Bloomberg News

House Republicans Seek About $34 Billion Food Stamp Cut

April 18, 2012

A Federal food stamps card in Fort Lauderdale, Florida. Photographer: Joe Raedle/Getty Images

A Federal food stamps card in Fort Lauderdale, Florida. Photographer: Joe Raedle/Getty Images

House Republicans are calling for $34 billion in cuts over the next decade to the food-stamp program, setting up a fresh election-year battle over the U.S. budget deficit.

Lawmakers said they plan to include the reductions in a package of $261 billion in spending cuts they will propose to replace automatic cuts scheduled to take effect in January.

House Agriculture Committee Chairman Frank Lucas said the plan is designed to squeeze inefficiencies out of the food-stamp program, which is projected to cost taxpayers about $80 billion this year.

“It’s basically closing loopholes; it’s tightening things up; it’s reflecting the budgetary times we’re in,” said Lucas, an Oklahoma Republican.

Democrats said such cuts would hurt millions of poor Americans. “We’re literally going to take it out of the mouths of babes,” said Representative Peter Welch, a Vermont Democrat. “It’s outrageous.”

The plan is sure to stall in the Democratic-controlled Senate and probably will become a campaign issue.

“Everything that happens in an even-number year is always an election issue,” Lucas said. The plan will establish a marker for Republicans in negotiations over what to do about the potential budgetary collision that looms at the end of this year.

Automatic Cuts

About $1 trillion in automatic cuts are set to begin taking effect in January -- the outcome of last year’s failure of a budget-cutting supercommittee to agree on a plan to reduce the deficit. The Bush-era income tax cuts will expire at the end of the year, and the government once again will be approaching its debt limit.

A budget plan adopted last month by House Republicans orders a half-dozen congressional committees to recommend $261 billion in spending cuts by April 27. Lawmakers aim for the plan to reach the House floor in May.

The chamber’s tax-writing Ways and Means Committee, charged with finding $53 billion in savings, is taking up legislation today that would make it harder for illegal immigrants to receive a child tax credit. It will also consider ending social services block grants, which help states provide a variety of services to low-income Americans.

Burden on Children

“In their zeal to cut taxes for the very wealthy, House Republicans continue to put the burden on the backs of children, the elderly and the disabled,” said Representative Sander Levin, the top Democrat on the Ways and Means panel.

The most significant item before Ways and Means would save $43.9 billion by requiring people who receive more in health insurance subsidies than they’re eligible for under the 2010 health care law to return the entire overpayment to the government. Unanticipated increases in income -- such as a year- end bonus --can change someone’s eligibility for tax credits, which will be calculated based on the previous year’s income and paid directly to insurance companies.

Current law caps the amount of overpayments that taxpayers are required to refund to the government. Representative Dave Camp, the Michigan Republican who chairs the Ways and Means Committee, said the change would protect taxpayers by preventing them from paying for benefits to people who don’t qualify.

The change would increase the number of individuals without health insurance by 350,000, said Thomas Barthold, chief of staff of the nonpartisan Joint Committee on Taxation.

Retirement Benefits

Other programs that probably will be targeted include federal workers’ retirement benefits and the government’s flood- insurance program. Republicans also want to revamp medical- malpractice laws to limit damages, which the Congressional Budget Office says would save money because lower insurance premiums for doctors would translate into smaller fees for their patients.

Food stamp cuts may be among the most contentious proposals. The program grew rapidly after the 2008 financial crisis, with about one in seven Americans now receiving benefits averaging $134 a month. This year’s cost is more than the annual budgets of most federal agencies, and food stamp costs have more than doubled since 2007.

The Republicans’ plan, which the chamber’s Agriculture Committee is taking up today, would end a $20 a month increase in benefits provided in the administration’s economic stimulus plan. It also would clamp down on what Republicans call abuses by state governments of the program’s eligibility rules, which they say have allowed many undeserving people to receive benefits.

“All we’re simply saying is: ‘You need to qualify for what you receive,’” Lucas said.

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net


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