Common sense rarely is the common denominator

Thursday, January 16, 2020
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Farm Connection

Before the year loses its fresh, youthful promise, let’s look at some recent research to, hopefully, address a nagging problem carried over from 2019.

For months last year, U.S. Secretary of Agriculture Sonny Perdue defended three proposed rule changes to the Supplemental Nutrition Assistance Program (SNAP) that will remove an estimated 3.7 million recipients from the program.

The proposed changes were—and still are—strongly opposed by House and Senate Ag Committee Democrats who rejected SNAP changes during the 2018 Farm Bill debate. Perdue persisted, though, and is now poised to implement most by administrative fiat.

One will go into effect April 1. This change, according to SNAP’s administrators at the U.S. Department of Agriculture (USDA), will limit states’ ability to issue waivers for “single, ablebodied adults” to receive SNAP benefits. By itself, the new rule will remove an estimated 755,000 people from SNAP.

Secretary Perdue claims the change is needed because “What we want to do is increase employment…” While he didn’t wink when offering that explanationthe rule’s clear intent is to cut costs, not put people to work—there’s a bigger problem with his “want.”

In May 2019, the Economic Research Service (ERS) published a SNAP analysis that completely undermines the Secretary’s claim while confirming what SNAP research has proven for years: SNAP is an economic engine in every community where its dollars flow; cutting it drains its horsepower.

The latter makes sense for two reasons. First, anytime the federal government spends $58.3 billion, SNAP’s estimated costs in 2019, it’s going to make a big splashespecially in poor communities.

Also, food assistance recipients, literally, spend every SNAP penny they get. In turn, says the ERS, the spending creates one job for every $10,000 in SNAP spent in their community.

That means that if Secretary Perdue knew what his department already knows he would not be advocating budget cuts to an important job generator in poor and rural communities.

And in tough times or in tougher places, SNAP’s economic impact is far bigger, ERS explains.

“During the Great Recession [2008 to 2011] the impacts of SNAP redemptions per dollar spent were larger than impacts per dollar spent on other Federal or State government transfer payments combined—including Social Security, Medicare, Medicaid, unemployment insurance compensation, veterans’ benefits and other government transfer payments…”

That’s right. The SNAP program not only creates jobs, in the past it has—dollar-for-dollar—had a larger economic impact than all other major “Federal or State” government transfer payments “combined.”

As such, the planned cuts to SNAP will, according to USDA’s own analysis, limit economic growth and kill more local jobs than Perdue’s cuts will ever create or fill with “able-bodied adults.”

But, to be fair, critics point out, program spending for all USDA food assistance ballooned from $37.6 billion in 2008 to, at the Great Recession’s peak, $79.9 billion in 2013.

It ballooned for two obvious reasons. First, that’s exactly what you should expect in times of widespread economic calamity; all assistance spending climbs during tough times. Also, SNAP participation rates rose from below 70 percent in many states to near 90 percent when eligible recipients simply showed up to claim benefits they qualified for.

Today, however, SNAP’s estimated 2019 cost is 27 percent lower than in 2013 even though the national participation rate remains a historically high 85 percent. (The participation rate for USDA’s federal crop insurance program was 86 percent in 2016.)

So, SNAP costs continue to fall; SNAP is an enormously important economic generator in every community, oftentimes more important than all other government programs combined; and every $10,000 in SNAP money spent creates one job.

With that pedigree, why is USDA, the People’s Department, defying its own research to enact new, restrictive rules that will harm both SNAP recipients and the communities where they live?

The answer defies common sense but at its heart you’ll find more cultural engineering than ag engineering.

The Farm and Food File is published weekly through the U.S. and Canada. Past columns, events and contact information are posted at www.farmandfoodfile.com.

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