Our Shutdown Stories series, which began as a series of public Facebook posts, is focused on providing factual, evidenced based information about the effects of shutting down particular Federal Government agencies. We are moving it here to our corporate blog, in an effort to increase readability and make it easier to share these complex issues. Please feel free to share on the platform of your choosing, with attribution to The War Room Group.
Let Them Eat Rhetoric
Week three of the partial government shutdown and your intrepid shutdown storyteller has started getting tips, leads, and requests to highlight specific agencies. As we stretch toward a full month of shutdown, agencies and programs are depleting (or have long ago depleted) the very limited funds they had to deliver critical services to the citizenry.
One such request that hit your storyteller’s inbox today: “Hi I just heard the president say he’d be happy for the shutdown to last a year. What about Food Stamps, will people on assistance still be able to eat?” It’s a hard question, but a good one, and worthy of my first expanded post and deeper dive into #ShutdownStories. So…Let’s talk about “Food Stamps” (Which are actually called the Supplemental Nutrition Assistance Program, or SNAP), and a whole lot of people depend on them to eat.
What is SNAP?
It’s probably best to quote straight from the source here. So, here is out the USDA Food and Nutrition Services (FNS) website puts it: “SNAP offers nutrition assistance to millions of eligible, low-income individuals and families and provides economic benefits to communities. SNAP is the largest program in the domestic hunger safety net. The Food and Nutrition Service works with State agencies, nutrition educators, and neighborhood and faith-based organizations to ensure that those eligible for nutrition assistance can make informed decisions about applying for the program and can access benefits. FNS also works with State partners and the retail community to improve program administration and ensure program integrity.”
Essentially, SNAP is a program that provides low-income individuals and families with assistance to buy food. That’s really what you need to know for these purposes. Sometimes individuals and families, through no direct fault or flaw, find themselves in need of assistance, and our Government provides that assistance through programs like SNAP.
What is happening?
On January 4th, The Washington Post reported that “The partial shutdown has cut off new funding to the Treasury Department and the USDA, leaving them largely unstaffed and crippling both departments’ ability to fulfill core functions.” What’s important here is the rarity that SNAP is a program, while it’s existence is automatically renewed, it’s funding must be approved by congress each year. As of January 4th, that funding will run out at the end of the month. This will leave 42 Million Americans without the assistance they count on to feed their families.
I don’t really understand SNAP
Well, fellow citizens, you aren’t alone. This is another one of those complex questions where the answer is, well, complex. Let’s see if we can break it down and demystify it a bit. First, we should look at who directly receives SNAP benefits:
- People of all ages receive SNAP, but it’s mostly kids:
- 48.7% of recipients are children
- 8% are elderly
- 19.8% are disabled, non-elderly
- 23.6% are non-disabled adults from a childless household (recipients in this category are limited to 3 months of benefits in a three-year period, unless they are working at least 20 hours per week)
- All households must have a gross income at or below 130% of the poverty level (around $24,100 per year for a family of 3)
- People of all races receive SNAP benefits
- 49.5% are White
- 26.3% are Black
- 20.2% are Hispanic or Latino
- 4% are of a racial or ethinic background that does not fit the above categories
Now there let’s talk about budgetary and economic impact:
- While there is a myth that SNAP spending greatly contributes to the National Debt, the numbers simply do not back that up, with SNAP making up only 2.2% of the Federal discretionary budget
- SNAP contributes to the growth of our economy – for every $5 of SNAP we see $9 in economic activity
What happens if it shuts down?
So far, as you can see SNAP is pretty important, it keeps people fed. It contributes positively to the economy. So, what happens if that funding lapses on February 1? Well, strap in…this one gets a little messy.
MarketWatch reports that not only will 20 million households and 40 million individuals be plunged into a food-vulnerability that will be difficult for the more charitable of us to help them overcome; but that the economy will also take a hit. Economists conservative estimates (using a 1.8 multiplier) show that our Gross Domestic Product (GDP) would take a potential 1.03% hit. It is estimated that the loss of spending by SNAP households implies a direct yearly loss to GDP of nearly $61 Billion.
What this means:
- A lot of people will lose their access to food. They will no longer be able to afford to feed themselves and their families at the level they do today
- Those people will stop spending on food (because they don’t have access to the money that they receive to do that)
- That spending stoppage will ripple out into our economy (from grocery stores, to transportation, to manufacturing, to farmers this hit is widespread)
- We could take a 1.03% hit to a GDP that was only projected to grow 2.3% in 2019
So, we will end where we always end, with our plea to everyone to make their voices heard with lawmakers that programs like SNAP are critical to our people and our economy and must be protected. The government must be opened, to govern the people.
As we stretch on, if there is an agency, program, or part of the business of government you’d like me to explore. Please drop me a note (email, twitter, facebook, linkedin) and I will dig in. For now, keep on keepin’ on, we are all in this together.