Want to know how $80 billion is spent? USDA won’t tell you


Over the last year, the narrative used to justify SNAP, the federal food stamp program has taken a significant dent. Here are a few examples:

  • The program is cited as necessary because of the recession – even though the Congressional Budget Office noted that most of its growth from 2000 forward was not due to the recession.

From The Washington Examiner comes yet another damaging bit of information to the program’s reputation:

Food stamp participation is at an all-time high, costing taxpayers $80 billion in 2012 alone, but the U.S. Department of Agriculture refuses to make public how much of that money pays for junk food.

A 2012 Yale study estimated Supplemental Nutritional Assistance Program benefits, formerly called food stamps, pay for $2 billion in sugary drinks alone every year. A 2010 study by the Center for Science in the Public Interest said that spending was even higher, estimating soda companies reap as much as $4 billion each year in SNAP money.

SNAP benefits are legally allowed to pay for everything from ice cream to soda. But because the USDA doesn’t make food stamp purchase data public, it’s difficult to know how much that junk food costs taxpayers.

Rep. Tom Marino, R-PA, introduced the SNAP Transparency Act on Friday, which would require the USDA to publicize what food stamps pay for.

According to Heritage Foundation Policy Analyst Rachel Sheffield, there are few limits on what can be bought with food stamps:

The big limits on SNAP, when it comes to what can be purchased, are on non-edible products, not food products. Benefits can technically be used to buy junk food, or what most people consider junk food.

Sheffield sent me the following link, which lists what can and cannot be bought with food stamps. Below are some of the restrictions and allowances:

SNAP benefits cannot be used to purchase beer, wine, liquor, cigarettes, or tobacco – nonfood items such as pet foods, soaps, paper products, household supplies, vitamins and medicines, hot foods, or food eaten in the store. Other restrictions exist as well.

Here’s what can be bought: Soft drinks, candy, cookies, snack crackers, and ice cream, seafood, steak, and bakery cakes.

According to the USDA website, Congress has considered restricting purchase allowances, but:

Since the current definition of food is a specific part of the Act, any change to this definition would require action by a member of Congress. Several times in the history of SNAP, Congress had considered placing limits on the types of food that could be purchased with program benefits. However, they concluded that designating foods as luxury or non-nutritious would be administratively costly and burdensome.

The USDA’s defense of current policy can be found here. Part of their defense is that enforcing restrictions would be costly, and would burden tens of thousands of grocery stores and the like across the country.

Predictably, powerful lobbyists oppose restricting what can be bought taxpayer money. Again from the Examiner:

Companies that make soda and other junk food oppose changing SNAP rules to restrict purchases to “healthy” foods, saying nutrition-based rules are arbitrary and can open the door to further restrictions. “We join with others in the non-alcoholic beverage industry and the broader food products industry concerned about any static policy, including SNAP benefits, that would look across 300,000+ items in a grocery store and arbitrarily restrict the sale of some of our products based on calorie content,” a Coca Cola official said in response to questions from the National Center.

In short, food stamps can be used to buy any number of unhealthy foods. As much as five percent of the program may be used for purchases of soft drinks. Adding insult to injury, the USDA refuses to publicize how the money is spent.

It is becoming increasingly clear that the food stamp program is far too large and cumbersome. However, what is the best way to make the system more transparent? Should the burden be placed upon the federal government? Should it be upon the businesses who allow purchases with food stamps?

I called Rep. Marino’s office to ask how his Act makes the aforementioned changes, as well as how much waste is estimated within the food stamp program. According to two spokespersons, the legislation adds no dollars to federal spending – the necessary aspects of oversight, including funds for a website, would come from existing authorizations within the USDA.

Regarding the level of inefficiency, a spokesperson had no estimate – and emphasized this was why the Act was necessary. Similarly, according to Michele Simon, the author of a 2012 report called “Follow the Money, Are Corporations Profiting from Hungry Americans?” There is no accounting of how the money is spent in the food stamp program:

We don’t know where the money is going, which is why the Act is necessary. The food makers and retailers know how the money is spent, but the government does not.

I was careful to say in my report that I am not against food stamps or government providing a safety net, especially at a time when people are in need. The concept of SNAP is correct – we need to help people when the economy is not making sure people are well-paid, etc.

The problem is the program has really become a form of welfare. This is where it gets tricky; the folks who advocate for SNAP want to have it both ways. They want the benefits of calling it a nutrition program, but they also want SNAP to be a form of income support.

But this is not tenable at a time when Americans are suffering from diet-related diseases.

The anti-hunger groups also work with corporate lobbyists to oppose the necessary oversight to the food stamp program. Ironically, the anti-hunger groups are leaving the program vulnerable to criticism from the right by fighting these transparency measures.

Simon also e-mailed that $4 million for expansion of a program announced on Monday for “fresh, healthy food” access by the USDA “is not even a drop in the bucket – it’s a feel-good PR move.”

A Marino spokesperson also directed me to a 1999 report by the USDA that estimated 98% reporting accuracy from businesses taking food stamps. Clearly, oversight is not impossible, especially since the 2008 farm bill mandated business must hold records of transactions for three years for investigative purposes – although the records are not allowed to be used for oversight.

When asked about the costs to businesses, the spokespersons said while they have no official estimate until the CBO gets its assessment back to the Representative, there would likely be an initial cost – most likely software purchases – but that profits are built into SNAP purchases anyway. Additionally, many of the software purchases could be deducted as a business expense.

Over the last three generations, it has been claimed that food stamps are a necessary part of the safety net for millions of Americans. However, as Simon – no Tea Party activist herself – noted, it has grown far beyond that. It would serve the American people well to know exactly where food stamp money is going, especially since the program was intended to help the poor in tough times, not support a welfare program for steaks, cakes, and corporations.