Saturday, November 03, 2007

Food stamps twice monthly?

Most Food Stamp Program families operate on a sharp monthly food spending cycle. The greater part of food stamp benefits are spent within a few days of being credited to the EBT card, the debit-style card used by the program to issue benefits. Colleagues and I have written about this cycle in articles for the American Journal of Agricultural Economics (2000) and Journal of Consumer Affairs (2001). At the same time, many food stamp families report food insecurity and hunger at some times of the month, generally near the end of the food stamp cycle.

For a couple years, I have been following the progress of a proposal in Michigan to have benefits issued twice a month, which might help families budget more smoothly over the course of the month, perhaps leading to healthier choices and less hardship in the second half of the month. See coverage in the New York Times and NPR.

The twice-monthly distribution is similar to what happens when your 401k plan adopts adequate levels of savings as the default option, but still allows you to opt for lower savings if you desire. Research suggests that many workers will accept the wiser default savings position. Similarly, with food stamp distribution, a family that prefers to shop once monthly is still welcome to do so, on the occasion of the second benefit credit each month. The twice monthly benefit delivery does not force people to shop twice monthly. If needed to keep some participants from being inconvenienced, one could even allow a more formal "opt out" mechanism, which would allow people to receive traditional once monthly benefit delivery on request. My own hunch is that many participants would like the new twice-monthly delivery schedule.

Advocates for the Michigan proposal, including grocers who would like to spread their sales more efficiently over the month, think they may be nearing success in the Michigan state legislature. Yet, they fear their efforts may be overturned by the U.S. Senate, which is reported to be considering language that would forbid twice-monthly benefit issuance. I haven't been able to track down the exact language of concern in the Senate's Farm Bill under debate. It seems twice-monthly benefit delivery should be considered, at least on a pilot basis. Certainly, it seems like a bad idea to cut off exploring this program innovation by federal fiat.

Update 11/6/2007: A reader sends the relevant text, which is available in section 4203 of the bill on the Senate agriculture committee's site: "MULTIPLE ISSUANCES.--The procedure may include issuing benefits to a household in more than 1 issuance only when a benefit correction is necessary." Thanks!

1 comment:

Carl said...

The twice monthly idea is a good one, however the program (at least in Oregon) needs to fixed first on more basic levels if this program can ever be considered anything beyond the failure it currently is.
As it currently is administered in Oregon, you have no hope of qualifying if you are an honest self employed person who has fallen on hard times (as I have due to family issues).
The system only allows a 50% deduction for cost of goods AND expenses which of coarse is not real world (except for maybe the Mob)
Currently my family is denied ANY State or Federal benefit whatsoever other than the Earned Income Tax Credit (for which I am thankful for) with an income of $1500 per month take home with a family of 5 and a house payment of $1200 per month (we have gone through all savings and are now living off credit cards)

Carl Strohmeyer, my personal blog