The Shriver Brief : Poverty Law Commentary & Insights : Sargent Shriver National Center on Poverty Law : Affordable Housing, Healthcare Reform

During the recent economic downturn, many American families became food insecure, meaning they had limited or uncertain access to enough nutritious food for an active, healthy life. In 2010, 40.3 million people received monthly benefits through the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps), up from 33.7 million people in 2009 and more than double the number of food stamp recipients in 2002. Participation in school meal programs also increased, and 32 million children now participate in school meal programs each day. Food insecurity is especially troublesome among older adults, given the population’s particular health and medical needs. From 2001 to 2009, the number of older Americans at risk of hunger increased by 79 percent.

The increasing prevalence of food insecurity in America has prompted Clearinghouse Review: Journal of Poverty Law and Policy to choose it as its 2012 special issue topic. Every year, the Review devotes one issue to exploration of a single topic; last year’s special issue focused on applying a human rights lens to poverty law practice, and the 2010 special issue discussed climate change and green jobs.

Helping low-income people increase their access to food through benefits programs such as SNAP, the Women, Infants, and Children Program (WIC), and the Child and Adult Care Food Program (CACPF) has long been a traditional strength of the legal services community, and Clearinghouse Review has published many articles on these topics. Recently, the Review has published articles exploring whether states should require identification requirements for SNAP participants, the use of SNAP benefits at fast-food chains, and low-income college students’ eligibility for SNAP benefits.

However, the nature of food insecurity is evolving, as are the federal and state programs that address the problem. Assisting clients with SNAP benefits has become a moving target for legal services attorneys, who are trying to help more clients get benefits in the face of state budget cutbacks that cause delays in processing times and reduce compliance with federal legal deadlines. Children, the elderly, immigrants, and people living with disabilities all face additional challenges when trying to access nutritious food through SNAP and other programs.

As the number of food-insecure Americans grows, it will not be enough for only those legal services attorneys specializing in benefits to confront the hunger problem. To end hunger in America, advocates from many disciplines—health, education, economic development, and housing, to name a few—will need to focus on food. Moreover, it will not be sufficient for these advocates to understand the changing landscape of federal and state benefit programs. To understand why so many communities are unable to secure nutritious food for all of their members, advocates need to take a close look at the communities themselves. Many low-income communities have become “food deserts” with limited access to nutritious foods. These neighborhoods also contain few safe spaces for physical activity, which has contributed to a dramatic rise in obesity over the past decade. Low-income families are also affected by food’s production, distribution, and consumption, both as workers and consumers.

The good news is that, across the country, advocates and community leaders are developing new approaches to food insecurity. Not only are they using traditional antipoverty programs in new ways, they are helping low-income people access nutritious food through farmers’ markets, community gardens, and fresh food financing initiatives. Lawyers are dismantling state-level barriers to national food programs, helping communities rezone to have more green space, incorporating the concept of a “human right to food” into their arguments, and ensuring that, as the delivery of benefits is modernized through the use of new technologies, vulnerable clients’ ability to access benefits is not compromised.. Food banks are collaborating with unexpected partners to make sure that nutritious food does not spoil before it reaches consumers. In its 2012 special issue, Clearinghouse Review hopes to showcase dynamic and diverse solutions to food insecurity from across the country so that advocates can share their expertise with one another and design new solutions to food insecurity.

If you are interested in learning more about Clearinghouse Review’s 2012 special issue, please contact Staff Attorney-Legal Editor Michele Host. The editorial team welcomes suggestions regarding topics and authors. If you or your organization is interested in sponsoring the 2012 special issue, contact Brendan Short.

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Families must be able to save money in order to achieve self-sufficiency and prosper. Unfortunately, the federal government often forgets this common-sense principal. 

Many public benefits programs—like cash welfare or Medicaid—limit eligibility to those with few or no assets. If a family has assets over the state’s limit, it must “spend down” longer term savings in order to receive what is often short-term public assistance. These asset limits are a relic of entitlement policies that no longer exist, since cash welfare programs now focus on quickly moving families to self-sufficiency rather than allowing them to receive benefits indefinitely. In other words, although personal savings and assets are precisely the kind of resources that allow families to move off—and stay off—public benefit programs, asset limits actually discourage anyone receiving public benefits from saving for the future.

States have full discretion in setting or eliminating asset limits for Temporary Assistance to Needy Families (TANF), Medicaid, and the State Children’s Health Insurance Program (SCHIP). They also have some flexibility to address asset limits for the Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps). Several states have eliminated asset limits in TANF, Medicaid and SCHIP, and 38 states have eliminated asset tests in SNAP.

Pennsylvania is one of these states. In 2008, when the recession hit and unemployment soared, it dropped asset limits in its SNAP program. Unfortunately, Pennsylvania’s Department of Public Works (DPW) recently announced that it wants to reinstate these tests. Under the proposal, individuals under 60 could have no more than $2,000 in assets, and individuals over 60 could have no more than $3,250, not including retirement accounts and homes. This is devastating news for the state’s 850,000 families currently receiving SNAP benefits. It would also be a blow to Pennsylvania’s economy since research shows that every $1 in SNAP benefits generates $1.73 in economic activity.

This proposed policy reversal is highly unusual because the trend among states has been to eliminate asset tests. So what is different about Pennsylvania? According to Anne Bale, a spokesperson for the DPW, Pennsylvania residents have complained about fraud and abuse in the SNAP program. DPW’s hope is that reinstituting asset limits would eliminate this waste, without requiring the state to spend money on fraud detection and prosecution. However, the state recently won an award for running the most efficient state SNAP program and has one of the lowest rates of SNAP fraud in the nation: 1/10 of 1%. Moreover, the state would not really save any money since it’s likely that more caseworkers would need to be hired and all caseworkers would need to receive training on the new limits and how to apply them. Added to the cost of software to computers, asset limits and the extra workload of understaffed offices, any cost savings would be slim. It would be a no-win situation: both bad for the state’s economy and bad for people trying to escape poverty’s cycle.

This proposed policy sends entirely the wrong message: Do not pull yourself up out of poverty; rather remain in the cycle of poverty, dependent on government benefits. It’s simply bad public policy to require people to spend all their assets in order to ensure a meal on the table then tell them that they need to save and become self-sufficient!

It time to do away with asset limits once and for all. Grab your fork and tell Pennsylvania and other states to stop sticking it public benefit recipients.

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Over the past 20 years, electronic deposit and electronic benefit transfers (EBT) have replaced paper checks for the delivery of public assistance benefits. EBT systems deliver government benefits by allowing recipients to use a plastic card to access their benefits through ATMs and point of sale (POS) devices located in select retail outlets.

One reason that EBT systems have become so popular is that states have found that they can save millions of dollars by "outsourcing" the provision of these benefits to big financial firms. In fact, JP Morgan is the largest processor of food stamp benefits in the United States.

JP Morgan has contracted to provide food stamp debit cards in 26 states and the District of Columbia. JP Morgan is paid for each case that it handles, so that means that the more Americans that go on food stamps, the more profits JP Morgan makes. Considering the fact that the number of Americans on food stamps has exploded from 26 million in 2007 to 43 million today, one can only imagine how much JP Morgan's profits in this area have soared.

J.P. Morgan also provides unemployment insurance benefit debit cards in seven states which is ironic since it, along with other big Wall Street banks, was a major contributor to the financial collapse that lead to tens of thousands of Americans becoming unemployed. 

It seems grossly unjust that the very Wall Street financial institutions that caused the recession and received bailouts from the U.S. government and tax dollars during the financial crisis are now making money off the recession and their victims again – low income families and taxpayers. Moreover, one of the programs that was on the chopping block during the debt debate was the food stamp program. In other words, Congress was prepared to cut food assistance to families, but did not even bother examining whether big banks’ profits from administering food stamp program benefits should be cut.

As part of the recent Wall Street reform, the Consumer Financial Protection Bureau (CFPB) was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB, which became operational on July 21^st, is now the sole federal agency focused on consumer protections. Among its responsibilities is supervision and enforcement with respect to the laws over providers of consumer financial products and services. As such, one of its early efforts should be to review the practice of continuing to allow financial institutions to profit off the very consumers they helped to defraud and deplete their assets in the first place.

To learn more about the CFPB visit its website.

To learn more about issues surrounding the electronic payment of public benefits you can view the Shriver Center’s webinar, The Next Frontier: in Public Assistance: Electronic Payment Cards.

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The Supplemental Nutrition Assistance Program (SNAP, formerly called Food Stamps) is one of the nation’s most important anti-hunger and anti-poverty programs and helps 44 million Americans buy food, including 1.8 million in Illinois. In 2009, SNAP effectively lifted 4.6 million Americans out of poverty. Today, SNAP is threatened by House Budget Committee Chairman Paul Ryan’s long-term budget plan, which passed the House on April 15, and other potential structural changes in government spending such as a global spending cap.

What is SNAP?
Food stamps have existed in one form or another since the latter years of the Great Depression, helping Americans avoid hunger and malnutrition. SNAP also helps American farmers and the 200,000 retailers who accept the benefits. The federal government pays for all SNAP benefits, and splits the cost of administering the program with the states.

SNAP is a critical part of the safety-net for American families. Three-quarters of all benefits go to households with children, and nearly one-third go to households where a family member is elderly (over 60) or disabled. SNAP serves American families whose income is less than 130% of the federal poverty line ($1,579 per month for a family of two or $2,389 for a family of four). This eligibility level is set by Congress.

SNAP benefits are keyed to the USDA Thrifty Food Plan, which is the Department of Agriculture’s estimate of the cost of a bare-bones, nutritionally adequate diet. The maximum benefits (including the small temporary increase provided by the American Recovery and Reinvestment Act) is currently $367 for a family of two or $668 for a family of four; that amount goes to families with no disposable income after certain necessities are deducted from their income. But the average person receives just $4.46 a day. Perhaps not surprisingly, food pantries report more need towards the end of the month, when people have exhausted their SNAP benefits and still need to eat.

Ryan’s Long-Term Budget Threatens SNAP
Chairman Ryan proposes radical, unwise, and unnecessary changes to the SNAP program including the following.

• Ryan would cut almost 20%, or $127 billion, from the SNAP program over ten years. Slashing this much from the program would require cutting off access to food for millions of Americans, or drastically reducing benefit levels.
• Ryan would change the structure of SNAP to a “block grant” starting in 2015. Block grants cap federal expenditures for a particular program, and the federal government simply gives states a fixed amount each year without regard to the level of need.
• Ryan would require adult recipients of SNAP to work or engage in job training. Our society should provide the most vulnerable among us adequate nutrition, even if they or their parents are unable to work.
• Ryan would make SNAP receipt time-limited, like Temporary Assistance for Needy Families (TANF). Such a policy would cause hunger and malnutrition for millions of Americans, especially the elderly, after they exhausted their period of eligibility.

Cutting $127 Billion from SNAP Would Rip a Hole in the Safety Net
Slashing 20% from the SNAP program would hurt millions of Americans, including the elderly and working families. It would also hurt farmers and retailers and shift a huge financial burden onto the states. In Illinois alone, a conservative estimate of the cuts would be $5 billion in lost support over 10 years. That is money that families could not use to buy healthy food, and money stores would not bring in, reducing employment and increasing food deserts, areas that lack access to healthy food. If the $127 billion in cuts come from solely from narrowing eligibility, at least 8 million individuals would need to be cut from the program. If the $127 billion in cuts come from a universal cut in benefits, it would be a reduction of over $30 per person per month, which adds up to more than $1,000 a year for a family of three. There isn’t much else to cut—SNAP is efficiently run and has an extremely low error rate, with over 98% of SNAP benefits going to households who are qualified for the program.

SNAP Should Remain a Federal Program
SNAP is, and should remain, a federally funded program for three main reasons. First, hunger is a national problem, and ensuring access to enough food for all Americans should be a shared commitment. Second, SNAP benefits food producers and sellers all around the country, ensuring steady national and local supplies of food. Third, if SNAP were block-granted, states would not be able to adequately respond to increases in need caused by natural disasters or recession. In 2005 after the hurricanes in the Gulf Coast, for example, SNAP provided two million suffering families $1 billion in benefits.

Block-Granting SNAP Would Undermine Its Purpose and Is Not Necessary to Control Spending
Chairman Ryan believes that block-granting SNAP would help keep spending down. In fact, the block-grant structure is unwise and unnecessary.

First, it’s unwise because a block-grant structure would rob SNAP of the flexibility to respond to times of increased need, like natural disasters and recessions. It is a testament to the flexibility of the program that in this time of unprecedented economic challenge it has grown to a record high, with 44 million Americans receiving SNAP in January 2011. SNAP must remain a counter-cyclical program to keep families afloat in difficult times.

Second, block-granting SNAP is not necessary to keep spending in check. Chairman Ryan incorrectly asserts that SNAP costs are rising out of control. In fact, the growth of SNAP is already slowing as the recovery begins. The non-partisan Congressional Budget Office predicts that SNAP expenditures will begin to fall starting in 2012. The program’s cost will return to a .3% share of GDP—the same as before the recession – by 2021. You can find state-level trends calculated by Food Research and Action Center here. 

In the last decade, SNAP costs have increased for four reasons. The vast majority of the rise is temporary and caused by the recession ,which has caused increase expenditure on SNAP because more people than ever qualify for help. The SNAP caseload closely tracks the number of people in poverty and the unemployment. Here in Illinois, for instance, in the last five years the unemployment rate has increased by 71% (from 5.6% in January 2006 to 9.6% in January 2011), and SNAP receipt has increased by 48% (from 1,216,433 to 1,803,223). Also, Congress and the President responded to the recession by temporarily boosting SNAP benefits by an average of $46 per household, which will expire in October of 2013. This expense is one of the best forms of stimulus in which our government has invested. A small part of the increased cost of SNAP comes from higher food costs, since the maximum SNAP amount is tied to the cost of a bare-bones nutritious diet. Finally, in the last decade we have made strides in getting qualified people who need help buying nutritious food enrolled in SNAP, but still one-third of eligible families do not receive SNAP, especially working families and the elderly. All this demonstrates that the biggest causes of the rise in the cost of SNAP have been the rise in the number of people who qualify for SNAP, and increase in benefits, both of which are temporary.

Adding a Time-Limit and Work Requirement to SNAP Are Impractical and Naive
The House doesn’t really think that people will stop needing to eat, do they? For many adults around the nation, SNAP is literally the only government support to which they are entitled that prevents their utter destitution and starvation.

Ryan’s proposal to require SNAP recipients to work or do job training is unrealistic and expensive. States already have smaller-scale employment & training programs for SNAP recipients, and require able-bodied childless adults to work or engage in training. But expanding this program to all recipients would swamp already-strapped states, driving up administrative costs with additional personnel and infrastructure. Paradoxically, elsewhere in Ryan’s plan he guts our nation’s investments in job training! Even the recently passed FY 2011 continuing resolution cut $1billion from job training and education.

Protecting SNAP’s Ability to Prevent Hunger in Challenging Times is a Moral Imperative
SNAP literally saves lives. SNAP helps families improve their nutrition, because 90% of SNAP benefits go to fruits and vegetables, grain products, meats, or dairy products, and the program includes a strong nutrition education component. Research shows that the national expansion of SNAP (Food Stamps) in the 1960s reduced infant mortality. That’s why prominent Americans, including conservatives like Bob Dole, support SNAP. Hunger and malnutrition in America was real—if you don’t remember it, watch this moving video. Today, tens of millions of Americans—one in five –struggle to buy food for their families.

Our lawmakers face a stark challenge—a growing structural deficit at a time of unprecedented need. But SNAP is not a part of the structural problem. For decades now our nation has embraced this core belief—that in a land so prosperous and fortunate as America, no adult, child, or elder should go hungry. Let us not turn our back on this most fundamental obligation.

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The USDA recently released its annual report for 2008 on food insecurity in the United States. As expected in this time of recession, food insecurity significantly increased, rising from 11.1% (13 million households) in 2007 to 14.6% (17 million households) in 2008, the highest levels since the study began in 1995. Food insecure households are defined as those who, at some time during the year, had difficulty providing sufficient food for all household members due to lack of resources. One-third of these households experienced very low food security, an episode in which food intake of some household members was reduced or eating patterns were disrupted.

Access to adequate nutrition affects many aspects of a child’s life, especially their learning and future health. As the nation focuses on the rising cost of health care, it is important to recognize that a large portion of every health care dollar is spent on preventable diseases, many of which are closely linked to nutrition. President Obama pointed out the importance of this issue to our nation’s strength: “Our children’s ability to grow, learn, and meet their full potential – and therefore our future competitiveness as a nation – depends on regular access to healthy meals.”

Fortunately, several programs exist to fight hunger in the United States. They range from the National School Lunch Program to Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and include the Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps). By expanding these programs, increasing access to them, and reducing associated administrative burdens, we can make use of this existing framework and truly fight hunger. 

SNAP is a massive program that reaches all ages and many working families (eligibility extends up to 130% of the Federal Poverty Level, or just under $24,000 per year for a family of 3). Utilization of this program is skyrocketing across the country, having increased by more than 37% in the past two years. In fact, a new study predicts that nearly half of all children in the country (and a shocking 90% of African American children) will receive SNAP benefits at some point during their childhood.

While the federal government fully funds the benefits in programs like SNAP, states are largely responsible for the administration. And, in light of state budget crises, the front-line workers administering these programs are not getting the support they need to deal with increasing demand. This leaves needy families without benefits, and leaves millions of dollars in Washington that could be funneled into local economies. 

President Obama has declared a goal of ending childhood hunger by 2015. While it is understandable that the prevalence of food insecurity rises during a severe recession, the trend does not need to continue. We must commit to ensuring that everyone in this wealthy nation can meet their most basic needs and access an adequate diet. Improving access to our existing food and nutrition programs in a vital first step, and can go a long way toward achieving the President’s goal.

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Most people rejoice when they find out they are getting a raise. But for low-income people, that joy may quickly turn to frustration when they realize the modest increase in income may cause a loss of hundreds of dollars in food stamp benefits. 

People across the country faced this challenge when the $25/week increase in Unemployment Insurance contained in the American Recovery and Reinvestment Act (the federal stimulus bill) took effect in March. For some, this modest increase in income pushed them off the “cliff” of aid programs as the extra money was more than offset by a loss in food stamp benefits.

Low-income families face similar challenges each day, with their steps toward independence cancelled by a loss of a work support such as food stamps. Ideally, working families are phased off of aid programs, with their benefits gradually decreasing while their incomes increases. This approach rewards work and provides the support necessary for a family to sustain its success.

But, eligibility for food stamps for most families is strictly capped at 130% of the Federal Poverty Level, or $1907/month for a family of 3. As a result, a household whose gross income exceeds this amount is ineligible--regardless of how much the family actually has available to purchase food after allowable expenses for rent, utilities, and child care. For example, a family of 3 whose monthly income increases by $100, from $1850 to $1950 per month, may lose over $300 in food stamps. Rather than being rewarded for its accomplishment, the family is left less financially secure.

Fortunately, states have the option of raising this cap, bringing more federally funded food stamps to needy families and their communities. Through a policy maneuver known as “categorical eligibility,” the “cliff” can be reduced so that families are eased off of assistance as their earnings increase. Such a policy reduces the number of families who earn too much to receive assistance but not enough to survive. By raising the gross income limit for food stamps, a state can prevent families from being penalized for their successes.

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