A SNAP — or is it?

A pie chart has been circulating on Facebook lately, purporting to show that military spending accounts for 57 percent of the federal budget, while food stamps account for just 1 percent. It was followed quickly by another post, this one linking to an analysis by the respected fact-checking site Politifact that concluded that the pie chart was false. http://www.politifact.com/truth-o-meter/statements/2015/aug/17/facebook-posts/pie-chart-federal-spending-circulating-internet-mi/

Politifact’s analysis pointed out that the pie chart was based only on the discretionary part of the federal budget, when at least 60 percent of the budget consists of mandatory spending, including the biggest-ticket entitlement programs – Social Security, Medicare and Medicaid. Of the total federal budget, military spending constitutes 16 percent, and spending on agriculture accounts for 4 percent. The agriculture budget, believe it or not, includes the Food Stamp program (it is now called SNAP, for Supplemental Nutrition Assistance Program). So the first pie chart’s comparison of SNAP and military spending is way out of whack. Folks who think entitlement spending, and the federal budget overall, are out of control have been quick to point to Politifact’s analysis and the huge percentages taken up by so-called entitlements.

It might be worth highlighting a few things in the Politifact post, and pointing out a few things that are not. First, as Politifact notes, the agriculture budget category that includes SNAP – Food Stamps — also includes farm subsidies and price supports. SNAP’s actual chunk of the federal budget of $3.7 trillion is about $75 billion, or 2 percent. SNAP spending and its number of recipients did go up during the recession, when unemployment soared, but by this year the number of recipients was down by 4 million, to about 44 million Americans. (The farm subsidies and price supports total about $25 billion. But the wealthiest 15 percent of farms get 85 percent of those benefits. According to the Government Accounting Office, in 2015 they included at least four Americans with net worths of more than $1.5 billion who got subsidies. Before a change in the law in 2014, the Environmental Working Group found 50 people on the Forbes list of the 400 richest Americans who got subsidies.)

Second, SNAP provides a benefit that must be spent immediately and directly, and only on approved food and beverages. (Contrary to claims you might have seen, you can’t use SNAP to buy beer, wine, liquor, cigarettes or other tobacco products, pet food, or even soap or household cleaning supplies. (See https://www.fns.usda.gov/snap/eligible-food-items) Because it’s spent immediately, SNAP supports the overall economy with a knock-on effect that most economists say puts about $1.70 back in for every buck doled out.

There is also a larger issue — what we consider entitlements, and how much taxpayer support they get. The first important distinction is between true welfare programs that are income-tested but do not require participants to pay into the system – such as SNAP and Medicaid – and what are, in effect, insurance or retirement programs based on private models, including Medicare and Social Security. Those require participants to contribute to them before they can get benefits, much like private pension plans or private health insurance. The apparently huge chunks of the federal budget devoted to Social Security and Medicare are funded by those kinds of earmarked pay-ins. Social Security payouts are based on how long a person worked, how much he or she paid into the pot, and how long he or she waits to retire.  (The Jourmudgeon, for example, paid in to both Social Security and Medicare in every paycheck for forty-odd years before he began collecting benefits. His return on all those Social Security contributions is a couple thousand bucks a month, nearly double the average payout. And from that, his payments for Medicare premiums continue to be deducted.)

Medicaid – medical care for the poor — is the costliest of all true welfare programs – those that don’t require a pay-in. But states, which are responsible for 45 percent of all Medicaid spending, are empowered to set Medicaid eligibility requirements. In many states, including The Jourmudgeon’s own, Virginia, it is almost impossible for a single person to meet the income threshold to qualify, short of living in a cardboard box and eating rats. The bulk of Medicaid spending, though, is on nursing home care for older Americans. And nursing home care is so expensive that even many middle-class people and their children can’t afford it. So they adopt the only strategy open to them – they consciously put themselves into poverty by spending down enough of their income and assets to qualify for Medicaid. That’s a huge skew in trying to factor the true cost of welfare.

Finally, The Jourmudgeon hasn’t even addressed many forms of welfare that benefit not the poor but mostly the better off – what are called indirect benefits including tax loopholes and other tax breaks and subsidies. And even before taking so-called indirect benefits into consideration, about half of all families in America receive some kind of government payout. In the course of their lifetimes, some four in five Americans will receive some form of direct government aid. So, The Jourmudgeon submits, there is a reason both military and entitlement spending eat up so much of the federal budget: They benefit practically all of us.