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Block-Granting SNAP: A Really Bad Idea
Yesterday, House Budget Committee Chairman Rep. Paul Ryan (R-WI) unveiled his comprehensive budget proposal for FY 2012. The plan includes a proposal to “block-grant” the Supplemental Nutrition Assistance Program (SNAP). This has huge implications for poor and hungry people who depend on SNAP each month.
First, what’s block-granting? Block-granting SNAP effectively means the federal government caps the total budget for the program, divides the money proportionately among the states, and allows state governments to determine how best to use the funds. Right now the program is considered an entitlement, meaning anybody who meets the eligibility criteria qualifies for benefits.
We know from experience with other anti-poverty programs that states exercise lots of discretion over how to use their block grants. For example, they could choose to provide SNAP benefits to households with incomes of 50 percent or less of the poverty line instead of the current 130 percent; they could impose all sorts of burdens on families applying for benefits; and they could decide to outright exclude certain subpopulations, like immigrants.
In 1996, Welfare Reform legislation eliminated Aid to Families with Dependent Children (AFDC) and renamed the program Temporary Assistance for Needy Families (TANF), added a work requirement and restructured it as block grant. The swift decline in the child poverty rate at the time supposedly demonstrated the value of block grants and work requirements. But there were other factors at work. In the late ’90s, the economy was booming, the country was at full employment, and all low-income workers benefited from the first increase in the minimum wage in many years. These were important factors in explaining the sharp decline in the poverty rate and SNAP usage, or food stamps as it was called then.
Now let’s come back to the present day and Ryan’s proposal to block-grant SNAP. His budget plan argues that SNAP’s growth is unsustainable. But SNAP is a countercyclical program that rises and falls depending on the state of the economy. The number of people on SNAP is currently at 44 million per month. In 2007, before the recession, SNAP rolls were two-thirds lower than they are now.
Since 2007, the unemployment rate has skyrocketed—in case you hadn’t noticed—so of course SNAP participation increased significantly. That’s exactly what the program is intended to do. The economy is slowly recovering from the worst recession in 80 years and the prevailing view among the nation’s economists is that, in time, the unemployment rate will fall to normal rates. So too should SNAP participation.
Ryan’s budget plan argues that SNAP rolls have been growing since before the recession. But here’s the thing. First, the booming economy in the late ’90s led to a drawdown in SNAP participation, so when an earlier recession in 2001 occurred, SNAP/food stamp participation was at an uncharacteristically low level. Second, wage rates remained flat during the 2000s—it wasn’t until 2008 that the minimum wage got another raise, 12 years after the last one. While wages for low-income workers stagnated, other costs of living, especially health care costs, were rising. Indeed, if you want to talk about what’s unsustainable, we should talk about healthcare costs, but I’ll leave that for another time.
Perhaps the best reason not to tamper with SNAP is that the program works spectacularly well, as the Center on Budget and Policy Priorities points out: “SNAP has one of the most rigorous quality control systems of any public benefit program and, in recent years, has achieved its lowest error rates on record. In fiscal year 2009, even as caseloads were rising, states set new record lows for error rates.”
For now, I hope it’s clear that block-granting SNAP is no solution to the program’s growth. In fact, the growth in participation is not a problem inherent to the program. It’s an economic problem—the difficulty low-income households have trying to get by.
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