Posts Tagged ‘Food Stamps’

Mathematical Malpractice: Food Stamps

Sunday, October 6th, 2013

I’m sorry, but I’m going to have to call out my favorite website again.

One of the things that drives budget hawks nuts is baseline spending. In baseline spending, government program X is projected to grow in the future and any slice of that growth that is removed by budget-cutters is called a “cut” even though it really isn’t.

Let’s say you have a government program that pays people to think about how wonderful our government is. Call it the Positing Thinking Initiative and fund it at $1 billion. Future spending for PTI will be projected to grow a few percent a year for cost of living, a few percent for increase utilization, etc. so that, in FY 2014, it’s a $1.2 billion program. And by FY2023, it’s a $6 billion program.

Congress will then “cut” the funding a little bit so that, by FY2023 it’s “only” a $4 billion program. They’ll then claim a few billion in spending cuts and go off for tea and medals.

This drives budget hawks nuts because it changes the language. It makes spending increases into spending “cuts” and makes actual spending cuts (or just level spending) into “savage brutal cuts”. This one of the reasons the sequester drew as much opposition as opponents thought it would. The sequester actually did cut spending for programs but everyone was so used to the distorted language of Washington that they couldn’t distinguish a real cut from a faux cut.

So I can understand where Ira Stoll is coming from when he claims that the cuts to the food stamp program aren’t actually cuts. The problem is that he’s not comparing apples to apples:

The non-partisan Congressional Budget Office estimates that the House bill would spend $725 billion on food stamps over the years 2014 to 2023. The Department of Agriculture’s web site offers a summary of spending on the program that reports spending totaling $461.7 billion over the years 2003 to 2012, a period that included a dramatic economic downturn.

This is a great example of how and why it is so difficult to cut government spending, and how warped the debate over spending has become. The Republicans want to increase food stamp spending 57 percent. The Democrats had previously planned to increase it by 65 percent (to $764 billion over 10 years instead of the $725 billion in the Republican bill), so they depict the Republicans as “meanspirited class warriors” seeking “deep cuts.”

Stoll acknowledges the economic downturn but ignores that the time period he’s talking about includes five years of non-downturn time. Food stamp spending tracks unemployment; the economy is the biggest reason food stamp spending has exploded in recent years. So this isn’t really a spending “hike” so much as the CBO estimating that unemployment will be a bigger problem in the next decade than it was in the last one.

Here is the CBOs report. Pay particular attention to Figure 2, which clearly shows that food stamp spending will decline every year for the next decade (a little more sharply in inflation-adjusted terms). It will be a very long time before it is back to pre-recessionary levels, but it is, in fact, declining, even in nominal dollars. This isn’t a baseline trick; this is an actual decline.

Spending (mostly for benefits and administrative costs) on SNAP in 2022 will be about $73 billion, CBO projects. In inflation-adjusted dollars, spending in 2022 is projected to be about 23 percent less than it was in 2011 but still about 60 percent higher than it was in 2007.

In fact, long-term projections of food stamp spending are very problematic since they depend heavily on the state of the economy. If the economy is better than the CBO anticipates, food stamp spending could be down to pre-recession levels by the end of the decade.

So with a program like food stamps, you really can’t play with decade-long projections like Stoll. That’s mathematical malpractice: comparing two completely different sets of budgets. CBO does decade-long projections because they are obligated to. But the only thing you can really judge is year-to-year spending.

Food stamp spending in FY2012 was $78 billion. FY2014 spending, under the Republican bill, will be lower than that (how much lower is difficult to pin down).

That’s a cut, not an increase. Even by Washington standards.