Chad Stone is chief economist at the Center on Budget and Policy Priorities.
Programs that provide assistance to people who are struggling to get by—the social safety net programs that any decent society provides—are under attack. Far from the claims of critics, however, programs like the Supplemental Nutrition Assistance Program, or SNAP, a.k.a. Food Stamps, are not on a relentless growth path with very high administrative costs that endanger the nation's fiscal future. Moreover, proposals to cut benefits and convert safety net programs now available to any qualified applicant to fixed-dollar block grants are misguided, as the history of Temporary Assistance for Needy Families (TANF, the program created in the 1996 welfare legislation) has shown.
When former House Speaker Newt Gingrich calls President Barack Obama the "Food Stamp President," he is not praising SNAP for working as it should by providing benefits to the larger number of people who qualify for them in a weak economy. But that's what's happened. Spending rose rapidly in the Great Recession, in part because of the increase in caseloads and in part because of the temporary benefit increase enacted in the 2009 Recovery Act. Providing assistance to low-income households is one of the most cost-effective ways to boost spending in a weak economy. But as the chart below shows, SNAP spending is projected to return to historical spending levels as the economy strengthens.
Former Gov. Mitt Romney's claim on NBC's Meet the Press earlier this year that the federal bureaucracy eats up most of the money Congress provides for safety net programs, and that little reaches people in need, is simply false. As my colleagues at CBPP have documented, at least 90 cents of every dollar (and in most cases, a higher percentage) of federal spending for Medicaid, SNAP, housing vouchers, Supplemental Security Income, school meals, and the Earned Income Tax Credit reaches low-income Americans. As the chart below shows, spending on social safety net programs has been critical in keeping people out of poverty through the recession. In addition, because these social safety net programs expand to meet the greater needs in a weak economy, they cushion the loss of purchasing power, keep the economy from weakening further, and prevent still more job loss. But because those increases are temporary, they do not add much if anything to the long-term budget deficit.
In contrast to most safety net programs, TANF is a block grant providing a fixed pot of money that does not automatically reach more people as needs increase. TANF benefits have eroded over time and now are below 50 percent of the poverty line in all states—and below 30 percent of the poverty line in most states. In addition, the share of needy families who receive benefits has fallen sharply. In 1996, TANF cash assistance reached 68 families with children for every 100 such families in poverty; in 2009, it helped just 27 families for every 100 in poverty. Largely because of these trends, Census data shows that the safety net now does much less than it once did to lift children out of deep poverty—that is, to lift them above half of the poverty line. The TANF experience illustrates why converting programs to block grants is the wrong model for repairing the safety net.
The safety net works, but it still has serious gaps. Converting safety net programs to block grants would be a huge step backwards.