The food stamps program (formally, SNAP or Supplemental Nutrition Assistance Program) was expanded four years ago. However, the expansion was intended by the U.S. Congress to be temporary. In fact, it was today that the expansion came to an end, thereby occasioning the Newshour's program.
The debate, moderated by Jeffrey Brown of the Newshour, was between Ellen Teller of the Food Research and Action Center, an anti-hunger nonprofit, and Robert Rector of the Heritage Foundation.
At one point in the debate, Rector denounces the food stamps program as follows:
Another thing that they have done is get rid of the asset limits which were traditionally part of this program. You can have a million dollars in the bank. You're unemployed, you can get into food stamps. Now, that's an outrage.
Jeffrey Brown, seemingly impressed by Rector's thrust, turned to Teller and asked, "Is that true about the million dollars, first?"
Teller totally avoided Rector's specific complaint and instead argued -- quite accurately -- that the reason for the recent increase in the number of people getting food stamps was not fraud but the worsening economy. Rector picked up on Teller's evasion and came right back:
She just ignored the fact that they have removed the asset test. ... There's no meaningful asset test. One of the things that the Republicans are doing is restoring the asset test.
Even the mild-mannered Jeffrey Brown would not let Teller go: "All right, answer that," he said, turning to Teller. All that Teller could manage in reply was that Congress's decision to not insist on an assets test had been bipartisan, and that the current Republican objections were a reversal of their previous position.
The whole issue of whether people with little or no income should be showered with food stamps if they happen to have a million dollars in the bank needs to be dealt with directly, not evaded. Sure, it looks terrible if a millionaire who happens to have a meager current income is given money by the government to buy food. Nevertheless, appearances aside, there actually is a good reason why there should be no assets test for food stamps.
There once were two people: Mr. Ant and Ms. Grasshopper. They earned the same income in the years before the economic crisis. However, Mr. Ant led a frugal life and managed to accumulate a million dollars in savings, whereas the prodigal Ms. Grasshopper flagrantly spent most of her income on travel, entertainment, etc., and accumulated no wealth at all. Then came an economic crisis, and both Mr. Ant and Ms. Grasshopper lost their jobs.
Would it be a good idea to assist Ms. Grasshopper with food stamps and deny them to Mr. Ant? Ms. Grasshopper deserves help because she has lost her job and has no savings to fall back on. But Mr. Ant deserves not to be denied assistance simply because he lived a frugal life. They should both be helped, irrespective of their wealth. The food stamps law should not have the assets test that the Republicans of today and Mr. Rector have demanded. An assets test would provide a perverse incentive to be profligate: why save, if, when you are in trouble, your savings will be held against you?
Finally, I should mention that the argument I am using to oppose the right wing demand for an assets test in the allocation of food stamps (and other government assistance), is also the argument that people on the right use to argue against taxes on capital income, such as interest income, dividends, and capital gains. To see why, assume as before that Mr. Ant and Ms. Grasshopper earned the same income for the same number of years, and that, while Mr. Ant saved a lot of money, Ms. Grasshopper did not. Consequently, Mr. Ant will be earning a substantial amount of income in interest, dividends, and capital gains, whereas Ms. Grasshopper will not. Therefore, under current income tax systems, which tax interest, dividends, and capital gains, Mr. Ant will be paying taxes on both current income from work and current income from his wealth, whereas Ms. Grasshopper will be paying taxes only on current labor income. They both earned the same income from work every year, and yet Mr. Ant ends up paying more in income taxes simply because he was frugal. Therefore, say people on the right, taxes on income from wealth punish frugal behavior and should be done away with.
I actually enjoy this irony. The fact that the same argument can be used to make both the left and the right uncomfortable tells me that it is the real deal; it's not sophistry.
Robert Rector probably knows the argument inside out. He has probably used it once or twice to argue against taxes on capital income. But he will turn a blind eye to it when it implies that food stamps should be given liberally, without some stupid assets test.
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