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I had an interesting discussion today while volunteering at a food bank program. The individual I spoke with was a retired math professor who stated his research makes him believe that significant money could be saved in regards to the foodstamp program.

Apparently the situation is that after the initial application for foodstamps, recipients on the program are required to file monthly or quarterly reports that document the minutia of their income (even things like a \$5 gift card from grandma) and if anything is deemed improperly documented the recipient is forced to file more paperwork or lose their food. The program is administered in county offices with waiting lines lasting 4-6 HOURS on average. All for approximately \$6 per day (\$185/month) through a special debit card that can only be used at authorized merchants.

The professor's contention was that money is being wasted and people are being dehumanized by the constant demand for proof-of-need documentation. He proposes that if we eliminated the monthly paperwork bureaucracy and just "gave" everybody who validly applied \$200 per month we would actually save money, even if the roster of recipients tripled. The only ways to get kicked off the program would be (A) dying - just like social security benefits, (B) requesting exit from the program, or (C) being convicted in a courtroom of committing fraud against the program (such as submitting fake applications for non-existent dependents) which would ban you for life.

On the surface is sounds practical: eliminate (actually repurpose - other agencies will find uses for these folks you can be sure) tens of thousands of high-pay civil service jobs) in exchange for just making an unquestioned monthly deposit. Note that the professor did support keeping the initial application screening process and also once a year requiring a simple "I still need help" affidavit. Mountains of paperwork monthly vs 1 sheet per year.

So my economic question is how can this "proposal" be validated? Where does one get the numbers for what is currently being spent on the program, broken down by both recipient costs and paperwork costs? Does such a source of data exist and is it available to average Joes like me for review?

PS: The professor also suggested putting a cap on the food card accounts of 90 days worth of benefits. If you don't use your benefits (say you are in the hospital for a few months) the card would not accept new deposits until there was "room" for more.

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  • $\begingroup$ Not an answer, but: You may find the research on a "basic income" (which just takes this idea a bit further) interesting. I'd note that it's hard to know the tradeoffs between monitoring costs and fraud costs, but in my experience, most programs seem to be required to spend too much on monitoring (in response to political pressures), and are thus not minimizing costs (they're then criticized anyway for being too expensive). So I'm sympathetic to the professor's argument, though validating it would require pretty extensive analysis. $\endgroup$ – dismalscience Dec 12 '15 at 16:16
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    $\begingroup$ @dismalscience - If you consider that the monitoring operations for foodstamps apparently exist on a county-by-county level, with multiple offices in large counties, you are talking about a LOT of paper pushers. Like you I am sympathetic but as a critical thinker I need data before agreeing with the proposal. Hmmm... I wonder if the GAO ever ran such an analysis? ;) $\endgroup$ – O.M.Y. Dec 14 '15 at 4:40
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http://www.fns.usda.gov/pd/supplemental-nutrition-assistance-program-snap - Participation and Costs is the first file in the list

Under the current rules, one problem with stopping activity reports is that all of the statistics you see there would be gone. Another more serious problem is that SNAP recipients are restricted from purchasing certain goods; it's not just that the SNAP card is only accepted at certain merchants.

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  • $\begingroup$ This answer is incomplete. Take the 2015 data where additional costs (including the federal share of administration) amounted to less than 10% of the total cost. What is not calculated in this, is for example the opportunity cost of individuals waiting in line and preparing the documentation. On the other hand, we would need to know how many individuals would benefit from the program despite not being eligible if you were to remove the monthly check. $\endgroup$ – HRSE Dec 13 '15 at 10:14
  • $\begingroup$ OMY specifically asked for the numbers being spent on the program, not the economic cost. Opportunity cost is impossible to quantify in this instance, as the statistics of people receiving SNAP benefits vary (some are employed while others not). $\endgroup$ – rocinante Dec 13 '15 at 16:37
  • $\begingroup$ @rocinante - exactly. Frankly, there were others at the event who joined the conversation and one of them opined that if you gave $200 to every man/woman/child in the US it would still be cheaper than the bureacracy of running the program. Can't say I buy that but I am curious to try and find out what the break-even point might be. $\endgroup$ – O.M.Y. Dec 14 '15 at 4:25
  • $\begingroup$ @rocinante - As for the purchase restrictions, I see no problem with maintaining the small number of compliance personnel who interface with merchants. They would be needed to certify new merchants, and check up on existing ones. I know from a friend who runs a small gas station / convenience store that it is in his own best economic interest to follow the rules. He gets lots of local business on foodstamp cards due to location, and if he gets caught selling unauthorized goods he could lose his ability to make those sales. I suspect the same is true for many $1 stores and even Walmart. $\endgroup$ – O.M.Y. Dec 14 '15 at 4:32

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