Before making arbitrary cuts to programs that feed the hungry, go where the money really is.”
By Joe Bruns — The U.S. House of Representatives is going after food stamps again. In July, the House voted to separate SNAP — as the food stamp program is now known — from the ten-year farm bill, upending a longstanding bipartisan compromise to link support for farmers with support for poor Americans.
The history of this arrangement dates back to The Great Depression when farmers were overproducing commodity products for which there was an insufficient market. By buying surplus commodity products and distributing them to the poor, both farmers and the poor benefited.With no chance for the House action to be sustained in the Senate, House Republican Leader Eric Cantor took a different tack, voting instead to reduce the program by some $4 billion annually, a five per-cent reduction from its $80 billion base. With floor leadership from Rep. Steve Southerland (R-FL) the Bill passed 217–210. No Democrat supported the Bill.
Many of these individuals, the argument goes, could, and should, be able to meet their needs by joining the workforce. For Rep. Southerland, who was recently profiled in The Washington Post, it is a moral hazard: work was given to men by God in the Garden of Eden, it is an obligation, and keeping those who could work on federal assistance is corrosive both to the individual and to society. Democrats, and other critics, point out that many recipients of SNAP already are working but are still unable to provide a basic level of nutrition for themselves and their families. But, beneath the wonkish details there is another less polite question.
Recently, Fox News ran a piece about an unemployed California surfer who dines on lobster and sushi courtesy of you, the taxpayer. This story, and others like it, has also provided food for talk radio and TV, raising memories of Ronald Reagan’s infamous welfare queen.
The story told by then presidential candidate Reagan was a myth built around a set of assumptions, and they continue to this day, despite significant reforms of the welfare system. But how much cheating takes place in the SNAP program?
It is actually difficult to find a straightforward answer to the question of how much cheating and fraud exist in the SNAP program. The USDA states that the amount of trafficking or conversion of SNAP benefits to cash is less than 1%. They also find that the amount of benefit is correctly calculated more than 96% of the time. But a basic premise of the program is that an able bodied person who can find work, should do so. Or they should enroll in a training program that will give them the necessary skills for employment.
The Great Recession Leads to Expansion of SNAP
The Great Recession increased the importance of the SNAP program, and expanded its rolls. Two key elements contributed to this expansion. First, broad based categorical eligibility was expanded by States to include some individuals with incomes greater than 130% of the poverty line as long as they met other State poverty program criteria. In addition, single able-bodied individuals with no children had their eligibility extended beyond the existing three-month limit. Both of these required State waivers to take effect, and are available only during periods of high unemployment.
Generally, it is people falling into the expanded coverage category who are targeted by the SNAP budget cuts.
It is important to note that these people constitute a relatively small portion of overall SNAP recipients. According to The Center on Budget and Policy Priorities, only 2% of those receiving SNAP had qualified disposable income above the poverty line, and the extension of eligibility for able individuals with no children added between 1 and 2 million to the monthly rolls.
Twenty-three million SNAP beneficiaries are children
But what about the Cheaters?
If the USDA inspector general finds an error and trafficking rate of about 3.6%, how many more individuals fall into the surfer bum category? That is, how many people game the system to get a benefit that reasonable people would agree was not intended for them? The answer is hard to come by. But let’s make some assumptions.
Let’s say, for argument sake, 25% of the 2 million able/single individuals, such as our surfer friend, are gamers, and should be out making a living. That seems high to me, but let’s make that call. That’s 500,000 ‘cheaters’ out of a program that provides benefits to 50 million, or 1%. Let’s further say that fully half of the people who have disposable income over the poverty line are also cheaters. That amounts to another 1%. So altogether, and rounding up for good measure, for argument sake, let’s say the cheater rate for SNAP is 6%, or $4.8 billion.$4.8 billion is a lot of money. But, before we start cutting every loose thread, consider also the following:
- Federal tax fraud and evasion cost the taxpayers $385 billion annually, but many in Congress want to reduce the IRS budget for compliance. Not surprisingly, tax non-compliance increases with income level.
- 13% of Americans think it is okay to cheat on their tax return
- The Department of Defense has acknowledged $1.1 trillion in fraud over ten years
- The full extent of Medicare and Medicaid fraud and abuse in unknown, but probably exceeds $150 billion annually. Most fraud is carried out by health care providers and organized rackets. Yet 1200 Medicare and Medicaid fraud complaints go uninvestigated due to staff shortages
I’m not suggesting that fraud and waste be tolerated in the SNAP program, or any other government program. What I am suggesting, though, is before making arbitrary cuts to programs that feed the hungry, we might be better advised, in the words of Willie Sutton, to go where the money is.
– Joe Bruns (Cajun Joe) is a Trail Mix Contributor