Jun 07 2012
“I have filed a modest package of food stamp reforms to the farm bill that will achieve several important goals: Save taxpayer dollars; reduce the deficit; achieve greater accountability in how the program is administered; confront widespread waste; direct food stamps to those truly in need; and help more Americans achieve financial independence…
It is time to re-engage the national discussion over how the receipt of welfare benefits can become damaging, not merely to the Treasury but also to the recipient… We need to re-establish the moral principle that federal welfare should be seen as temporary assistance, not permanent support. The goal should be to help people become independent and self-sufficient. Such reforms, made sincerely and with concern for those in need, will improve America’s social, fiscal, and economic health.”
WASHINGTON—U.S. Sen. Jeff Sessions (R-AL), Ranking Member of the Senate Budget Committee, spoke on the Senate floor today to unveil a package of food stamp reforms that he has offered to the farm bill now under consideration in the Senate, as well as to discuss the need to address the approximately $900 billion spent annually on means-tested federal welfare programs:
Sessions’ remarks, as prepared, follow:
“Mr. President, I rise today to discuss several important amendments I have filed to the farm bill that is now before the Senate.
What might surprise many people is that the overwhelming majority of funds in the farm bill are not spent on anything to do with farms or agriculture. For instance, crop insurance is just 8 percent of the farm bill. Horticulture is less than 1 percent. But a full 80 percent of the farm bill goes to the federal food stamp program.
Yet, 83 percent of the small savings in this proposal—it contains $23 billion in cuts, none of which occur next year, out of almost $1 trillion in spending over 10 years—are taken from the farm provisions. Food stamp spending is virtually untouched.
Overall, this legislation will spend $82 billion on food stamps next year, and an estimated $770 billion over the next ten years. To put these figures in perspective, we will spend $40 billion federal dollars next year on roads and bridges.
Food stamp spending has more than quadrupled since the year 2001. It has increased 100 percent since President Obama took office.
This is not just a question of whether we have the money. We also have to ask: Is the benefit going to the right people? Is the money being expended wisely? Is it helping people become independent? Is it encouraging people to look for ways to be productive and be responsible for their families? Or does it create dependency on a series of government programs?
There are a number of reasons for the arresting trend of growth in this program. While the poor economy has undeniably increased the number of people on food stamps, this alone cannot explain the extraordinary growth in the program. For instance, between 2001 and 2006, food stamp spending doubled—but the unemployment rate remained around five percent.
When the food stamp program was first expanded nationwide, about 1 in 50 Americans received food stamp benefits. Today, nearly 1 in 7 Americans are on food stamps.
Three factors help explain this extraordinary increase.
The first is that eligibility standards have been loosened over time, with a dramatic drop in eligibility standards in the last few years.
Second, it has been the explicit policy goal of the federal bureaucracy to increase the number of people on food stamps—bonus pay is even offered to those states who sign more people up.
And third, the way the system is arranged—with states administering the program but the feds paying for it—states have an incentive to see their food stamp budgets swell, not shrink. That means overlooking a dramatic amount of fraud and abuse.
So I have filed a modest package of food stamp reforms to the farm bill that will achieve several important goals: Save taxpayer dollars; reduce the deficit; achieve greater accountability in how the program is administered; confront widespread waste; direct food stamps to those truly in need; and help more Americans achieve financial independence.
Before walking through the specific reforms I have offered, I think it is important to put the food stamp program in context. It is now the second largest federal welfare expense, following Medicaid. If food stamps spending were returned next year to 2007 funding levels, and increased from there at the rate of inflation, it would produce an astonishing $340 billion in savings over the next 10 years.
Food stamps are one of 17 federal nutritional support programs and one of nearly 80 federal welfare programs. So there is no confusion, these figures count only low-income support programs—excluded and not counted are entitlement programs like Medicare, Social Security and Unemployment benefits.
Collectively, our federal welfare programs constitute about $700 billion in federal spending and $200 billion in state contributions to the same programs.
An individual on food stamps may receive as much as $25,000 in various forms of financial assistance for their household from the federal government, in addition to whatever part- or full-time salary they may earn or any support they may receive from their family or community. In other words, this is not normally the only source of income for a person.
Changes in eligibility have also eliminated the asset test for food stamps, which brings me to the first of four amendments I have offered:
Restoring The Asset Test For Food Stamps
Through a system known as categorical eligibility, states can provide benefits to those whose assets exceed the statutory asset limit as long as they receive some other federal benefit. One state went so far as to determine individuals as food-stamp eligible solely because they received a brochure for another benefit in the mail. According to CBO, this simple process of restricting broad-based categorically eligibility produces $12 billion in savings for taxpayers over the next 10 years, and would not remove from the rolls a single person who qualifies for food stamps.
Close The LIHEAP Loophole
Fifteen states are using a loophole in order to get more food stamp dollars from the federal government. They do this by mailing a very small check—less than a dollar a month—under the Low Income Home Energy Assistance Program (LIHEAP). Anyone who receives that check, which may be as little as a few dollars a year, becomes eligible to claim a lower income on the basis of home energy expenses—even if they don’t pay those expenses.
This reform will require households that receive food stamps to provide proof of payment for their heating or cooling bill in order to qualify for the income deduction. Closing this loophole will produce $14 billion in savings over the next 10 years.
End Bonus Payments For Increasing SNAP Registration
States currently receive bonus payments for enrolling individuals in the food stamp program. These bonus payments highlight the perverse incentive states have to expand food stamp registration rather than to reduce fraud and help more people achieve financial independence, which is the source of American vitality and growth.
Implement E-Verify-Style System For Food Stamp Usage
This amendment would simply require the government to use a simple program called SAVE, similar to the popular E-verify system, to ensure those adults receiving benefits are in fact lawfully in the country. This is the commonsense thing to do at a time when we have to borrow 40 cents for every dollar the government spends.
Ultimately, beyond these first steps, the best way to achieve integrity in the food stamp program is to block grant it to the states. This will provide states with a strong incentive to make sure that each dollar is being properly spent. The House budget adopts this reform. Senate Democrats, of course, have not even written a budget plan. If steps had been taken to go through that detailed financial analysis in this Congress, it would have become clear that we could save a lot of money by ending the abuses in the food stamp program. It would also become clear that we will run out of money to pay for this program if we don't make changes.
But this is more than just a financial issue. It is a moral issue as well.
Reforming the way we deliver welfare is the compassionate course. The result of welfare reform in 1996 was less poverty, more growth, less teen pregnancy, more work, and more people successfully caring for themselves.
Unfortunately, since then, members in both parties have failed to protect these important gains. The welfare budget has swelled dramatically. Oversight has diminished. Standards have slipped. So we now find ourselves in need of welfare reform for the 21st century.
It is time to re-engage the national discussion over how the receipt of welfare benefits can become damaging, not merely to the Treasury but also to the recipient.
Left unattended, the safety net can become a restraint, permanently removing people from the workforce. And federal programs, unmonitored, can begin to replace the family, church, and community as a source of aid and support.
We need to re-establish the moral principle that federal welfare should be seen as temporary assistance, not permanent support. The goal should be to help people become independent and self-sufficient. Such reforms, made sincerely and with concern for those in need, will improve America’s social, fiscal, and economic health.
Empowering the individual is more than sound policy. It remains the animating moral idea behind the American experience."