Deep Cuts in Food Stamp Program Could Impact Millions

September 21, 2013 at 12:00 AM EDT
After a showdown in the House ended with a vote to cut the nation's food stamp program by $40 billion dollars, the controversial measure is headed to the Senate. Wall Street Journal reporter Damian Paletta breaks down some of the numbers behind the food stamp program and explains the impact of the proposed cuts.

HARI SREENIVASAN: This week, the House of  Representatives narrowly passed a bill that would cut the federal food stamp program by roughly $40 billion during the next decade. Senate Democrats vowed to block the Republican measure.

Right now, a record 47 million Americans received food stamps as these numbers have grown, so too has the cost of the program. It now exceeds $78 billion a year. To help us understand what the current clash about food stamps is all about, is Damian Paletta from the Wall Street Journal, joins us now from Washington, D.C. Thanks for being with us.

So, Democrats say the very fact that 1 in 7 Americans qualifies for food stamps is proof that the program should not be cut. What’s the Republican counter to that? What would the GOP like to see changed?

DAMIAN PALETTA: The Republicans are raising the question, if the stock market is at record highs and the economy is recovering and the unemployment rate is coming down, why are we seeing more and more people signing up for the food stamp program? And it’s true in the past decade, the number of people in the program has doubled.

So they are a lot of questions about why that that is taking place and they are putting controls in place that that say, will help move people either out of the program into well-paying jobs or move people out of the program that they believe should not have qualified in the first place.

HARI SREENIVASAN: What are some of those controls that they want to put back in place?

DAMIAN PALETTA: Put for example work requirements for people that are receiving food stamps, who don’t have kids and they also want to roll back some rules– many states in the past decade have made it easier for people to qualify by either raising or waving income or asset tests.

So, for example, you could have $10,000 in the bank that you are saving for your kid’s college education and still qualify for food stamps if you’re not making a lot of income. Some Republicans want to roll that back saying if you have money saved you should use that money for food and things like that right now.

HARI SREENIVASAN: So critics of the program this week repeatedly highlighted a Fox News Report showing an unemployed surfer in California using food stamps to buy sushi and lobster. They say the video proves that benefits are going to people who don’t really need them. Which raises the question, is he really representative of those receiving benefits?

DAMIAN PALETTA: My experience–and i have talked to a lot of people who receive food stamps– is the vast majority of people that receive food stamps are in really tough financial situations. Many of them are either generational poverty. They received food stamps when they were children, they’re receiving food stamps now and their children will probably receive food stamps. Or situational poverty– they lost their job and they are stunned they are in this situation.

But of course, any program this big, there is going to be fraud and abuse. There are going to be select examples that make people scratch their heads and wonder why. For example, for the really poor, food stamps are a type of currency. And you can see people, they will go, maybe buy something for somebody else with their food stamps in exchange for cash. That does happen, it’s just really hard to police.

HARI SREENIVASAN: Let’s talk about fraud for one second. The government said there’s only a one percent fraud rate in the food stamp program, but even that is $750 million a year. How significant a problem is fraud?

DAMIAN PALETTA: It’s a significant problem. And quite frankly, one percent, it’s really hard to tell how much exists. It happens one, the recipients could be abusing and big and also some small businesses and big businesses even could be abusing the program as well.

The Department of Agriculture which runs the program is trying to stay on top of this but but the program has grown so large and the Department of Agriculture’s resources are so tight that they are probably not able to do as much as they would like to do.

HARI SREENIVASAN: Damian Paletta from the Wall Street Journal, thank you so much.

DAMIAN PALETTA: My pleasure.