Cuts for Food Stamps, More Welfare for Farmers

James Greiff is an editor for Bloomberg View. He was Wall Street news team leader at Bloomberg News and senior editor for Bloomberg Markets magazine. He previously reported on banking for the St. Petersburg Times and the Charlotte Observer.
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Ideas that appear to spring from some warped alternate universe seem to keep finding a comfortable berth in the U.S. House of Representatives.

The latest is an assault on food stamps, a bulwark against hunger and malnutrition for many of the poorest Americans.

The House now is considering legislation that cuts $40 billion from food stamps during the next decade. The Center on Budget and Policy Prioritiesestimatesthat as many as 4 million people would be dropped from the program, which now has more than 47 million participants, a majority of whom are old, children or disabled.

But, as they say on late-night infomercials, there's more:

The House also is considering an amendment that rewards states for getting people off food stamps.

On the face of it, that doesn't sound so bad. If someone has a decent job or lands one, there's no reason he or she should continue getting food stamps.

That's not what the House has in mind. Instead, states would be allowed to require that a food-stamp recipients be working part time or in a job-training program -- all of which would be fine provided there are part-time jobs and training programs to be had. If someone is unemployed and can't find a job, he or she could be cut off. The federal money that states would otherwise devote to food stamps (federal and state governments jointly administer the program) could then be used as the state pleased.

The $40 billion cut the House plans would come on top of a previously scheduled reduction in benefits that kicks in Nov. 1, when supplemental funding for food stamps from the 2009 stimulus program dries up.

The House initially wanted $20.5 billion in cuts from food stamps in its version of a new farm bill, which Congress usually renews every five years. Traditionally, the farm bill marries food stamps with agriculture subsidies, ensuring support from rural and largely Republicans legislators and urban and mainly Democratic lawmakers. The House farm bill died because some Republicans thought a $20.5-billion reduction wasn't enough, while Democrats considered it too much.

So the House split the bill, starting last month with stand-alone legislation for agriculture subsidies.

The parsimony the House has in mind for food stamps is offset by lard for farmers, who as a group have incomes almost a quarter higher than the U.S. average. The House plan would eliminate $5 billion in yearly cash payments to almost anyone who owns agricultural land, including a fair number ofresidents of Manhattan's Upper East Side and Beverly Hills, California. But the loss would be more than compensated for with more generous subsidies forcrop insurance, which costs taxpayers as much as $10 billion a year.

On top of that, the House bill would bump up price supports to account for the bull market in commodities in the past few years. So if prices return to historical levels, the government will be stuck buying enough crops to maintain elevated prices floors.

The House may be right to cut spending on food stamps, which cost taxpayers $80 billion a year, about double the amount before the onset of the Great Recession. The proposed $40 billion in cuts spread over 10 years amounts to just 5 percent of the program's current cost. (Of course, a better way to lower food-stamp spending would be with economic policies that spur growth and job creation.)

Yet it is a reflection of the House's bizarre priorities that poor people take a hit even as the farm sector -- which is forecast to enjoy arecord$128 billion in net income this year -- gets more largesse.

If the House were really interested in cutting wasteful spending, while offering support to farmers who need it, here's an idea: Apply the same income test to qualify for farm subsidies as food stamps. That would be 130 percent of the poverty line, or $23,550 a year for a family of four. If it's good enough for the food-stamp program, it should be good enough for farmers.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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