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SNAP & Poverty

By Eric Gray, Executive Director

According to the USDA, the average American household spends $909 per month on groceries. After the recent shutdown and President Trumps mention of food stamps in his state of the union address, we’re getting many questions from local media, schools and concerned citizens about what furloughed federal employees do during a partial government shut down. With Supplemental Nutrition Assistance Program (SNAP) benefits having been distributed on January 20 and with no certainty on whether another distribution will happen, many more families (1 in 7) receiving assistance are concerned too. About 18% of the fees paid at our Orlando & Treasure Coast grocery programs come from SNAP benefits so I thought we should take some time to learn a little about the program and its relation to poverty.

Fifty-five years ago, had the Federal Government been shut down, a woman named Isabelle Kelley, of Simsbury, Connecticut would have been staying home as a furloughed worker. Instead, Kelley played a central role in shaping food assistance and nutrition programs in the United States. She helped administer the Special Milk Program for schoolchildren following the passage of the Agricultural Act of 1954. Her role grew as the government became more involved in social welfare policy under President John F. Kennedy’s “New Frontier” efforts in the early 1960s. Kennedy’s first executive order, the day after his inauguration, expanded the existing food distribution programs for families in need. The Agriculture Department named Kelley to a four-person task force to design and carry out a food stamp program. What started as a pilot program in eight regions eventually formed the basis of the Food Stamp Act of 1964. It was signed into law that year, with President Lyndon B. Johnson calling it “a realistic and responsible step toward the fuller and wiser use of our agricultural abundance.” Earlier that year (fifty five years ago last month) President Johnson launched the War on Poverty at his January 8 State of the Union address.

Isabelle Kelley was later appointed the first director of the Food Stamp Division in 1965. She said, “We had a mandate to run a small, cautious program that would be expanded only slowly, on an absolutely voluntary basis.” Within five years, the program was serving six million Americans, with a budget in the hundreds of millions of dollars. Today the program, now called SNAP (Supplumental Nutrition Assistance) supports roughly 44.2 million Americans at a cost of $70.9 billion annually.

This past month, the one in seven Floridians receiving an electronic benefits transfer for use in purchasing grocery food, received their benefits 11 days early. This distribution will need to last them through February 28 regardless of whether the Federal Government stays open. Of greater concern is the possibility of no solution before March 1 when the next transfer would be scheduled.

In part because net income for American farmers declined 12% from the previous year (lowest levels since 2002), Congress once again passed the Farm Bill in December. Eighty percent of the Farm Bill spending is used for nutritional programs, the largest of which is SNAP. However, since the bill passed around the same time as the shutdown, the actions expected from passage have stalled.

For example, USDA publishes a number of reports that are key to farmers’ marketing and production efforts. USDA recently cancelled release of both the annual Crop Production report and the most recent monthly World Supply and Demand Estimates, which contains information key to understanding world agricultural markets. In addition to cancelling release of information key to agricultural markets, USDA has halted the important preliminary work required to implement the new Farm Bill and has stopped the processing of loan and grant programs, including the program to help farmers hurt by current trade policy decisions. Further, the shut-down, if it happens again, could potentially halt benefits going to millions of people currently receiving benefits from SNAP, including the food stamp program. SNAP provides assistance to low-income individuals and families so they may afford vegetables, fruits, dairy products, meat, poultry, fish, bread and cereals. Nutritional programs were the most contentious topic in the Farm Bill. Republicans, with support from President Trump, wanted to change rules so that able-bodied adults with no dependents would be required to work, participate in work training or enroll in educational classes to receive nutritional assistance. Democrats opposed such changes, preferring current rules. The federal government already has requirements on food benefits; namely, that “able-bodied adults without dependents” between 18 and 49 work at least 20 hours a week or engage with a job-training or volunteer program in order to stay on benefits for longer than three months over a three-year period. Dozens of adults visit our program in downtown Orlando to verify their employment with a CareerSource staff member in an effort to continue their SNAP benefits. Policy makers concerned about benefit programs prefer work requirements because they believe that receiving money from the federal government incentivizes people to avoid work altogether. An analysis by the Center for Budget Policy and Priorities found that 82 percent of all SNAP households and 87 percent of families with children that receive SNAP benefits were employed in the same year they received benefits.

SNAP benefits, if broken down, provide $1.40 per meal assuming three meals daily for the average recipient. Some organizations have encouraged people to try the SNAP Challenge and go one full week spending no more than $29.40 on food. Forty-nine percent of all SNAP households have children and 20% have a non-elderly disabled person in the home.

Many of the sharpest criticisms of the SNAP program are related to fraud. The USDA does have 100 inspectors throughout the country just monitoring for trafficking or misappropriation of SNAP Fuds. Trafficking is the selling or converting of SNAP benefits into cash payments of some type. According to the USDA, 4 cents of every SNAP dollar issued was misused in the 1990’s. Today that figure is 1 cent of every dollar with 8 percent of retailers nationwide being cited for abuse. These are usually smaller establishments as opposed to larger commercial stores.

SNAP benefits were said to be a significant part of the American Reinvestment and Recovery Act from 2008 to 2013. The USDA reported in 2002 and in 2010 that for every dollar spent on SNAP benefits there was a positive correlation to economic activity measured through Gross Domestic Product. In 2002, their estimate was $1.84 in positive economic activity for each dollar spent and in 2010 their estimate was $1.79. Mark Zandi at Moody’s Analytics, in a 2008 study, reported this figure to be $1.73.

There has been robust debate about additional restrictions being placed on SNAP benefit uses. Currently the funds can only be used for the purchase of consumable product excluding hot prepared foods or restaurants. SNAP can also not be used for the purchase of some household necessities like toilet paper or feminine hygiene products. While studies do not indicate any differences in consumption patterns among SNAP beneficiaries and non-beneficiaries, the funds can be used to purchase items such as soda, candy or high sugar cereals. Funds cannot be used to purchase Tobacco, Pet Food or Alcohol among other items. Changes to the restrictions have not occurred because of the difficulty in monitoring and determining what constitutes healthy food as well as issues of personal freedoms.

SNAP benefits help complement an individual or family’s budget to buy nutritious food. An individual receives on average $125 per month, while a family of four gets $500. Additionally, typical households receiving SNAP benefits can have no more than $2,250 in the bank to meet requirements. Average monthly income for a person receiving SNAP is currently $731 gross.

Poverty levels are the strongest possible correlate for participation in the SNAP program. Participants must earn 130% of the US Poverty rate or lower. This would be $1,245 gross per month for an individual. For comparison, in Florida, an adult qualifies for Medicaid insurance if they are in a household earning 65% of the US Poverty level or below.

The ‘poverty line’ is the threshold below which families or individuals are considered to be lacking the resources to meet the basic needs for healthy living; having insufficient income to provide the food, shelter and clothing needed to preserve health. Poverty among Americans between ages 18–64 has fallen only marginally since 1966, from 10.5% then to 10.1% today. Poverty has significantly fallen among Americans under 18 years old from 23% in 1964 down to less than 17%, although in Orlando that figure is 28% according to the 2018 US Census data. The most dramatic decrease in poverty has been among Americans over 65, falling from 28.5% in 1966 to 10.1% today. Today, more than 39.7 million (12%) Americans, 2.8 million Floridians (14%) and 353,000 (15%) Metro Orlando residents, including 168,000 children, are considered to be living in poverty. No matter your feelings about the SNAP/Food Stamp Program, it is a large enough program effecting enough people that a little knowledge can go a long way in forming important decisions.