Milling & Baking News - July 24, 2012 - 18

Washington 

SNAP faces spending cuts in Senate and House farm bills
WASHINGTON — The nation’s principal food security safety net, the Supplemental Nutrition Assistance Program, would sustain cuts in funding under both Senate and House farm bill proposals. The Senate on June 21 passed the Agriculture Reform, Food and Jobs Act of 2012, which would reduce SNAP funding by about $4.5 billion over the next 10 years. The House Committee on Agriculture on July 13 passed the Federal Agriculture Reform and Risk Management Act (FARRM), which would slash SNAP funding by about $16.5 billion over the same span. The House leadership has yet to decide when the measure will be brought to the floor for a vote. The current farm bill expires on Sept. 30. Proponents of both bills asserted no family or individual eligible to receive SNAP benefits would be denied them because the cuts they proposed aimed to crack down on what they asserted were fraud and abuse in the food assistance program. But congressional opponents of the SNAP cuts and food assistance advocates called them devastating to those, primarily the working poor, who would see benefits reduced or even lost. Both the Senate and House bills targeted what they alleged were abuses of the so-called “heat-and-eat” policy, which provides states the option of coordinating assistance they provide under the Low-Income Home Energy Assistance Program (LIHEAP) and SNAP. Under this policy, in 15 states, LIHEAP participants who qualify for SNAP may use the standard utility allowance (SUA) when itemizing deductions to determine their net monthly income. SUAs are based on a state or local area’s average utility costs over time. These averages may be used by state SNAP agencies instead of requiring actual utility bills to simplify the calculation of shelter costs as part of the formula used when determining an applicant’s SNAP benefit. SNAP benefit levels are based on household size and net monthly income. A spokeswoman for Feeding America, the nation’s community of more than 200 food banks, pointed out this policy was particularly helpful to families who rent and do not own their homes or apartments and whose rent payments
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include money the property owner then uses to pay for utilities. Currently, an applicant living in one of the 15 participating states who receives any level of LIHEAP payment to assist paying utility bills may use the standard utility allowance in connection with determining SNAP benefits. Representative Frank Lucas of Oklahoma, chairman of the House Committee on Agriculture, asserted, “In practice, that means that states

can game the system by sending a $1 check that can trigger an increase of up to $130 in SNAP benefits. Closing this loophole ensures that both LIHEAP and SNAP are targeted to the families who need assistance.” The Senate and House bills would restrict the connection between the SNAP standard utility allowance and LIHEAP to households receiving at least $10 a month in LIHEAP benefits. The Congressional Budget Office estimated 500,000 SNAP households would see their benefits cut by an average of $90 per month as a result. Both bills envision this tightening in the “heat-and-eat” policy would reduce SNAP spending by $4.5 billion over 10 years. The Senate bill’s cuts mostly end there, but the House bill goes much further. It does so primarily by targeting states’ use of “categorical eligibility” in determining who may receive SNAP benefits. Under categorical eligibility, eligibility to receive SNAP benefits may be based on an individual’s or a household’s participation in another means-tested assistance program. Categorical eligibility allows

households to be certified as SNAP eligible without counting their assets. Categorical eligibility may be granted when households receive any assistance from Temporary Assistance for Needy Families (TANF), Supplemental Security Income or other state general assistance programs. The assistance may be in the form of cash or non-cash benefits such as support with child care or transportation, or that meets other TANF goals such as promoting twoparent families through the use of educational brochures and 800 numbers. Forty-three states permit non-cash benefits to determine categorical eligibility for SNAP. Although categorical eligibility deems some households to be SNAP eligible, they must still meet income limits for SNAP and must undergo a SNAP benefit calculation, so it is possible to be categorically eligible yet receive no SNAP benefits. Mr. Lucas asserted, “When states implement categorical eligibility, these households do not need to meet SNAP asset or gross income tests … Families that receive cash assistance can still take advantage of categorical eligibility for SNAP. But by ensuring that only cash assistance triggers SNAP eligibility — and not other benefits like brochures — we can save billions of dollars over 10 years.” The House bill expects to cut SNAP spending by $11.5 billion over 10 years in this way. The C.B.O. estimated repealing categorical eligibility would eliminate food assistance to 1.8 million low-income people. The Obama administration’s estimate was higher; it asserted up to 3 million people may lose their food assistance. Additionally, since many school children’s eligibility for free school lunches is based on their family’s SNAP eligibility, it was estimated that should families be removed from SNAP because of a repeal of categorical eligibility as many as 280,000 children would no longer be eligible for free school lunches. The House bill also would eliminate annual payments of $48 million in performance bonuses made to states to improve SNAP integrity. The bonuses reward states that reduce payment error rates or increase participation rates among eligible people. Mr. Lucas said there should be no bonuses awarded to states for doing
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Milling & Baking News - July 24, 2012

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