Families on food stamps would suffer while farms get fat

As a member of Congress, Rep. Doug LaMalfa (R-Richvale) is proud to stand up for the principles of limited government and individual responsibility.

The first-term congressman expresses skepticism about such safety-net programs as food stamps, regarding them as the handiwork of an “oppressive” government that snatches wages from the hands of working people. Helping the poor is better left to individuals and churches, he said at a recent committee hearing in Washington, because then “it comes from the heart, not from a badge or from a mandate.”

As a rice farmer from California’s fertile Central Valley, however, this same Doug LaMalfa has done pretty well by the “oppressive” federal government. From 1995 through 2012, according to USDA figures compiled by the Washington-based Environmental Working Group, the farm he co-owns with other family members has collected $5.1 million in government crop subsidies.

LaMalfa made his remarks during the House Agriculture Committee’s meeting last month on a massive farm bill. The measure has been kicking around Capitol Hill since last year but may finally be slouching toward enactment, with the House and Senate both hard at work on similar, if not identical, versions.

What makes this process especially worth watching is that the farm bill is a curious hybrid — it covers both the food stamp program, which is one of the nation’s most important economic safety-net programs, and farm subsidies, which are an equally important source of corporate welfare. If you keep your eyes open, you’ll be able to witness Congress hack away at the former while protecting — or even expanding as much as fourfold — the latter.

In the name of cutting $20 billion from the food stamp program over 10 years, the House bill would throw almost 2 million recipients off the food stamp rolls, as estimated by the Center on Budget and Policy Priorities. Most of them are seniors or members of low-income working families with children. More than 200,000 children would lose their eligibility for free school meals. By LaMalfa’s estimate, these are “modest changes” aimed at reform, but of course he and his family don’t have to worry about being on the edge of destitution. (The Senate version would cut only $4 billion, which is why it’s not favored in the House.)

LaMalfa’s words reflected a familiar theme in congressional debate, which is that the recipients of payouts like farm subsidies are honest, hardworking folks while those getting food stamps (or other low-income relief) should be grateful at the help they get and shut up otherwise. After all, the committee is proposing merely to “retract just a little bit of this spending over something that’s grown exponentially in the last three or four years,” he said of the food stamp program.

It’s proper to consider here why the food stamp program, formally known as the Supplemental Nutrition Assistance Program, or SNAP, has grown exponentially in recent years. Enrollment rose by 70% from 2007 through 2011, when it reached about 45 million, according to the Congressional Budget Office. That’s about as shocking as finding a prize in your Cracker Jack box, since SNAP enrollments always track unemployment rates, though with a lag of a couple of years. Now that unemployment is finally coming down, the CBO expects food stamp enrollments to start falling next year.

The program’s annual expense, which more than doubled to $72 billion between 2007 and 2011, also shot up because the stimulus bill increased benefits by nearly 14%. The increase is scheduled to expire in November, reducing benefits for a typical family of three by about $20 to $25 a month. That doesn’t sound like much to you? The average benefit today is $134 a month per person. Do the math: That works out to $1.48 per meal.

The House and Senate bills haven’t taken aim at the per-person benefits. But what they’re plotting is more insidious. They’re targeting the eligibility process, with the aim of making it harder to enroll. The goal is to eliminate something called categorical eligibility. This eligibility allows states, which administer SNAP, to deem eligible those who already receive assistance from another means-tested federal program, such as Temporary Assistance for Needy Families, or TANF.

The goal of this Clinton-era change was to cut paperwork costs. SNAP’s critics talk as though it opened a huge loophole, allowing people to qualify with a wink, sometimes when they had substantial private assets. But SNAP experts say it does nothing of the kind. In 2011, only 2% of SNAP households had disposable income above the poverty line. For the most part, their other assets were minimal or nonexistent.

Even with categorical eligibility, enrollees still have to undergo a burdensome application process. “Qualifying for SNAP requires a fair amount of time and disclosure of your income and circumstances,” says Dorothy Rosenbaum, a SNAP expert at the Center for Budget and Policy Priorities. “States are not certifying lots of people who aren’t eligible.”

But this is a standard attack on relief programs: If you can’t kill the program, discourage participation. Just last year, conservatives in Congress pitched a fit upon discovering that the USDA had actually launched an outreach program to get eligible people signed up. Sen. Jeff Sessions (R-Ala.) complained that the USDA’s goal was “maximum registration,” as if a government program designed to help the needy should be kept secret, like the NSA.

My guess is that it would be hard to find many U.S. farmers who don’t know to the last thin dime what they’re entitled to in crop subsidies. That brings us to that piece of the farm bill. Rep. LaMalfa’s office grouses that totting up his farm’s take in the past is unfair, because the House and Senate farm bills both eliminate the $5-billion direct payment programs from which he collected. “Rep. LaMalfa voted to end [these] very programs,” a spokesman says.

That’s a neat bit of legerdemain. It’s true that direct payments would be eliminated by both bills. But they’d be replaced by new programs that could be even more lucrative for the same farmers. Who says so? Among others, the reliably conservative American Enterprise Institute, which cast a spotlight on the bill’s “price loss coverage” and crop insurance provisions, and termed the whole thing a pack of “fake savings.”

The price loss program will guarantee that farmers receive no less than 90% of a benchmark price for wheat, corn, rice and many other commodities. The scam is that today’s prices are historically high — the benchmark for rice, which sold for an average of 7 cents a pound from 1996 through 2006, was set at 14 cents in the bill filed in the House on May 13. For japonica, the premium rice grown in LaMalfa’s Butte County and elsewhere in California, the benchmark is more than 16 cents.

The AEI says that if prices moderate toward pre-2007 levels, the cost of this program will explode; its potential cost is $18 billion a year, or almost four times as much as the supposedly wasteful direct subsidy program it’s meant to replace. (This is how Congress “saves” on corporate welfare: through fakery.)

“The new target prices are set so high that they’re very likely to be triggered,” Scott Faber, vice president for government affairs at the Environmental Working Group, told me. “It’s a bait-and-switch — both houses are taking savings from direct payments and plowing them into new entitlements.”

The House proposal also enhances the value of government-subsidized crop insurance by guaranteeing that farmers of certain crops receive 90% of their average revenues, up from the current 85%. The government, by the way, pays roughly two-thirds of the premiums of crop insurance. Ask yourself: Does it do that for business insurance in your industry?

California farmers, as major rice producers, would be big winners in these schemes. I asked LaMalfa’s spokesman how he’d fare under the new arrangement. He replied that “the congressional office does not communicate with the representative’s farm.” But he did indicate that it’s important to “help keep farmers afloat” in difficult years.

That’s true of ordinary working American families, too. The question for Rep. LaMalfa and his fellow food stamp hackers on the agriculture committee is: Why is it important for government to skip out on aid for families, but pony up for farmers like him?

Michael Hiltzik’s column appears Sundays and Wednesdays. Reach him at [email protected], read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @hiltzikm on Twitter.