A Food Stamp Block Grant is an Attack on the Poor
Lessons from Welfare Reform
With a Republican dominated House, Senate and White House the much touted “block grant” is reemerging in full force. Supported by those who espouse local control and reigning- in spending on entitlements, block grants can, on the surface, seem like an attractive way of moving forward. In lieu of unrestricted spending and strict government rules and regulations, states receive a lump sum of funds to administer safety net programs and thus are provided with a greater amount of flexibility. It has recently been revealed that President Trump’s overhaul of the Affordable Care Act will mostly likely entail shifting Medicaid from a federal entitlement to state grants. Many leading policy makers, including Speaker of the House Paul Ryan, support this shift to block grants for other social programs, including, worryingly, the food stamps program (the Supplemental Nutrition Assistance Program or SNAP).
Widely recognized as one of the country’s most effective anti-poverty programs, research shows that SNAP not only helps to financially stabilize poor families and decrease food insecurity, but also can lead to improved health outcomes. A block grant could seriously derail this critical component of the safety net.
How could these shifts impact Ohio? History can provide some insights. In 1996, cash assistance (formerly Aid to Families with Dependent Children,), was modified to a block grant (TANF) as a result of welfare reform. Since this reform, which eliminated cash assistance as an entitlement, significantly fewer poor families receive aid and there has been a drastic decline in the percent of funds going to basic (cash) assistance. In the year after the policy change 70 percent of the grant was spent on basic assistance. Today, that number is down to roughly 25 percent (both in Ohio and nationally). Similarly, in the years just before the reform, welfare caseloads in Ohio peaked at over 700,000. [i] Currently, the program only serves 108,000 people, and very few adults, despite increases in the state’s poverty rate. In fact, in the past decade alone, cash assistance rolls have decreased by about 40 percent.
These changes are, for the most part, a result of stricter and more punitive eligibility, as well as sizeable portions of the grant being supplanted from cash assistance to fund other programs and services. Furthermore, large portions of the grant remain unspent. It is clear that the block grant of welfare has led to a gradual demise of the program and has weakened the safety net for poor families.
What if food stamps face a similar fate?
Currently, about 1.6 million Ohioans receive SNAP benefits. Total SNAP expenditures in Ohio exceed $2.7 billion.[ii] About 90 percent of this goes directly to beneficiaries for food (nationally and in Ohio). The rest goes toward administrative and anti-fraud expenses (fraud in the program is extremely low). One hundred percent of the benefit portion is paid by the federal government; the state of Ohio contributes about 50 percent of the administrative costs. SNAP funding is a federal entitlement program and funding is mandatory, regardless of the number of individuals in need of the benefit. [iii]
Now, let’s assume a SNAP block grant was instituted to replace the entitlement; no longer would federal funding be mandatory to meet the need. And, let’s assume this resulted in similar supplanting of funds and barriers to access, as experienced by TANF. If SNAP spending that went directly towards food benefits for the poor was reduced to just 25 percent as TANF funds have been, funding toward food stamps could be reduced by approximately $1.7 billion, to roughly $700 million annually. In contrast, current expenditures that goes directly to benefits is over $2.4 billion.
What about caseloads? If the current caseload decreased by 40 percent (as TANF caseloads have over the past decade), 650,000 fewer individuals would be served by the program, reaching less than half of the nearly 2 million food insecure people in the state. Picture what amounts to more than half of the population of Cuyahoga County losing food aid. It’s hard to imagine the devastation that would result from cuts of this magnitude. It would be impossible for food banks and private charity to fill the need.
While some may argue that this dire outcome is unlikely, it’s worth considering that during the welfare reform battles of the nineties, even the most ardent advocates did not anticipate what would become of the program. Most could not foresee that the program would effectively become obsolete. Additionally, the nature of the block grant allows for states to redirect funds to other services that meet general program goals. It is easy to imagine that other non-benefit services and programs, such as those related to education and health services, could easily align with SNAP’s missions and compete for funds. Governor Kasich has already alluded to an emerging fiscal crisis in Ohio. This lays the groundwork for significant budget holes, some of which could be plugged with SNAP block grant dollars. What’s more, the downfall of TANF in Ohio demonstrates that our policymakers have an overall distaste for safety net programs. Given the current political climate, it is plausible that existing political support for the SNAP program will wane.
Moreover, the above scenario assumes that block grant funding will be set at current levels. Ohio may be lucky if that’s the case. Last year, the House proposed major cuts to SNAP spending, in addition to the to block grant shift, which would make the end result even more dramatic. [iv]
There are multiple added reasons why advocates should fear a SNAP block grant, including its limited ability to respond to changes in poverty and economic recession (addressed here at length). A block grant could also easily lead policy makers to justify a decrease in already meager benefit amounts to stretch the grant. If Congress is successful in this endeavor, the future for the program is bleak. Handing the purse strings to state and local government has provided too great a temptation to divert necessary funds from the hands (and mouths) of the poor. Anti-hunger advocates looking for motivation to fight such a policy change should look no further than to the history of welfare reform. Block grants are dangerous to the safety net, and we should work to avoid them at all costs.
Rose Frech is a licensed social worker who teaches and writes about poverty and social welfare policy from Cleveland, Ohio. She serves as Vice-President of the Board of Directors for the NASW Ohio Chapter.