Policy: Entitlements

Diana Furchtgott-Roth: House panel approves needed food stamp reforms

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Opinion,Diana Furchtgott Roth,Columnists,House of Representatives,Entitlements,Food Stamps

With the House Agriculture Committee voting to trim the $80 billion food stamp program by $3 billion a year, or 2.5 percent, the New York Times is predictably outraged.

"If anything, Washington should be allocating more money to address tremendous unmet needs," the paper's Tuesday editorial trumpeted.

No matter that four years after the end of the recession, more than 47 million Americans are on food stamps, officially called the Supplemental Nutrition Assistance Program, or SNAP. Extra food stamp funding allocated in the 2009 stimulus bill -- $80 extra per month for a family of four -- is still in place.

States such as Florida, Alabama and Rhode Island have created "SNAP outreach plans" to recruit residents to sign up for the program to get a larger share of the federal food stamp pie.

Alabama's fliers say, "Be a patriot. Bring your food stamp money home." In Rhode Island, seniors can attend SNAP bingo.

At the recession's start, in December 2007, 27 million Americans, fewer than 1 in 10, received food stamps. At the end of the recession, in June 2009, 11 percent of the population was using SNAP. In 2012, 15 percent of Americans were on food stamps, more than one in seven.

Food stamp participation has always increased during a recession and at the beginning of a recovery, but this increase is far greater than in prior recoveries. The three-year period after the recessions of the early 1980s saw decreases in food stamp usage, but the recessions of the early 1990s and in 2001 saw increases between 1 and 2 percent over the same period. In comparison, food stamp usage increased 3.5 percent following the 2007 recession.

Much of the increase can be explained by evolving SNAP rules that expand eligibility and increase benefits to ever more Americans. In October 2008, the minimum benefit and standard deduction for households were increased and the cap for child care expenses was eliminated. Some restrictions on food stamps for able-bodied adults without disabilities were modified.

So, even as our economy is returning to normal, food stamp benefits are not declining commensurately. Food stamps have become more of a permanent entitlement rather than a temporary stopgap for the temporarily unemployed.

That's why the House Agriculture Committee's attempt to trim the bill is an important step forward.

The bill would end automatic eligibility for food stamps when people sign up for other programs. It would also end the practice of states giving energy assistance to those without energy bills, just to enable them to qualify for food stamps.

Rather than running the program from Washington, a better approach would be to allocate food stamps funding to individual states, allow them to decide on eligibility and keep any savings for themselves. That way Wyoming could have one set of rules, and Alabama another.

If states could keep the savings, they would not be tempted to recruit recipients to the program just for the sake of getting more federal dollars.

Washington should concentrate on making America a better place to do business, to encourage job growth and reduce the need for food stamps.

America has the highest corporate tax rates in the world -- how about reforming the corporate tax system to attract back $1.7 trillion in multinational assets held offshore? Or approving the Keystone XL pipeline? Or ending Obamacare penalties for employers who hire?

Assisting the poor should not lead to creation of a permanent middle-class entitlement. The House farm bill is an important first step to controlling the runaway food stamp program. Too bad it doesn't go further and give the program to the states.

Washington Examiner Columnist Diana Furchtgott-Roth (dfr@manhattan-institute.org), former chief economist at the U.S. Department of Labor, is a senior fellow at the Manhattan Institute for Policy Research.

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