Senate makes deeper cuts to food stamps to pay for Medicaid, teacher jobs

To pay for a much-needed, job-saving and job-creating bill to help ease states’ budget woes, Democrats have made further cuts to food stamps, and for the first time ever, benefit recipients could see their monthly checks shrink.

The initial version of the state aid bill — championed by Republican and Democratic governors, as well as congressional Democrats — cut approximately $6.7 billion from the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps). It did so by taking back some of an expanded benefit created in the American Recovery and Reinvestment Act, the Feb. 2009 stimulus bill. The state aid bill made a number of cuts to provide $10 billion for teachers’ jobs and $16.1 billion for Medicaid funds.

Senate Majority Leader Harry Reid, D-Nev., thought the bill was deficit-neutral, but the Congressional Budget Office said it came up approximately $5 billion short. (The Democrats had not cut enough because they had not factored in the timing of the bill’s passage. The changes cannot go into effect until mid-September, at the earliest, as the bill needs a House vote.) Democrats tinkered with the bill, cutting unspent funds from a number of programs.

And they expanded the cuts to SNAP. A CBO score released Tuesday night shows the revised version more than pays for itself, reducing the deficit by $1.37 billion over the next ten years. SNAP benefits face a $11.9 billion rollback starting in April, 2014. A family of three can expect their benefits to drop about $50 a month.

Never before have congressional policies actually created a month-to-month cut in food stamps. Even in the 1996 rollback of numerous welfare programs, SNAP benefits just grew more slowly than food inflation. Congress has always attempted to avoid a “cliff.” Policy experts describe that “cliff” in benefits as “devastating.”

The ARRA increase to SNAP benefits boosted benefits from meager to less-meager, advocates say. “We have been very supportive of the ARRA boost,” says Ellen Vollinger of the Food Research and Action Center. “But it underscored that these benefits are not generous. Anecdotally, we heard that the ARRA boost let some SNAP recipients keep going to the supermarket in the third or fourth week of the month, rather than going to a soup kitchen starting after the second week. They were stretching out their benefits, and purchasing some more nutritious food, like fresh fruit and vegetables.” Vollinger notes that even with the ARRA funding the average SNAP benefit is not really enough to eat.

And FRAC argues that that the situation where the government might actually cut benefits… would be “devastating” for recipients. “In the 1990s, there were terrible cuts to the program,” Vollinger explains. “But nobody ever started receiving less money [because the benefits increased more slowly than the price of food increased]. That situation — what will happen if people aren’t well-informed about the cut? What if they don’t recognize that the benefit will be lower?” It has never happened in the history of the program, Vollinger notes.

An Iowa Policy Project study released in November found federal stimulus for Medicaid created a $252 million increase in the value of goods and services produced in the state during fiscal year 2009, and $114 million in income for 2,354 workers in created or saved jobs.

In February, the organization released a report that found that for every $1 million invested in food assistance programs, about 10 Iowa jobs are saved or created.