In the days before Christmas, President Trump signed the 2018 Farm Bill, which the House and Senate had voted overwhelmingly to support. It authorizes $868 billion over the next 10 years for programs administered by the United States Department of Agriculture. Approximately 80 percent goes to the SNAP, or food stamp, program. Much of the remaining spending subsidizes farmers.
With a growing share of the federal budget going toward mandatory programs like Medicare and Social Security, the Farm Bill is one discretionary spending program that should be reduced. Its subsidies are special interest politics, pure and simple. And while feeding the poor is a valid policy goal, SNAP’s flawed structure should be reformed.
Not surprisingly, the bill reflects the political power of farmers. Although full-time farmers are now less than 2 percent of the U.S. population, they continue to wield considerable influence in Congress. Even the food stamp program was enacted partly to benefit them — which it does by increasing the demand and prices for agricultural products — even as its biggest proponents are now largely low-income urban residents and their elected representatives.
Historically, the bill’s justification was that farmers’ incomes were falling relative to workers in urban areas. This simply isn’t the case anymore.
Since the first half of the 20th century, as the number of Americans earning their living from farming has fallen steadily, farmer’s incomes have risen faster than those of nonfarm households. In fact, during each year since 2010, the average income of farm households has exceeded that of nonfarm households by at least 25 percent.
Direct subsidies to farmers are the second-largest expense in the Farm Bill. These subsidies are intended to protect farmers from risk, raise prices above free-market levels and promote resource conservation. They benefit large farmers much more than small ones. More than 60 percent of payments from the three largest subsidy programs go to the largest 10 percent of farms.
SNAP is a more justifiable, though still problematic, type of program. Its antiquated structure leads to waste. So although millions of low-income Americans depend on food stamps, SNAP funding should not be exempt from cuts.
Research shows that many food stamp recipients are able bodied and could find jobs or work longer hours to support themselves and their families. SNAP, along with other means-tested welfare programs, reduces the incentives of recipients to work. If their incomes increase above a certain threshold, workers lose eligibility for benefits.
The Republican-dominated House of Representatives supported a provision to increase SNAP work requirements as part of the Farm Bill, but in order to get the 60 votes needed to pass the Senate, that provision was stripped. The proposed changes “would have required able-bodied beneficiaries between the ages of 18 and 59 to either hold a job or participate in a job training program for 20 hours each week to remain eligible for the program.”
SNAP has had work requirements since the 1990s, though many states have been granted waivers that exempt many recipients. An estimated 3 million able-bodied Americans without dependents receive foods stamps and are not working and not required to look for jobs.
Requiring more SNAP recipients to work might not reduce spending much in the short run, but it could have a much bigger impact in the long run. Work requirements include incentives to get more education and training, which could enable current recipients to gain the skills needed to earn middle class incomes, cutting SNAP’s costs and even bolstering the tax base.
As millions of Baby Boomers retire each year, the share of federal spending on entitlements steadily rises. The only way to avoid eventually cutting Social Security or Medicare benefits to seniors (without hiking taxes significantly) is to cut spending somewhere else. No matter where that happens, it’s going to be politically difficult and painful. The Farm Bill is as logical a place as any.
—Tracy C. Miller is a senior policy research editor with the Mercatus Center at George Mason University.