2014 Farm Bill: Addressing Misuse, Protecting Food Assistance

The Agricultural Act of 2014 achieves savings in the Supplemental Nutrition Assistance Program (SNAP) solely by stopping fraud and misuse, while maintaining critical assistance for families. Savings in this section are achieved without removing anyone from the SNAP program, and ensures that every person receives the benefits they are intended to get under the current rules of the program.

The 2014 Farm Bill stops lottery winners from continuing to receive assistance, increases program efficiency and cracks down on trafficking. The farm bill also closes a loophole being used by 17 states to artificially inflate benefits for a small number of recipients.

 

The Farm Bill’s $8 billion in nutrition savings:

The 2014 Farm Bill achieves virtually all of its $8 billion in nutrition program savings by addressing a program misuse, commonly referred to as “heat and eat,” whereby a small number of states are artificially inflating some people’s food assistance benefits by listing a utility bill they don’t actually have on their food assistance applications. 

The amount of SNAP benefits a person receives is set by calculating a person’s monthly income and monthly expenses—which then determines how much in benefits the person receives to help purchase food each month.

Seventeen states are providing individuals who don’t have a heating a bill (often because their utilities are included in their rent and are already accounted for in the expense section of their application) with $1 per year in home heating (LIHEAP) assistance. This $1 per year is clearly not actually meant to help someone pay a heating bill.

However, it is assumed that if someone is receiving LIHEAP assistance, they must have a home heating bill, and thus they will automatically have a standard average heating bill listed on their SNAP application. Listing a heating bill on a SNAP application when a person doesn’t actually have a heating bill means that person will receive benefits above and beyond what they are intended to receive based on their actual expenses under the current rules of the SNAP program.

 

The Farm Bill addresses this misuse by preventing states from listing a utility bill on an individual’s food assistance application unless the person receives at least $20 in home heating assistance per year, or if the person produces his or her actual a utility bill.

 

In other words: for a SNAP recipient receiving more than $20 per year in home heating assistance, nothing changes.  For a SNAP recipient receiving less than $20 per year in home heating assistance but who can produce their heating bill, nothing changes.  If a SNAP recipient receives less than $20 per year in home heating assistance and does not have a heating bill, then a heating bill will not be listed for them on their SNAP application, but their application and benefit amount will accurately reflect their actual expenses.

 

This change does not affect 96% of SNAP recipients.  All recipients will continue to receive 100 percent of the SNAP benefits their actual expenses call for under the current rules of the program. The 2014 Farm Bill does not remove anyone from the SNAP program. 

 

What Supporters of Food Assistance Programs Are Saying About Farm Bill Food Stamp Policy

 

For more information on the Farm Bill’s savings in food assistance, click here.

 

Bob Greenstein, Center on Budget and Policy Priorities:

“Congress did not intend for states to stretch the benefit rules this way and longstanding [food stamp] supporters like myself find it difficult to defend… It’s difficult to defend the practice of giving people higher benefits for supposedly paying bills they don’t, in fact, pay … If Congress doesn’t address the weakness in the SUA rules, SNAP’s opponents surely will use it to tarnish the program in the public mind as they lay the groundwork for more radical and damaging changes to the program.” Additionally, the Farm Bill “includes provisions designed to provide SNAP households with more access to healthy food outlets such as farmers’ markets, to ensure that retailers that participate in the program offer a healthy variety of foods for sale, and to tighten retailer compliance with SNAP rules.” 

 

The New York Times Editorial Board:

“On balance, the bill is clearly worthy of support, particularly because it will prevent austerity fanatics in future Congresses from gutting food stamps for the next five years… Most of [those affected] live in the 16 states that have taken advantage of a loophole in a utility-assistance program, receiving benefits that Congress did not intend. That loophole should have been closed…”

 

Washington Post Editorial Board

This ““loophole… costs taxpayers hundreds of millions of dollars each year — and gives an otherwise vital component of the social safety net a black eye.” “This maneuver results in many people receiving money based on utility expenses they did not actually incur.” For Members of Congress looking to gut food stamps, this “looks less like a clever way to help the poor and more like a political gift to SNAP’s perennial opponents.” The Farm Bill’s policy would affect “only 4 percent of all SNAP families,” and “crucially, none would lose basic eligibility.”

 

USA Today Editorial Board

“The trick — called ‘heat and eat’ — is to give someone with no actual heating bill a token amount of home heating assistance — as little as $1 a year in some states, or a single dime a year in California. Sixteen states and Washington, D.C., use the gimmick to extract billions of dollars in extra federal food-stamp benefits that their citizens aren't really entitled to under the rules… It is a scam that bends the rules in ways lawmakers never intended… It gives some people extra benefits while others in the same situation get less… Defenders of the poor should realize that one of the greatest threats to the food-stamp program is the perception that people are using it to cheat the government. Closing the heat-and-eat loophole makes that argument much harder to make.”

 

Oran Hesterman, Fair Food Network:

“Congress should pass this farm bill.” The 2014 Farm Bill “is the best chance we have of protecting the integrity of this program, which is critical to the food security of low-income Americans… With incentive programs like those supported by the farm bill, we can begin to turn SNAP from strictly an anti-hunger program into an anti-hunger and pro-health program.” “This farm bill limits some of the egregious payments to rich, corporate farms that should have been done away with long ago. Many of the likely provisions promote healthy food systems in unprecedented ways. I have hope that we can improve our nation’s nutrition assistance to better serve both farmers and those in need. Congress should pass the farm bill and bring us closer to that reality.”

 

 

Additional reading:

 

Washington Post editorial (“Congress should close a food stamp loophole”): http://www.washingtonpost.com/opinions/congress-should-close-a-food-stamp-loophole/2013/12/30/23736316-699c-11e3-8b5b-a77187b716a3_story.html

 

Bob Greenstein commentary:

http://www.cbpp.org/cms/index.cfm?fa=view&id=4081

 

Center on Budget and Policy Priorities Analysis:

http://www.cbpp.org/cms/index.cfm?fa=view&id=4082