Bloomberg News

Boehner Tells House States Shouldn’t Avoid Food-Stamp Cuts (1)

March 13, 2014

House Republicans should act to block states from avoiding $8.6 billion in food-stamp cuts lawmakers enacted last month, House Speaker John Boehner said.

“Since the passage of the farm bill, states have found ways to cheat, once again, on signing up people for food stamps,” Boehner told reporters today in Washington. “And so I would hope that the House would act to try to stop this cheating and this fraud from continuing.”

At least six states including New York and Pennsylvania are triggering extra federal nutrition spending by adding money to a home-heating subsidy tied to increased U.S. food-stamp aid. The guidelines are included in a revamp of agriculture policy enacted last month.

The other states include Connecticut, Oregon, Montana and Rhode Island. More states are considering the approach, thwarting deficit-conscious lawmakers in Congress who thought that setting a higher threshold for food stamps would reduce spending on the benefits.

Federal spending on food stamps -- formally called the Supplemental Nutrition Assistance Program, or SNAP -- has more than doubled in the past five years, with most of the money spent at retailers including Supervalu Inc. (SVU:US) and Kroger Co. (KR:US) The program cost a record $79.9 billion in fiscal 2013, almost one-eighth of the roughly $650 billion a year Americans spend on groceries.

Some of that food aid is tied to the Low Income Home Energy Assistance Program, also known by its acronym, LIHEAP.

Heating Assistance

Under the previous farm law, states that gave residents as little as $1 a year in home-heating assistance -- a move nicknamed “heat-and-eat” -- could qualify that person’s household for an average of $1,080 in additional food stamps annually from the U.S. government.

About 15 states and the District of Columbia operated such programs. The new law raises to $20 a year the home-heating aid needed for a household to receive extra food-stamp money. The idea is that most of those 15 states would stop qualifying residents for the food aid and save the U.S. government money.

That’s not happening in the six states, which are diverting funds from other programs to spend on heating assistance. New York, for instance, said it raised home-heating spending by $6 million, triggering an additional $457 million a year in federal food-stamp spending to about 300,000 households.

‘Seems Odd’

“It seems odd that anybody would have a problem with states doing what the provision allows,” said Ellen Vollinger, a food-stamp lobbyist with the Food Research and Action Center in Washington, which encouraged states to create heat-and-eat programs. “The farm bill anticipated that some states would continue, and some would not continue.”

States that are qualifying residents for the extra aid are being unfair to taxpayers, Boehner said today.

“We just passed a farm bill, and we find states finding ways around the farm bill and frankly perpetuating the fraud that we were trying to stop,” he told reporters.

Anti-hunger organizations are lobbying states to allocate the extra money to preserve benefits as state officials agree to boost home-heating subsidies.

“By taking advantage of ‘heat and eat,’ Rhode Island is ensuring that our state’s most vulnerable residents such as the elderly and disabled citizens continue to benefit from the SNAP program,” Rhode Island Governor Lincoln Chafee, a Democrat who formerly served in the U.S. Senate as a Republican, said in a statement earlier this week.

“The advantage of this provision is clear,” said Chafee, who said continuing such programs would preserve $69 million in federal money for his state, aiding about 69,000 households.

About 46.8 million Americans received food stamps in December, the latest month data were available, the USDA said March 7. Almost half of all food stamps are redeemed at big-box retail chains such as Wal-Mart Stores Inc. (WMT:US), while most of the rest are used at supermarkets such as Safeway Inc., (SWY:US) according to data collected by Bloomberg.

To contact the reporters on this story: Alan Bjerga in Washington at abjerga@bloomberg.net; Derek Wallbank in Washington at dwallbank@bloomberg.net

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

March 13 (Bloomberg) -- U.S. House Speaker John Boehner talks about the affordable care act, the economy, and the situation in Ukraine. Boehner speaks at a news conference in Washington. (Excerpt. Source: Bloomberg)

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