Monday, January 11, 2016

Jared Bernstein Weighs in on the Bush/Ryan Food Stamp Fiasco

Jared Bernstein weighs in on the new Jeb Bush proposal to turn food stamps into a block grant to the states, a plan similar to Paul Ryan's.
The idea is to take a set of programs, such as the Supplemental Nutrition Assistance Program (SNAP), housing vouchers, child care, and more, and turn them into a consolidated block grant, which means providing states with a fixed amount of funding to run the programs. When Bush claims that he’ll end food stamps, this is what he’s talking about. Because welfare reform turned cash assistance to poor families into a block grant in the mid-1990s, we have a reference point whereby to judge the effects.
The main reason this idea is so destructive is that it undermines the essence of the safety net, or its countercyclical function. The figure above makes the case (as the figure’s a bit gnarly, I pasted in the data below). It shows that when the last downturn hit, SNAP caseloads quickly responded to the loss of income among low-income households, while Temporary Assistance for Needy Families (TANF) hardly responded at all. The opportunity grant threatens to turn SNAP into TANF, killing the former’s countercyclical aspect in the same way block grants killed it for TANF.
The key here is that food stamps have been a great countercyclical mechanism to aid those in need in the event of an economic downturn. Sure, food stamp use goes up when the economy turns down, but that's as it should be. Also, food stamps remain in use longer than seems necessary when the economy begins to recover. That doesn't seem right, but Bernstein explains:
The last few recoveries have started out “wageless” or “jobless.” In this expansion, the finance sector recovered way before the rest, and even six and a half years into the recovery, we’re still not at full employment. Poverty rates have been pretty stable, in large part because of the very countercyclical function “opportunity grants” are threatening. But as I’ve documented in great detail, until we get to and stay at full employment, the benefits of growth will not adequately lift the poor.
In fact, rather than revealing undue generosity, what the SNAP rolls’ asymmetry reveals is how quickly poor people get whacked by recessions and how slowly they recover.
Now, you can believe that safety-net programs keep the poor in "a cycle of dependency," but the countercyclical nature of food-stamp use negates that argument. After that, any claim that food stamps should be cut is not only heartless but counterproductive for the American economy. When people are out of a job and hungry, they're pretty unproductive people whose children then suffer needlessly and often permanently. Pretty mean-spirited, if you ask me, not to mention bad for American society.

Bad nutrition equals sick kids with slower cognitive development. Not good.

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