What the Heck? SNAP go his arguments

Joe HeckWe can update statistics on the SNAP (food stamp) program in Nevada by referring to the Caseload Summary of the DWSS, (pdf).  For FY 2012 there were 187,896 adults and 163,969 children receiving SNAP benefits. Of these, 143,115 adults and 124,890 children lived in Clark County, and 24,834 adults and 21,672 children lived in Washoe County. (p.45)  In sum there were  351,865 receiving food assistance.

The average value of the benefits statewide per case in FY 2012 was $258.56, per month, and per person averaged to $122.70. [DWSSpdf]

And, yes there are more people participating in the SNAP program in Nevada, as indicated by the following chart:

NV SNAP participation per 1000

This trend is in line with the employment (unemployment) trends in Nevada since FY 2003.   Nevada’s highest unemployment rate was 14.0% in October 2010, and was lowest (3.8%) in April, 2000.  [BLS] Nevada’s current unemployment rate of 9.5% earns the Silver State the dubious honor of being 50th in the ranking of state unemployment rates as of August 2013. [BLS]

NV Unemployment 3There’s good and bad news herein.  As DETR explains:

“Service-providing industries are expected to create 100,500 jobs in the ten-year forecast horizon. A lot of the growth in the service-providing industries is a reflection of increasing population and consumption over a decade. Leisure and hospitality industry is projected to have 36,100 more jobs by 2020, the largest employment gain in jobs among all industries. Most of the gain is anticipated to be generated in the accommodation and food services sector.” (pdf)

The number of jobs is increasing — but, as we discover from the BLS tables of average hourly wages and weekly earnings — the average hourly wage in the leisure and hospitality sector is $13.54 per hour, with an average weekly wage of $352.04.  This is the lowest rate of all the sectors in the tables, the next lowest rate being $16.67 in “retail trade.”

Thus, we have a situation in which the unemployment rate which drives a significant portion of the SNAP applications is decreasing, but the kinds of jobs increasingly available are in the lowest wage categories.   With the highest unemployment rate in the nation, and jobs increasing predominantly in the lowest wage sector, Nevada will be hard pressed to find ways to reduce family poverty.

Representative Joe Heck (R-NV) explained his vote on the continuing resolution, with dramatic cuts to the SNAP program, in a statement which doesn’t square with the reality of employment projections in Nevada:

“Every able-bodied American that does not have dependents should be required to meet the work requirements … the reforms put in place by this bill ensure that only those that meet the income guidelines receive the assistance they need,” Heck said in a statement. “The best thing we can do to help those on SNAP and other forms of federal assistance is create an economic environment where the private sector can grow and create more good-paying jobs.”

Instead of pragmatic assistance to those employed in low wage jobs, Heck offers verbiage: “create an economic environment….”  Pure GOP speak for Business Subsidy Good; People Assistance Bad.  The advice is singularly unattached to the reality that the jobs actually being created tend NOT to be “good paying.”

What Representative Heck asserts, but does not substantiate, is that any of the 351,865 receiving food assistance in Nevada do NOT meet the income guidelines.   The issue to which Representative Heck may be applying his penchant for generalities is the BBCE guidelines.

In fiscal year 2010, GAO estimates that 2.6 percent (473,000) of households that received Supplemental Nutrition Assistance Program (SNAP) benefits would not have been eligible for the program without broad-based categorical eligibility (BBCE) because their incomes were over the federal SNAP eligibility limits.  [GAO]

However, what Representative Heck isn’t including is another segment of the GAO Report on SNAP:

GAO estimates that BBCE increased SNAP benefit costs, which are borne by the federal government, by less than 1 percent in fiscal year 2010. In that year, total SNAP benefits provided to households that, without BBCE, would not have been eligible for the program because their incomes were over the federal SNAP eligibility limits were an estimated $38 million monthly or about $460 million for the year. These households received an estimated average monthly SNAP benefit of $81 compared to $293 for other households. BBCE’s effect on SNAP administrative costs, which are shared by the federal and state governments, is unclear, in part because of other recent changes that affect this spending, such as state budget and staffing reductions in the recent recession.  (emphasis added)

In short, one can argue that the broad based categorical eligibility did increase the cost of SNAP — but it cannot be seriously asserted that these were the “budget busting” increases cited by those who object to funding the program.

However, there’s always that fall back position: Generalizing about “waste, fraud, and abuse.”  The USDA defines welfare fraud as (1) exchanging SNAP benefits for cash; (2) an application who is dishonest on his or her application; and (3) a retailer who has been disqualified for past abuse lies on an application to be restored to the program.

Further, the USDA has taken serious (and effective) steps to reduce SNAP abuse:  “Due to increased oversight and improvements to program management by USDA, the trafficking rate has fallen significantly over the last two decades, from about 4 cents on the dollar in 1993 to about 1 cent in 2006-08 (most recent data available).”

Those who oppose the SNAP program are more likely to cite stories of “dead people getting SNAP debit cards.”   For example, an audit in Nevada found cards issued to 27 deceased persons. [LVRJ]  This from a total of 351,865 recipients — see what your calculator returns when you divide 27 by 351,865.

Calculator

This news was followed by the following opinion statement:

About 2,400 people were in both databases, and 749 of the deceased were not shown as deceased in the Welfare Division database. Auditors then reviewed 50 of these cases and found that 27 cards had been used after the cardholder had died. Because the sampling number was so low, it is likely that far more than the 27 cards of dead people still are being used. [LVRJ]

It could be.  At the same time it could also be true that the small sample size tended to make the problem look as though we were viewing the heavens with binoculars.  Larger issues may be suggested but the details are extremely hard to determine.   Phrased more elegantly: “A study with low statistical power has a reduced chance of detecting a true effect, but it is less well appreciated that low power also reduces the likelihood that a statistically significant result reflects a true effect.” [NCBI]  The comparison of Vital Statistics databases with SNAP rolls is obviously a desirable thing; however the extrapolation that this “proves”  serious fraud is a step too far.

There is no substantiation for the allegation that the broad based categorical eligibility (BBCE) guidelines for SNAP added an unbearable burden to the federal coffers.  There is no evidence that SNAP is beset by waste, fraud, and abuse — indeed the level of abuse has been reduced in recent years from 4% to 1% (and note not all the fraud is on the part of the recipient).

“Over 99 percent of those receiving SNAP benefits are eligible and payment accuracy was 96.20 percent in 2011 –a historic high. Payment errors are less than half what they were 10 years ago, which has reduced improper payments by $3.67 billion in 2011.” [USDA]

And here comes the kicker — the reason that SNAP benefits were audited for comparison to Vital Statistics?  The federal government directed this:

USDA publishing a final rule in August 2012 that requires States to cross check against the Social Security Master Death File, Social Security’s Prisoner Verification System, and FNS’s Electronic Disqualified Recipient System, prior to certifying individuals for the program, to ensure that no ineligible people receive benefits.”

It really doesn’t quite do to cite an example of an audit to “demonstrate” fraud and abuse, when the intention of the agency conducting the audit was part of an on-going effort to reduce that self-same  fraud and abuse.

If Representative Heck can’t cite any rationale for his desire to “reform” SNAP other than to berate the BBCE — not a significant part of the poverty reduction problem — and to bemoan “abuse and fraud” also not a significant problem, then his objections are hollow ideology at the expense of those recipients who find themselves seeking employment in a land of low wage jobs.

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