America’s Collision Course With The Debt Ceiling
As the nation counts down to default, Diane talks to longtime Congress watcher Norm Ornstein about the debt limit negotiations, what's at stake and whether he sees a way forward.
One in seven Americans receives food stamps, a number that’s up sharply since the financial crisis. Most experts agree unemployment and underemployment have contributed to the number of people in need of food assistance. The U.S. House of Representatives is considering a measure that would cut nearly two million people from the program and cause 280,000 children to lose free meals. Anti-poverty advocates call it unconscionable. But supporters of the cuts say the food stamp program is inefficient and many people are receiving benefits who are not truly in need. Diane and her guests discuss the cost of feeding America’s poor.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. The number of Americans who receive food stamps is up more than 40 percent from three years ago. In Mississippi and Oregon, 20 percent of the population is on food stamps. The farm bill under consideration by Congress includes cuts to the federal food assistance program.
MS. DIANE REHMJoining me in the studio to talk about the politics and economics of feeding the nation's poor: Jim Weill of the Food Research and Action Center, Jerry Hagstrom of The Hagstrom Report and National Journal magazine, and Douglas Besharov of the University of Maryland and the Atlantic Council. I hope you'll join us, 800-433-8850. Send us your email to firstname.lastname@example.org. Join us on Facebook or send us a tweet. Good morning to all of you.
MR. JIM WEILLGood morning.
PROF. DOUGLAS BESHAROVGood morning, Diane.
MR. JERRY HAGSTROMGood morning.
REHMJerry, if I could start with you, compared to about a decade ago, how many people are now on food stamps?
HAGSTROMI can't quite give you a number for a decade ago, but, before the recession, there were about 23 million people on food stamps. Now, there are about 46 million, and this is, we believe, mostly due to the recession. So many people have lost their jobs, or their incomes have been reduced, that they now qualify for the program. And at the same time, the federal government and the states have encouraged people to apply to get the benefits that are due them under the federal law.
REHMAnd how are states coping with this incredibly strong rise?
HAGSTROMWell, of course, the money for the food stamp program comes from the federal government. But the states have been encouraging people to get on the program. And, of course, the states must actually do the paperwork to qualify people. And they have been encouraging people to use the simplest way to get on. There are some programs called categorical eligibility. If they get other benefits, they're -- it's easier to process their applications. Some people think that the states have been kind of taking advantage of that and qualifying people too easily.
REHMDoes that mean the states have been lowering eligibility?
HAGSTROMIt depends on, you know, how you define that. They have made it a little easier. For example, it's now easier in many states to have more than one car and still get on food stamps, but people would say, well, if people are out of work, how could you possibly expect them to sell a car in order to get food stamps? They need those cars to be able to drive to job interviews. So it's a hard line to follow.
REHMAnd is there a minimum income that qualifies a person for food stamps?
HAGSTROMWell, it's complicated because the income level depend on whether you -- on what kinds of expenses you have. But in general, for a family of three, if you're making about $24,000 a year, you can get food stamps. Now, of course, the benefits go down if your -- if you qualify but your income is higher.
REHMI see. I see. Jim -- Jerry Hagstrom is founder and executive director of The Hagstrom Report and a columnist for the National Journal. Doug, how do you see the increase in the need, the call for food stamps?
BESHAROVWell, first, it's really important to understand that food stamps are not just a nutrition program. It's a -- since it's script and since people can use the benefit to buy food and therefore use the money they would've used to buy food for something else, we're thinking -- we're talking here about a benefit that's like cash. It's near cash. And I think I would disagree a little bit with Jerry...
REHMWell, just back up there for a moment. What other kinds of items can food stamps buy in addition to food?
BESHAROVNo, what I meant was if I -- if you give me a food stamp to purchase my food, the money I would've used to buy my food, I can now use for something else.
BESHAROVThat's -- and so we should think about this as most economists think of this. It's another form of aid for low-income people because it doesn't -- we don't get just a boxful of food. We get the equivalent of what we would spend on food. And the reason I mentioned that and why it's so important is for very low-income people, they need all those food stamps to buy food. That part of the food stamp population is using food as a -- food stamps or SNAP as a food supplement.
BESHAROVHigher income people at 24-, 25-, $30,000, if they have more than three children, it's higher than that. Food stamps for them are a form of income supplement. There's nothing wrong with that, but we should understand that it is used to help them cope with their daily expenditures. It's not just food.
REHMSo what difference does that make in your mind?
BESHAROVWhen we think about food stamps and nutritional assistance, we think of people who without the food would go hungry or would become malnourished or would otherwise have a health problem because of the lack of food. As Jerry indicated, when we're giving people the right to have two cars and so forth, they are not a meal away from starvation. We're keeping them more comfortable as we should. But it's a form of income support.
REHMDoug Besharov, he's at the University of Maryland School of Public Policy and a senior fellow at the Atlantic Council. Jim Weill, you think it's not a bad thing that the number of food stamp recipients has actually increased.
WEILLThat's right. First of all, the number was going up very quickly in the period before the recession during the Bush administration in part 'cause people's -- the bottom half of the population, the bottom third was losing ground even though the economy was growing during the Bush years. So there were more eligible people then. And, in fact, more people came on during the Bush years than during the Obama years. So far, that's about equal.
WEILLAnd then the recession pushed it up faster, of course. But this is a safety net program. It's supposed to be there when other systems fail. So the fact that the numbers have gone up so much is a good thing, not a bad thing. It's because others -- the private job market has failed in significant respects. Social Security doesn't reach some people. Social Security has shortcomings.
WEILLSo we don't normally criticize safety nets because they succeed in being safety nets. When homeless shelter populations go up, we don't go around saying, well, let's close the homeless shelters. We say, well, why are there more people who can't afford housing? Why isn't there enough affordable housing? This is a wonderful program. It's got its flaws, but it's a wonderful program that's done exactly what it's intended to do.
REHMHow would the eligibility change if indeed the House passed the farm bill with this elimination or reduction of those receiving food stamps?
WEILLRight. Well, they make several changes. One change they make is they eliminate a state option to have more liberal asset tests and a slightly more liberal income test than the basic federal rule is. So if you look at assets, the federal rule is a family, a household can't have more than $2,000 in assets, aside from a car, and get into the program.
WEILLStates have had options to say, well, sure, families got $3,000. They're saving for a security deposit, for community college tuition, whatever, or has two cars to get to work, as Jerry indicated. States have an option to say, we're going to make the asset test a little bit better or better than the federal asset test. The House farm bill would shut down that option. So the House throws almost 2 million people out of the program totally and cuts benefits for hundreds of thousands of additional households.
HAGSTROMI think those numbers that Jim has given you are right. I -- and this is the -- but this is the conundrum that Congress is dealing with is that they want to save money. They want deficit reduction, and the argument that is made within agricultural circles is that most of their deficit reduction that's coming in the farm bill, about $15 billion, is coming out of ag programs, farm programs, and that there should be some way of reducing food stamps as well.
HAGSTROMNow, you can have an argument, are you going to balance the budget on the backs of the poor, or is it possible that the states are being too liberal here? There are 39 states, according to USDA, that allow the people to have as many vehicles as they own, that they don't require that you get rid of any in order to get food stamps. Is that conscionable or not? You know, as I -- I'm a neutral journalist on this, so I just throw out the information.
BESHAROVWell, Jim made a good point, which is that the food stamp case load has been rising. In fact, if you look at a graph, it's a straight line since 2000, almost a straight line, to now. And I think most economists agree that about two-thirds of that rise is changes for the worse in the economy. But I think I would also emphasize that about a third of that increase is because we've loosened the rules. It's easier to get on food stamps.
BESHAROVThere's no asset test in the states. We're talking about zero asset tests. That means that lady, who won the million-dollar lottery -- she had a legal right to food stamps until they change their rules. In food stamps, you don't have to have your income recertified but once a year. So if you're unemployed or have a problem in one month, for the next 11 months, you are legally eligible for food stamps.
BESHAROVSo I suppose I would -- since I think I'm the one who's supposed to make this argument today, Jim said there are 44 -- there -- it's a 2 million person cut in food stamps that's proposed, and I think that's about right. There are 44, 45 million people on food stamps. That's about a 5 percent cut that's being proposed. Some programs somewhere in this country is going to have to be cut or we're broke.
REHMBut what you are saying is that there ought to be a better asset test and there ought to be recertification.
BESHAROVRight, within reason. I wouldn't...
REHMBut the asset test you're particularly concerned about. All right. We'll talk more about that asset test when we come back. We'll take your calls. I look forward to hearing from you.
REHMAnd we're back talking about proposed cuts in the food stamp program. The House of Representatives looking at the 45- to 46 million currently on food stamps wants to cut that by about 5 percent by creating a more secure asset test and by better certification of those who go on food stamps and then stay on food stamps. Jerry Hagstrom, what does the Senate want to do?
HAGSTROMWell, the Senate has proposed a much smaller cut. They would cut only 4.5 billion over 10 years as compared with the House cut of 16- or 16.5 billion because the only thing that the Senate would do is that would say that in order for a state to qualify someone who is given low-income heating assistance, the state would have to actually give that person $10 a year or more.
HAGSTROMThe states have been sending out a tiny, tiny amount of money in order to qualify people for food stamps because they've been qualified if they get some kind of energy assistance. This is for heat -- basically for heating in the wintertime. So Sen. Stabenow -- Debbie Stabenow of Michigan, who is the chairman of the Senate Agriculture Committee, says this is a loophole that the states are just pushing a problem on to the federal government. And so she wants to cut back on this, as well as, of course, eliminate any possibility that lottery winners can get the -- can get food stamps.
REHMWas that the first time that that had ever happened that a lottery winner who was on food stamps maintained that food stamp eligibility?
HAGSTROMAs far as I know -- and I think there have been two cases of this -- but that's all.
HAGSTROMI mean, it's certainly -- it's a very colorful problem...
HAGSTROM...but not exactly the biggest problem facing the program.
REHMOK. And, Jim Weill, how would you feel about this more stringent asset test and recertification that Doug Besharov talked about?
WEILLWell, just to go back to a couple of things.
WEILLIf a family is on the program and is certified for a year, if they get a job, they report that. They don't continue on benefits. They are only -- the agency only comes out to them once a year. But they're supposed to report income when it changes.
REHMThey're supposed to report.
WEILLRight. And the home energy provision isn't something that qualifies families with something that gets slightly more benefits to families that are already in the program. But the problem with these cuts -- all these cuts is -- and we're not talking about the lottery provision, of course.
WEILLThe states are making choices that work for recipients and work for them administratively. States have decided -- and, you know, these are mostly Republican governors at this point. States have decided that the cost of verifying that somebody has $1,900 of assets instead of $2,400 of assets isn't worth their time and is a bad strategy when the families are hungry. The other point about there have to be budget cuts all around is that that's just the wrong way to look at it.
WEILLAnd Congress is only cutting programs essentially for poor people. Congress has already cut food stamps twice in the last two years. Over the last 18 months, every bipartisan commission that's looked at deficit reduction, every bipartisan deal -- Simpson-Bowles, there was a Rivlin-Domenici commission, the so-called Gang of Six -- I realize we're getting wonky here -- and last summer's budget deal between the parties, all of them exempted food stamps from any cuts because the recognition by the people involved.
WEILLAnd this was a conscious choice that this was not the place to look for savings to deal with the deficit. Food stamps didn't cause the deficit, and making people hungrier is not going to solve the deficit.
BESHAROVWell, it's true that we have to do something about Medicaid, Medicare and Social Security, but every $25 billion is something. I teach at a university that would be delighted to have one-tenth of that over 10 years. So $1 billion is still a lot of money. The problem -- and both Jerry and Jim have mentioned it -- is a structural one about how we now deal with programs for low-income Americans.
BESHAROVAs we've discussed, the money comes from the federal government. But the deciding of who gets that money is a state decision, and if you -- if anybody -- this is not high economics. The states don't pay the cost of the benefits. They pay half the cost or more of deciding who gets benefits.
BESHAROVSo they want to cut the cost of deciding. And, my goodness gracious, if that means more people get benefits, all the better for my state. And so I think we're talking here about a reform that ought to be good across a number of programs. It's not just food stamps. It's disability where the same thing is happening. It's not welfare -- TANF, they now call it -- because in TANF, the states pay all the benefits.
BESHAROVSo surprise, surprise, in this recession, welfare cases, TANF have been flat. Food stamps have gone way up, disability way up because states are deciding to put people on disability programs and give them food stamps instead of putting them on welfare because they pay for welfare. The federal government pays for food stamps.
REHMAll right. And let's keep our discussion on food stamps. We've had a number of emails like this one. It says, "I believe no one should go hungry in this country. But I see people buying expensive items with food stamps, much of which is not healthy. Many of these people are overweight. I think there should be a list of items which can be purchased with food stamps. Steak, potato chips, sugared drinks, and candy should not be on that list." What do you think about that, Jim? Is that a fair criticism?
WEILLWell, first of all, all those studies show that foods -- low-income people in this country and food stamp recipients as a subset of low-income people eat about the same diet as everybody else does in terms of the government's Healthy Eating Index. So we're all making mediocre choices perhaps from all...
REHMAnd you're saying it's no different.
WEILLRight. It's no different, except that they're more financially strapped, so some of their choices are driven more by money. You know, food stamps coupons have been replaced by EBT cards, so the transaction at the cashier is supposed to be invisible. So sometimes people say they see people buying things with food stamps, and they're actually working from...
REHMSo we really don't know. Would you agree with that, Jerry Hagstrom? We really don't know what kinds of food they're buying?
HAGSTROMYes, I would agree with that. And there have been a number of people, including Dan Glickman, who is the former agriculture secretary, who is the chairman of FRAC, but also who is studying agriculture and food at the Bipartisan Policy Center, who have called for better data collection on food stamps. The idea is that the grocery stores collect all this data for their own marketing purposes, and, surely, they could analyze it in terms of food stamp beneficiaries.
HAGSTROMNow, whether we'd come up with much information that's different, we don't know because, in fact, we have a huge obesity problem in this country. But in the last 10 years, the medical people say the actual increase in obesity has been more among middle-income people than among poor people. Poor people already have an obesity problem, but now it has spread among the middle-class. So it's a general national problem, but it needs to be addressed. And I think we do need this information.
REHMDo you believe, Doug Besharov, that there ought to be more transparency about the foods that people are buying with food stamps?
BESHAROVNo. I think food stamps should be viewed for what they are, which is a form of cash assistance. It's a card. You go into the store. You buy a prepared chicken. You have to use your own money. You buy raw lobster. You can use a food stamp. It's all crazy. This is financial assistance to low-income Americans. We should be in favor of that. And what -- how they use that money is a different question from whether we should micromanage how they spend it.
REHMHow long do people ordinarily stay on food stamps? Do we know?
BESHAROVWe have a little more data now, and the length of time people spend on food stamps has increased in the last 10 years partly because these rules have made it easier for people -- can't say higher income, but somewhat higher income to get on food stamps and stay on.
REHMWhen you say somewhat higher income, what do you mean?
BESHAROVAt the risk of being corrected on this show, some place between 150 to 180 percent of poverty, which could...
REHMWhich would be?
BESHAROV...could take a family of three as high as 30- or $34,000.
REHMThat sounds like pretty lean pickings to me.
WEILLIt is. That number is basically right. But bear in mind that how much food stamps you get depends on what your income is within the range of eligibility. So somebody making 150 percent in the poverty line in earnings winds up getting very little food stamps. Somebody whose earnings are 30 percent of the poverty line gets more -- much more food stamps.
REHMOK. Let's be specific here. A family of three, making $30,000 a year, how much in dollar amounts would that person be getting in terms of food stamps?
WEILLSo I can't answer that both 'cause I don't remember, and it depends what their child care costs are and things like that. But it would probably be on the neighborhood of a couple hundred dollars a month.
REHMA couple of hundred a month. Do you agree with that, Jerry?
HAGSTROMYes. I think -- it could actually be a little lower than that. I think the most basic benefit is between $130 and $150 a month.
WEILLA little more than that per person, so...
REHMYeah. So you're kind of shaking your head, Doug. I mean, that doesn't buy a whole heck of a lot of food for a family of three.
BESHAROVBut they have other income. My point here is, remember, I didn't say cut it. All I said was treat it as income. Thirty percent of the people on disability get food stamps. Without the food stamps, they'd still be eating. It's a form of financial assistance. We should coordinate food stamps with other programs so that people would be better off. We wouldn't argue about whether they're buying steak or whatever.
BESHAROVWe don't ask someone who's on disability, why did you buy steak, because we provided an assistance for them to live in a decent way in America. What's happened here is we've tried to protect the food stamp program by saying food stamps are needed to prevent hunger, malnutrition. It's gone beyond that. That's all right. It's a form of support for low-income Americans. We should be in favor of that, but we should describe what it is.
WEILLJust to be clear, people -- this is a program for people with low incomes, and those incomes might be from earnings. They might be from Social Security. They might be from disability. They might be from welfare, although that's much less frequent now. But they all have low income. So the people on disability, like the people who are earning minimum wage, don't have enough income to buy the food they need.
WEILLThey may be able to afford a quarter of the diet or a fifth of the diet or half the diet, and the program accounts for that. But no matter the source of income, we're talking about people who would be very hungry if it were not for food stamps.
REHMAnd what about children, Jerry Hagstrom?
HAGSTROMWell, I think it's something like 40 percent of the people who are on food stamps are children. And there you face a question of, if these kids did not have -- did not -- or the parents did not get this money to buy these children food, how would they eat? I do think it's a simplistic argument to just say they'd still eat even if they didn't get food stamps.
HAGSTROMWell, they'd eat something, but they -- but, you know, years ago in this country, we had a problem with people being too thin. It's true today that we have a problem with people being too fat, but you could go back to a problem of people not having enough caloric intake.
REHMAnd you're listening to "The Diane Rehm Show." We're going to open the phones now, 800-433-8850, first to Arlington, Texas. Good morning, Ed. You're on the air.
EDHi, Diane. I wonder if your guests could comment on my understanding of the food stamp program, something that, I think, has gotten lost in the discussion, which is that it's actually a dual-purpose program. Much of the discussion -- all of the discussions before has focused on the benefit to the recipients of the food stamp program. But I haven't heard anything address the second purpose of the program, which is that it started as a price support system for farmers.
EDIt was a way to increase demand for farm products. And as such, food stamp program is not really a welfare program as typically administered by the Department of Human Services. It's administered by the Department of Agriculture, which is more proof of what I'm saying.
REHMAll right, sir. Thanks for your call. Jerry.
HAGSTROMYes, that's absolutely true. It was started to increase demand for agricultural products as well as address the very real problem of hunger in the country. And it continues to be passed as part of the farm bill. And I will say this, in 1996, when they were doing welfare reform, the farm community did stand up and saved the food stamp program in a much stronger way than the welfare advocates were able to address the cash welfare program.
REHMAnd, of course, in the midst of this drought, you've got food prices going up, which is going to mean that that $130 or $150 per month is going to buy less.
WEILLThat's right, one more reason not to cut the program. I'd also add that the program primarily benefits poor people, but also benefits farmers. But also, one of the strengths of the program, unlike, for example, the wonderful Food Pantry Network that the nation has, is that this uses normal commercial means of getting food to people. People get a card that they can use at a supermarket, a grocery store or a farmers' market, whatever. It's built into the basic DNA of our food system.
BESHAROVI hate to mention the socialist countries of Europe. We're the...
REHMSo why do so?
BESHAROVBecause we're the only country in the world that uses food stamps to help low-income people. Most other developed countries give them cash, and they don't create an artificial price support for food. They don't subsidize the farmers. They make it easy for people to stand up straight and say, this is the benefit I get.
REHMAll right. Let's go to Portsmouth, N.H. Good morning, Michelle.
MICHELLEGood morning. And the last comment that was just made, I agree with. Two points. One is that in a lot of local areas, the farmers' markets, people aren't allowed to use their food stamps. And the second point is that I live in an area that had a huge Air Force base. It was a sacked base, so our -- the size of our community doubled. But knowing that a noncommissioned family of four people qualify for food stamp -- and these are people that serve in your military -- this is how poorly they are paid. They qualify for that program.
REHMAll right. Thanks for your call. Jim.
WEILLWell, I look at the flip side of that, which is that this program which people think sometimes stereotyped as just being for unemployed people or whatever, serves a huge diversity of people, including veterans and people in the active military. The amount of food stamps used at commissaries has tripled over the course of the recession.
REHMJim Weill, president of the Food Research and Action Center. Short break. We'll be right back.
REHMAnd as we talk about plans within the House of Representatives to curtail the food stamp program, here's an email from a woman in Ohio. She says, "I can only speak for Ohio. My son-in-law lost his job earlier this year. My daughter earns a little over $30,000 a year. They have four small children. They qualify for food stamps in the amount of a little over $300 a month. My grandson can eat that much. Plus, recertification in Ohio is every six months." So some states are clearly taking a closer look at that.
REHMAnd then we have an email from someone who is a former stamp -- food stamp auditor in the state of Michigan, who says, "The way the state conforms to federal standards needs to be reviewed. Many states seek waivers to lessen the error rates. Some of these waivers cover up bad policy that causes overspending but lessens their error rate." Jim Weill.
WEILLWell, I haven't seen waivers on error rate and quality control issues, and the program is known for having a remarkably low error rate and, you know, about 1 percent. And it's come way down over the years for many reasons, better work by the Department of Agriculture and the states and replacing coupons with electronic benefits cards. So fraud is not an issue in the program although some of the opponents of the program point to it.
WEILLThe Ohio note, I'd just add, you know, benefits are just not enough for families. The benefit level is predicated on something called the Thrifty Food Plan, which is the low -- below the low government food plan. It's not enough for a family to live on each month. And benefits should be better, but we're in a period where that's not going to happen. But on a minimum, we ought to stop all this talk about cutting benefits and cutting the programs.
REHMIn the same breath, frankly, the House of Representatives, the U.S. Senate is calling for extension of tax cuts on some proposals on those who make $250,000 and below, some calling for an extension for every income. Here's an email from Laurel in Ann Arbor, Mich., and it may be a view that's reflected by many. She says, "Our welfare state results in people being kept permanently dependent on the government. There is no incentive for them to find work." How much truth to that, Jerry Hagstrom?
HAGSTROMI wouldn't find much truth in that. First of all, no one can just live on food stamps. You can only use it to buy food. You can't buy anything else with it, not even -- you can't buy hot prepared foods. You certainly can't buy cigarettes or tobacco or liquor, like some people think that you can. And you couldn't pay your rent with food stamps.
HAGSTROMOne of the reasons why we have so many people on food stamps today is that the income levels for a lot of people have gone down, and now they are -- now they qualify for food stamps when, a generation ago, they would have made enough to be considered middle class and not qualify.
REHMAnd why is it that Mississippi and Oregon have the highest percentage of their populations on food stamps?
HAGSTROMWell, Jim might be able to address this also, but I would say that in Mississippi, there is a great deal of poverty and has been, you know, over the centuries. In Oregon, it's a higher income state, but they've had economic problems. And I believe Oregon has one of the best programs in the country to encourage people to take advantage of their food stamp benefit.
WEILLThat's right. Jerry's right. Oregon reaches a higher proportion of eligible people than even Mississippi does. The percentage of eligible people that states reach varies widely, and it also goes to this argument that states are just taking advantage of the program. In some states like California, only half of the eligible people are in the program 'cause the states put up barriers to getting on the program. In California, until a year ago, if you move from one county to another, you had to reapply for food stamps, so...
REHMInteresting. All right. To Salisbury, Md. Good morning, Shawn.
SHAWNGood morning, Diane. Thank you for taking my call. I appreciate it.
SHAWNI used to -- for two years, my mother, you know, was separated and lost her job at the same time, so she lived on supplemental food stamps. And she did, you know, bought cereals, milk, bread, eggs with her food stamps 'cause she understood, you know, what it was -- what the purpose was.
SHAWNBut at the same time, I was working part-time in a grocery store, and I've seen firsthand, for every, you know, struggling mom or single dad that is on food stamps doing the right thing, there's an equal number of, you know, mothers and fathers with children who would come into the store and buy Oreos and relative junk food completely with their food stamps and then use their Independence Card -- in Maryland it's called -- to buy that.
SHAWNAnd then they would buy a carton of cigarettes and 60 beers with their cash that they earn. I'm just wondering how prevalent an issue this is nationally. Is there any way to combat it? Because it seems -- I mean, there's nothing we could do. And I'm wondering if there's anything the states or the federal government can actually do about this.
REHMHow much fraud actually exists within the system, Doug Besharov?
BESHAROVOh, I was afraid you were going to ask me.
BESHAROVI haven't got the slightest idea. It used to be much greater. It used to be that a food stamp -- they used to be little stamps...
BESHAROV...on the street was worth 75 cents to the dollar, sometimes 50 cents to the dollar.
BESHAROVAnd there was a whole market of these things.
BESHAROVNow, they're a card. It's much more difficult to cheat with a card in terms of selling it. Beyond that, I don't know, and maybe Jim or Jerry knows.
WEILLWell, it has come down to about 1 percent, and, you know, it's far better than virtually any other government program. It's really miniscule in the context. You know, in terms of people's choices, what they do with their food stamps for food, what they do with their cash for other things, you know, low-income people in this country, working people and non-working people, veterans, seniors, whatever, are the same types of flawed human beings as the rest of us.
WEILLThey make some bad choices, and they make some good choices. All the evidence says is that they're making basically the same choices as the rest of us. But we like to pick on poor people and poor people's programs rather than recognize that we're all in this together.
REHMAll right. To Lansing, Mich. Good morning, Allison. Allison, are you there?
ALLISONOh, I am. I'm sorry.
REHMGo right ahead, please.
ALLISONOK. I just wanted to say that my husband and I have been on food stamps for a while now. I will not say how long. But I had a comment about the asset test. For us, because he's self-employed, works two jobs, we have a lot of expenses. And so I have to reapply or at least prove what it is that our income is or what our savings is or anything about every three to six months.
ALLISONAnd my case worker changes on a regular basis, and I kind of have to retell the story, write letters and explain why it is that we just have to show calendars of when he's working because we don't have pay stubs. And it's very difficult. It's like a part-time job for me as a stay-at-home mom to try to keep up with it. I send pages and pages of photocopied receipts just to keep ourselves up, so, anyway...
REHMSo it's something for you that's an ongoing additional chore in terms of just keeping your family fit?
ALLISONExactly. And, you know, I -- first of all, I don't like the term food stamps. At least in Michigan, they call it the EBT or the bridge card. The food stamps, I think, is kind of an antiquated term. I don't know. It just has a really negative connotation, I think. But also, I just -- I would really like to get off, and I heard somebody, or you reading something from somebody in Ann Arbor, which is not far from us, referring to that -- it's not an incentive for anybody to get off.
ALLISONAnd we're a family of five, three young kids, and I want to get off so bad. I mean, we are doing everything we possibly can to raise our income, but it's just hard. My husband works two jobs.
REHMAnd tell me, Allison, what is your income?
ALLISONOur income, it's probably hovering around $25,000 and...
REHMAnd how much do you get in the way of food stamp?
ALLISONWe get about $400. And, actually, if our income changes either up or down within 30 days of $100, we have to report it. So that's a lot of work because, since my husband is self-employed, sometimes we might make an extra $500. Sometimes we're down. And, yeah, I mean, it's all over the place. It's a lot of work. So I don't want anybody to think that this is easygoing, we just sit back on the recliner.
REHMI'm glad you called, Allison. Jerry Hagstrom.
HAGSTROMI think this caller is an extraordinary representative of what this is all about. First of all, she explains what she has to go through to get on the program. Secondly, I absolutely understand why the state would want this information, and I don't really have any answer for how to do it more easily. But, third, I think the most important thing is it shows how much this -- how important this program is to her family to go through all of this to get $400 a month. It shows why this program has become such a central part of the human safety net in this country.
WEILLI have nothing to add to that. She's a wonderful example, and Jerry got it right.
BESHAROVWell, stepping back a foot or two, when we use the Census Bureau data to determine the incomes of people on food -- SNAP, food stamps, EBT, whatever, the incomes are about 20 percent higher than are reported to the food stamp authorities. The people who are worried about the overuse of food stamps -- now, there are some people who are just social conservatives, don't want to spend the money and so forth. Others are worried that the system at the decision-making point is making too many mistakes compared to where it should.
BESHAROVAnd the 1 percent figure is really a very different kind of number than I would say from what Jim is talking in terms of missed payments. The argument here, I think, is not whether there should be a program but whether there should be something done about the people who aren't necessarily eligible. The other part of this discussion, which we haven't had today, is, what would you do if you cut at the top those people who presumably aren't eligible, whether it's one person or a million people or 5 million people?
BESHAROVAnd the answer is, if we were a logical society, notice that they give. We would think about giving more money to the people who need or more food stamps or EBT benefits to the people at the bottom. The striking thing about this conversation is we can't say, gee, we ought to think about how much people at $30-, $40- or $50,000 need, and don't the people at $20- and $25,000 need more? We are really stuck in a conversation that is tragic.
WEILLCan I just add? We would like to increase the benefit across the board, but people at $30,000 do get less from the program the way it's structured than people at $20,000. But, on Doug's point about income, one of the things that Allison's story shows is how hard it is to penetrate the system.
WEILLSo everybody who says, you know, there are too many people in the program aren't recognizing that the price to get into the program psychically and often financially, taking off work, is high. People do not go into this program on a whim. People go into this program 'cause they desperately need it. And getting the agency to take your application and getting it to respond to changes in your income, getting the phone answered, getting the agency to act is often, in many counties, many states, extremely hard.
REHMAnd you're listening to "The Diane Rehm Show." We've had several emails like this one asking, "What is the effect of the food stamp program on the economy overall? Isn't there a multiplier effect at work wherein cutting food stamps on low-income assistance would actually hurt the economy?" Jim Weill.
WEILLYeah, the best study comes from a guy named Mark Zandi at Moody Analytics, who says that food stamps produce about $1.79 for every dollar in food stamp investments, so it has a bigger positive effect...
WEILL...on the economy than essentially any other form of government spending.
REHMAll right. And one last caller in High Point, N.C. Good morning, Jim.
JIMGood morning. First, I'd like to say I'm not on food stamps. But I keep hearing the comments our government is broke, our government is broke, so we have to cut 5 percent from the absolute lowest income people in the country. But yet, right now, going through -- which just went through the Senate, it's headed to the House to be killed -- is those making a quarter of a million dollars a year do not want to sacrifice and pay 4 percent more in taxes.
JIMAnd I'm sure people at the bottom end would consider $250,000 a year very, very wealthy people. I -- and we're told that, if wealthy people have their taxes raised 4 percent, it's going to hurt the economy, but if the lowest people in our government go ahead and cut them 5 percent and it's not going to hurt anyone, I just think there's a large disparity there. Thank you for your time.
REHMThank you. Doug Besharov, how do you respond to people who say over and over again that what's happening here is that those who are in charge are looking at the most vulnerable rather than focusing on those who have the most?
BESHAROVThe proposal to tax at a higher rate the people over 200 -- making more than $250,000 a year, whatever, as The Washington Post, The New York Times, everyone says, makes just the smallest bite in our overall budget problems. The people who have to pay more taxes are middle class. They're -- you ought to have a whole program about where the real money is, where the taxes have to rise.
BESHAROVAnd where they have to rise are the middle-class tax cuts. And, sure, we should go after the rich. But it's the people making between $100- and $250,000, where the bulk of Americans, that's where the bulk of the tax revenues are. And most of the attempts to fix this go after the people there. So we're in a political battle to badmouth the very wealthy, which is, by the way, 1 1/2 lawyers in this town, $250,000. It's not a lot of money. But the bulk of tax revenues would come from taxing the middle class, and we're afraid to do that.
REHMDo you have a comment, Jerry Hagstrom?
HAGSTROMWell, I think his comments are right. But I would also say that the amount of money that you would save even out of the House cut, $16.5 billion, is a very small amount of money, and it would hurt a lot of people.
REHMJerry Hagstrom of The Hagstrom Report, he's also a columnist for National Journal. Doug Besharov is professor at the University of Maryland and a senior fellow at the Atlantic Council, and Jim Weill, president of the Food Research and Action Center. Obviously, these discussions are going to continue. We shall see what happens. Thank you for being here. And thanks for listening. I'm Diane Rehm.
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