The food-stamp program has grown into the benefits program that's eating up America.
The $75 billion program has rankled some taxpayers and politicians with its huge ramp-up in spending. Since 2006, the Supplemental Nutrition Assistance Program has more than doubled its spending, with nearly one in seven Americans now relying on the program to put food on the table. Spending on the program amounted to roughly 2 percent of the government's 2012 budget.
The surge in spending has prompted calls for change, with the Republican-led House proposing to cut almost $40 billion in food aid over a decade. Democrats also want cuts, but are proposing a $4 billion reduction over the same period.
But what's behind the surge in food-stamp spending? According to some opponents of the program, it's the return of the "welfare queen," of lazy people who would rather take food from taxpayers than work. The much reviled "surfer dude," San Diego resident Jason Greenslate, became the face of this piece of rhetoric after he bragged to Fox News about buying lobster and sushi with his EBT card.
Yet the truth of the matter is that the surfer dude is an anomaly, not the rule. Almost 70 percent of food-stamp recipients aren't expected to work because they are children, elderly or disabled, according to the Center on Budget and Policy Priorities. And an "overwhelming majority" of SNAP recipients who can work are actually employed, the group found.
The reason behind the surge in food-stamp spending comes down to economics, not freeloading surfers. The recession, which cut wages and jobs, pushed millions of Americans onto the food-stamp rolls. While the economy is slowly improving, many new jobs are in low-wage sectors such as the fast-food industry. A McDonald's (MCD) cashier pulling in minimum wage, for example, would meet the income eligibility for food stamps.
As it is now, the cuts proposed by the House would cut as many as 3 million low-income people from the program, while eliminating meals for several hundred thousand poor school children, the Center on Budget and Policy Priorities notes.
"Some of the proposals that are out there that are pretty extreme," Diane Whitmore Schanzenbach, a professor at Northwestern University and the author of a recent paper on food stamps published by The Hamilton Project, told CBS MoneyWatch. "Most of the benefits are going to families, those working with kids and the elderly."
Given how many Americans rely on the SNAP program, how might the government trim spending or improve the program without being too Grinchy?
Below are five suggestions culled from experts and recent studies into the program:
- Cut SNAP-Ed educational spending: The $388 million set aside each year for nutritional education could be put to better use, according to Whitmore Schanzenbach's December report from The Hamilton Project. A recent Department of Agriculture evaluation of three SNAP-Ed interventions "found the programs had no significant impact," the study notes. Instead, she suggests shifting the funding to providing a price rebate on fruits and vegetables, providing a monetary incentive to improve the diets and health of recipients.
- Eliminate the "heat and eat" loophole: States have used this loophole to "artificially boost a household's food stamp benefit," according to the conservative think tank The Heritage Foundation. Residents who receive as little as $1 in heating assistance can get a larger income deduction for spending on utilities, allowing them to receive greater food-stamp benefits. Raising the required state contribution to $20 a year would save $8.7 billion over a decade, as the House plan suggests.
- Cut food-stamp fraud: Sure, there's still fraud in the SNAP system, although not as much as some detractors think. Fraud can occur when someone lies on their application, sells benefits for cash or when a retailer who has abused the system lies to get on the program again, according to the USDA. Trafficking only represented 1 cent on each dollar from 2006-08, down from 4 cents in 1993, the agency notes. Still, one estimate pegs fraud at costing taxpayers $222 million annually.
- Raise the minimum wage: A hot-button topic, but one that bears discussion. Research points to the prevalence of low-wage jobs as creating a burden on taxpayers. A single Wal-Mart (WMT) Supercenter store in Wisconsin, for example, may require taxpayers to shell out $1.7 million per year -- or almost $6,000 per employee -- in aid, according to a report from congressional Democrats. MIT's Livable Wage calculator shows that a Wisconsin family of four needs $18.74 an hour to bring in a livable wage. The average wage of a Wal-Mart associate is $8.88 per hour, according to Glassdoor.
- Do nothing: Yes, you read that correctly. As the economy improves, more Americans are taking themselves off the food-stamp rolls. It's already happening: More than 350,000 individuals left the program in September, marking the first year-over-year decline since 2007. The Congressional Budget Office has predicted that spending will decline each year through 2023.