A Minute With...

Craig Gundersen, economist and expert on food insecurity

10/28/2013  8:00 am

On Nov. 1, the temporary federal stimulus increase to the Supplemental Nutrition Assistance Program (formerly known as the Food Stamp program) will end, meaning the average household of four will see a 5 percent reduction in its monthly benefits.

Craig Gundersen is a University of Illinois economist who studies the determinants and consequences of food insecurity and the efficacy of food assistance programs on public health. Gundersen, the Soybean Industry Endowed Professor of Agricultural Strategy and executive director of the National Soybean Research Laboratory, spoke with News Bureau business and law editor Phil Ciciora about what the reduction in funds will likely mean for the 20 percent of U.S. households enrolled in SNAP.

With job growth reduced to a trickle, does it make sense to reduce food stamp benefits right now?

image of professor craig gundersenIn 2009, the American Recovery and Reinvestment Act substantially increased SNAP benefits. This increase was scheduled to be phased out by 2015. However, the Obama administration chose to take some of that money that was supposed to go toward food stamps and use it for other priorities.

Basically, on Nov. 1, SNAP benefits will revert to what they would have been in 2013 if there hadn’t been a stimulus package. The cut took place sooner than it was supposed to, and it just seems that much more drastic because it was supposed to be spread out over two more years.

But it’s important to keep in mind that food stamps have historically played a great role in the social safety net. They were important and successful before the stimulus, and they will continue to be important and successful after the stimulus funding sunsets.

What will the 5 percent reduction do to food insecurity rates?

Food insecurity rates are going to increase due to the early expiration of the stimulus-related benefit increase. And some people who would consider applying for SNAP might choose not to because the benefits will be lower than they used to be. But there will still be some who really need those extra benefits, so it will inevitably be harder for them.

Food stamps traditionally have been packaged with the Farm Bill. Do the two need to be decoupled, or would that make the program even more vulnerable to cuts?

I think SNAP and other food assistance programs should continue to be part of the Farm Bill. From my perspective, the central goal of the U.S. Department of Agriculture is to alleviate food insecurity, and that’s being done through SNAP as well as programs like the National School Lunch program. The USDA also helps make our farmers as profitable and productive as possible. The more food that’s produced in the U.S., the more that food prices are lower, which has been shown to benefit low-income households. So having it together, and having it spread across the supply chain from farmers to low-income families, is important. And having it all under the umbrella of the USDA is the best way to approach it.

The House of Representatives recently passed a bill that cuts $4 billion annually from SNAP. The Senate’s version of the bill cuts $400 million annually. How will those bills be reconciled?

Any proposal to cut SNAP benefits really makes me scratch my head. SNAP is a counter-cyclical program, so when times are tough, like they are now, it does exactly what it’s supposed to do. To my mind, it’s great that we have a program like SNAP that can step in and help people when times are tough.

Once the economy gets better, though, SNAP caseloads will fall by the millions and expenditures will fall by billions of dollars. When that happens, that’s going to dwarf any of the changes proposed by Congress. So reducing unemployment through economic growth is the key.

One of the traditional arguments against food stamps is that it creates a disincentive to work. How true is that?

That is one of those canards that keeps popping up. To be sure, there are programs that can serve as a disincentive to work. We may still want those programs because there may be very good reasons for those programs, but they still act as disincentives to work. For example, you could argue that some aspects of unemployment insurance act as disincentives to working. Moreover, there are some other programs that have these so-called “cliffs,” where if your income increases by one dollar, you lose benefits. Medicaid is an example of that.

Food stamps, though – I just don’t see it. There’s really not enough of a disincentive in SNAP to induce people to work less. If for every additional dollar someone earned, their SNAP benefits were reduced by 80 cents, instead of the current level of 30 cents, then that would be a disincentive to work. (This is akin to ordinary taxes – if taxes are too high, they can discourage work.) So there aren’t a lot of disincentives in SNAP, especially compared to other programs, so there should be no concerns about increasing benefits.

If SNAP were leading to reductions in the labor force, then we would have to reconsider that. But that’s not happening. I think we need to make it easier for everyone, especially low-income Americans, to have access to safe, affordable and nutritious food. SNAP does exactly that.

What about the fraud and abuse that critics rail against?

SNAP is a very efficient program. In addition, it’s also very effective. The primary goal of SNAP is to alleviate food insecurity, and study after study has shown that it works extremely well doing just that.

With the advent of electronic benefit transfer cards – in Illinois, they’re called Link cards – it’s exceedingly difficult for individuals and stores to commit fraud. It used to be easier to commit fraud when there were actual coupons.

Fraud still exists, though, but it’s negligible compared to the amount of fraud that occurs with taxes. Some estimates peg IRS losses due to fraudulent taxes at hundreds of billions of dollars per year. Food stamp-related fraud is minuscule compared to that.

Recently, you were involved in a conference that looked at the history of food stamps. What will SNAP look like going forward?

Fifty years ago, stunting and wasting were problems in impoverished communities in the U.S. Back then, children were suffering from the type of malnutrition levels that you now see only in developing countries. That’s why food stamps were introduced – to address that problem.

It’s actually become a more important component of the social safety net today than it used to be. Other programs have been phased out, and others have not kept up with demand. And yet SNAP continues to reduce the incidence, depth and severity of poverty and, as noted previously, reductions in food insecurity. It’s also been shown to reduce infant mortality rates and obesity rates.

 

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