The truth about food stamps

The House is gearing up to vote on a bill concerning the Supplemental Nutrition Assistance Program, or SNAP, soon. Many people still refer to SNAP as "food stamps," even though recipients receive their benefits on Electronic Benefit Transfer (EBT) cards these days, as opposed to physical stamps. In Michigan, they're sometimes called "Bridge Cards," as the Mackinac Bridge is prominently displayed on the card. In this post, I'll be using the terms interchangeably.

Funding for SNAP was traditionally voted on as part of a larger farm bill, which included crop subsidies and funding for other agricultural interests. That changed this past July, however, when Democrats and Republicans got into a slap fight over spending levels for SNAP in the latest iteration of the farm bill. So the farm subsidies were divorced from SNAP, and voted on (and passed) as a standalone measure in the House, with a promise to return to food stamp funding at a later date.

That later date has arrived, and details concerning the standalone food stamp bill, backed by House Majority Leader Eric Cantor (R-VA), have emerged. Unsurprisingly, it's filled with cuts. It reduces funding by $40 billion over ten years, and imposes work requirements for adults. It is projected to push up to 6 million people off the program, including the parents of dependent children who are unable to find work.

This bill is terrible. It's nothing more than a needless attack on a program that provides a slim sustenance floor to a country with few jobs, and even fewer jobs that provide wages that are worth a damn. Yes, I'm defending food stamps. That might sound odd in a political environment in which it's in vogue to demonize poor people. Which is nothing new; beating up on welfare recipients has been a favorite conservative pastime since Ronald Reagan popularized the campaign strategy in the 1980's.

But the truth is this: food stamps fucking own. I write this as someone who has never been on food stamps, ever. I write this as someone who has numbers, charts, graphs, studies, and empirical evidence on my side. My arguments aren't based on bullshit anecdotal stories about the guy in front of me at the checkout using food stamps to buy things he doesn't "deserve," or how he looks like he's wearing nice clothes, or buying unhealthy foods like pop and potato chips, or what-the-fuck-ever.

What follows is an unabashed, unapologetic, full-throated defense of food stamps, and welfare more broadly. It's overdue in a debate in which "rampant fraud and abuse" within SNAP is assumed to be true by default. It doesn't help when well intentioned but otherwise hapless liberals cede so much ground by accepting these conservative terms, while muttering something along the lines of "yeah, maybe there's fraud and abuse in the program, just as there is with any government program, but, umm, there are people that truly do need the help! And, uh, it's unfortunate so many abuse it, giving those that are honest a bad name, and, erm...oh god, can we pretty please just debate gay marriage or something?"

Fuck that. SNAP is the best weapon we have in our arsenal, in terms of fiscal policy, at fighting poverty while simultaneously stimulating the economy. It deserves a better defense.

So here it is.

***

It is true that food stamp use is at an all time high; 47 million Americans utilized the program in fiscal year 2012, at a cost of $80 billion to the federal government.  But this uptick is because of the Great Recession, and because the jobs we're creating today are of a lower quality, in terms of wages and benefits, than the jobs we lost. It has nothing to do with fraud or abuse, as Republicans like to claim. Actual instances of illegal activity, such as trafficking (when recipients sell their food benefits for things other than food), are comically low; A rate of 1.3%, according to an August report. Inaccurate payments to recipients are also infrequent. It was 5% in 2011, down from 10% in 1990. A third of those inaccurate payments were actually underpayments, or people getting less than what they were eligible for.

As I wrote in a previous post, total spending on SNAP and Temporary Assistance for Needy Families (TANF) combined was $97 billion in fiscal year 2012, which is 2 to 3% of the federal budget for that year. Never mind fraud and abuse. We wouldn't make a dent in the national debt even if we eliminated these programs in their entirety. 

SNAP is an "automatic stabilizer," meaning enrollment and the amount spent on enrollees automatically goes up in tough economic times. In other words, SNAP enrollment is a sign of the times, not political ambition. And "the times" are quite terrible:

SNAP enrollment, as this chart demonstrates, moves and bends with overall poverty levels. Indeed, there are still more Americans currently living with incomes at 130% of the federal poverty level than there are food stamp recipients:

To evaluate the effectiveness of SNAP, two things need to be considered: the impact it has on its recipients, and the broader impact it has on the economy as a whole. Information regarding the first of these two is readily available. The United States Department of Agriculture (USDA, the federal department responsible for SNAP) conducts and publishes rigorous research on everything from the demographics of its recipients, what they purchase, how often they purchase it, where they purchase it from, and how much they spend per month.

For this section, I'll be using data from two comprehensive studies: one from the USDA (though it's a bit dated; it was published in April of 2012, and uses figures from fiscal years 2010 and 2011), and one from the progressive Center on Budget and Policy Priorities (CBPP).

Per the CBPP study, SNAP kept 4.7 million people out of poverty in 2011, including 2.1 million children. In addition to this, it lifted 1.5 million children above 50% of the poverty line. As for the demographics - 56% of SNAP recipients are either children or elderly. Households with children receive 71% of all food stamp benefits.

Many participants have or used to have a job. 30% of households had earnings from employment, 21% from Social Security, and 7% from unemployment benefits in fiscal year 2010. In fact, many able-bodied, non-disabled SNAP recipients are employed. Per another CBPP analysis:

"The overwhelming majority of SNAP recipients who can work do so. Among SNAP households with at least one working-age, non-disabled adult, more than half work while receiving SNAP - and more than 80% work in the year prior to or the year after receiving SNAP. The rates are even higher for families with children - more than 60% work while receiving SNAP, and almost 90% work in the prior or subsequent year."

Many Americans don't receive assistance for long. In the mid 2000s, half of all new recipients left the program within 10 months, and 74% of all new recipients left within 2 years.

In fiscal year 2012, the the average monthly benefit for a food stamp recipient was $133.41.  Part of what makes the new Republican backed proposal particularly heinous is that benefits are already scheduled to be cut, absent any other action. The maximum monthly SNAP benefits are at their current levels because of the American Recovery and Reinvestment Act (commonly referred to as "the stimulus"), signed into law by President Obama in early 2009. The law boosted benefits in all SNAP households by 13.6%. But that boost expires in November of 2013, thus reducing the amount some recipients will receive in a couple of months. Meanwhile, a gradually improving economy means that SNAP spending as a share of GDP is expected to drop in the coming years.

This drop in benefits isn’t just bad news for recipients in a still struggling economy – it’s bad news for us all. This is because SNAP has a broader positive impact on the economy, thanks to something economists call “the multiplier effect.” A multiplier is a measure of how much an endogenous variable changes due to exogenous changes, such as an increase in government spending or tax cuts. Empirical evidence, such as this Economic Research Report, suggests that SNAP has a particularly effective GDP multiplier, thanks to the targeted nature of the program:

"An increase in SNAP benefits provides a fiscal stimulus to the economy during an economic downturn. When resources are underemployed, the increase in SNAP benefits starts a multiplier process in which inter-industry transactions and induced consumption effects lead to an economic impact that is greater than the initial stimulus.

When government expenditures go directly to households as transfers, wages, or tax rebates, there is the issue of how much is spent, how much is saved (or used to pay off the debt), and how much is taxed. The higher a household’s income, the more likely some of it will be saved and taxed, which reduces the multiplier effects from the expenditures. This is a reason to carefully translate government expenditures into an exogenous change in final demand."

In other words, SNAP has a high multiplier because its low income recipients are far more likely to dump their benefits right back into the economy with little delay. The report concludes that SNAP has a GDP multiplier of 1.79. That is to say, an increase of $1 in SNAP expenditures increases economic activity by $1.79. This boost in economic activity creates jobs; it is estimated that 8,900 to 17,900 jobs (primarily in farming, retail, and transportation) are created or maintained for every $1 billion increase in SNAP benefits.

Other independent researchers, such as Moody Analytics, have also studied the multiplier effect, and concluded that government spending on direct transfer programs, such as SNAP, TANF, and unemployment benefits, are more effective stimulus measures than tax cuts:

This is quite possibly the most important thing for those of us who aren’t on food stamps to understand: they indirectly benefit us as well. Food stamps are an integral part of the economy. While recipients benefit to the tune of hundreds of dollars, large box retailers benefit to the tune of billions of dollars. It’s a significant source of revenue for places like Walmart and Meijer, and it’s not a stretch to say that some smaller retailers wouldn’t be able to keep their doors open without it. Plus, the additional jobs created boosts aggregate demand within the private sector. Those of us who aren’t farmers or employed in retail benefit when these employees spend their disposable income on the firms that do happen to employ us.

So much of the opposition to food stamps isn’t based on an understanding of the statistics or multipliers, though. It’s based on observations in the checkout line. This is asinine, when objectively considered. How can one reach a rational conclusion about a multi-billion dollar program, encompassing millions of people, based on what is, at best, a 30 to 40 second interaction at a grocery store next to someone you’ve never even met?

Part of the problem is that people walk into such situations with preconceived notions of who a welfare recipient is. It’s not as if you can conduct full scale interviews with the food stamp recipient’s friends and family, or have his/her W-2’s and bank statements readily available. As such, all you can do is make surface level observations concerning their general demeanor, how they're dressed, and what they’re buying (although, if you’re feeling particularly creepy, you could follow them to the parking lot and observe what car they’re leaving in). With such little information available, the mind is left to fill in the blanks. This is the part where years and years of conservative dogma creates a feedback loop in which the mind fills in the blanks with the very worst of assumptions, when, in reality, you truly don’t know the first thing about the person you are observing.

And yet, the food stamp resentment stories at the checkout lane persist. One Huffington Post article, “How Food Stamp Resentment Feeds Crabby Conservatism,” details instances of the same tale of woe, in which food stamp recipients are observed buying expensive items such as crab legs and nice steaks, being reported in various newspapers throughout the country. Elected officials like to get in on the action as well. After the first farm bill, which provided combined funding for SNAP and farm subsidies, failed in the House, Rep. Louie Gohmert (R – TX) took to the floor to summarize this resentment from the perspective of someone who isn’t on food stamps:

"He looks at the king crab legs and looks at his ground meat and realizes, because he does pay income tax, he is actually helping pay for the king crab legs when he can’t pay for them for himself."

There are a number of problems with this particular brand of food stamp resentment, however. For some food stamp recipients, occasionally buying gourmet food is a rare luxury in an otherwise decidedly non-luxurious life. As one woman from the Huffington Post piece puts it:

"Sara Woods of Knoxville, Tenn., is not ashamed to say she once bought crab legs with food stamps.

In December, she and her husband asked their six kids what they wanted for Christmas dinner. Woods said her husband's good in the kitchen, since he works as a cook in one restaurant and as a sous-chef in another. It was one of the only times he didn't have to work on Christmas Day, and he wanted to cook for his family. Their 15-year-old daughter wanted crab legs.

"Everybody could pick one thing, and that was the one thing she wanted, Woods said."

As for why people make questionable purchases, Woods has a theory from her own experience.

"When you get that money, you feel like you can breathe," she said. "I can understand why people would buy things that people think are outrageous. When it comes, you feel like I can buy whatever food I want right now. You never can buy whatever you want. My clothes are hand-me-down, furniture second-hand. The food is new and mine.""

In a similar vein, there's also this somewhat infamous Ann Landers column, in which a reader wrote in to complain about a woman in front of him purchasing a birthday cake with food stamps. Another reader wrote in to respond to the irate letter:

"Dear Ann Landers: I'm the woman who bought that $17 cake and paid for it with food stamps. I thought the checkout woman in the store would burn a hole through me with her eyes. What she didn't know (and I would never tell her) is that the cake was for my little girl's birthday.

It will be her last. She has bone cancer and will probably be gone within six to eight months. Let this be a lesson to those who sit in judgment of others without knowing all the facts."

To be sure, these are extreme circumstances. I'm not suggesting that everyone is buying these items for their cancer stricken daughters. But it is food (derp) for thought. As always, the broader point is: you don't know these people, and you don't know their situation.

In the end, it really doesn't matter if they're buying expensive food items. As I wrote, the average monthly benefit is $133.41 a month. Once that money is gone for the month, it's gone. Food stamp recipients are ultimately screwing themselves over by buying pricey lobsters and steaks, as their benefits will run out quicker, and they'll have to wait until next month before the card is reloaded. It costs you no more as a taxpayer. Food stamp recipients, like all of us, are human, and sometimes fail to make the most frugal choices. It's important to remember that this isn't fraud; buying these items is perfectly legal.

Conservative dogma dictates that this should be illegal, though, because it allows welfare recipients for one brief, blissful moment to feel like they aren't poor.

That's why some of them are suggesting that we impose more restrictions on SNAP, such as drug testing, and prohibiting certain unhealthy and/or expensive foods. I've already written a post on why drug testing for welfare is a terrible idea. As for prohibiting certain unhealthy foods, the USDA published a paper on why this isn't practical:

• No clear standards exist for defining foods as good or bad, or healthy or not healthy.
• Federal dietary guidance uniformly applies to the total diet - there are no widely accepted standards to judge the "healthfulness" of individual foods.
• Foods contain many components that can affect health, and diets contain many foods. As a result, it is challenging to determine whether - and the point at which - the presence or absence of desirable nutrients outweighs the presence of nutrients to be avoided in ruling a food "in" or "out."
• Implementation of food restrictions would increase program complexity and costs.
• There are more than 300,000 food products on the market, and an average of 12,000 new products were introduced each year between 1990 and 2000. The task of identifying, evaluating, and tracking the nutritional profile of every food available for purchase would be substantial. The burden of identifying which products met Federal standards would most likely fall on an expanded bureaucracy or on manufactures and producers asked to certify that their products meet Federal standards. 
• Responsibility for enforcing compliance would rest in the hands of employees at check-out counters in 160,000 stores across the nation. While many have modern scanning and inventory control systems, others - especially small stores and specialty markets - do not.
• New effort would be needed to help participants avoid the rejection of purchases at the check-out counter, an event with the potential to reduce productivity at the register and stigmatize participants.
• Restrictions may be ineffective in changing the purchases of food stamp participants.
• About 70 percent of all food stamp participants - those who receive less than the maximum benefit - are expected to purchase a portion of their food with their own money. There is no guarantee that restricting the use of food stamps would affect food purchases - other than substituting one form of payment (cash) for another (food stamps).
• No evidence exists that food stamp participation contributes to poor diet quality or obesity.
• There is no strong research-based evidence to support restricting food stamp benefits. Food stamp recipients are no more likely than higher income consumers to choose foods with little nutritional value; thus the basis of singling out low-income food stamp recipients and restricting their food choices is not clear.

Actually, the last bullet point is a bit dated. There is some research that indicates that obesity and poor food choices are problems amongst food stamp recipients. For example, a more recent USDA report suggests that SNAP participants were less likely to consume whole grains, raw vegetables, and reduced-fat milk (while being more likely to drink whole milk). On the other hand, the report indicates that SNAP participants are less likely to consume sweets, deserts, and salty snacks. In other words, prohibiting these items makes little sense, as food stamp recipients already consume these items in fewer quantities than higher income non-participants.

Everything from the existence of "food deserts," or urban zones in which it is difficult to find a grocery store that sells nutritious food, to the high cost of healthy foods, relative to less costly junk food, contributes to these poor food choices. But according to Rep. Markwayne Mullin (R - OK), it doesn't matter if you're a fat slob or a physically fit gym rat; you're still abusing the system! That was the take away from the welfare tale he whooed a town hall audience with:

"So I'm in Crystal City and I'm buying my groceries...and I noticed everybody was giving that card. They had these huge baskets, and I realized it was the first of the month. But then I'm looking over, and there's a couple beside me. This guy was built like a brick house. I mean, he had muscles all over him. He was in a little tank top and a pair of shorts and really nice Nike shoes. And she was standing there, and she was all in shape and she looked like she had just come from a fitness program. She was in the spandex, and you know, they were both physically fit. And they go up in front of me and they pay with that card. Fraud. Absolute 100% all it is is fraud...it's all over the place. And there you go, to the fact that we shouldn't be supporting those who won't work. They're spending their money someplace." 

When you're on welfare, you just can't win with these guys.

What about other observations, such as the clothing a welfare recipient is wearing? Or other perceived indicators of wealth, such as material possessions like appliances or cell phones? Let's begin with this: In America, owning some nice things doesn't mean you aren't poor. It's important to understand this. Poverty is better defined by the ability to buy the essentials, such as shelter, essential utilities like heating and electricity, food, and health care.

Someone could have purchased expensive clothing, fallen on hard times, but continue to wear that clothing while utilizing food stamps. Relatively nice, brand name clothing can be purchased cheaply at places like the Salvation Army, and it's unlikely anyone would know the difference. Nice clothes do not a wealthy person make. Should someone be obligated to try and sell their material possessions, such as appliances and clothing, before receiving government largesse? That wouldn't make much fiscal sense, as this ThinkProgress article notes. Selling things will only get you so many meals, when they could otherwise provide far more utility:

The same concept applies to clothing, or even a nice car (a car that doesn't break down is an enormous asset; it's essential to securing employment, and can serve as shelter in the event that one becomes homeless).

One of my favorite blog entries on this matter summarizes if far more eloquently than I can:

"Many months ago a friend on Twitter tweeted that she was behind a woman at a checkout line and the woman was paying with food stamps and she had a DESIGNER PURSE!!! OMG!! Because, you know, the nerve of that lady! This is such a common knee jerk reaction that so many people have. Having been on food stamps I see the world differently.

If I saw a woman with a designer purse paying for her groceries with food stamps my thought would probably be "nice bag!"

Because, guess what, we don't know what is up in this woman's life. We don't know her beginning, middle, where she is now. We don't know if the purse is real, we don't know if the purse was one of the last things she purchased for herself before her life took a turn, we don't know if the purse was a gift, we don't know if the purse was something that she set aside $10 every week for a year in order to buy."

***

Let me close with my own welfare story.

I stop by Meijer after work to pick up a few groceries. I get in line at the checkout lane and notice that the man in front of me is paying for his groceries with food stamps. Nothing that he's buying sticks out; looks like the same basic items everyone else is getting. He does buy some chips and pop. Looking down in my own cart, I see the exact same chips and pop (and some beer too, for good measure).

He's dressed normally. Nothing flashy or fashionable. Nothing like the silly Abercrombie & Fitch button down I'm wearing, along with black slacks and black dress shoes.

He's using taxpayer dollars to help buy these groceries. But so am I. I'm a state employee (your taxes are my salary). I'm the product of taxpayer funded public schools and a public university, which lead to me getting this job in the first place. After 10 years of state employment, I fully intend to take advantage of a government benefit in which the remainder of my student loans are completely forgiven. Really, this man in front of me probably isn't utilizing any more government services than I am.

I'm struck by the fact that my job allows me to buy the food that I'm buying many times over. Far more than what the pithy amount on his EBT card allows him to buy. I'm thankful for the job that I have, and understand fully what a blessing it is. I also understand how delicate and fragile it all is. Budget cutbacks, layoffs, a medical calamity that renders me disabled and unable to work, etc. Any of these could happen to me at any time.

Then, suddenly, I'm the one swiping the EBT card.

I'm no more invincible than this man. I'm no better than this man. I have no idea what sort of struggles this man has experienced that led him to this point. Far worse than me, I'd wager.

This man in front of me is on welfare, but that's alright. What on earth do I have to complain about?