DN Editorial: Pa.'s asset test for food stamps is a big, costly mistake

Posted: January 12, 2012

GOV CORBETT'S plan to reinstitute an assets limit for qualifying for food stamps - $2,000 for those under 60 and $3,250 for those who are older - is sheer economic idiocy that will hurt not only those who are struggling to put food on the table, but the rest of the commonwealth.

But before we explain, let us pause to marvel at the persistence of the pernicious myth of the "food stamp," nee "welfare queen." It remains alive and well on the Internet despite hard data to back up the notion that people are getting rich off what we now call the Supplemental Nutrition Assistance Program (SNAP). The only detail that has changed: the welfare Cadillac is now a BMW.

(Besides, what luxury-car dealer would let someone with an income of $17,000 a year - 160 percent of the poverty line, - drive away in one of their expensive cars?No amount of logic would dissuade those determined to believe this myth, but consider: an asset limit is most likely to affect, not those living in poverty long term, but those who were working but lost jobs in the recession, have a modest amount of cash on hand and are trying to make it back up the income ladder.

Experts in the region say the recent spike in food-stamp usage has come in places where people had been working but lost their jobs - in Northeast Philadelphia, for example, or inner-ring suburbs like Upper Darby.

Under the Department of Public Welfare's proposal, a person's home and one car would not count as assets but cash savings (to buy a car, for example, or to cover funeral expenses) would. People scrambling to make it on unemployment insurance could find themselves forced to spend their modest nest eggs in order to get help to buy food.

Only 10 other states have asset limits that low. The $2,000 limit was set in 1980 and hasn't changed since. Adjusted for inflation, that $2,000 is worth $5,229 today. By contrast, 35 states have no asset limits for food stamps. Pennsylvania dropped its limit in 2008 in part because it wasted far more money than it saved.

Reinstituting the asset limit would deny food stamps to 2 percent of Pennsylvania's 1.8 million recipients, representing a "savings" of about $85 million.

Why is the state doing this? There are no data that fraud is rampant. In fact, Pennsylvania has one of the lowest instances of fraud, according to the federal government. And here's the real mystery: SNAP is a federal program; it is not even financed by the state. And that means that the state doesn't benefit from the savings; in fact, the cuts will hurt Pennsylvania's economy. Five out of the commonwealth's top-10 businesses sell food, meaning a reduction in profits and a loss of jobs. And caseworkers will have to reopen the files of food- stamp recipients to determine their assets, adding to costs.

Fewer private jobs, higher government expenses, more hungry Pennsylvanians: It's a trifecta of stupidity. Tell the governor to re-think this idea but fast.

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