Ten years ago the annual cost of the federal food stamp program was about $250 million. Today, through a series of changes that almost no one noticed as they occurred, it has grown more than twentyfold to an annual cost of more than $5.6 million.
Because the increasingly controversial coupon program is up for renewal this year in Congress and because many of its implications still are poorly understood, the Congressional Budget Office issued a report on it yesterday.
The report's main point is that food stamps need to be thought of, not as a food program, but as a general welfare program. The CBO's researchers point out that food stamps are the purest welfare program the government has, the only one in which the only test is that recipients be below certain income levels.
For other kinds of government benefits it is not enough to be "poor." For Social Security a person must be retired or disabled or a surviving parent of young children; for Medicare a person must be disabled or over 64; and the payments we call welfare go only to the aged, blind and disabled or to mothers of young children whose husbands have left home (or, in some states, whose husbands are unemployed)
Food stamps are "the only national program providing assistance to all needy families," CBO Director Alice M. Rivlin notes in a preface to the report, and the report itself adds that food stamps today are "essentially the only federal income assistance to aid working-poor households."
The stamps now go to more than 17 million people, or about 1 out of every 13 persons in the country.
The report, written by CBO staff member G. William Hoagland, makes these other points about the coupons:
The stamps increase the purchasing power of those who receive them, and only part of that increase - 57 per cent, on average - is used to purchase additional food. The other 43 per cent represents income "freed for nonfood purchases." This is true even though the stamps can only be exchanged in stores for food. The average receiving family simply does not increase its food purchases by the entire amount the stamps increase the family's purchasing power, so that after buying food it has more dollars left over than before.
The stamps also serve in the same way as an increase in the federal share of regular welfare payments would, to even out the level of welfare benefits nationwide by narrowing the benefit differences between high-paying and low-paying states.
The way the complicated stamp system works the lower a family's cash income, the more the family can increase its purchasing power through the use of stamps. Thus welfare families in low-paying states gain more from food stamps than those in states where welfare benefits are relatively high.
In September, 1975, for example, welfare benefits averaged $291 a month in the mid-Atlantic states, $127 in the southeastern - a $164 a month difference. But welfare families in the southeastern states gained an average $121 from food stamps, while those in the mid-Atlantic region gained $70.
Counting welfare payments and food stamps together, mid-Atlantic welfare families ended up with $361 a month, southeastern welfare families with $248; the stamps reduce the regional differential to $113.
The Census Bureau has never counted food stamps as income in measuring poverty in the United States. The CBO report says that if it did, as perhaps it logically should, the number of people found to be poor would be reduced by about 4 million, or nearly 30 per cent.
The CBO report also suggests the phenomenal growth of the stamp program in the last several years is unlikely to countinue.
Part of that growth was due to changes in the law, particularly in 1971. Part was also due to the rates at which food prices rose in the period 1973-75, rates unlikely to be repeated anytime soon; food stamp entitlements are pegged to food prices by law.
The high unemployment rate of the last several years has also increased the number of families elgible for stamps, and hopefully unemployment also will recede, the report says.
Congress considered a number of proposals last year for changing the food stamp law, some of which would have had a restrictive and some a liberalizing effect. But nothing was passed.
CBO Director Rivlin urged that Congress act cautiously as these proposals come up this year. Welfare reform is one of the major items on the incoming Carter administration's agenda, and Rivlin noted that decisions made on food stamps will also have "implications for . . . reform of other welfare programs."
Congressional sources say one possibility is that Congress might simply extend the food stamp program for another year this year, to allow more time for the stamp and other welfare programs to be considered together.