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The Washington Independent
The Washington Independent

To Get Medicaid and Education Aid to States, An Unprecedented Cut to Food Stamps

The stimulus increased benefits, but lower-than-expected inflation led to lower-than-expected food prices. Now the Senate might reclaim some of the benefits increase, starting in 2014.

Liam Evans
Last updated: Jul 31, 2020 | Aug 03, 2010

After spending the afternoon applying for food stamps, Lizvette Perez buys milk and butter. (St. Petersburg Times/ZUMA Press)

This week, the Senate is preparing to rob Peter to pay Paul. They will take from one program helping the neediest of Americans in order to give to another. The lucky recipient is a whittled-down state-aid bill with $16 billion to help sustain Medicaid and $10 billion to keep teachers on the job. That is less money than the states were originally promised, but not nothing: This bill, a compromise of a compromise, could save an estimated 138,800 jobs and ease states’ budget woes by $26.1 billion.

[Economy1] But to gain the votes of the Republicans necessary for passage, the bill includes “pay fors” to make it deficit-neutral. There is language to close a foreign tax credit loophole, raising $9 billion. Billions more come from tinkering with Medicaid drug prices and rescinding unspent funds from a variety of programs. But controversially, the bill will also likely slash $6.7 billion from the Supplemental Nutrition Assistance Program, or SNAP, the benefits formerly known as food stamps. This might result in a cut in benefit checks from one month to the next — an unprecedented event in the history of the benefit.

American food stamps are not generous, averaging only $4.50 a day even after being bumped up in the recession-era stimulus — less than you’d need to buy two meals at McDonald’s. And since the start of the recession, the number of families depending on them has skyrocketed. The economic crisis has pushed 12.9 million people into SNAP; as of April, more than 40 million collect the bare-bones benefits. More than 6 million Americans report no income whatsoever except for SNAP — because they are not eligible for unemployment insurance, Social Security, disability or other programs.

Sensitive to the risky politics of cutting benefits for the neediest Americans, aides have been on a behind-the-scenes push to convince think tanks, unions and reporters of both the necessity and humanity of the cuts. In their telling, it is not a cut at all. It is merely a “technical fix” for years in the future.

This line of reasoning begins with the American Recovery and Reinvestment Act, or ARRA, the $787 billion stimulus bill passed in Feb. 2009. ARRA provided a temporary boost to SNAP payments by increasing benefits until food prices reached a certain target. The authors of the bill believed that the price of food would catch up to the benefit increase in 2014, and the program would be back on its normal track. But lower-than-expected inflation led to lower-than-expected food prices. The government would still be spending on additional benefits until 2015 or even 2018, according to the most recent projections by the Congressional Budget Office.

Thus, SNAP became an opportunity of sorts, a cut that Democrats could stomach and Republicans might support. It offered fresh funds that could be used for something else. As that belief took hold, some decided that it would be better to use the funds on a worthy priority, like the state-aid bill, rather than as an offset for a tax cut or some other project.

Still, the suggestion caused outrage on the Hill. The House Appropriations Committee originated the education-jobs provision in a war supplemental bill, and in an interview with the Fiscal Times, its chair, Rep. Dave Obey (D-Wis.), first revealed that the White House had suggested cutting SNAP early in the summer.

“We were told we have to offset every damn dime of [new teacher spending]. Well, it ain’t easy to find offsets, and with all due respect to the administration their first suggestion for offsets was to cut food stamps. Now they were careful not to make an official budget request, because they didn’t want to take the political heat for it, but that was the first trial balloon they sent down here,” he said.

“Their line of argument was, well, the cost of food relative to what we thought it would be has come down, so people on food stamps are getting a pretty good deal in comparison to what we thought they were going to get. Well isn’t that nice. Some poor bastard is going to get a break for a change.”

Now they’re likely to get less of one. The ARRA increase to SNAP benefits boosted benefits from meager to less-meager, advocates say. “We have been very supportive of the ARRA boost,” says Ellen Vollinger of the Food Research and Action Center. “But it underscored that these benefits are not generous. Anecdotally, we heard that the ARRA boost let some SNAP recipients keep going to the supermarket in the third or fourth week of the month, rather than going to a soup kitchen starting after the second week. They were stretching out their benefits, and purchasing some more nutritious food, like fresh fruit and vegetables.” Vollinger notes that even with the ARRA funding the average SNAP benefit is not really enough to eat.

And FRAC argues that that the situation where the government might actually cut benefits — where in Feb. 2014, a recipient might receive a $400 benefit on their EBT card, and in March, 2014, $350 — would be “devastating” for recipients. “In the 1990s, there were terrible cuts to the program,” Vollinger explains. “But nobody ever started receiving less money [because the benefits increased more slowly than the price of food increased]. That situation — what will happen if people aren’t well-informed about the cut? What if they don’t recognize that the benefit will be lower?” It has never happened in the history of the program, Vollinger notes.

On Monday, the Senate was due to take a cloture vote on the bill. But the Congressional Budget Office found the offsets insufficient by $4.9 billion, since the bill would likely not take effect until mid-September at the earliest, since it also needs a House vote. (It is possible that the House would return for an emergency vote on the bill, to get the necessary Medicaid and teacher funding to states as soon as possible.) Republicans had refused to vote for a bill increasing the deficit, and pulled their support. That has pushed the cloture vote to Wednesday. Even then, after all the Democrats’ compromises, Republicans might not vote for the bill.

Liam Evans | Liam Evans is a freelance writer and social media manager who specializes in assisting finance professionals and Fintech entrepreneurs in growing their online audience and attracting more paying customers. Liam worked as a bank teller and virtual assistant for financial firms in the United States and the United Kingdom for six years before beginning her writing career.


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