers.  Congressional Democrats have also championed substantial improvements to the EITC for childless workers.

Unfortunately, Ryan’s proposal has two serious flaws.

First, he would pay for it in part by eliminating the refundable part of the Child Tax Credit for several million children in low-income immigrant working families, including citizen children and “Dreamers,” thereby pushing many of them into — or deeper into — poverty. He would also eliminate the Social Services Block Grant, a flexible funding source that helps states meet the specialized needs of their most vulnerable populations, primarily low- and moderate-income children and people who are elderly or disabled.  (This program provides the kind of services and state flexibility that Ryan says we need more of when he promotes other parts of his plan that would enable states to cut food stamps and rental assistance and shift the resources to services.)

Also among the programs that Ryan would end is one that provides fresh fruits and vegetables primarily to children in schools in low-income areas.  By contrast, the President would pay for his EITC expansion by closing tax loopholes for wealthy taxpayers.

Second, Ryan presents the proposal as an alternative to raising the minimum wage, which has lost 22 percent of its value since the late 1960s due to inflation.  As we have explained, it takes both a strong EITC and an adequate minimum wage to ensure that work “pays” adequately for those in low-wage jobs.  The two policies should be seen as complements, not substitutes.

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Ryan’s Rhetoric Doesn’t Match His Proposal’s Reality

July 24, 2014 at 4:55 pm

House Budget Committee Chairman Paul Ryan left the impression today that his proposed Opportunity Grant will allow low-income individuals to get income assistance as well as help they may need to go to school, get off drugs, and succeed in the workplace.  That picture, however, doesn’t reflect the reality of his proposal.

Chairman Ryan spoke eloquently this morning about “Andrea,” a single mother who needs income assistance in the near term, help finding a job, assistance so she can go to college, and help paying for child care for her two young children while she works and attends school so she can reach her dream of becoming a teacher and climb into the middle class.  He implied that his Opportunity Grant would deliver the package of supports she needs to succeed.

In fact, under Chairman Ryan’s plan, neither Andrea nor anyone else would be guaranteed any assistance.  This means that Andrea could apply for services and be told that she cannot get any help.  Chairman Ryan doesn’t acknowledge that scenario.

To be sure, many kinds of assistance already are limited so that not everyone who’s eligible for assistance gets it — with one important exception.  Today, all eligible poor households can get help to buy groceries through SNAP (formerly food stamps), a form of income assistance that not only helps those households put food on the table but can free up resources so that families — not caseworkers — can decide how to direct their limited incomes.  Chairman Ryan’s plan would no longer guarantee that basic safety net.

And, nothing in Chairman Ryan’s proposal would make it more likely that families in Andrea’s situation would receive that full package of supports unless other needy individuals and families receive significantly less help.  Indeed, states already have flexibility to use Temporary Assistance for Needy Families (TANF, which provides basic income assistance to poor families with children) to put together precisely this package of benefits.  But TANF’s flexibility does not trump its limited resources, and that’s why many single mothers like Andrea can’t get the help they need to make ends meet, find work, go to school, and ensure that their children are safe and well cared for while they juggle work and school.

Today, just 25 of every 100 poor families receive TANF assistance, only 1 in 7 low-income children who qualify for help paying for child care receives it; and just 1 in 4 low-income households that qualify for help paying for housing get it.

Also of note, the service provider structure that Ryan envisions almost surely would require more staff and, thus, would generate higher administrative costs, leaving less funding for assistance and services.

In short, the only way that Chairman Ryan’s plan can provide more assistance, targeted or not, to families like Andrea’s is if some poor households receive significantly less help, with cuts likely coming in help to pay for food and housing — the two largest programs that Ryan would consolidate under the Opportunity Grant.

The case of “Steven,” whom Ryan also highlights, makes the point as well.  A single 19-year-old non-custodial father, Steven is jobless and needs help to get off drugs.  Ryan’s proposal indicates that the Opportunity Grant would help him get drug treatment, move him into transitional housing (a form of subsidized housing), and get him help with attending parenting classes, finding work, and pursuing further education.

These are all needed services, and limited funding keeps many people, particularly adults not living with children and who have the same needs as Steven, from obtaining that help.  But the Opportunity Grant structure would not provide additional resources (and as my colleague Robert Greenstein points out, could well provide fewer resources), so the only way to provide this richer set of supports for Steven is to cut the help that other families receive.

Chairman Ryan skirts this fundamental math.  Consolidating funding streams into a single “opportunity” grant allows him to say that individuals like Andrea and Steven will get a better-targeted suite of supports without saying which families will get less help and how that will affect them.

Greenstein on Ryan’s “Opportunity Grant”

July 24, 2014 at 4:52 pm

CBPP President Robert Greenstein just issued a commentary on House Budget Committee Chairman Paul Ryan’s “Opportunity Grant” proposal, part of his new poverty plan.  Here’s the opening:

A centerpiece of House Budget Committee Chairman Paul Ryan’s new poverty plan would consolidate 11 safety-net and related programs — from food stamps to housing vouchers, child care, and the Community Development Block Grant (CDBG) — into a single block grant to states.  This new “Opportunity Grant” would operate initially in an unspecified number of states.  While some other elements of the Ryan poverty plan deserve serious consideration, such as those relating to the Earned Income Tax Credit and criminal justice reform, his “Opportunity Grant” would likely increase poverty and hardship, and is therefore ill-advised, for several reasons.

Click here for the full commentary.

CLASP: State Experiences Show Safety Net Programs Don’t Need Massive Overhaul to Work Better

July 23, 2014 at 5:23 pm

As House Budget Committee Chairman Paul Ryan prepares to unveil his proposal to address poverty, Olivia Golden of the Center for Law and Social Policy (CLASP) today took a closer look at the experiences of six states to debunk common myths about the delivery of safety net programs.

Golden writes:

[S]ome commenters have criticized major anti-poverty programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) as so complex, rigid, difficult to administer, and impossible to package together that they need fundamental change.  These critics’ recommended changes include merging the programs into a block grant, allowing states discretion over major program provisions through waivers, or delegating discretion below the level of states, to local governments or case managers.

These proposals are deeply risky for families. . . . And we just don’t need to take those risks.  New information from the states continues to build the evidence that massive overhaul is simply not necessary to achieve the goal of more streamlined and integrated program administration.

Golden explained that the experiences of the six states involved in the Work Support Strategies (WSS) initiative — a project coordinated by CBPP, CLASP, and the Urban Institute that is designing, testing, and implementing more effective, streamlined, and integrated approaches to delivering key supports for low-income working families — offer lessons for how to improve safety net programs.

She concluded:

Rather than let myths drive suggested remedies to the safety net, let’s build on success and follow the evidence about what changes can really make a difference.  Rather than massive overhauls that would only undercut effective programs, we need to build on what some states are already doing:  delivering health and nutrition assistance, help with child care, and other core work supports smoothly, speedily, and as an integrated package to all eligible families.

Click here to read the full piece.