BY GREG BEATO – Possibly the only cultural phenomenon that had a bigger year in 2010 than Justin Bieber was the needs-based entitlement program formerly known as Food Stamps. Now dubbed the Supplemental Nutrition Access Program, or SNAP, it enrolled more than 40 million people for the first time in March 2010. By August that number had grown to 41,836,300. At that point, nearly one in seven Americans were receiving monthly payments of approximately $133, for a monthly outlay of more than $5.5 billion.
“Nothing tells the reality of this economy better than this,” Bloomberg Television news anchor Margaret Brennan uttered solemnly in January 2010, setting the tone for a year’s worth of coverage. In May, The Atlanta Journal-Constitution told the tale of an entertainment attorney who’d once earned $250,000 a year resorting to food stamps to feed his two kids. In June, NPR featured the story of a former restaurant critic who was now dining on Uncle Sam’s dime. Even Newt Gingrich bought into SNAP’s rapidly expanding girth as a telling metric of economic stagnation. “Which future do I want?” he wrote in an October memo sent to Republican candidates. “More food stamps? Or more paychecks?”
But the Great Recession isn’t the whole story behind food stamps’ Second Great Awakening. The Department of Agriculture’s Food & Nutrition Service (FNS) has been engaged in a lengthy campaign to boost the program’s enrollment rates. In 2000 just 16.9 million people were receiving food stamps, and only 50 percent of those who were eligible participated in the program. Then FNS and the state agencies that administer SNAP began streamlining application processes and ramping up their outreach efforts. By 2007, 66 percent of “eligibles” had been converted into participants, and preliminary data suggests that that percentage continued to increase in 2008 and 2009. SNAP, it turns out, is a rare and increasingly costly example of government efficiency.
SNAP’s growth was driven partly by the transition from paper-based coupons to electronic benefit transfer (EBT) cards, a process that was mostly completed by 2004. Every month, the government deposits funds into accounts established for SNAP recipients, who then draw upon these funds via magnetic-strip cards that work at point-of-sale devices in more than 190,000 retail stores. “The card is convenient, secure, and reduces the stigma sometimes associated with public assistance,” a California EBT website advises.
Convenient, stigma-free purchasing power is just one the way government has been, in the words of Secretary of Agriculture Tom Vilsack, “breaking down barriers to participation” in SNAP. In theory, you cannot receive food stamps if your gross monthly income exceeds 130 percent of the poverty level. In addition, if you have “countable resources” such as bank accounts or vehicles that fail to qualify for certain exclusionary criteria, you’re also ineligible.
But while the federal government sets these standards, it also gives states the leeway to modify them. Under a process known as “broad-based categorical eligibility,” SNAP applicants in dozens of states are now automatically considered eligible for food stamps if they’re already participating in a Temporary Assistance for Needy Families (TANF) program. Details vary, but categorical eligibility typically means applicants can have gross incomes of up to 200 percent of the poverty level, aren’t subject to asset tests, and don’t need to verify their net incomes. Meanwhile, participation in a state-funded TANF program can be achieved simply by sending individuals informational brochures about various services.
Millions of people have entered SNAP under these circumstances. A Department of Agriculture report published in October 2010 notes that 66 percent of SNAP recipients in 2009 “were categorically eligible and thus neither subject to the asset test nor required to provide information about their assets.” In one controversial 2009 case, an Ohio family of three who owned their fully paid off home, had a three-year-old Mercedes and one additional car, and held $80,000 in the bank qualified for $500 a month in food stamps.
The FNS and stage agencies have also figured out ways to increase the monthly payments that SNAP participants receive. Ultimately, a household’s net income determines the size of its payment—the lower the net income, the higher the benefit. To lower their net incomes, recipients can claim various deductions, including one for utilities that can be as much as $273 a month. According to federal guidelines, recipients can claim the maximum utility deduction regardless of how much they actually spend on utilities as long as they participate in a Low-Income Home Energy Assistance Program (LIHEAP). To take advantage of this fact, state agencies have started issuing annual fuel-assistance payments of $1 to SNAP recipients. In New York alone, administrators reportedly boosted monthly payments to 90,000 households by an average of $131 a month.
In part the FNS is pushing SNAP so hard because it believes the program functions as an economic stimulus. In 2008, Mark Zandi, chief economist at Moody’s Analytics, testified before Congress that expanding the food stamp program was the most effective way to “prime the economy’s pump.” A $1 increase in payments, he suggested, boosts GDP by $1.73. Since then, annual food stamps outlays have jumped from $37 billion to more than $60 billion.
But while the government believes SNAP can bulk up the economy, it also believes the program can slenderize the body politic. In 2009, FNS chief Kevin Concannon suggested the agency’s goal is to overhaul America’s diet. “The analogy I think of is in the anti-smoking arena,” he told Whorunsgov.com. “It took a number of years to really get the systems reoriented and established so that we prohibit smoking in public places.”
As the largest of FNS’s 15 nutrition assistance programs, SNAP is also the most strategic one to reorient. Will Humble, director of Arizona’s Department of Health Services, envisions using SNAP to compel food retailers to carry more nutritious products. “Why is SNAP a good leverage point for changing vendor behavior?” he asks on his blog. “Because the federal government provides more than $50 [billion] in SNAP benefits every year.”
FNS aims to use this leverage on purchasers as well as vendors. With its EBT system, it can now intimately monitor and potentially influence the eating habits of more than 40 million Americans. New York City Mayor Michael Bloomberg has already floated the idea of making soda off-limits for SNAP recipients. (In 2004, the U.S. Department of Agriculture denied Minnesota permission to enact a similar ban.) Hank Cardello, author of Stuffed: An Insider’s Look at Who’s (Really) Making America Fat, thinks a more general form of gastronomic policing is the way to go. “Rather than create a modern-day Prohibition on specific foods or beverages, the food stamp program should be restructured to cap the total calories purchased each month,” he writes at The Atlantic.
So far the government has shown more interest in rewarding good behavior than punishing bad. In December 2011, the FNS will start testing a “healthy incentives” program in Hampden County, Massachusetts. Participants will receive a 30 percent discount on their EBT purchases of fruits and vegetables. As coercion goes, this may qualify as pretty benign stuff. You give millions of hungry Americans money for food. And then you give them even more money if they agree to eat like upscale locavores battling Big Corn Syrup.
But locavores want to decentralize the food system in an effort to reclaim control over what goes into their bodies. SNAP is moving in the opposite direction. And as its new status as a behavior modification tool grows increasingly apparent, so too does the realization that the program’s growth, commonly attributed to economic desperation, is fueled at least as much by policy imperatives. Food stamp use has hit historic highs because the government’s effort to expand the program has hit historic highs. Even more than McDonald’s, the feds have mastered the art of supersizing.
Reason Contributing Editor Greg Beato (gbeato@soundbitten.com) writes from San Franscisco. This is republished from Reason.com with permission.