Food Stamps – A Political Hot Potato!

Location Date: 
January 20, 2012

I thought we could take a look at food stamps, now that GOP-hopeful Newt Gingrich has labelled President Obama the “best food stamp president in American history!”  The debate over food stamps is reflective of the deep partisan rifts in U.S. politics today.

The U.S. Department of Agriculture manages a program called the Supplemental Nutrition Assistance Program (SNAP), better known as the Food Stamp Program.  The Program was a temporary one that started in 1939 and was highly useful in both assisting with the then-high levels of unemployment and unmarketable food surpluses.  It became an Act of Congress in 1964 as a “War on Poverty” and has gone through substantial iterations since that time. 

A record $71.8 billion was spent on the program in fiscal 2011.  It is expected to top $80 billion this year.

Based on 2010 data, here are some interesting facts:

·         49% of all participants are children (17 or younger)

·         15% are elderly (60+)

·         20% are disabled

·         Average monthly gross income per household using food stamps is $731

Given this data, it is incredible and disturbing that food stamp usage is close to all-time highs – over 46 million Americans - close to 15% of the U.S. population –rely on the program.

Companies, particularly the grocers, are all working hard to compete for this market (Click Here to read more).  They have adjusted their hours to midnight openings at the start of the month, designed ultra-low priced brands and packaging, offered discounts on frozen food, etc.  A competitive marketplace for these customers is a small consolation.

Food stamp usage is clearly a lagging indicator of improving economic and employment data.  Like the U6 unemployment data, food stamp usage provides insight into structural unemployment trends and disparity in income levels.  The October data showed a small fall in usage by 44,000 people - let’s hope this disturbing trend in society improves a lot more in 2012!

Jim McGovern