This essay has moved to FAFDL.org. Apologies for the inconvenience.
It really is a sign of how few meaningful public health interventions are available to the federal government that changes in nutrition labels on food packages are seen as a substantial reform. All the things they are talking about make sense, I’m dubious about the potential impact. I’m open to being persuaded.
Against the backdrop of the foolish pearl clutching that has greeted the CBO report that shows Obamacare will give people the freedom to choose to work less, I stumbled across a piece by Reihan Salam on Representatives Nikki Tsongas (D-MA) and Tom Petri’s (R-WI) push for a commission to improve co-coordination between federal and state anti-poverty programs. Petri is particularly interested in dealing with the disincentives to work that are built into many programs, sometimes in the aggregate.
For instance, consider the scenario of a single mother with two children making $17,000 a year living in Wisconsin in 2009 who claims all available deductions and participated in all eligible benefit programs. If this single mother were to work extra hours or receive a raise so that her earnings increase to $21,000, she would only see $540 of that $4,000 in new earnings—she would have lost $3,460 in benefits. That amounts to almost an 88 percent effective tax rate, leaving the hard-working parent and her children little to show for the extra effort. Even more shocking is that if this mother received a raise or worked more to raise her earnings another $1,000 to $22,000, she would actually have less in disposable income than she had when earning $21,000.
How can this be?
It all comes back to benefit phaseout schedules. For instance, SNAP benefits for a single mother in some states gradually diminish as income rise and eventually stop when earnings reach $23,000 annually, leading to over 100 percent in effective taxation at some point—meaning that you lose more than you bring in.
Reihan points to Oren Cass’ Flex Fund idea as one way of dealing with the issue. There is a lot for liberals and conservatives to like in Cass’ ideas. The biggest obstacle the idea faces is that it is a broad omnibus reform. Those are really, really hard to do. I’d like to suggest a small bore solution to a program that I’ve thought a lot about and have some experience with.
I’m going to lay the case for a tiered phase out of SNAP benefits as participants income rises. The three tiers would be the current basket of goods covered by SNAP, the WIC basket of goods or perhaps the WIC basket and finally fresh produce as covered in the new Food Insecurity Nutrition Incentive program. But first, let’s look at the case for whitelisting SNAP benefits in the first place.
I’ve long thought that the basket of goods covered by SNAP (Supplemental Nutrition Assistance Program, formerly known as food stamps) should whitelisted. That is, SNAP should pay for foods that provide sustenance. It should not pay for things like soda and cookies. Another reform would be to forgo the whitelist for recipients but require a mandatory basket of goods for participating retailers must carry and keep in inventory. Using the already existing WIC package would be a simple way to do this. Another popular idea would be to simply exclude sugary beverages.
Whitelisting SNAP would accomplish a number of important things:
- It would end a large indirect federal subsidy to junk food manufacturers
- It would increase the indirect federal subsidy to non-junk food producers
- It would improve the eating habits of a substantial number of Americans by increasing fruit and vegetable consumption that is too low and decreasing sugar consumption that far to high. There is a reasonable expectation that this would lower medical costs. Those are medical costs which are most likely being picked up by the taxpayer.
- It would serve as a strong public health message that diet matters and that junk food is not just empty calories
- It would nearly end the problem of food deserts over night. If corner stores needed to carrying a certain basket of goods to certify for SNAP, store in low income neighborhoods would start stocking fresh produce and whole grain bread and cereal over night. Problem solved. I’ve worked with corner stores to achieve WIC status. They respond to incentives and WIC participation changes their product mix for the better.
- It would insulate SNAP politically. A program that only pays for nutritious food is much harder to attack politically and would be less vulnerable to budget cuts.
The idea faces a few obstacles. First, anti-hunger groups won’t lobby for a change like this. They argue that it is demeaning to recipients that they couldn’t shop like everyone else.That it is stigmatizing to have pay for some items with their EBT card and for other by other means. They point out that SNAP participants eat about as well as everyone else. They argue that cheaper foods provide cheaper calories.
These arguments are easily dealt with.
There are lots of everyday necessities that you can’t pay for with your EBT card: aspirin, dish soap, tooth paste, sandwich bags. Shifting soda and potato chips into that category doesn’t make the check out any more demeaning than buying tuna and cold medicine in the same transaction. I’ve been on SNAP and I found room for a little ice cream here and there, but I would have traded that in a second for dish soap, tooth paste or double coupons for fresh produce. SNAP is by nature paternalistic. If we want a less paternalistic program, we would do a straight cash transfer. Given our cognitive biases against budgeting and the fact that a lot of SNAP spending is intended for kids, compartmentalizing an in kind transfer for food makes more sense. Now with the federal government on the hook for a lot more low income health care spending, it makes even more sense to exclude junk food. In fact, given what we’ve learned about behavioral psychology, done right, a SNAP whitelist could have a significant positive effect on participant’s food choices. That’s a topic for another day. Read More…
In thinking about writing a piece on the SNAP battle going on in Congress, I put together some of the most interesting stuff I’ve read this week. I thought I’d share it.
LAWMAKERS “REPRESENTING” MOST OF THE HUNGRIEST COUNTIES VOTED TO CUT SNAP
Environmental Working Group
If you live in one of America’s 100 hungriest counties, there is a one-in-three chance that you rely on food stamps.
There is also a pretty good chance that your member of Congress just voted to kick you off food stamps.
And, if you live in Haywood County, Tennessee, or Shannon County, South Dakota, you can be sure your representative not only voted to kick you off food stamps but also voted to give him- or herself more farm subsidies.
Sadly, two-thirds of the 39 legislators who represent America’s 100 hungriest counties voted yesterday to cut funding for the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, by $40 billion over the next ten years.
What’s more, the same legislators voted last month to increase unlimited subsidies for the largest farm businesses at a time of record farm income.
FOOD STAMP FIGHT: GREAT FOR GOP BASE. NOT GREAT FOR OUTREACH
Frank James | NPR
President George W. Bush isn’t fondly remembered by progressives for much. But anti-hunger advocates credited him during his administration for strongly supporting the Supplemental Nutrition Assistance Program (the formal name for food stamps) and other policies to help unemployed or low-income workers and their children escape the fear of not knowing where their next meals would come from.
Under Bush, . When I fairly early in the Bush administration, they were already praising Bush for doing more than President Clinton to directly respond to the food insecurity crisis affecting many people.
Paul Krugman | The New York Times
To the extent that there’s any rational argument here at all, I think, it rests on the observation that while SNAP enrollment did fall during the boom of the 1990s, it was flat or rising during the expansion of the middle Bush years. This supposedly shows that the program’s use was being driven by things other than economic factors.
But there’s a crucial point such analyses miss: the “Bush boom,” such as it was, never did trickle down to lower-income Americans — the kind of people who might use food stamps. Here’s a chart comparing income, in 2012 dollars, at the 20th percentile (left axis, inverted) with the percentage of the population on SNAP:
The Clinton expansion led to a substantial rise in incomes near in the lower part of the distribution, and was accompanied by a sharp fall in SNAP usage. The Bush expansion never did reach many Americans, so it’s no surprise that SNAP use didn’t fall. And then, of course, SNAP use surged in the crisis, which is what is supposed to happen with a safety net program.
MORE SNAP JUDGEMENTS
Paul Krugman | The New York Times
Spending as a percentage of GDP was no higher in 2007 than it had been in 1990. It then soared when we experienced the worst economic crisis since the Great Depression — which is exactly what should have happened. True, spending didn’t fall during the Bush-era economic expansion, but as I’ve already explained, that expansion didn’t trickle down to the people who use food stamps.
You also want to bear in mind that we used to have another major poverty program — AFDC — which was replaced with TANF, which has virtually withered away. In 1990, spending on AFDC was 0.3 percent of GDP; by 2011, it was down to 0.07 percent of GDP. So food stamps were, in effect, picking up some (but only some) of the hole left by the end of traditional welfare.
THE FACTUALLY CHALLENGED MORALLY QUESTIONABLE ASSAULT ON FOOD STAMPS
Jonathan Cohn | The New Republic
The 2002 and 2008 laws re-authorizing food stamps streamlined enrollment, eased the asset test, and made other changes that both boosted benefits and boosted participation. Conservative publications are full of anecdotes that suggest food stamps are fostering dependency and, I’m sure, some beneficiaries live up to stereotypes of lazy people living on the dole. But the percentage of SNAP recipients who are working has actually risen steadily for two decades. It’s up to about half. (See the next graph.) And the program’s design actually arguably encourages work, for reasons the Center on Budget details:
the SNAP benefit formula contains an important work incentive. For every additional dollar a SNAP recipient earns, her benefits decline by only 24 to 36 cents — much less than in most other programs. Families that receive SNAP thus have a strong incentive to work longer hours or to search for better-paying employment. States further support work through the SNAP Employment and Training program, which funds training and work activities for unemployed adults who receive SNAP.
More generally, 95 percent of SNAP participants have incomes below 130 percent of the poverty line, or about $30,000 a year for a family of four. Forty-four percent have incomes that are less than half the poverty line, or about $12,500 for a family of four. SNAP doesn’t seem plagued by waste or fraud, either. Ninety-two percent of the program’s funding goes to actual benefits. A 2011 report from the General Accounting Office found that program errors, including both people getting too much assistance and people getting too little, affected less than 4 percent of recipients.
Jonathan Chait – REPUBLICANS: WE WERE TOO NICE TO THE HUNGRY, BUT WE FIXED THAT
Center for Budget and Policy Priorities – CUTS IN HOUSE LEADERSHIP SNAP PROPOSAL WOULD AFFECT MILLIONS OF LOW INCOME AMERICANS