By M.D. Kittle | Wisconsin Reporter
MADISON – Another month, another record for food stamp participation in the land of the free.
But, oh SNAP! Did you know the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program is pumping billions of dollars into the nation’s economy, according to the USDA. While the economic multiplier is seeded with billions in federal tax money, the government agency notes the impact on the U.S. economy could be more pronounced if only the millions of people eligible not availing themselves of SNAP took advantage of the taxpayer-funded program.
A record 47,791,996 people received SNAP benefits in December 2012, the final month of the first quarter in the fed’s fiscal year, according to USDA data. That’s an increase of nearly 1.28 million stamp collectors from December 2011. Household participants climbed by more than 900,000, to 23,064,554.
The disastrous Great Recession and its lingering effects have created greater pockets of need, but free-market economists argue that federal policy, pushed by the Obama administration, has created ease of access and, in doing so, government dependency.
SNAP spending has doubled since 2008, from about $40 billion to around $80 billion.
“(The federal government) is taking that money from taxpayers and essentially putting that into an assistance program,” said Rachel Sheffield, research associate at the conservative Heritage Foundation. “This program should be helping individuals in need be self-sufficient.”
USDA officials had not responded to Wisconsin’s Reporter’s request for comment as of this post, but in a news release on SNAP, the agency notes that participation in the food stamp programs among eligible recipients has “closely followed the pattern of poverty in America.”
“As the number of persons in poverty rose, participation in SNAP grew,” the USDA release states.
More chairs at the table
The welfare reforms in the 1990s lowered the national food stamp participation rates to 16.9 million people, from a previous high of 28 million people in July 2000. The rate has been climbing ever since.
Last April, the Congressional Budget Office reported the number of SNAP recipients rose 70 percent between the beginning of the recession, in 2007, and 2011.
In its report, the CBO said the increase has been “driven primarily by the weak economy.”
But as unemployment declines, down to its lowest level in four years, and the Obama administration touts signs of a strengthening economy, the number of SNAP recipients continues to rise by the tens of thousands every month.
USDA sees success in the expansion of SNAP – beyond basic access to impoverished children and families.
“Why does increasing participation in SNAP make sense for your community?” the USDA asks in a news release earlier this year.
The answer, according to the agency: SNAP generates economic activity.
“SNAP brings Federal dollars into communities in the form of benefits which are redeemed by SNAP participants at local stores. These benefits ripple throughout the economies of the community, State, and Nation.”
For example, USDA says:
- Every $5 in new SNAP benefits generates a total of $9.20 in community spending.2
- Every additional dollar’s worth of SNAP benefits generates 17 to 47 cents of new spending on food.3
- On average, $1 billion of retail food demand by SNAP recipients generates 3,300 farm jobs.4
That sounds like a big boost to the economy at large. There’s only one problem with that glowing assessment, Sheffield said.
“It’s important to remember the money spent on these programs comes from taxpayers,” she said.
SNAP is just one of roughly 80 federal welfare programs that taxpayers fund at nearly $1 trillion per year. Spending has been climbing since President Johnson declared the War on Poverty in the 1960s, and economic observers like Sheffield say the United States is still losing the battle. They call for an emphasis on work, personal responsibility and sensible spending.
Poverty did decline in the United States, from 19 percent in 1964, when Johnson declared his war and the federal budget took on Medicaid, Medicare and expanded housing, to 11.2 percent a decade later. It hasn’t risen above 15.2 percent since, although it held steady in 2011 at 15 percent, according to the U.S. Census Bureau.
Matthews points to a truism that economists say should be self-evident: that the poverty rate goes up in times of economic decline, and it falls during booms.
Brandon Scholz, president and CEO of the Wisconsin Grocers Association, acknowledges the economic impact of SNAP, or FoodShare, as Wisconsin’s program is known. While the association hasn’t taken a position on the issue, Scholz said grocery stores recognize FoodShare is supposed to be a temporary safety net.
“We are not in a position to view that as a permanent source of support for somebody,” he said, adding that grocery stores are in a stronger position when the economy is stronger and when food stamp use declines.
“I think that’s better in the long run — you buy, you sell, you grow that circle of economic development. It’s a longer and more sustainable way to grow,” Scholz said. “We won’t take the position that we arbitrarily need to increase or decrease SNAP. If you’re going to make arguments for the benefit to be increased or decreased, you’d better come up with a number and make the case why.”
USDA has tried to make the case. The agency is pitching outreach grants of up to $75,000 to attract more eligible SNAP recipients to the food stamp program. The purpose, USDA says, is to “implement and learn more about effective strategies to inform and educate potentially eligible low income people, who are not currently participating in … (SNAP), about the nutrition benefits of the program, eligibility rules, and how to apply.”
The proportion of eligible people participating in SNAP increased from 54 percent in 2001 to 67 percent in 2006, adding 9 million people, USDA notes. Over the period, the federal government widened eligibility.
“… SNAP is severely underutilized,” according to the USDA news release. “Nationwide, 33 percent of people who are eligible for the SNAP do not participate.”
In Wisconsin, FoodShare participation has risen sharply in recent years, although it was down slightly in January, the most recent month of data available.
More than $102.67 million in food assistance benefits was paid out to 854,692 recipients of the program in January, according to the state Department of Health Services.
Gov. Scott Walker wants to tie food assistance to work training for able-bodied adults without dependent children. He is pushing to eliminate a provision making work or job training voluntary for FoodShare recipients.
Qualifying beneficiaries would have to enroll in employment and worker training programs through the state departments of Health Services, Children and Families or Workforce Development. If they don’t, the beneficiaries could lose the benefit after a few months.
Heritage Foundation’s Sheffield says few states are moving toward the Walker model, a conservative approach to welfare founded by another Wisconsin governor, Tommy Thompson, and in many ways co-opted by former President Clinton, in the 1990s.
“We’ve seen the USDA try to recruit people onto food stamps,” Sheffield said. “We think that perspective is completely opposite what we want our welfare programs to do. Welfare should be a last resort. It shouldn’t promote dependence but self-reliance.”
Contact M.D. Kittle at [email protected]
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