Wednesday, August 24, 2016

Reducing Inequality and Poverty in America

Martin Feldstein reports:
The largest of the ten major means-tested programs is the food subsidy program, now called SNAP (Supplemental Nutrition Assistance Program). Some 46 million people, about one-seventh of the US population, receive monthly benefits totaling $75 billion per year. Despite its widespread use, the government estimates that only about 70% of those who are eligible receive benefits.

Eligibility to receive SNAP benefits is limited to households with incomes below 130% of the poverty level, about $1,700 a month for a family of three. Because a decision by a second adult to work could eliminate eligibility, the program discourages employment and reduces earned incomes.

Although SNAP is described as a nutrition program, the average benefit of $130 per month is far less than these low-income households spend on food. The program is thus really equivalent to a cash transfer. As such, it dominates the program launched by President Bill Clinton to provide cash assistance with significant restrictions.

When Clinton declared in 1996 that he would “end welfare as we know it,” he worked with Congress to create the Temporary Assistance for Needy Families (TANF) program, which requires recipients to work and limits their lifetime eligibility to 60 months. As a result of these conditions, the $17 billion program has declined in scale and has a participation rate of less than 50% percent of eligible households.
An article , well worth your time.