Let's get a few things straight on the nations Food Stamp Program (SNAP)

Entitlements have been taking a verbal and legislative beating during this election year climate and nothing worse than the distortions spewing toward the Food Stamp Program, (now known as SNAP) from the depths of conservatism. SNAP has become a scapegoat for many of America’s fiscal problems. As if making sure children and families don’t go hungry in the richest nation in the world, is what’s bankrupting our nation.

Aside from the moral deficiencies of many conservatives I speak to, the astounding confidence by which they speak about SNAP and it’s “crippling” of America, is only surpassed by the utter ignorance, such statements are founded on. Most don’t even know its called SNAP but they are certain it’s an inefficient and ineffective government handout that is abused by most of it’s “lazy” beneficiaries.

Let’s look at some of the top concerns:

1. Food stamps are adding to our deficit problems.

A report by Dottie Rosenbaum at the Center on Budget and Policy Priorities says:

SNAP is not contributing to the nation’s long-term fiscal problems. While SNAP spending has risen considerably since the recession hit, the increases are expected to be temporary. CBO predicts that SNAP enrollment will fall in coming years as the economy recovers. By 2022, SNAP spending will return nearly to pre-recession levels as a share of GDP.

Once the economy has fully recovered, SNAP costs are expected to rise only in response to growth in the size of the low-income population and increases in food prices. Unlike health care programs and Social Security, there are no demographic or programmatic pressures that will cause SNAP costs to grow faster than the overall economy. Thus, SNAP is not contributing to the nation’s long-term fiscal problems.

2. The Food Stamp Program is inefficient and ineffective at delivering assistance.

SNAP has responded effectively to the recession. SNAP caseloads have increased significantly since late 2007, as the recession and lagging recovery battered the economic circumstances of millions of Americans and dramatically increased the number of low-income households who qualify and apply for help from the program.

In addition, the 2009 Recovery Act increased SNAP benefits as a way of delivering economic stimulus. Policymakers deemed SNAP to be effective for this purpose because of its broad reach among low-income populations and its high efficiency. According to the National Academy of Science measures of poverty, which count SNAP as income, SNAP kept about 4 million people out of poverty in 2010 and lessened the severity of poverty for millions of others.

Economists consider SNAP one of the most effective forms of economic stimulus. Moody’s Analytics estimates that in a weak economy, every dollar increase in SNAP benefits generates $1.72 in economic activity. Similarly, CBO rated an increase in SNAP benefits as one of the two most cost-effective of all spending and tax options it examined for boosting growth and jobs in a weak economy.

Not only did SNAP deliver, it was able to handle the drastic increase in recipients, as the recession began to take full effect. Keeping 4 million people out of poverty and millions more from depression like conditions. Another interesting point, is that SNAP benefits generate $1.72 in economic activity for every dollar increase in spending. Making the SNAP program not only a cost effective benefits delivery system, but an excellent growth and jobs booster in a weak economy.

3. SNAP is plagued by fraud and people “gaming” the system.

Despite the recent rapid caseload growth, USDA reports that states achieved a record-low SNAP error rate in fiscal year 2011 (see Figure 4.)

Only 3 percent of all SNAP benefits represented overpayments, meaning they either went to ineligible households or went to eligible households but in excessive amounts, and more than 98 percent of SNAP benefits were issued to eligible households. In addition, the combined error rate — that is, the sum of overpayments and underpayments (see box) reached an all-time low in 2011 of just 3.80 percent.

In 2011, for example, the overpayment error rate was 2.99 percent and the underpayment rate was 0.81 percent. The combined error rate was thus 3.80 percent. But the net loss to the federal government from errors was only 2.18 percent.

The USDA has cut “trafficking” — the sale of SNAP benefits for cash, which violates federal law — by three-quarters over the past 15 years. USDA has also permanently disqualified thousands of retail stores from the program for not following federal requirements. In fiscal year 2011, USDA convicted 179 retailers and recovered $26.5 million in fraudulent transactions. When cases of SNAP fraud are reported in the news, it is because the offenders have been caught, evidence that states and USDA are aggressively combating fraud.

With fraud rates at an all time low of 3.8% and an actual loss to the government of 2.18%, I’d say this myth is busted. These rates were actually lower than even I expected and this report adds further confidence to the issue over stores being held accountable for catering to fraudulent behavior. Rather impressive stats, especially when compared to the IRS tax noncompliance rate of 16.9%.

4. Obama’s policies have caused the huge increases in people on food stamps.

Caseloads have increased in every state. Some of the states that were hit hardest by the recession saw the largest caseload increases. For example Nevada, Florida, Idaho, and Utah, the four states with the largest growth in the number of unemployed workers between 2007 and 2011, also had the largest growth in the number of SNAP recipients.

The rapid caseload growth primarily reflected the fact that more households were eligible because of the recession. SNAP caseloads can grow for two reasons: because more households are qualifying for the program and enrolling or because a larger share of eligible households are signing up. Both of these occurred in recent years.

Now we know, SNAP enrollment follows the poverty line and the poverty in America increased due to the Great Recession. It’s also easy to see that Obama’s increased funding for SNAP has benefited the economy by injecting stimulus, thus creating growth and in return more jobs.

Based on the CBPP report, President Obama’s policies have helped the situation and have proven to be a wise investment. Not just for the added stimulus but for the millions of American’s who wouldn’t have made it, otherwise.

For those still thinking that gutting the Food Stamp program is a good idea or in some way it would benefit the economy by ending it all together, I’d suggest a new economic strategy, based in reality. SNAP is surpassed in efficiency only by unemployment benefits. It provides vital stimulus to families and the economy and it’s fraud rates are at the lowest levels on record.

While I’m sure we have programs in our government that could be cut or eliminated, SNAP certainly isn’t one of them. SNAP provides assistance to millions of American’s and in the long run, does so without increasing its share of the GPD. A win-win in my book, but I’m not running for President.

According to the CBPP, Mitt Romney’s plan:

Cuts in the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program) would throw 13 million low-income people off the benefit rolls, cut benefits deeply — by over $1,800 a year for a family of four — or some combination of the two. These cuts would primarily affect poor families with children, seniors, and people with disabilities.

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