Pennsylvania will no longer punish its poorest families for saving money after Gov. Tom Wolf’s (D) administration announced the end of a flawed eligibility test for food stamps that was imposed by Wolf’s Republican predecessor.
On Tuesday, state officials said they are ending food stamps asset tests about three years after they began. Former Gov. Tom Corbett (R) started denying Supplemental Nutrition Assistance Program (SNAP) benefits to recipients whose savings accounts and other, non-cash assets totaled more than $5,500. While certain asset classes were exempt, owning a burial plot or scraping together emergency savings in a bank counted against you.
There are about 890,000 households receiving monthly SNAP benefits in Pennsylvania. Just 4,000 households were denied in the first year of Corbett’s policy because they had more assets than the test allowed. Beyond the sliver of applicants who actually “failed” the asset test, a far larger group lost benefits because of the rule. Another 111,000 households got barred from SNAP because they hadn’t provided the right documents to verify their assets.
Pennsylvania’s move away from asset tests contrasts with some recent moves in other states where old stereotypes about welfare fraud still rule lawmakers’ minds. Kansas recently put a new series of restrictions on how public assistance dollars can be spent, ensuring the state’s poor can’t go on cruises or visit movie theaters on the public dime. A dead-end Missouri bill barring low-income families from buying steak and seafood at grocery stores regardless of the actual price and nutritional value of the goods drew national criticism. A simple screening for how much wealth a benefits applicant holds may seem mild in contrast, but the negative effects of asset tests far outweigh the very limited impact they have on keeping people of real means off the dole.
Local news reports indicate that Pennsylvania became the 12th state to use asset tests for SNAP when Corbett initiated the policy. But nearly all Americans who receive food stamps face some form of asset screening. Nearly all states that waive the SNAP asset test do so by using a household’s participation in some other welfare program like Temporary Assistance for Needy Families (TANF) as a screen for their food stamps eligibility. Maryland, Ohio, Illinois, Alabama, Louisiana, and Colorado are the only states where recipients do not face an asset test for TANF or for SNAP, according to research from the New America Foundation.
The policies wreak statewide havoc, not just individual harm for the few eligible families who manage to scrape together savings. SNAP is such an efficient program that it returns more value in economic growth than what it costs to provide. Every dollar in SNAP benefits delivered creates around $1.80 in gross domestic product. This means that Pennsylvania lost out on something like $636 million in economic growth by denying 115,000 households a benefit that averages $256 per month.
Asset tests make more work for SNAP administrators, and overworking SNAP administrators is proven to increase their error rates. Every new piece of paperwork the asset tests required on the part of a poor family was also a new task for Pennsylvania staffers. Two of every three erroneous SNAP payments — of which there are few considering the vast size of the program — is caused by caseworker error rather than deceit on the part of the recipient or screw-ups somewhere else in the pipeline. Removing asset tests has delivered higher payment accuracy rates in the states that have taken the step Wolf announced Tuesday.
Even when staff process everything correctly and payments go out on time and in their proper amounts, more paperwork per case means fewer cases processed in any given period. Anything that slows down food stamps applications exacerbates an already startling failure. SNAP currently reaches 83 percent of the people who are eligible for it, leaving one in every six qualified people out. Some states, like New Jersey, have failed to meet federal processing speed requirements for food stamps applications on such a consistent basis that the government has threatened to stop paying half the cost of administering the program. The state would still give out federally-funded benefits, but it would lose about $140 million in federal matching funds for operating the program. Pennsylvania also ranked near the bottom in processing speed under Corbett’s policy.
If conservatives are worried about rich folks getting USDA money, they should look instead to the crop insurance system. Holes in that system for protecting farmers from the proclivities of nature have allowed giant insurance corporations to collect $10 billion in profit just since the early 2000s. A related program that made direct subsidy payments for certain crops had paid over $11 million to billionaire landowners in the 15 years before it was closed down and replaced with an expanded version of the flawed insurance system. Most of the monetary benefit that system provides accrues “to the largest and most successful farm businesses,” not the mom-and-pop farms that are typically invoked in speeches about farm policy.