The high costs of cutting SNAP Benefits

By Robin Ayers-Lee. California has the highest poverty rate in the country, 23.8 percent, according to Supplemental Poverty Measure (SPM) Census Bureau. Nationwide, the Supplemental Nutrition Assistance Program (SNAP), formerly called the Food Stamp Program, lifted nearly five million people, including 2.2 million children, out of poverty. Since California contains a tenth of the US population, we can estimate that 500,000 Californians, almost half of them children, benefited from SNAP, and will suffer the loss.

SNAP benefits act as an economic stabilizer. They stimulate growth, improve health outcomes for beneficiaries, increase workers’ earnings and support egalitarian American ideals.

At some point in their lives, half of all children and half of all adults will receive SNAP benefits (part of the Farm Bill that requires approval in Congress every five years since it was first introduced in 1933 as part of the New Deal).

Henry Wallace, FDR’s Secretary of Agriculture, designed it to address the dual issues of hunger and surplus agricultural commodities. The Food Stamp Act of 1964 became permanent when President Johnson signed it.

SNAP constitutes most of the bill’s budget. If the 2008 Farm Bill were reauthorized without any changes the spending on the programs allocated for a ten-year period (2014-2023) would total $973 billion with 79 percent going to SNAP. In comparison, when this legislation was enacted in 2008 only 67 percent of the Farm Bill’s budget went to SNAP.

These low-income programs “do not contribute to the nation’s long-term fiscal problems,” according to former administrator of the Food and Nutrition Service Robert Greenstein, now the executive director of the Center on Budget and Policy Priorities.

Despite polarizing political and public opinion these safety net programs are important economic tools for recovery. Automatic stabilizers like SNAP are designed to expand during bad economies, helping to lessen the downturn and speed recovery. Two-thirds of recent SNAP enrollees need assistance as a direct result of our deep economic downturn. Without these effective stabilizers, more people would fall into poverty and the recession could have been significantly deeper and our recovery even slower.

Low-income people receiving a benefits transfer spend it all and spend it right away, which doesn’t happen with tax cuts for middle- and upper-income people. Every new SNAP dollar generates up to $1.80 in economic activity. In a weak economy SNAP is one of the two most cost-effective methods for spurring job creation and economic growth.

When approximately one in seven of us will experience food insecurity at some point during the year, the percentage of Americans in poverty and facing food insecurity could rise significantly higher than the 14.5% it averages today.

Until recently, more than 47 million Americans received an average SNAP benefit of $133 per month, giving them $4.33 per day in extra food purchasing power. This relatively small amount of nutrition assistance helped to alleviate food insecurity and lifted millions out of poverty for a cost of $77 billion this year, which is about 2 percent of the $3.8 trillion federal outlays for 2013.

Beyond that, enhancing economic productivity by improving health outcomes could be the cheapest way to see economic growth. The costs to fund public healthcare programs Medicare and Medicaid, at $142 billion and $30 billion respectively were more than double what we spend on SNAP. Improving consumers’ access to fruits and vegetables could save significantly on cardiovascular disease.

It’s penny-wise, pound-foolish to choose energy-dense foods over costlier nutrient-dense foods. Low-cost policy investments could increase fruit and vegetable consumption to tackle the epidemic of noncommunicable diseases (NCD), saving trillions of dollars in government spending. Expanded rather than reduced, SNAP could be a life-saving, money-saving policy.

Nearly half of all SNAP benefit recipients are children under the age of 18. Research finds that children, and even fetuses who suffer food insecurity in utero, have a higher likelihood of developing a metabolic syndrome later in life—and that increases the risk for NCDs like heart disease and diabetes. Improving children’s health by expanding SNAP would help close a widening gap of income disparity that may be at the root of many of our health and economic problems. Research in economics, epidemiology and other disciplines shows that the more equally wealth is distributed, the better the health of that society.

Obama’s budget included a letter to Congress acknowledging the need for reducing spending but cautioning:
“Reining in our deficits is not an end in and of itself… And as we tighten our belts by cutting, consolidating, and reforming programs, we also must invest in the areas that will be critical to giving every American a fair shot at success and creating an economy that is built to last.”

The harm from any cuts to SNAP far outweighs the immediate government savings. SNAP is effective policy worth maintaining and expanding because it delivers more than an equivalent cash transfer; and it supports work without creating long-term reliance. Remember, children are half the recipients. Let’s not waste this opportunity for meaningful investment with a high return.

Unequal distribution of wealth in our country is dangerous which, warns Robert Reich, “not only diminishes economic growth but also tears at the fabric of our society.” Our current economic policies have once again fostered levels of inequality that when compared to other developed countries are only beat by Turkey, Mexico, and Chile. Sustainable economic growth will only be realized with an expansion of policies that reduce this gap. SNAP helps achieve this and is an important link between the most vulnerable among us and a more equal, just, and economically sound future for all Americans.


One Response to The high costs of cutting SNAP Benefits

  1. Lauren Ayers says:

    Robin is a junior at UC Berkeley in Environmental Economics. This was condensed from a paper for one of her classes; I learned so much from it that I asked her to make a short version, and the Sun agrees that it’s worth sharing beyond the academic setting. We need real facts in this era when the 99% are waking up to how the old bromides about ‘the poor exploiting the system’ are just ways the 1% uses to turn us against each other. Thanks to the Sun, more people will find out that Congress harms ALL of us when they cut SNAP.