California Polytechnic State University San Luis Obispo

SNAP Policy

Brooke Palmer, Julianna Ziliotto, Kayce Murray, Mary Allen

AGB 312 - 01

Professor Hamilton

June 7, 2016

It is human nature to be hungry. Humans eat because food is what fuels them and keeps

them alive and well. What happens when someone cannot find the nutrients to satisfy their

hunger? What happens when fellow Americans skip meals and search for food in places most

people would never consider? Does the rest of the country simply turn the other way? Does the

government only serve those who can survive? We hope not.

The United States Department of Agriculture defines food-insecurity as, “times during the

year, [when] households [are] uncertain of having, or unable to acquire, enough food to meet the

needs of all their members because they had insufficient money or other resources for food”

(United States Department of Agriculture Economic Research Service, USDA ERS). In the year

2014, 14% of United States households faced food insecurity. Of the 14%, 5.6% were considered

“very low food security” households, meaning there was “disrupted eating patterns and food

intake was reduced at times” (USDA ERS). The 14% of the U.S. population classified as food

insecure equates to roughly 17.4 million households. Food insecurity is a pressing issue and the

government has set up programs, like the Supplemental Nutrition Assistance Program (SNAP), to

aid people in need (Wilde, 183).

For the past 77 years SNAP, formerly known as food stamps, has undergone numerous

changes and even periods of nonexistence. SNAP began in 1939 under the Presidency of Franklin

D. Roosevelt in order to combat food surpluses and high unemployment rates during the Great

Depression. In 1943, the program was brought to an end after combatting these issues (United

States Department of Agriculture Food and Nutrition Service, USDA FNS). However, after 18

years of studying and amending the program, the Kennedy administration decided to re-

implement the program in 1961. This time, the program left out the incentive to diminish food

surpluses and focused on combatting poverty issues and food insecurity (USDA FNS). Just three

years later the program recipients increased to 380,000. After analyzing the powerful impact of

food stamps, the Johnson administration passed the Food Stamp Act of 1964. Then the food

stamp program became a permanent part of our nation’s law (USDA FNS). With the new

legislation, geographical expansion occurred and the number of participants drastically increased.

In 1964, the government predicted the number of participants would reach 4 million and

level off. However, by late 1974 the number of participants had reached 15 million. With so

many citizens reliant on food stamps modification became necessary. The first amendments to the

program occurred during the Food Stamp Reform of 1977 and much of the current model can be

traced to this reform (California Department of Social Services, CDSS). Three of the first major

changes included eligibility and work requirements, allowing the purchase of seeds and plants

meant for human consumption, and authorizing the Federal Government to pay 50% of all of the

State’s administrative costs (USDA FSN). Since the first modification in the early 1970s, the

program has gone through numerous incremental changes to cater to the ever changing economy.

In June 2004, the Electronic Benefit Transfer (EBT) was developed in an attempt to

counter fraud, theft, record keeping, efficiency, and paper waste (USDA FSN). With this system,

SNAP participants are issued a plastic card with a four digit access code they use when

purchasing goods, rather than outdated paper coupons (USDA FSN). More recently, a change

occurred in the 2008 Farm Bill when the Federal Government proposed the program’s name be

changed to the Supplemental Nutrition Assistance Program (SNAP), which is most commonly

used today (USDA FSN). Overall, the nation’s SNAP program has an extensive history and is

subject to alterations which can vary from state to state.

The flawed system has led to participant fraud, leading many taxpayers to distrust the

program and its benefits. Some participants are selling EBT benefits for cash, which is explicitly

stated as illegal in the SNAP guidelines. In November, 2013, an undercover investigation by

CBS13 in Sacramento examined multiple cases where individuals sold their EBT cards on

Craigslist for upwards of $116 (CBS Sacramento). The CDSS is aware of the misuse of benefits

and has found an increasing number of cases.

Taking into account the history and current issues, the government must move forward by

making strides to extend the benefits to everyone who needs them, while also making it harder for

those receiving the benefits to misuse the program. Nutrition assistance programs are extremely

beneficial and necessary in our economy.

Looking to the specific stakeholders, the SNAP program affects several main stakeholders

including the individuals and households who rely on SNAP benefits, the USDA’s Food and

Nutrition Service (FNS) which administers the program, the retailers who must comply with the

SNAP program, and the taxpayers help fund the program. Each of these stakeholders play a

different role in keeping the program alive. Without the users, there would be no need for the

program. Without the FNS, the program would not be administered. Without it being

administered, millions of food companies and farms who sell their food to retailers would

experience a decreased demand. Without willing retailers, no places for users to redeem the

SNAP benefits would exist. Without taxpayers, there would not be enough funding for the

program at all. Needless to say, the program benefits a wide array of stakeholders who rely on

each other

Although each stakeholder has a role in keeping the program functioning, the policy

affects each stakeholder differently. The goal of the program is to provide food assistance to the

poorest of the poor while they work to gain financial stability and can once again contribute to

society. Studies show, “50% of all new entrants to the SNAP program will leave the program

within 9 months as they become more financially stable” (SNAP to Health). Again, without this

policy, thousands of Americans would go hungry and be classified as food insecure.

Along with recipients of SNAP, retailers must also be approved to accept SNAP benefits.

To do this, a store or farmer's market must fill out a lengthy application, undergo a background

check, and may possibly be visited by an FSN employee before approval (USDA FSN). Once

approved, the inevitable benefit of sales from SNAP users will also come with some costs. A

more recent change was implemented with the 2014 Farm Bill reform is the mandatory use of

EBT equipment instead of paper vouchers. The provision “requires non-exempt retailers to pay

for EBT equipment and supplies, implementation, and related services” (Shahin). This new policy

regulation will not be subsidized by the government, retailers will be responsible for all monetary

costs. In addition to the cost of equipment, retailers also face a 10 cent charge each time EBT

benefits are redeemed at their location (Hudson).

However, retailers also incur benefits in exchange for accepting SNAP. If the users of

SNAP were not given access to the benefits they would have very little to no money to spend on

groceries. As a result, the majority of all goods purchased with SNAP benefits would not be

consumed without these funds. Having the means to serve those with SNAP benefits can increase

a retailer’s sales by at least 7-8%, depending on economical demographics (Hudson).

The policy effect on the taxpayers comes in monetary form, due to their funding of the

program. However, compared to other federal programs, this tax is relatively small. According to

Citizens for Tax Justice, “In 2012, the average American taxpayer making $50,000 per year paid

just $36 towards the food stamps program,” (Citizens for Tax Justice). As seen, a minimal amount

of taxes are collected for such a valuable program.

With the taxpayer’s monetary support, the Federal government pays for the cost of SNAP

and the administration costs are left for the states to fund (Center on Budget and Policy Priorities).

Although the costs are split, the Federal government faces a vast majority of the costs. Last year

the total costs of SNAP benefits reached $75 billion. However, states only incurred 6%, while the

Federal government faced the other 94% of program’s costs.

Of the $3.8 trillion dollars the Federal government spent last year, only $75 billion of the

budget was allocated to the SNAP program (National Priorities Project). The $75 billion accounts

for the majority of the USDA’s Food & Agriculture budget (55%), which made up 2.03% of the

entire Federal Budget (see Fig. 1). While the SNAP program may seem small in the Federal

Budget, it is heavily debated and faces potentially drastic budget cuts.

Figure 1: Total Federal Spending for 2015. From National Priorities Project. Federal Spending Where Does the Money Go.

Taxpayers assist in funding the project, although most of those who pay the tax do not

directly reap the benefits. However, taxpayers do indirectly see a return. Perhaps one of the most

important benefits taxpayers experience is the influence on the economy. Once the benefits are

spent they also have the potential to multiply in the economy. For example, a study conducted by

the USDA demonstrated $1 of SNAP benefits spent had the potential to generate $1.84 in the

economy. In a simulated economy consumers have more money and are more likely to purchase

more goods (Nischan). Additionally, food stamps frees up money recipients can spend on other

goods, such as healthcare and other necessities which may come secondary to nutrition. Overall,

food stamps come as a bargain to taxpayers, who receive an array of benefits.

When it comes to winners and losers, food and nutrition programs provide more good than

harm. The economy, agricultural producers, landowners, and wholesalers are just a few of the

winners. For example, the economy benefits not only because of jobs created but also because of

the positive impact it has during a recession (Hamilton). According to U.S. Department of

Agriculture, every $1 billion in SNAP benefits creates 8,999-17,900 full-time jobs. Which

provides job opportunities to those in need. Additionally, during times of recession when

household incomes are limited, food and nutrition programs such as SNAP are the most

responsive, because they can be attained immediately (SNAP to Health and Hamilton).

Additionally, SNAP increases the demand for produce and assists in keeping the demand

constant in times of recession. Without SNAP these household would be unable to purchase

produce. Also, in times of recession the demand is held constant because recipients are receiving

the same amount of funding. This helps to diminish the adverse effects to farmers during a

recession. Furthermore, with the 2014 Farm Bill, local economies also benefited from the

USDA’s inclusion of farmer’s markets in SNAP eligibilities (USDA). Now, local farmers receive

the full dollar back in their pockets rather than the 20 cents which is generated by grocery outlets

(USDA).

Most importantly though are the users of the programs. The users are better off because of

the benefits received, “In 2015, the average SNAP client received a monthly benefit of $126.39,

and the average household received $256.11 monthly” (SNAP to Health). In addition, SNAP has

been called “the cornerstone of the nation’s nutrition safety net” (SNAP to Health), and is one of

the most important programs in place to prevent hunger and food insecurity in the United States.

Moreover, \if SNAP benefits were classified as net income approximately 3.6 million people

would have been lifted out of poverty (Peterson). Unfortunately, users were faced with cuts after

the passage of the 2014 Farm Bill in which household’s benefits were reduced an average of $90

per month, leaving them worse off (Nixon). This was one of the first times in which funding for

food and nutrition programs took a hard hit.

As with any type of policy, the policy backing SNAP has multiple supporters and

opponents. The core of SNAP and “the hands that feed the program” lie within the USDA through

the House Agriculture Committee and the Senate Committee on Agriculture, Nutrition and

Forestry (Merlin). Because SNAP is part of the Farm Bill, many lobbyists who support SNAP

give support to those who run these committees. At the time of the last Farm Bill revision in

2014, some of the top recipients included Senator Deborah Stabenow, chair of the Senate Ag

committee, Senator Pat Roberts, ranking member of the Senate Committee on Agriculture,

Nutrition and Forestry, and Frank Lucas, chair of the House Committee on Agriculture (Merlin).

In 2012, the lobbying interest groups funded many of these recipients amounted to

seventy-one different groups, spanning from human rights groups, civil servants/public officials,

and food processing/sales industries (Merlin). Each one of these interest groups benefits from the

spending of the SNAP program. The food processing and sales industries see the biggest benefits

from the SNAP program because the benefits “can’t be used for fast food and must be spent on

items with a USDA nutritional label as well as fruits, vegetables, and meats” (Merlin). This forces

SNAP users to spend money at grocery stores, essentially supporting retailers, producers, and

processors alike.

Some opposition of the policy revolves around decreasing the budget deficit. Before the

2014 Farm Bill was implemented, much deliberation occurred which would “call for cuts to the

$80-billion-a-year food stamps program” (Lengell). The deliberations over cuts to the SNAP

program were long and contentious. Republicans initially approached the reform wanting cuts to

the program to exceed $20 billion, claiming “the bill was needed because the food stamp

program, which costs nearly $80 billion a year, had grown out of control” (Nixon). However, the

Democrats disagreed on such drastic cuts, with Representative James McGovern stating, “it’s a

sad day in the people’s House when the leadership bring to the floor one of the most heartless

bills I have ever seen” (Nixon).

Eventually the two sides came to a compromise and the 2014 Farm Bill did include cuts to

the SNAP program. The cut will decrease the program's budget by “$8.55 billion over ten years

and shrink benefits for about 850,000 households in 17 states by an average of $90 a month”

(Bollen). This cut will close the budget deficit slightly, but it will come at a cost to those who

desperately need government support to meet their nutritional needs.

Given the program's current state, here are a brief set of policy modifications which would

improve the system. Since the early 1940’s the number of those reliant on SNAP benefits has

greatly increased. However, “15% of those eligible are not served,” in the U.S.” (Food Research

and Action Center, FRAC). Instead of increasing the budget to provide for those in need, the 2014

Farm Bill cut the program by $8 billion dollars over the course of 10 years (Peterson). This

budget cut will further increase the number of citizens who are unable to receive benefits. Rather

than cutting the budget the government should strive to keep the monetary support to SNAP

constant.

Nutrition assistance programs are funded in order to keep the people of the United States

healthy and properly nurtured. However, some aspects of the program allow for cheap unhealthy

habits to continue. The U.S. has a 26.3% adult obesity rate (USDA ERS, Food Environment

Atlas), and sweetened beverages “represent the largest source of added sugar and excess calories

in the American diet and have been linked to weight gain and type 2 diabetes” (Wang et al.).

Considering those factors, it is not surprising there is a push to eliminate the ability for SNAP

users to use their benefits on such nutritiously detrimental items. In fact, “…approximately 6

percent of food stamp purchases across the nation go to soda and other sugar-sweetened

beverages defined by the USDA as having ‘minimal nutritious value,’” said Robert Doar from

City Limits, a nonprofit news institute. The mayor of New York City, Michael Bloomberg has

already attempted to make strides against SNAP users consumption of sugary beverages. In an

attempt to ban the drinks from being eligible, Bloomberg commented “Why should we continue

supporting unhealthy purchases in the false name of nutrition assistance?” (Columbia

Broadcasting System). After his complete ban was shot down, he attempted to implement a two

year trial period for his city, but again, this proposal was not approved. It is time for legislatures

to realize the potential benefits of a ban on sweetened beverage purchases and to take action.

The government also needs to eliminate the three-month time limit on SNAP. If they

neglect to do this, over 1 million of the poorest in the nation will be cut off from SNA “regardless

of how hard they are looking for work. The impact will be felt in the 22 states which must or are

choosing to re-impose the time limit in 2016” (Center on Budget and Policy Priorities). In turn, if

implemented, the regulation would further increase the amount of poverty and insecurity. While

the state of California is not included in the legislative change, the effects may influence future

legislation in the state. The people who are approved for SNAP rely on this supplemental income

and it would be detrimental to restrict access.

Legislation must be passed to keep the budget allocation constant, restrict sugary

beverages and non-nutritious products, and avoiding a time restriction more of those in need will

receive nutrition. As a result, taxpayers will experience a more productive economy as a result of

the money multiplier. Farmers will experience a stable demand for their products even in times of

recession. Finally, retailers will see increased revenues. Without SNAP benefits most recipients

would not have any money to spend, essentially meaning most sales would not have been made

without benefits.

On the other hand, there will also be adverse effects. For example, a policy change of

restricting sugary products and sodas would hurt companies like Coke and Pepsi, or candy

manufacturers. During Bloomberg’s attempts at regulation, The American Beverage Association

retaliated with comments such as “targeting struggling families who rely on (food stamps’) vital

safety net will not make America healthier or reduce government spending” (CBS). These

comments come out of the fear. A ban would shift the demand for these items down, causing

companies to lose income, and potentially lower prices. Big producers must be willing to risk a

small price for a step in the right direction to supply the U.S. population with adequate food and

healthy habits. The users of SNAP benefits will also be opponents of this ban. Most users feel

they should not be told what they can and cannot purchase with their benefits.

While there will be many winners and losers of the modifications suggested providing

accessible nutrition assistance for those in need is the first priority. It is crucial for the government

to step in and implement these changes in order to combat food scarcity in the U.S. Overall, when

the budget faces cuts the government should avoid cutting the funds for SNAP. In order to see the

benefits to retailers, farmers, recipients, taxpayers, and many more, it is crucial the budget

allocation for nutrition assistance remains constant.

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