Three Reasons High Food Stamp Enrollment Is Due To The Economy, Not Fraud

August 4, 2013 12:08 pm 0 comments Views: 64

food-stamps-pic_main-300x198Critics have charged that the fact that the Supplemental Nutrition Assistance Program (SNAP) continues to see high enrollment even as the unemployment rate gradually improves is evidence of fraud. But a new report from the Center on Budget and Policy Priorities marshals evidence that the continuing demand for food stamps is thanks to the sluggish economy.

The report points to three main reasons that enrollment in SNAP remains high because of the economy and not because of fraud or waste:

1. The labor market is still weak. SNAP spending rose quickly as the recession took hold and more and more people needed assistance. Its caseload and spending growth have “slowed substantially” while the economy recovers, the report notes, with spending just 1.5 percent higher in the first half of 2013 compared to the year before. Yet while the unemployment rate has started to drop, the number of people who are actually employed remains flat.

CBPP chart 1

2. The number of unemployed people who don’t receive unemployment benefits keeps growing. More and more people who have lost their jobs are not receiving benefits: In the first half of 2013, 11.9 million workers were unemployed, but just 6.7 million got assistance. That disparity has increased since 2009, when 14.3 million workers were without a job and 9.2 million of them were without benefits. This group is the most likely to qualify for SNAP assistance since they have neither wages nor unemployment insurance coming in.

CBPP chart 2

3. Declines in SNAP enrollment usually lag behind falling unemployment rates.After spikes in unemployment in 1992, 2003, and 2010 began to decline again, SNAP still lagged the improvement in the economy “by several years,” the Congressional Budget Office has found. Two other studies have found that the current relationship between SNAP enrollment and unemployment is consistent with what happened after the two previous economic downturns.

Many Republicans who have tried to cut the SNAP program justify the cuts by pointing to fraud and abuse, even though outright fraud has been brought down to just 1 percent. Those very Republicans have also benefitted heavilyfrom the other half of the spending in the farm bill: agriculture subsidies. Democrats who voted for cuts to food stamps have taken big sums from the farm industry.

Republicans in the House have been particularly hard at work to undermine a program that lifts millions out of poverty, ramming through a bill that stripped SNAP from the farm bill altogether and leaving it vulnerable to drastic cuts. But even without these cuts, recipients will see a significant reduction in their benefits come November.

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