It's almost impossible to find fiscal responsibility in either political party these days. But a new proposal from the Trump administration suggests that small-government politicians may be just as endangered.
The new budget from President Trump will extend the direction, the controversy, and the double-talk of last week's budget breakthrough in Congress. The $4.4 trillion 2019 spending plan has already stoked accusations of hypocrisy, perhaps most vociferously from a number of Republicans concerned about fiscal conservatism. However, one proposed reform to a safety-net program nestled inside Trump's plan offers the most intriguing flip on traditional party positions. When it comes to food stamps, the Trump administration and its Republican allies want to innovate a big-government reform, while Democrats argue for the free market and individual choice.
Among the deep cuts to federal agencies, the Trump budget aims for a 16 percent reduction in spending at the U.S. Department of Agriculture, trimming close to $20 billion from an already reduced FY2018 outlay of $140 billion. That would be nearly impossible to accomplish through reductions in discretionary spending alone. In fact, the USDA will spend only $21 billion in discretionary funds for FY2018, once Congress passes the rest of the current budget in an omnibus bill expected in March.
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The bulk of the USDA budget (82 percent) comprises mandatory spending — required spending based on statute, rather than appropriate funds from Congress — and almost all of it on nutrition programs. Most of that spending goes to the Supplemental Nutrition Assistance Program (SNAP), or food stamps. Outlays for SNAP have drifted downward over the past few years as the economy recovered from the Great Recession, falling from $103 billion to a projected $98 billion for FY2018. However, costs for Child Nutrition Programs (CNP) have risen, which leaves the outlays for mandatory spending roughly static.
The Trump administration wants to break that cycle and drive costs downward. To do so, it has taken a page from delivery food services to revamp SNAP. Rather than solely relying on electronic benefit transfers (EBTs) to debit cards, the White House proposes a model similar to Blue Apron for much of the SNAP effort. Half of all nutrition benefits would come in "USDA foods packages" directly to recipients, consisting of "shelf-stable milk, ready to eat cereals, pasta, peanut butter, beans, and canned fruit and vegetables."
The government would obviously benefit from this model. Rather than have all of the SNAP benefits fund retail purchases of food items, the USDA could buy them in bulk at wholesale cost. The packaging and shipping would get centralized, allowing for greater efficiency, at least in theory, while limiting the potential for abuse of EBTs. The budget emphasized this point, saying that the proposal "has the potential to reduce waste, fraud, and abuse by limiting opportunities for benefits to be misused or trafficked."
That's not an unreasonable concern. The SNAP program is funded by taxpayers and has restrictions on both eligibility for enrollment and for purchases, the latter of which has proven tricky for both the old food stamps and the current EBT cards. The issue of misuse and fraudulent use of welfare benefits is legitimate in any program; taxpayers deserve accountability for how government spends their money, even in safety-net programs.
Furthermore, it has the tactical advantage and cost savings of entitlement reform without requiring Congress to make broad statutory changes. That eliminates a political headache and allows Trump to escape a larger debate over entitlement reform. The cost savings would be substantial, too. The White House estimates it can trim SNAP outlays by at least $129 billion over a decade on this change alone.
However, the SNAP proposal raises troubling questions about the direction of governance and its intrusion into personal choice — and under single-party Republican governance, no less. Conservatives would never support government-run single-payer medical systems, for example, where a bureaucrat decided whether to grant access to care and what type. Why would conservatives cheer a single-payer food system in which bureaucrats choose what foods families can eat, and only from a government source?
The concerns over this proposal extend beyond the philosophical. The EBT system works in an adaptive and flexible manner because it allows people to shop when they need food. One has to suddenly believe in the infallibility of government services to ignore the risk of delivery failures from a government-run monopolized production service, an odd position for conservatives or Republicans to take. Taking away the food choices on these staples also risks delivering food that recipients can't use, thanks to allergies or other intolerances, such as lactose or gluten.
The economic impact of this transfer to the government may also present another practical issue. If the government acquires 50 percent of SNAP purchases, that will remove around $50 billion a year that would otherwise go to local businesses from families in the program. The recipients would still have half of their benefits in cash, but the hit to those economies may result in fewer choices for SNAP consumers. Plus, the USDA could use its economic might to force lower prices from farmers than they get currently in order to keep downward pressure on costs, which is precisely how monopolies operate.
There is nothing wrong with thinking outside of the box, and our entitlement programs do need a fresh look at reform and cost reductions. Those reforms should ensure that the needy have both resources and the dignity to use them. But conservative reform solutions should focus on promoting opportunities for people to gain enough economically to outgrow programs like SNAP, rather than look for ways to expand the government's footprint in their lives. The White House should leave the food boxes to Blue Apron and go back to the drawing board.
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