Monday, December 2, 2013

Food Fight!

A fresh look at food stamps and fair wages

Photo by Andrew Small

Two historic firsts in summer 2013 focused a fractured Congress on two familiar fights over economic fairness: food stamps and fair wages.

In July, the House of Representatives passed the first Farm Bill without a nutrition section since 1961, eliminating the Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps). [1]

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In August, fast-food workers walked out for their largest protest for fair wages, demanding an increase in the minimum wage to fifteen dollars an hour. [2]

The looming “food fight” brings to light how the food stamps program transformed from social safety net to force-fed subsidy. The structure of the program’s expansion illustrates how concepts of economic fairness have evolved overtime.

“Food Stamp President”

During a Republican presidential primary debate in 2012, Newt Gingrich famously claimed “more people have been put on food stamps by Barack Obama than any President in American history.”[3] While factually untrue at the time, it would soon prove true with nearly 48 million Americans at nearly $80 billion dollars a year in 2013.[4] Nevertheless, the Speaker’s assertion raises a relevant question: how did this program become so large? To answer what food stamps have become, one must remember why the program began.
By Franklin D. Roosevelt Presidential Library and Museum [Public domain], via Wikimedia Commons

The Farm Bill: The Origins of Food Stamps

Food stamps emerged from New Deal policies under Franklin Roosevelt’s administration. The first farm bill programs emerged in the Agricultural Adjustment Act of 1933, addressing widespread domestic hunger surrounding The Great Depression, falling crop prices for farmers and catastrophic drought. [5] The bill kept food prices artificially high for struggling farmers by subsidizing wealthy farmers for not growing food. Senator Elmer Thomas from Oklahoma, who drafted the bill, sought to stabilize the value of an “honest dollar” for debtors and creditors. [6] Congress passed a more permanent version of the bill in 1938, which would need renewal every five years, adding food stamps into the program.

Originally, Americans on relief could purchase $1 orange stamps to purchase any food regardless of how prices rose in the market and they could purchase 50-cent stamps to buy food determined to be surplus.[7] The compromise ensured that farmers to afford to earn a living while consumers could afford to eat.

In 1943, Congress suspended the first food stamp program—after 
reaching 20 million people over four years at a total cost of $262 million—when the forces that made it necessary, unmarketable food surpluses and widespread unemployment, no longer existed.[8] The peak reach of the program fed 4 million Americans and would not be reinstated effectively until 1964. Though the program ended after successfully reducing problems, critics worried about a perpetual food stamp plan to assist the needy growing too large. 

In 1957, U.S. Representative Leonor Sullivan, a major proponent of the Food Stamp Act of 1964, warned against hyperbolic expansion, stating,

The Department of Agriculture seemed bent on outlining a possible food stamp plan of such scope and magnitude, involving some 25 million persons, as to make the whole idea seem ridiculous and tear food stamp plans to smithereens.[9]
Sullivan explained that her program proposed to channel surplus food to those actually in need, lamenting, “it is hard for us to realize that among us in this rich land, with record-breaking economic levels, we have some 5 million fellow citizens going to bed with a feeling of not having enough to eat.”[10]

Increased Cost and Enrollment: A Cocktail of Causes

With 48 million Americans enrolled in SNAP today, Sullivan’s prediction does not seem so far fetched. Approximately 15% of Americans enrolled are in the program, compared with 8% of the population in 1975.[11] Prior to the Obama administration, the program had seen a major expansion under President Bush. In 2010, Annie Lowrey wrote in Slate:

The cocktail of rising unemployment, stagnant wages, eased access to support programs, and purposeful destigmatization during the Bush administration meant that rolls swelled—from 17 million when he took office to 28 million when he left. [12]

Lowrey’s explanation for the program’s expansion under both Bush and Obama conveys the complexity of causes increasing food stamp enrollment. The success or failure of the program should be judged by investigating each ingredient of the “cocktail” that Lowrey describes increased the program’s spending and enrollment.

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Rising Unemployment

Food stamp rhetoric often focuses on unemployment as the root cause of the program’s growth. Newt Gingrich tied his critique of food stamps at the 2012 debate to America’s most poignant problem, a jobs crisis. 

Gingrich said it would make “liberals unhappy” to end government dependence, promising, “I’m going to continue to find ways to help poor people learn how to get a job, learn how to get a better job and learn some day to own the job.“[13] However, the former Speaker’s talking point made more sense in the 1990s than during the current crisis when the majority of food stamp recipients did not have jobs.

Though the majority of food stamp recipients are children and seniors (58% of recipients), the working population receiving food stamps has increased in recent years. The working poor represent the largest additions to the program in the last two decades. 

In 1990, 42 percent of all SNAP households received cash welfare benefits and only 19 percent had earnings. In 2010, only 8 percent received cash welfare, while 30 percent had earnings.[14] So not only are more employed people enrolling in SNAP but less of them are receiving other forms of welfare.

While unemployment can drive up SNAP enrollment, decreasing unemployment does not necessarily reduce the amount of people who need the program. The Congressional Budget Office predicts the unemployment rate will drop to 4.6% by 2017 but that SNAP enrollment will only drop to 43.3 million people.[15] Enrollment does not directly correlate with unemployment because the program also subsidizes people with a low income. This phenomenon has become all the more clear in the face of stagnant wages.

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Stagnant Wages

Though SNAP helps the elderly, children, and the unemployed, SNAP is one of the few means tested programs that can supplement a small income. 

A household’s gross monthly income must be at or below 130 percent of the poverty line or $2,069 (about $24,800 a year) for a three-person family. [16] 

Even as the recovery from the recession begins to see jobs return to the market, those jobs have disproportionately been low-wage jobs, with jobs paying less than $13.83 per hour representing 58 percent of the job gains since 2010.[17]

The fast-food worker strike provides a fruitful example for critics, demonstrating how food stamps factor into the equation of low wages. While the fast food industry earns about 13 percent of America’s gross domestic product, 86 percent of their workers are earning subminimum, poverty or low wages. [18] Compared with the 8.6 percent of workers who receive food stamps across other industries, 14 percent of fast-food workers receive food stamps as estimated by the Food Chain Workers Alliance. [19]

The fast food industry does not report the number of employees on food stamps but it is possible to estimate knowing the fast-food industry employs approximately 20 million food workers. If 14 percent of those workers receive assistance then there are approximately 2.8 million food stamp recipients. The average cost per person for SNAP is around $8,800 per year. A rough estimate based on averages could mean that food stamps subsidize the fast-food industry, a $200 billion industry, to the tune of nearly $24 billion in the aggregate. [20]

While organizations like Club for Growth and the Cato Institute[21] have highlighted the $20 billion in subsidies to farmers as a market skewing force that raises commodity prices.[22] Their attention may be better served analyzing what industries are subsidized by the $80 billion in wage subsidies through food stamps. However, SNAP proponents point out that reduce the incentive to remain unemployed. SNAP is often the only means-tested benefit program for which people qualify with a low income. The program prevents lifts working people out of poverty, decreasing dependence on other forms of welfare.[23]

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Eased Access to Support Programs

Though they may disagree about who has a dependence on the program, opponents of food stamps will be the first to admit that the program is expensive. The Heritage Foundation reports it is the second most expensive means-tested aid program, increasing from $19.8 billon in 2000 to $84.6 billion in 2011. [24] The record costs have sparked a new conversation about how to reduce the cost of the program.

The Congressional Budget Office has outlined four major ideas proposed to reduce the cost of the program: changing eligibility standards, changing benefit amounts, changing administrative costs, changing how it is funded. [25] The House Republicans’ 2013 bill proposes $39 billion in savings over 10 years by limiting access for at least 3.8 million participants.

The Center on Budget and Policy Priorities estimates that cuts in the House bill would most negatively affect three different recipients of SNAP benefits. Of the almost $40 billion cut over 10 years, $19 billion would be cut from 1.7 million childless adults in 2014 that cannot find jobs.[26]  Another $11.6 billion in cuts comes from eliminating eligibility to families based on “expanded categorical eligibility.”[27] These 2.1 million people would have gross incomes or assets above the federal SNAP limits but disposable income below the poverty level due to high rent or child care costs. Without categorical eligibility, also, nearly half of the 50 million people going hungry in this country will have pre-tax incomes “too high” to allow them to qualify for SNAP. [28]

Throughout the existence of food stamps in the United States, the ease of access to the program has been most contentious component to the law. 

In 1971, Congress added uniform work requirements to the program. In 1977, Republicans stressed limit program eligibility to focus on the most needy while Democrats sought to streamline the process, eliminating the stamp purchasing requirements. [29] The debate focused more on eliminating fraud and waste in the program rather than addressing the broader economic factors that would contribute to its expansion. When the deal passed in 1977, Senator Bob Dole, who had opposed food stamps a decade earlier as a congressman, said, “I am confident that this bill eliminates the greedy and feeds the needy.”[30]

In the 1980s, Congress added restrictions on assets in order to qualify for food stamps. These efforts reduced growth in food stamps spending which was at $24.2 billion in 1980. Over the next decade the program only increased to $26.6 billion. In the 1990s, Congress tinkered with program eligibility in a wave of welfare reform. By 2013, the program has grown to over $80 billion. [31]

Eligibility requirements have provided the most immediate mechanism for Congress to reduce enrollment and spending in the program. While factors like unemployment and wages rely on market forces, eligibility requirements are more politically expedient compared with changing benefit payouts. Nevertheless, another $8.7 billion in the House bill’s spending reduction comes from restricting a simplification option for determining household benefits where 850,000 households would lose an average of $90 a month in benefits. Aside from the $19 billion in savings from eliminating unemployed childless adults from the program, the rest of the House bill savings come from eliminating eligibility for those who earn too much money to qualify or eliminating automatic enrollment through programs like Medicaid or Temporary Assistance for Needy Families.[32]

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Another factor that has expanded the program were efforts to eliminate the stigma surrounding food stamps. From 1994 to 2007, the program expanded to cards, taking away the distinction between someone paying with a credit card or with food stamps by issuing the assistance through debit cards.[33] In 2002, the program simplified access by aligning the administration process with programs like Temporary Assistance for Needy Families and Medicaid.

In 2008, the Congress passed the program, overriding a presidential veto and renaming the program to the Supplemental Nutritional Assistance Program to eliminate the stigma associated with “food stamps.”[34] One of the largest factors in the program’s size is the participation rate, the percentage of eligible people enrolling in the program. In 2002, only 54 percent of eligible people enrolled. Today, SNAP has a 75 percent participation rate for eligible people.[35]

Perhaps this is why rhetoric opposing SNAP has focused on stigmatizing food stamps by proposing work requirements or drug tests for benefit recipients. The Center on Budget and Policy Priorities described “work requirements” as a “misguided” means to reducing food stamps because able-bodied recipients are restricted to three months of unemployment within three years before they lose benefits.

Rhetoric about drug testing and preventing felons from receiving SNAP overemphasizes possible savings ($35 million from drug testing, $21 million from preventing felons from receiving benefits) while creating a larger stigma around a program that benefits millions who do not abuse it.[37] The program’s fraud is at an all time low with only 1.3 percent of SNAP benefits getting traded at a discount for cash.[38] While taxpayer money needs to be accounted for, these instances of fraud dwarf the larger economic problems of unemployment and low wages that contribute to the programs’ growth.

Does SNAP Accomplish Its Goals?

The Farm Bill has been a historically bipartisan bill is because most congressmen can agree with its goals while negotiating its methods. After the House voted to remove SNAP from the 2013 farm bill, Bob Dole and Tom Daschle wrote an editorial in The Los Angeles Times asking Congress to work past their differences to “address hunger through provisions in the farm bill.”[39] The Brookings Institute says the main purpose of the Supplemental Nutritional Assistance Program is “increase the ability of the poor to purchase a nutritionally adequate, albeit low cost, diet.” The second purpose is to serve as an economic stabilizer, providing Keynesian stimulus, and a responsive guaranteed income. Its third purpose is to reduce poverty and help working people out of poverty.[40]

Increasing nutrition
While SNAP aims to supplement a low income to purchase fresh food, the conditions contributing to unemployment and low wages often compounds with systemic problems that limit access to healthy, affordable foods.[41] Low-income communities have less access to full-service grocery stores and a greater availability of fast food restaurants.[42] When health food is more expensive and of a poorer quality, low-income people often choose cheap filling food over maximizing calories to prevent hunger.[43] While subsidies to farmers stabilize food markets to prevent spikes in food costs, SNAP might not be the most effective policy for improving nutrition. Programs like the 2010 Healthy Food Financing Initiative, which targets “food deserts” by providing financing to grocery stores in urban and rural areas and creating business opportunities for farmers, may be a better use of taxpayer money towards improving access to healthy food.[44]

The Dole-Daschle editorial on SNAP touted how the farm bill has enabled all Americans to benefit from the “efficiency of our farmers and ranchers,” creating a “safe and plentiful food system for less than 10% of our disposable income.” The former congressmen cite the program as an appropriate action for a country with “ample resources” to use “abundance to help those who are hungry.”[45] In creating a stability of pricing for nutritious food, the farm bill has benefitted more Americans than the recipients of farm subsidies or food stamps.

Stabilizing the economy

Though the 2008 rebranding of food stamps to SNAP emphasized a renewed focus on nutrition, the program’s main focus concerns the economic forces that catalyzed its creation. Though originally designed as a temporary relief to feed the unemployed through depressions and recessions, the programs purpose has expanded to reducing unemployment by subsidizing wages and stimulating demand.

The program may even promote job growth through economic stimulus. In 2008, Moody Analytics said every $1 spent eliminating hunger generated $1.70 in economic activity.
[46] While both sides will dispute how to stimulate growth by either increasing or decreasing food stamp spending, the program’s purpose has shifted. As food stamps transforms from a safety net program for the unemployed to a supplement to a working income. The rhetoric surrounding potential cuts needs to reflect this new reality.

Reducing poverty

The reality of SNAP’s effectiveness remains difficult to measure. The USDA estimates food stamps lifted 4.7 million people out of poverty in 2012 but the US Census still measures that 46.2 million Americans live in poverty.[47] The poverty rate has never exceeded its modern peak of 23 percent in 1959 but the poverty rate has remained between 12 and 15 percent since the War on Poverty began with more people living in poverty as the population increases.[48] While some assert that charity ought to replace such programs, the recent cuts to SNAP have strained food banks designed to respond to emergencies, costing about 2 billion meals and setting back most of the progress made by private charitable works in the United States.[49]

While SNAP delivers help to more people each year, it delivers them to different individuals and families. The USDA estimates that half of SNAP recipients leave the program after one year.[50] It serves as a short-term stimulus to help people break to the middle class with a long-term benefit. Contrary to Paul Ryan’s assertion that the safety net has become a hammock, the program works as a springboard out of poverty.[51]


While the SNAP may be the most efficient way for government to supplement low-incomes, its effectiveness is largely inextricable from broader framework of social safety net programs in the United States. The social safety net made up about $411 billion or 12 percent of the federal budget in 2012.[52] Food stamps as a program made up $80 billion dollars or 2 percent of the $3.5 trillion dollar national budget.[53] It provides modest benefits to recipients in the short term and stimulates economic activity but also subsidizes lower wages and has seen dramatic increases in spending. 

When deciding whether to keep SNAP benefits intact or not, Americans need to consider how program affects the cost of food, the cost of services, the cost to families in need and the cost to taxpayers. It is a program designed to help farmers, consumers, employers and needy families. The program's first administrator, Milo Perkins described the program as an essential assistance to farmers and the underfed, explaining, "We got a picture of a gorge, with farm surpluses on one cliff and under-nourished city folks with outstretched hands on the other. We set out to find a practical way to build a bridge across that chasm."[54]

[1] Dann, Carrie, and Frank Thorp. 2013. "House passes farm bill without food stamp measure." First Read. (accessed October 10, 2013).

[2] "Fast-food workers stage largest protests yet." Yahoo Finance. 2013. (accessed October 10, 2013).

[3] Cillizza, Chris. 2012. "Newt Gingrich doubles down on ‘food stamps.’“ The Washington Post. (accessed October 10, 2013).

[4] Redden, Molly. 2013. "Congress Fights over Food Stamps: Don't Worry About the Growth of SNAP." New Republic. (accessed October 10, 2013).

[5] "Farm Aid." The Farm Bill. (accessed October 10, 2013).

[6] "THOMAS AMENDMENT." Oklahoma State University. (accessed October 10, 2013).

[7] Ibid.

[8] Ibid.

[9] Congressional Record, January 31, 1957, House Proceedings


[10] Congressional Record, January 31, 1957, House Proceedings


[11] Izzo, Phil. 2013. "Food-Stamp Use Rises; Some 15% Get Benefits" The Wall Street Journal. (accessed October 10, 2013).

[12]Lowrey, Annie. "How conservatives learned to love the federal food stamps program." Slate. (accessed October 10, 2013).

[13] Cillizza, Chris. 2012. "Newt Gingrich doubles down on ‘food stamps.’“ The Washington Post. (accessed October 10, 2013).

[14] Klein, Ezra. 2012. "Gingrich says Obama is the ‘food stamp president.’ Is he? - The Washington Post." The Washington Post. (accessed October 10, 2013).

[15] Izzo, Phil. 2013. "Food-Stamp Use Rises; Some 15% Get Benefits" The Wall Street Journal. (accessed October 10, 2013).

[16] "A Quick Guide to SNAP Eligibility and Benefits." Center on Budget and Policy Priorities. (accessed October 10, 2013).

[17]"The Low-Wage Recovery and Growing Inequality." 2012. National Employment Law Project. (accessed October 10, 2013).

[18] Sanburn, Josh. "Food Service Employers Often Rely on Food Stamps." TIME. (accessed October 10, 2013).

[19] "The Hands That Feed Us." Food Chain Workers Alliance. (accessed August 14, 2013).

[20] Sherman, Erik. "Fast-food workers urged to stage nationwide strike - CBS News." CBS News. (accessed October 12, 2013).

[21] "Bloomberg: Crop Insurance Subsidies Fleece Taxpayers." Cato Institute. (accessed October 14, 2013).

[22] "Farm subsidies: A welfare program for agribusiness." The Week. (accessed October 14, 2013).

[23] "Policy Basics: Introduction to the Supplemental Nutrition Assistance Program (SNAP)" Center on Budget and Policy Priorities. 2013. (accessed October 10, 2013).

[24] Rector, Robert. 2012. "Reforming the Food Stamp Program." Conservative Policy Research and Analysis. (accessed October 10, 2013).

[25] "An Overview of the Supplemental Nutrition Assistance Program." Congressional Budget Office. (accessed October 12, 2013).

[26] Rosenbaum, Dottie. "Cuts in House Leadership SNAP Proposal Would Affect Millions of Low-Income Americans." Center on Budget and Policy Priorities. (accessed October 14, 2013).

[27] Ibid.

[28] Pennacchia, Robyn. "Congress votes to cut billion from food stamps, cutting off 6 million people | Death and Taxes." Death and Taxes. (accessed October 14, 2013).

[29] "United States Department of Agriculture- SNAP History." United States Department of Agriculture. (accessed October 14, 2013).

[30] "Robert Dole Archives." The University of Kansas. (accessed October 14, 2013).

[31] Haskins, Ron. "Reflecting on SNAP: Purposes, Spending, and Potential Savings | Brookings Institution." The Brookings Institute. (accessed October 14, 2013).

[32] Ibid.

[33] "United States Department of Agriculture." United States Department of Agriculture. (accessed October 14, 2013).

[34] Ibid.

[35] Rosenbaum, Dottie. “SNAP is Effective and Efficient. ”Center on Budget and Policy Priorities. 11 Mar. 2013. (accessed November 24, 2013).

[36] Greenstein, Robert. 2013. "Commentary: Portraying Severe SNAP Benefit Cuts as a Mere Work Requirement." Center on Budget and Policy Priorities. (accessed October 10, 2013).

[37] Rosenbaum, Dottie. "Cuts in House Leadership SNAP Proposal Would Affect Millions of Low-Income Americans." Center on Budget and Policy Priorities. (accessed October 14, 2013).

[38] “What is SNAP Fraud?”. United States Department of Agriculture. (accessed November 25, 2013).

[39] Dole, Bob and Tom Daschle. “Stop playing politics with hunger.” The Los Angeles Times (accessed November 25, 2013).

[40] Haskins, Ron. "Reflecting on SNAP: Purposes, Spending, and Potential Savings | Brookings Institution." The Brookings Institute. (accessed October 14, 2013).

[41] "Why Low-Income and Food Insecure People are Vulnerable to Overweight and Obesity." Food Research Action Center. (accessed November 25, 2013).

[42] Ibid.

[43] Ibid.

[44]"Obama Administration Details Healthy Food Financing Initiative." Health and Human Services. 2010. (accessed November 25, 2013).

[45] Dole, Bob and Tom Daschle. “Stop playing politics with hunger.” The Los Angeles Times

[46] "Policy Basics: Introduction to the Supplemental Nutrition Assistance Program (SNAP)" Center on Budget and Policy Priorities. 2013. (accessed October 10, 2013).

[47]“Income, Poverty, and Health Insurance Coverage in the United States: 2011.” US Census. (accessed November 25, 2013).

[48] Ibid.

[49] Huang, Cindy. “Food charities struggle to cover meals lost from food stamps.” PBS. (accessed November 29, 2013).

[50] Super, Arthur. “Background on the Food Stamp Program.” Center for Budget and Policy Priorities. (accessed November 25, 2013).

[51] “Paul Ryan’s Response to the 2011 State of the Union.” The Washington Post. (accessed November 29, 2013).

[52] “Policy Basics: Where Do Our Federal Tax Dollars Go?” Center for Budget and Policy Priorities. (accessed November 29, 2013).

[53] Ibid.

[54] "United States Department of Agriculture- SNAP History" United States Department of Agriculture. (accessed October 14, 2013).