Bipartisan Farm Bill To Cut SNAP Benefits by $8 Billion

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Note: Originally posted at The McLean Parlor

Congress is finally ready to pass a Farm Bill this week that would spend some $950 billion over the next ten years. Relative to the current baseline for funding on agricultural subsidies and food assistance to low-income Americans, the legislation would cut around $23 billion dollars. Just over a third of those savings would come from the largest portion of the bill — SNAP (food stamps) — for a total of over $8 billion. Those cuts are seen as a compromise between previous Senate and House versions, where the former intended $4 billion in spending reductions on the SNAP program versus the $40 billion Republicans were seeking.

On the agricultural side, most notably, legislators have agreed to scrap the direct payment program for farmers while using most of the savings to expand crop insurance and other forms of farm aid. For more information on that side of things I’d recommend Brad Plummer’s post and accompanying chart to put all that spending in context.

The compromise for SNAP funding is certainly not splitting the difference between previous respective versions. Because it excludes much of the severe cuts in the Republican-led House offering, this week’s bill elicited an ‘all things being equal’ thumbs-up from the left-leaning Center for Budget and Policy Priorities (CBPP). Yet that doesn’t mean the legislative outcome won’t leave a not-insignificant number of people less well-off, and, unsurprisingly, the largest segment of those folks are low-income Americans.

More generally, here is what the consolidated bill will change in the SNAP program, as the longer-from CBPP summary states:

  • Clarify certain SNAP eligibility rules, such asby ensuring that lottery winners and affluent college students are not eligible for SNAP.
  • Strengthen SNAP program integrity, such as through new measures to combat trafficking of benefits by retailers and recipients.
  • Test innovative strategies to connect more SNAP participants to employment, by including a pilot project to spark state innovation accompanied by rigorous evaluation of the impact on participants’ employment and earnings.
  • Improve access to healthy food options by requiring stores to stock more perishable foods and testing new ways for clients to make purchases with their SNAP benefit card (for example,  by swiping SNAP cards on mobile devices at farmers’ markets) that could open up the program to more retailers with healthy options.

Some of that is arguably worth pursuing, sure. But where do all the savings (technically closer to $8.6 billion) come from? A hefty cut that “shrink benefits for about 850,000 households in 17 states by an average of $90 a month, according to CBO.” This is realized by closing the “heat and eat” loophole. Although I’ve heard of that particular phrase before, wherein states would pair low-income heating assistance eligibility (through the LIHEAP program) with state-administered SNAP guidelines, I wasn’t well-versed in the particulars. Fortunately MSNBC’s Ned Resnikoff recently wrote a succinct explanation:

Here’s how “Heat and Eat” works: In most states across the country, people who spend more than half their income on housing and utilities are eligible for deductions which increase their benefit levels. For the most part, that means food stamp recipients need to show state agencies their housing and utility bills in order to claim the deduction. But in “Heat and Eat” states, anyone who qualifies for energy assistance is assumed to also qualify for the shelter deduction. That means that state agencies can automatically increase how much their citizens receive in food stamps by giving them a purely symbolic energy subsidy. Anyone who receives even $1 in energy assistance is eligible for more food stamp benefits than they would otherwise receive.

The important caveat to highlight, though, is what food bank director Caryn Long later emphasizes in that piece; such“‘Heat and Eat’ policies benefited those who already qualified for both food stamps and energy assistance.” It also eliminated a lot of red tape for both state agencies and beneficiaries. The ‘loophole’ was a legitimate, if considered unintended by their federal counterparts, policy option for states to increase food aid to those in need.

Yet eliminating over $8 billion dollars from 850,000 households is an incredibly concentrated reduction — roughly a quarter of which will come from the state of New York alone. The average per household monthly benefit nationally, at the end of fiscal year 2013, was $273.96, according to monthly data from the USDA (New York’s average is about nine cents less). The average per household cut contained in the Farm Bill is $90 dollars a month. This bill will slash monthly food assistance for over three-quarters of a million low-income households by a third.

Yes, this legislation is far away from what House Republicans were pursuing through their separate SNAP bill with $40 billion in cuts. It was a strong enough threat, I suppose, to get more than double the original Democratic-led Senate reductions in SNAP. However, that version would have pared back ‘heat and eat’ anyway and the current bill was voted through by the House on Wednesday with 89 Democratic votes — including Minority Leader Nancy Pelosi. So there was a bipartisan consensus to eliminate what amounts to a perceived process flaw before the compromise, and the president will probably sign it into law. Food insecure households will have to deal with these cuts, but at least the Morning Joe class can applaud Washington coming together to keep poverty policy kludged.

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