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Food Stamp Explosion

Posted By Arnold Ahlert On January 23, 2014 @ 12:25 am In Daily Mailer,FrontPage | 16 Comments

Another dose of reality has trumped the Obama administration’s economic happy talk. According to data from the U.S. Department of Agriculture (USDA), one-in-five Americans were on the food stamp program in 2013. A staggering 23,052,388 households needed supplemental food assistance in FY2013, an increase of 722,675 households compared to FY2012. 

The cost of the program, known as the Supplemental Nutrition Assistance Program (SNAP), has also reached an all-time high. For fiscal year 2013, the SNAP program cost American taxpayers $79.6 billion. That represents a 36.8 percent increase in expenditures over the last five years. 

And it’s not just households that have seen a huge jump in the SNAP participation rate. The monthly average for individual users of the program has also increased dramatically, as an additional 1,027,012 participants pushed the total number of individual users from 46,609,072 to 47,636,084 over the same time period. Since 2009, the number of individuals using the SNAP program has increased by 42.2 percent.

Obviously the global financial crisis of 2007 contributed to the increased number of people who lost their jobs and/or savings, and were forced to turn to supplemental assistance as a result. But the biggest bump in both the number of households and individuals on the program occurred between FY2009 and FY2010, when America was ostensibly in the beginning of the so-called recovery. Furthermore, the next three years saw a steady increase in usage as well.

The increase leads to one of two conclusions. Either the number of people gaming the system is getting out of hand, or the economy isn’t in recovery for a vast number of Americans.

Certainly a certain percentage of fraud exists. In Florida’s Palm Beach County, warrants were issued in December for 60 people suspected of cheating the system out of $2.8 million. The scheme involved a market that allowed SNAP users to illegally swipe their cards for cash. In return, the market got a 50 percent kickback for lying to state and federal authorities and saying that that groceries were purchased. In two Louisiana counties, a failure at Xerox Corp., temporarily taking down the electronic benefit transfer system, resulted in an unknown number of customers stripping bare the shelves of two Wal-Mart stores and making purchases well beyond their EBT card limits.

Sen. David Vitter (R-LA) has introduced a bill, the “Food Stamp Fraud Prevention and Accountability Act” that would require SNAP users to show a photo ID when using their benefit cards. “Using a photo ID is standard in many day to day transactions, and most of those are not exclusively paid for by the taxpayer dollars,” Vitter said. “Food Stamps have more than doubled in cost since 2008 and continue to grow in an unsustainable way, and the events in Louisiana unfortunately highlight the fraud surrounding the taxpayer-funded program.”

Naturally those on the left resisted the idea. “Many poor people do not have photo IDs, and it costs money they do not have to get them,” said Deborah Weinstein, executive director of the Coalition on Human Needs. “Senator Vitter’s proposal will be especially tough on elderly and poor people who do not have the documents needed to get their photo ID, and who will struggle even to get to the necessary offices. They will wind up going without food.”

A recent inspector general audit estimated that $222 million per year could be saved by cracking down on fraud. The audit found some of the more obvious scams, such as recipients using “erroneous” Social Security numbers, or receiving duplicate benefits in the same state. Others fraudsters were getting benefits from more than one state at the same time, or using a dead person’s Social Security number to collect benefits. 

Yet if that number is accurate, fraud is not a large problem, since it comprises only .28 percent of the $79 billion spent on the program. That is not to say cheating shouldn’t be addressed. But it leads one to believe that a non-recovering economy is the more likely culprit.

Furthermore, there is far more evidence to support that scenario. Despite the president touting an unemployment rate of 6.7 percent, a record-shattering 91.8 million Americans are no longer in the workforce, and the labor participation rate has reached its lowest level since 1978. That lack of labor force participation includes a record number of women (55 million), and the lowest workforce participation rate for black Americans ever recorded.

The population of the United State is approximately 317 million. Thus, more than a few Americans might be wondering how we have an unemployment rate of only 6.7 percent when almost 92 million people no longer participate in the workforce. Surely some have retired and some are not eligible to work, but what about the rest?

In a memo sent out to his clients, Wall Street advisor David John Marotta contends that the government’s statistics are fraudulent. “Unemployment in its truest definition, meaning the portion of people who do not have any job, is 37.2%,” he contends. “This number obviously includes some people who are not or never plan to seek employment. But it does describe how many people are not able to, do not want to or cannot find a way to work. Policies that remove the barriers to employment, thus decreasing this number, are obviously beneficial.”

He also explains the essence of the co-called “jobless recovery,” where Wall Street flirts with record highs, even as four-out-of-five American adults endure unemployment, near-poverty or reliance on welfare programs for some portion of their lives. “Given current government policies, it is specifically by avoiding U.S. workers that companies are keeping their profits strong,” he explains. “Obamacare punishes large companies for each full-time worker and provides strong incentives for small businesses to stay below 50 full-time-equivalent employees. Automation and outsourcing are making U.S. companies more profitable at the expense of U.S. employment.” 

He further contends the government is manipulating the data used to calculate inflation, which is also being exacerbated by the Federal Reserve’s continuing bond purchases that devalue our currency. This combination of unemployment stats and inflation rate is known as the “misery index,” and Marotta believes it should be nearly double what the government officially says it is.

Marotta is not the only one accusing the government of fudging statistics for political benefit. The House Oversight Committee has begun an investigation into allegations unearthed by the NY Post’s John Crudele. He contends a “knowledgeable source” told him the Census Bureau, which compiles the data used by the Labor Department to calculate the monthly unemployment rate, was manipulating that data in the months leading up to the 2012 election. The focus of the investigation is the period between August and September of that year, when the unemployment rate dropped from 8.1 percent to 7.8 percent. 

The Census Bureau is controlled by the Commerce Department. And in a familiar refrain, some Committee members assert that Commerce is stonewalling the probe.

Whatever the real statistics are, they are not the only indication that all is not well. CNBC reports that the nation is facing a “tsunami” of retail store closings. They include Sears, which will close its flagship store in Chicago, adding it to the list of 300 closures the chain has made since 2010. J.C. Penny’s and Macy’s have also announced multiple store closings. Target will eliminate 475 jobs worldwide, and not refill 700 positions–assuming they can weather the massive data breach that affected 110 million credit card users shopping at their stores.

Last year, retail jobs accounted for the second-highest number of employees in the nation, after government jobs and those in the professional services industry. Thus, large numbers of store closings do not bode well for that sector this year. Yet even more telling, lower-paying jobs in general accounted for most of the nation’s job creation last year — with the largest percentage increase occurring in the temporary help industry.

Americans have noticed. A Fox News poll published yesterday reveals that 74 percent of the public believes the nation is still in recession. Furthermore, they’re apparently not buying the administration’s populist solutions for fixing it. When asked what the most important economic issue facing the country was, 40 percent said jobs and unemployment, followed by government spending at 36 percent. Only 12 percent said income inequality, and only 6 percent thought taxes were the nation’s most pressing economic problem.

And then there is the proverbial 800-pound gorilla known as ObamaCare. On Tuesday, Target announced it would no longer offer health insurance to its part-time employees beginning April 1. Ironically, this announcement was made the same day the Associated Press (AP) ran a story contending that ObamaCare “isn’t expected to prompt sudden, radical changes for workers.” It further contended that “anecdotes of companies cutting employees’ hours aren’t showing up in official U.S. employment numbers.”

Note the word “official.” Last month, a paltry 74,000 jobs were created, even as 347,000 Americans left the workforce. That means for every jobs created, almost five Americans stopped looking for work. As far as the Obama administration and its media allies like the AP are concerned, the former number is “official.” The latter number is unofficial–or perhaps “anecdotal.” 

One suspects the more than 47 million Americans on food stamps, along with every other American enduring the slowest “recovery” since WWII have little interest in statistics. They want jobs, and dubious government employment numbers and empty rhetoric, courtesy of the president and his party, are not viable substitutes.

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