Friday, July 30, 2010

Senate Cutting Food Stamps Funding by $6.7 Billion

Ezra Klein reports in the Washington Post that the Senate is cutting food stamps funding by $6.7 billon. Klein notes that's a strange move, because money spent on food stamps may be the the best economic stimulus of all:
The Recovery Act included an immediate 13.6 percent increase in food stamps (which are now known as SNAP). That increase equals out to a maximum of $80 per household -- and these are not rich households. But the price of food has leveled out, and in some cases decreased, in the recession. Meanwhile, the number of people who needed help skyrocketed to more than 40 million. For that reason, the program's costs ballooned from an expected $20 billion to about $65 billion. The new price tag scared some, so people began talking about cutting the benefits back.

And here we are. Democrats needed to offset spending on two worthy, important programs [Medicare and teacher funding]. So they're cutting another important, worthy program. But you really can't think of a worse program to cut than SNAP. SNAP is an extraordinarily well-targeted stimulus. It goes to poor households, for something they need to buy. According to Mark Zandi's numbers, it's literally the most stimulative way to spend a dollar: Better than state and local aid, or unemployment insurance. You get more than $1.70 of economic activity for each buck you put in...
But this is also a question of priorities, of what gets cut. Bernie Sanders put up an amendment last month to cut about $35 billion in oil and gas subsidies. It failed. Republicans are arguing to extend Bush's tax cuts for the rich with no offsets, and they may well succeed. But food assistance for poor families? You can get the votes to slash those. Read more

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