In Miguel de Cervantes’ classic novel, “Don Quixote,” the titular character rides off into battle against several windmills he believes to be giant beasts. His hapless sidekick Sancho Panza watches helplessly as the crusader launches his ferocious assault on imagined monsters.
Similar images come to mind when discussing Governor Corbett’s new policy regarding the Supplemental Nutrition Assistance Program (SNAP), more commonly known as food stamps. The Corbett Administration recently announced that it would bar people under 60 with more than $2,000 in savings or other assets (home, retirement benefits, and one car not included) from collecting food stamps. A higher limit would be set for seniors. This was all done under the guise of clamping down on fraud.
Yet a closer examination reveals these vague claims of fraud to be more akin to Quixote’s imaginary monsters than to any real threat to taxpayers. A Department of Agriculture report on how well the states administered their food stamps program shows that no fraud claims were established in 2010. In fact, the costs of agency errors far exceeded that of non-existent fraud, raising the question of whether an asset test could have unforeseen costs. It is widely accepted – except, of course, by the Corbett Administration – that the additional training, paperwork and document verification accompanying this policy change will mean higher administrative costs. An increase in agency errors resulting from the added bureaucracy could have a similar effect.
But the cost is not only monetary. Food stamp usage has increased as a result of the Great Recession and its aftermath, which dislocated workers and wreaked havoc on families’ finances. Yet putting a limit on the amount of savings and assets one can hold punishes people that choose to save for the future, encouraging them instead to deplete their reserves.
The Corbett Administration claims this will stop people from taking advantage of the system. But food stamps are already limited to those with low incomes, and food stamp payments are low enough only to help people, not to provide for them entirely. Pennsylvania ranks in the bottom tenth of the nation as far as average state food stamp payment amounts go – below even Texas. The average monthly benefit for a Pennsylvania household ($262.61 in 2010) would only go so far in covering that average household’s grocery bill. The Department of Agriculture’s estimates that monthly food costs for a family of four range from around $550 to $800 per month, depending on how old the children are. And those estimates are for the spending plans it labels “thrifty” and “low-cost.”
Losing such aid would hurt not only the recipients, but businesses and the economy as well. Food stamps help prop up demand, preserving jobs in grocery stores and the trucking and warehouse services they employ. The spending done by workers in those preserved jobs, in turn, ripples through the economy. Moreover, food stamps are the most effective form of economic stimulus, since they are given to cash-strapped individuals who usually spend them immediately. A Moody’s Analytics study found that food stamps generated $1.73 for every dollar spent.
So one could be excused for feeling a bit like Sancho Panza as he watches his leader gallop off full-speed at a windmill. Perhaps Quixote truly believes in the imaginary beasts he seeks to slay, or perhaps he has some inkling of the absurdity of his quest. No matter – the result is the same.
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