Nov. 18 (Bloomberg) -- Congressional critics looking to cut the nation’s food stamp bill -- which has doubled in the past five years -- are pointing to what some say is a loophole in the law:
If a state gives a resident as little as $1 a year in heating assistance, it allows that person’s household to automatically qualify for an average of $1,080 in additional food stamps annually from the federal government.
That’s what 14 states, including New York and California, and the District of Columbia have done.
“If there are programs available for people, we should use them,” Mary Cheh, a Democratic member of the District of Columbia city council, said. At her urging, the council unanimously approved the “heat and eat” arrangement in 2009, agreeing to make token heating-aid payments so citizens can get more for food.
Members of a House-Senate conference committee are scrutinizing food stamp eligibility rules as they seek to reconcile different versions of a bill that would set agricultural policy for the next five years. Either would cut food-stamp spending, mostly by altering who can get benefits. The Senate would cut roughly $4 billion over 10 years, largely by toughening the heat-and-eat requirement. The House trims another $35 billion by further tightening eligibility and adding drug testing and work requirements.
Federal spending on food stamps -- formally called the Supplemental Nutrition Assistance Program -- has more than doubled in the past five years, with the bulk of the money spent at retailers including Wal-Mart Stores Inc. and Kroger Co.
Reductions are necessary to keep the program focused on its purpose of providing temporary assistance to truly needy people in difficult times, said Rachel Sheffield, policy analyst for food stamps at the Heritage Foundation, a Washington-based research group that favors major reductions.
The heating program “is basically a loophole,” she said. “Food-stamp spending is federal, so states have no incentive not to seek increased benefits.”
The farm bill “is an opportunity to reform. It’s the logical time to take steps to promote self-sufficiency” through work requirements, smaller subsidies and tighter eligibility, she said. “Let’s look at our welfare system, how it’s working and what it can be.”
Food stamps spent at retailers such as Target Corp. and Supervalu Inc. cost a record $75.2 billion in 2012, almost one-eighth of the roughly $650 billion a year Americans spend on groceries. About 47.7 million Americans used the program in August, the most recent month available, the U.S. Department of Agriculture said last week. Almost half of all food-stamp redemptions are in big-box supercenters such as Wal-Mart, while most of the rest are in chains such as Safeway Inc., according to data collected by Bloomberg.
Payments to recipients fell about 5 percent already this month, as a temporary boost passed as part of the 2009 economic stimulus expired. Both the House and Senate versions of a farm bill include further reductions. The Senate plan saves money mainly by raising to $10 a year the amount of heating assistance states must contribute in order to qualify residents for the heat-and-eat food stamp benefits, according to the Congressional Budget Office.
The House, as part of a plan to shave $39 billion from food stamps, raises the required state contribution under the heat-and-eat provision to $20 a year. That would save $8.7 billion over a decade as states drop the program because of the increased cost. The House would also cut $11.6 billion by ending “categorical eligibility,” in which enrollment in other social services automatically qualifies a recipient for food stamps even when eligibility under those programs are less strenuous than for the food aid.
Together, those two proposals would knock 1.8 million households off food stamps and cut benefits by about $90 a month for 850,000 others. The biggest savings, $19 billion, would come from reducing waivers states can give childless adults who would otherwise face work requirements or time limits under food stamps. That would immediately cut off 1.7 million recipients, according to the Congressional Budget Office.
The reductions make little sense at a time when, according to U.S. Department of Agriculture data, about 49 million in the U.S. struggle to put food on their plates, said Ellen Vollinger, food-stamp lobbyist with the Food Research and Action Center, a Washington-based anti-hunger advocacy group that has urged states to adopt heat-and-eat programs.
“These programs provide economic stability to communities,” she said. “That doesn’t change just because of discussion in Washington.”
Debra Frigon, a 53-year-old District of Columbia resident, uses food stamps to supplement disability checks she receives from the Veterans Administration and Social Security, related in part to her Navy service in the 1980s. She’s already seen her benefits cut this month by the expiration of the stimulus and worries that additional reductions will threaten a healthy diet for her one daughter who is still at home.
“We eat sandwiches during the week and try to eat more balanced meals on weekends,” she said. “We buy marked-down products and small portions, but what we have already doesn’t go very far. We’ve already lost some benefits. More would really hurt us.”
Other changes in the House bill would cut nutrition education funds, impose drug-testing requirements and ban aid to felons. In total, tighter rules and an improving economy would drop food-stamp rolls to 34 million people by 2023, according to the budget office.
The federal government should be pushing states to get food-stamp recipients to work and Congress should be less focused on finding ways to throw people out of the program, Agriculture Secretary Tom Vilsack said. The House plan “is not the right way to approach the policy. If folks are focusing on the right policy,” spending should go down on its own without new restrictions, he said in an interview.
Representative Tim Huelskamp, a Kansas Republican, said what matters most is crafting policies that better target the program to the neediest. Benefit-boosts tied to heating benefits are “indefensible to the folks back home,” he said. “Spending is out of control,” he said. “This is the one entitlement that we’ll have an actual vote on this year, and this is the one chance for House Republicans” to follow through on promises to limit social spending, he said.
Cheh, the Washington city council member, said the farm-bill debate is frustrating to her city, where food-stamp enrollment in the 2012 fiscal year was 141,147, roughly 22 percent of the city’s population.
“Poorer families don’t have political power, that’s why this is occurring,” she said. “Just because they don’t have political power, that doesn’t mean you can be cruel to people at the bottom.”
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