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Wednesday, 16 May 2018 06:39

To Pay for Tax Cuts for the Wealthy, House Bill Would Cut Food to Poor

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snapjpgA House Agricultural Committee bill would make the poor subsidize the wealthy by reducing food assistance. (Photo: U.S. Department of Agriculture)

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It is hard to imagine anything more perniciously cynical than cutting vital food assistance to the poor to pay for tax cuts to the wealthy, but this is the age of merciless plutocracy. Indeed, the House Agricultural Committee is considering draconian new work requirements for recipients of the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps).

As a recent Newsweek article noted, "SNAP is the sole food source for 8.5 million American families -- and roughly 41 million people in America, up 5 million from 2008, who are considered 'food insecure' because they lack reliable access to affordable, nutritious food."

Eligibility.com reports on the financial thresholds for SNAP:

The maximum gross monthly income is 130 percent of the federal poverty level, and the maximum net monthly income is 100 percent of the federal poverty level. For instance, if your household only consists of one person, then the gross monthly income to be eligible for SNAP is $1,287 (net $990). For two people, gross is $1,726, net is $1,335. The net income is determined by subtracting all acceptable deductions from your gross income.

The federal poverty line is $1702 for the purpose of calculating eligibility for SNAP benefits in 2018. It is estimated that SNAP covers approximately $1.50 per person per meal.

Clearly, SNAP offers nutritional support to those in extreme need. However, in its war on the poor, the Republicans in the House of Representatives are aiming to place onerous work requirements on SNAP recipients. The Center for American Progress reports that this is the second step to the recently passed lopsided tax cuts for the rich:

The recently passed 2017 tax legislation, commonly referred to as the Tax Cuts and Jobs Act, provided a massive windfall to wealthy individuals and large corporations. According to estimates from the Institute on Taxation and Economic Policy, the richest 1 percent of households, those with incomes higher than $607,090, stand to receive a total tax cut of more than $84 billion in 2019 alone. To put this number in perspective, in 2019, the total cost of nutrition assistance benefits paid through the Supplemental Nutrition Assistance Program (SNAP) … is expected to be only $58 billion. SNAP is the nation’s largest food assistance program, helping 1 in 8 families -- and 1 in 4 American children -- afford to put food on the table. This means that the tax cuts to the top 1 percent alone could finance the entire SNAP program for nearly 1 1/2 years.

The bill in the House Agricultural Committee would cut an approximately 2 million people from receiving work stamps through the implementation of work requirements for some to meet eligibility. Remember, even if those singled out met work requirements, they would in all possibility be paid so little that they would still meet the poverty line threshold required to receive food SNAP assistance.

The Center on Budget and Policy Priorities describes the most significant portion of the bill:

The bill contains changes that would cause more than 1 million low-income households … to lose their benefits altogether or have them reduced. The Committee would use these benefit cuts, in part, to pay for a few modest benefit enhancements. But the net effect of all these provisions on SNAP benefits would still be a significant cut overall, and a substantial number of people would lose their SNAP benefits altogether. The remaining savings from the eligibility and benefit cuts would go to expanding state and federal bureaucracies and financing various grant programs outside of SNAP, at the expense of low-income families and individuals whose basic food assistance would end or shrink.

Remember that the House Agricultural Committee is applying Ayn Randian philosophy to the issue of life-sustaining food. This is consistent with Donald Trump's overall goal to shrink the SNAP program. Indeed, SNAP has been under continuous assault by Republicans, including in 2013 when the program suffered a severe blow that resulted in "a loss of nearly 2 billion meals," according to CBS News. Trump even wants to replace a large portion of SNAP funding with "food boxes."

A staggering irony of this assault on food stamps is that their use contributes to economic growth. Everywhere along the food supply chain -- from farmers to truckers to supermarkets -- the SNAP program brings money into the economy. In fact, even the United States Department of Agriculture Economic Research Service corroborates this fact:

Not only do SNAP benefits support a household’s food purchasing needs, benefits also augment the incomes and spending of others (such as farmers, retailers, food processors, and food distributors, as well as their employees); this, in turn, has ripple effects for other parties. Thus, SNAP benefits start a multiplier process that supports macroeconomic spending and production. SNAP participation and benefits can automatically expand when the economy weakens and contract when it strengthens. ERS research has estimated a multiplier of SNAP benefits on Gross Domestic Product (GDP) of 1.79, that is, an increase of $1 billion in SNAP benefits increases GDP by $1.79 billion and results in an increase of 8,900-17,900 full-time equivalent jobs.

Thus, reducing food stamp recipients is counterproductive to economic growth.

None of this is surprising if one views this proposed bill, along with Trump's executive order to mandate more stringent working requirements for Medicaid recipients, as an initiative aimed at people of color. Even though the majority of SNAP and Medicaid recipients are white, states are doing fancy footwork in an effort to shield white recipients from the reforms while targeting recipients of color. For example, as New York Magazine reports, three states are already establishing Medicaid work policies that would allow counties with high unemployment rates (which tend to be rural and disproportionately white) to be exempt. Meanwhile, more densely populated urban areas, where people of color are more likely to live, are subject to the discriminatory requirements. Should the House Agricultural Committee SNAP work requirement bill pass, expect more of the same.