Pennsylvania Moves to Starve Poor People
That’s the message I came away with after reading an online article from a Philadelphia Inquirer reporter about a decision by the state of Pennsylvania to limit eligibility for food stamps. The article is a perfect example of the difficulty advocates for limited government face in communicating their ideas through the mainstream press.
At issue is the PA Department of Public Welfare’s decision to eliminate eligibility for food stamps for people under the age of 60 who have more than $2,000 in assets (the value of one’s house, retirement benefits, and car would be excluded). The DPW estimates that only “2 percent of the 1.8 million Pennsylvanians receiving food stamps would be affected by the asset test.” Indeed, the DPW’s website notes that “Because of changes to SNAP, most Pennsylvania households are not subject to a net income limit, nor are they subject to any resource or asset limits.”
(SNAP is the acronym for the federal Supplemental Nutrition Assistance Program, which was known as the Food Stamp program until 2008 when Congress changed its name to sound more palatable. The program is run jointly by the U.S. Department of Agriculture and state governments, but federal taxpayers pay for the direct benefits.)
One of the “changes” that the DPW refers to is categorical eligibility, which basically means that Pennsylvania households already receiving benefits from other welfare programs, including cash welfare and Supplemental Security Income, automatically qualify for food stamps. In recent years, both the state of Pennsylvania and the federal government have made it easier to qualify for food stamps benefits.
Unfortunately, the Inquirer reporter either wasn’t aware of these details or didn’t deem them important enough for inclusion. Instead, he quotes ten—let me repeat that, ten—critics of the DPW’s decision. The critics include a “national hunger expert,” the legal director of a “leading anti-hunger group,” the executive director of the Greater Philadelphia Coalition Against Hunger, the executive director of the “liberal Pennsylvania Budget and Policy Center,” and an older woman who says that she’ll “have to give up paying for my health insurance.”
It took me all of two minutes to get a quote from Nathan Benefield, the director of policy analysis at Pennsylvania’s pro-liberty Commonwealth Foundation:
Unfortunately for taxpayers, politicians in Harrisburg and Washington have for the past few years considered it a “success” to have more families on welfare. Pennsylvania welfare eligibility and spending—including for food stamps—has exploded, threatening to crowd out everything else in the state budget. Means testing for assets is a common-sense reform to ensure those who truly need aid get it.
There, was that so hard?
Of course, journalists who are interested in getting the pro-liberty take on welfare reform are welcome to contact my colleagues and me at the Cato Institute. Honestly, we don’t want people to starve in order to save a buck—we just believe that the federal government is an improper and less effective means for assisting those who are truly in need. Pressed for time? Here are Cato essays on food subsidies, welfare, and federal subsidies to state and local government.
New Video Shows the War on Poverty Is a Failure
The Center for Freedom and Prosperity has released another “Economics 101″ video, and this one has a very powerful message about the federal government’s so-called War on Poverty.
As explained by Hadley Heath of the Independent Women’s Forum, the various income redistribution schemes being imposed by Washington are bad for taxpayers — and bad for poor people.
The video has a plethora of useful information, but the data on the poverty rate is particularly compelling. Prior to the War on Poverty, the United States was getting more prosperous with each passing year and there were dramatic reductions in the level of destitution.
But once the federal government got involved in the mid-1960s, the good news evaporated. Indeed, the poverty rate has basically stagnated for the past 40-plus years, usually hovering around 13 percent depending on economic conditions.
Another remarkable finding in the video is that poor people in America rarely suffer from material deprivation. Indeed, they have wide access to consumer goods that used to be considered luxuries – and they also have more housing space than the average European (and with Europe falling apart, the comparisons presumably will become even more noteworthy).
The most important message of the video, however, is that small government and economic freedom are the best answers for poverty. As Hadley explains, poor people can be liberated to live meaningful, self-reliant lives if we can reduce the heavy burden of the federal government.
Last but not least, the video doesn’t address every issue in great detail, and there are three additional points that should be added to any discussion of poverty.
- The biggest beneficiaries of the current system are the army of bureaucrats that receive very comfortable salaries administering various programs.
- The Obama Administration is looking to re-define poverty in a way that would expand the welfare state and increase the burden of redistribution programs.
- The welfare reform legislation of the 1990s was a small step in the right direction because it eliminated a federal entitlement and shifted responsibility back to the state level. This success story should be replicated for programs such as Medicaid.
This last point is worth emphasizing because it is also one of the core messages of the video. The federal government has done a terrible job dealing with poverty. The time has come to get Washington out of the racket of income redistribution.
Federal Spending: Ryan vs. Obama
House Budget Committee Chairman, Paul Ryan, introduced his budget resolution for fiscal 2012 and beyond today entitled “The Path to Prosperity.” The plan would cut some spending programs, reduce top income tax rates, and reform Medicare and Medicaid. The following two charts compare spending levels under Chairman Ryan’s plan and President Obama’s recent budget (as scored by the Congressional Budget Office).
Figure 1 shows that spending rises more slowly over the next decade under Ryan’s plan than Obama’s plan. But spending rises substantially under both plans—between 2012 and 2021, spending rises 34 percent under Ryan and 55 percent under Obama.
Figure 2 compares Ryan’s and Obama’s proposed spending levels at the end of the 10-year budget window in 2021. The figure indicates where Ryan finds his budget savings. Going from the largest spending category to the smallest:
- Ryan doesn’t provide specific Social Security cuts, instead proposing a budget mechanism to force Congress to take action on the program. It is disappointing that his plan doesn’t include common sense reforms such raising the retirement age.
- Ryan finds modest Medicare savings in the short term, but the big savings occur beyond 10 years when his “premium support” reform is fully implemented. I would rather see Ryan’s Medicare reforms kick in sooner, which after all are designed to improve quality and efficiency in the health care system.
- Ryan adopts Obama’s proposed defense (security) savings, but larger cuts are called for. After all, defense spending has doubled over the last decade, even excluding the costs of wars in Iraq and Afghanistan.
- Ryan includes modest cuts to nonsecurity discretionary spending. Larger cuts are needed, including termination of entire agencies. See DownsizingGovernment.org.
- Ryan makes substantial cuts to other entitlements, such as farm subsidies. Bravo!
- Ryan would turn Medicaid and food stamps into block grants. That is an excellent direction for reform, and it would allow Congress to steadily reduce spending and ultimately devolve these programs to the states.
- Ryan would repeal the costly 2010 health care law. Bravo!
To summarize, Ryan’s budget plan would make crucial reforms to federal health care programs, and it would limit the size of the federal government over the long term. However, his plan would be improved by adopting more cuts and eliminations of agencies in short term, such as those proposed by Senator Rand Paul.
USDA’s Budget Boom
Spending at the U.S. Department of Agriculture will be an estimated inflation-adjusted 43 percent higher this year compared to just a decade ago. The following chart shows the dramatic rise in USDA spending from fiscal 1970 to the president’s projection for fiscal 2011:
Most folks probably think of farm subsidies when they think of the USDA. However, farm programs only account for 19 percent of total USDA outlays. The vast majority of USDA spending, 69 percent, goes to food subsidies: food stamps, school breakfast and lunch programs, and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). In fact, spending on food stamps alone this year will account for roughly half of total USDA spending.
Why aren’t these programs housed at the Department of Health and Human Services, the government’s chief welfare bureaucracy? The answer is politics, of course. Every five years or so Congress passes a new “farm bill,” which updates or sets the agenda for USDA programs and policies. Stuffing welfare programs in with traditional farm subsidies engenders broad legislative support for the total legislative package. Including food subsidies helps secure votes from urban and suburban legislators who would otherwise have little or no incentive to vote for farm subsidies.
See here for more on downsizing the Department of Agriculture, including both farm and food subsidies.
Spending Growth: Mandatory Programs
While Congress haggles over Republican ambitions to trim $61 billion in funding for domestic discretionary programs, it’s important to remember that mandatory (or “entitlement”) spending is the main driver of recent and future budget growth.
The following chart compares fiscal 2007 spending to the president’s proposal for fiscal 2012 for the largest areas of overall federal spending:
Note that the area of spending that has increased the most dramatically is “other mandatory.” Major programs in this category range from food stamps to retirement and disability benefits for federal workers. The following chart shows the increase in spending for the largest of these programs:
This area of spending, and the programs that it consists of, are often forgotten in the debate over how to rein in our extraordinary deficits and mounting debt. That needs to change.
Bootleggers & Baptists, Sugary Soda Edition
Here’s a poor, unsuccessful letter that impressed the relevant New York Times reporters, but not their editorial overlords:
It may seem counter-intuitive that bleeding-heart anti-hunger groups and “Big Food and Big Beverage” would ally to oppose Mayor Bloomberg’s request to prevent New Yorkers from using food stamps to purchase sugary sodas [“Unlikely Allies in Food Stamp Debate,” October 16]. Yet the “bootleggers and Baptists” theory of regulation explains that this “strange bedfellows” phenomenon is actually the norm, rather than the exception.
Most laws have two types of supporters: the true believers and those who benefit financially. Baptists don’t want you drinking on the Lord ’s Day, for example, while bootleggers profit from the above-market prices that Blue Laws enable them to charge on Sundays. Consequently, both groups support politicians who support Blue Laws.
Baptists-and-bootleggers coalitions underlie almost all government activities. Defense spending: (neo)conservatives and defense contractors. President Obama’s new health care law: the political left and the health care and insurance industries. Ethanol subsidies: environmentalists and agribusiness. Education: egalitarians and teachers’ unions. The list goes on.
It’s easier to illustrate the theory (and sexier) when the bootleggers are non-believers who cynically manipulate government solely for their own gain. Yet one can be both a Baptist and a bootlegger. The Coca-Cola Company may sincerely believe that society benefits when the government subsidizes sugary sodas for poor people. Even so, a bootlegger-cum-Baptist can still rip off taxpayers.
This morning, NPR reported on another bootleggers-and-Baptists coalition: anti-immigration zealots and the prison industry.
Welfare and Fiscal Federalism
The Washington Post recently reported on the federal government’s cash-welfare program, Temporary Assistance for Needy Families. Despite the deep recession, the TANF welfare rolls haven’t seen a dramatic increase. Meanwhile, other federal anti-poverty programs have seen the sizable increases that are to be expected in a recession:
Nationwide, welfare cases grew by 11 percent from the start of the recession through March, according to the Department of Health and Human Services. In contrast, the number of families getting food stamps jumped by 50 percent and the number getting unemployment benefits more than doubled. Medicaid grew by more than 13 percent from late 2007 to late 2009, according to the Kaiser Family Foundation.
As I’ve noted before, TANF’s tighter work and eligibility requirements have made it a less desirable option for those seeking government assistance. Over the past decade, inflation-adjusted spending on all federal anti-poverty programs has increased by 89 percent. Only TANF saw a decrease in spending.
When TANF replaced the federal government’s open-ended entitlement in 1996, it allowed the states great leeway to set benefits. California, which offers more generous benefits than other states, has seen its TANF rolls increase by almost 25 percent since the recession started. In contrast, Michigan and Rhode Island, which have seen a respective 2 percent increase and 10 percent decrease in their welfare rolls, offer less generous TANF benefits.
The variation in TANF enrollment among the states points to the desirability of handing off all responsibility for anti-poverty programs to the states. The beauty of fiscal federalism is that it enables states to pursue policies that better reflect local preferences, while constraining governments because of interstate competition. Federal policymakers should get out of the anti-poverty business as the Constitution intended.
Rising Welfare Costs
The Government Accountability Office released Congressional testimony this week looking at Temporary Assistance for Needy Families. TANF, which replaced unrestricted welfare in 1996, has reduced welfare rolls and encouraged recipients to obtain work. Unfortunately, TANF’s goals have been undermined.
The GAO notes that “work participation rates … do not appear to be achieving the intended purpose of encouraging states to engage specified proportions of TANF adults in work activities.”
States are required to have at least 50 percent of eligible TANF recipients from single parent families participating in work activities. However, states are given various credits and exemptions that significantly reduce the number of recipients required to work. As a result, only about 30 percent of TANF recipients engage in “work activities,” which is often liberally defined. (This has been the case before and during the recession.)
Moreover, while TANF has successfully reduced the budgetary cost of cash-welfare, overall federal spending on anti-poverty programs has increased dramatically. According to a chart from Brian Riedl, anti-poverty spending has increased an inflation-adjusted 89 percent over the present decade:
I previously discussed how TANF enrollment has dropped since its passage in 1996 while food stamp enrollment has greatly increased. A food stamp user interviewed by the New York Times indicates one reason for the trend:
‘It used to be easier to go on cash assistance,’ she said as she left a food stamp office in Brooklyn this month. ‘You didn’t have to go to work, you didn’t have to report every day to an office and sign in and sign out. Now, if you don’t go to those group job meetings in the mornings, they shut down your whole welfare case. So that’s why I just get food stamps.’
Not surprisingly, the cost of the food stamps program has gone through the roof:
The desirability of federal anti-poverty programs in the midst of difficult economic times is a sensitive topic. However, with so many Americans currently in need of assistance, now is actually a good time to discuss the role of government in taking care of the less fortunate. As a Cato essay on welfare and Temporary Assistance for Needy Families argues, the federal government isn’t the best option.
Food Stamps Cut?
Prior to last week’s passage of another $26 billion in bailout money for state and local governments, I noted that the legislation wasn’t really offset:
Congressional Democrats say the measure is paid for with a combination of spending cuts elsewhere and tax increases. However, the new spending is front loaded and much of the spending cuts wouldn’t be realized until after 2013. For example, the Congressional Budget Office’s score of the legislation shows savings from the food stamps program of $12 billion from 2014-2018. Congress can come back any time before that and rescind the cuts.
It’s typical Beltway budgetary sleight-of-hand: increase spending up front and “cut” spending on the back-end to get a more deficit-friendly score from the CBO. Democrats don’t really intend to see these cuts actualized, and have indicated as much. That hasn’t stopped media outlets from across the ideological spectrum from running sensationalist headlines.
A headline from CBS News says “Food Stamps Slashed to Pay for Teachers Job Bill.” A hysterical headline at the leftish Huffington Post reads “Cutting Food Stamps to Save Teacher Jobs: A Hateful Trade-off.” And a headline on the conservative Human Events website claims “Democrats Rob Food Stamps to Pay Teachers.”
Adding to the heat is legislation moving through Congress that would “cut” future food stamps spending to help pay for increased child nutrition programs. But as was the case with the bailout legislation, the only change that’s being proposed is to move forward the expiration date for the temporary food stamp expansion contained in the 2009 stimulus bill.
In addition to unnecessary hand-wringing over the future, the near past is all but being ignored. As the following chart shows, the cost of the food stamps programs has exploded over the decade thanks to the recession and benefit increases under presidents Bush and Obama:
The food stamps program needs to be cut. In fact, the entire federal welfare system needs to be devolved to the states, or preferably, private charity. That phantom cuts following a massive increase in food stamps spending would cause such angst indicates that those of us who believe the needy aren’t best served by Uncle Sam have our work cut out.
Food Stamps on Campus
Food stamp usage is on an upsurge as a result of the economic downturn and liberalized eligibility. Thanks to some good journalistic work from Aleksandra Kulczuga of the Daily Caller, we’re getting a better picture of how government dependency is spreading to a new generation.
Kulczuga reports that college students are increasingly going on the dole thanks to encouragement from college officials and poverty organizations dedicated to fomenting government dependency.
From the article:
Adam Sylvain, a sophomore at Virginia’s George Mason University, recounted a recent conversation with friends in his dorm room. “My roommate told me he applied for food stamps, and they told him he qualified for $200 a month in benefits,” Sylvain said. “He’s here on scholarship and he saves over $5,000 each summer in cash.”
“A few of our other friends who were in the room also said if there were able to, they would get food stamps … They think that if they’re eligible it’s the government’s fault, so they might as well,” Sylvain said.
Students at GMU can buy a meal plan for $1,275 that provides 10 meals a week for the semester — that’s $71 a week.
When I was in college, my friends and I worked during the school year and through the summer to fund our expenses. My father worked multiple jobs to pay his way through college while supporting a young wife. He grew up in a family headed by a single mother that relied on extended family and charities to help them through tough times. He may have been eligible for food stamps in college, but he would have never taken a government handout.
Today’s generation seems to be different. This Salon article tells of unemployed college grads using food stamps to purchase organic food at high-end grocers like Whole Foods.
From the article:
At Magida’s brick row house in Baltimore, she and Mak minced garlic while observing that one of the upsides of unemployment was having plenty of time to cook elaborate meals, and that among their friends, they had let go of any bad feelings about how their food was procured.
“It’s not a thing people feel ashamed of, at least not around here,” said Mak. “It feels like a necessity right now.”
Savory aromas wafted through the kitchen as a table was set with a heaping plate of Thai yellow curry with coconut milk and lemongrass, Chinese gourd sautéed in hot chile sauce and sweet clementine juice, all of it courtesy of government assistance.
Remember that many of these students probably had their college educations subsidized by the government as well.
Food Stamp Price Tag Rising
Food stamp usage is at record levels according to the New York Times, with one in eight Americans now receiving benefits. There are several reasons for the upswing, including expanded eligibility in the 2000s and the severe economic downturn. The following chart shows the dramatic rise in spending for the Supplemental Nutrition Assistance Program, known as the Food Stamp program until 2008 when Congress changed its name to sound more palatable.
Most Americans think that we should aid those in real need, but individuals should do so voluntarily without resorting to forced government transfers.
The Times gives three examples of people who recently started receiving food aid. Each offers some food for thought.
The first is a 45 year-old Harlem widow with an annual income of $15,000. A food bank had encouraged her to apply for the benefits:
A big woman with a broad smile, Ms. Bostick-Thomas swept into the group’s office a few days later, talking up her daughters’ college degrees and bemoaning the cost of oxtail meat. “I’m not saying I go hungry,” Ms. Bostick-Thomas said. “But I can’t always eat what I want.” The worker projected a benefit of $147 a month. “That’s going to help!” she said. “I wouldn’t have gone and applied on my own.”
I don’t know this woman’s exact circumstances, and there’s no reason to doubt she needs assistance. But aren’t her college-educated daughters in a position to help their mother? Government welfare undermines the traditional role the family played in mutual assistance.
Here’s the second example:
Juan Diego Castro, 24, is a college graduate and Americorps volunteer whose immigrant parents warned him “not to be a burden on this country.” He has a monthly stipend of about $2,500 and initially thought food stamps should go to needier people, like the tenants he organizes. “My concern was if I’m taking food stamps and I have a job, is it morally correct?” he said.
But federal law eases eligibility for Americorps members, and a food bank worker urged him and fellow volunteers to apply, arguing that there was enough aid to go around and that use would demonstrate continuing need. “That meeting definitely turned us around,” Mr. Castro said.
This fellow’s annualized monthly stipend is more than I made in my first job in Washington. And for Mr. Castro, who was warned not to be a burden on this country, he ought to be told that the federal Americorps program is exactly that. But more disconcerting is the fact that the food bank worker urged him and his colleagues to go the dole in order to advertise it.
This anecdote illustrates Michael Tanner’s argument that government poverty programs serve vested interests:
Among the non-poor with a vital interest in anti-poverty programs are social workers and government employees who administer the programs. Thus, anti-poverty programs are usually more concerned with protecting the prerogatives of the bureaucracy than with fighting poverty.
The last example from the Times is a Colombian immigrant who missed three months of work as a janitor because she fell and had to have knee surgery:
Last November, she limped into a storefront church in Queens, where a food bank worker was taking applications beside the pews.
About her lost wages, she struck a stoic pose, saying her san cocho — Colombian soup — had less meat and more plantains. But her composure cracked when she talked of the effect on her 10-year-old daughter. “My refrigerator is empty,” Ms. Catano said.
Last month, Ms. Catano was back at work, with a benefit of $170 a month and no qualms about joining 38 million Americans eating with government aid. “I had the feeling that working people were not eligible,” she said. “But then they told me, ‘No, no, the program has improved.’”
This is precisely the sort of person that is deserving of charity. But the federal government isn’t a charity; it is a forced transfer machine. The less fortunate, and society as a whole, would be better off if the taxes paid to support inefficient, counterproductive government programs were instead left in the hands of supportive individuals and organizations.
See this essay for more on government food subsidies.
The Federal Government Is Bribing States to Create More Welfare Dependency?!?
If you want to get depressed or angry, the New York Times has an article celebrating the effort by politicians at all levels of government to lure more people into the food stamp program. New York City is running ads in foreign languagues asking people to stick their snouts in the public trough. The City is even signing up prisoners when they get out of jail. The state of New York, meanwhile, actually set up quotas for enrolling new recipients. And on the federal level, there apparently is a program that gives states “bonuses” for putting more people on the dole. No wonder one out of every eight Americans is receiving food stamps. By the way, this is not just the fault of Democrats. The ranking Republican on the Agriculture Committee is a big defender of the program, in part because of the sordid pact among urban and rural politicians to support each other’s handouts. And President George W. Bush’s food stamp administrator actually had the gall to assert “food stamps is not welfare.” No wonder the burden of federal spending skyrocketed during the reign of so-called compassionate conservatism. The correct policy, of course, is to get the federal government out of the welfare business. If Mayor Bloomberg thinks it is a “civic duty” to expand food stamps, he should see whether New York City voters agree with him – and want to foot the bill.
A decade ago, New York City officials were so reluctant to give out food stamps, they made people register one day and return the next just to get an application. The welfare commissioner said the program caused dependency and the poor were “better off” without it. Now the city urges the needy to seek aid (in languages from Albanian to Yiddish). Neighborhood groups recruit clients at churches and grocery stores, with materials that all but proclaim a civic duty to apply — to “help New York farmers, grocers, and businesses.” There is even a program on Rikers Island to enroll inmates leaving the jail. “Applying for food stamps is easier than ever,” city posters say. …These changes, combined with soaring unemployment, have pushed enrollment to record highs, with one in eight Americans now getting aid. “I’ve seen a remarkable shift,” said Senator Richard G. Lugar, an Indiana Republican and prominent food stamp supporter. “People now see that it’s necessary to have a strong food stamp program.” …The program has commercial allies, in farmers and grocery stores, and it got an unexpected boost from President George W. Bush, whose food stamp administrator, Eric Bost, proved an ardent supporter. “I assure you, food stamps is not welfare,” Mr. Bost said in a recent interview. Still, some critics see it as welfare in disguise and advocate more restraints. …The federal government now gives bonuses to states that enroll the most eligible people. …In 2008, the program got an upbeat new name: the Supplemental Nutrition Assistance Program — SNAP. …Since Mayor Michael R. Bloomberg took office eight years ago, the rolls have doubled, to 1.6 million people… Albany made a parallel push to enroll the working poor, setting an explicit goal for caseload growth. “This is all federal money — it drives dollars to local economies,” said Russell Sykes, a senior program official. But Mr. Turner, now a consultant in Milwaukee, warns that the aid encourages the poor to work less and therefore remain in need. “It’s going to be very difficult with large swaths of the lower middle class tasting the fruits of dependency to be weaned from this,” he said.
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