[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
PROGRAM INTEGRITY FOR THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM
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JOINT HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTHCARE,
BENEFITS, AND ADMINISTRATIVE RULES
AND THE
SUBCOMMITTEE ON INTERGOVERNMENTAL AFFAIRS
OF THE
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
MAY 9, 2018
__________
Serial No. 115-83
__________
Printed for the use of the Committee on Oversight and Government Reform
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov
http://oversight.house.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
31-270 PDF WASHINGTON : 2018
Committee on Oversight and Government Reform
Trey Gowdy, South Carolina, Chairman
John J. Duncan, Jr., Tennessee Elijah E. Cummings, Maryland,
Darrell E. Issa, California Ranking Minority Member
Jim Jordan, Ohio Carolyn B. Maloney, New York
Mark Sanford, South Carolina Eleanor Holmes Norton, District of
Justin Amash, Michigan Columbia
Paul A. Gosar, Arizona Wm. Lacy Clay, Missouri
Scott DesJarlais, Tennessee Stephen F. Lynch, Massachusetts
Greg Gianforte, Montana Jim Cooper, Tennessee
Virginia Foxx, North Carolina Gerald E. Connolly, Virginia
Thomas Massie, Kentucky Robin L. Kelly, Illinois
Mark Meadows, North Carolina Brenda L. Lawrence, Michigan
Ron DeSantis, Florida Bonnie Watson Coleman, New Jersey
Dennis A. Ross, Florida Raja Krishnamoorthi, Illinois
Mark Walker, North Carolina Jamie Raskin, Maryland
Rod Blum, Iowa Jimmy Gomez, Maryland
Jody B. Hice, Georgia Peter Welch, Vermont
Steve Russell, Oklahoma Matt Cartwright, Pennsylvania
Glenn Grothman, Wisconsin Mark DeSaulnier, California
Will Hurd, Texas Stacey E. Plaskett, Virgin Islands
Gary J. Palmer, Alabama John P. Sarbanes, Maryland
James Comer, Kentucky
Paul Mitchell, Michigan
Sheria Clarke, Staff Director
Robert Borden, Deputy Staff Director
William McKenna, General Counsel
Betsy Ferguson, Counsel
Anudeep Buddharaju, Counsel
Kiley Bidelman, Clerk
David Rapallo, Minority Staff Director
Subcommittee on Healthcare, Benefits, and Administrative Rules
Jim Jordan, Ohio, Chairman
Mark Walker, North Carolina, Vice Raja Krishnamoorthi, Illinois,
Chair Ranking Minority Member
Darrell E. Issa, California Jim Cooper, Tennessee
Mark Sanford, South Carolina Eleanor Holmes Norton, District of
Scott DesJarlais, Tennessee Columbia
Mark Meadows, North Carolina Robin L. Kelly, Illinois
Glenn Grothman, Wisconsin Bonnie Watson Coleman, New Jersey
Paul Mitchell, Michigan Stacey E. Plaskett, Virgin Islands
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Subcommittee on Intergovernmental Affairs
Gary Palmer, Alabama, Chairman
Glenn Grothman, Wisconsin, Vice Jamie Raskin, Maryland, Ranking
Chair Minority Member
John J. Duncan, Jr., Tennessee Mark DeSaulnier, California
Virginia Foxx, North Carolina Matt Cartwright, Pennsylvania
Thomas Massie, Kentucky Wm. Lacy Clay, Missouri
Mark Walker, North Carolina (Vacancy)
Mark Sanford, South Carolina
C O N T E N T S
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Page
Hearing held on May 9, 2018...................................... 1
WITNESSES
Mr. Brandon Lipps, Administrator, Food and Nutrition Service,
Acting Deputy Under Secretary, Food , Nutrition , and Consumer
Services, U.S. Department of Agriculture
Oral Statement............................................... 7
Written Statement............................................ 9
Ms. Kathy Larin, Director of Education, Workforce, and Income
Security, U.S. Government Accountability Office
Oral Statement............................................... 15
Written Statement............................................ 17
Mr. Sam Adolphsen, Senior Fellow, The Foundation for Government
Accountability
Oral Statement............................................... 48
Written Statement............................................ 50
Ms. Stacy Dean, Vice President for Food Assistance Policy, The
Center on Budget and Policy Priorities
Oral Statement............................................... 68
Written Statement............................................ 70
APPENDIX
Letter for the Record from EPIC.org, submitted by Ranking Member
Krishnamoorthi................................................. 112
Letter for the Record from the Network Lobby for Catholic Social
Justice, submitted by Ranking Member Krishnamoorthi............ 115
Questions for the Record, submitted by Members of the Committee.. 117
PROGRAM INTEGRITY FOR THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM
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Wednesday, May 9, 2018
House of Representatives
Subcommittee on Healthcare, Benefits, and
Administrative Rules, joint with the Subcommittee
on Intergovernmental Affairs,
Committee on Oversight and Government Reform,
Washington, D.C.
The subcommittees met, pursuant to call, at 10:09 a.m., in
Room 2154, Rayburn House Office Building, Hon. Jim Jordan
[chairman of the subcommittee] presiding.
Present: Representatives Jordan, Palmer, DesJarlais,
Massie, Meadows, Walker, Grothman, Krishnamoorthi, Raskin,
Kelly, Watson Coleman, and DeSaulnier.
Also Present: Representative Gianforte.
Mr. Jordan. The subcommittee will come to order. We will
start with opening statements.
I want to welcome our guests. We will introduce you here in
just a few minutes and give you your opportunity for an opening
statement and then go to questions. You know how these things
typically work. You have to listen to the politicians first
before we get to listen to the experts.
We are going to start with the gentleman from Alabama with
an opening statement, and then we will go to the minority side.
Then I will have some brief remarks, and we will get right to
you.
The gentleman from Alabama is recognized.
Mr. Palmer. Thank you, Mr. Chairman.
I thank the witnesses for being here today.
The Supplemental Nutrition Assistance Program, otherwise
known as SNAP, offers assistance to millions of Americans who
cannot afford nutritional food for themselves and their
families. There are over 45 million Americans who rely on this
program.
The Food and Nutrition Service administers the program in
partnership with State agencies, but nearly all the funding
comes from the Federal taxpayer. In 2017, we spent over $70
billion on SNAP and other food programs. With a program of that
size and that price tag, it is essential to apply the highest
standards of program integrity.
The committee has worked to expose a pervasive problem of
improper payments in our Federal programs. This is an issue
that I have paid particular attention to, given that, last
year, we had $140 billion in improper payments, which I like to
remind my colleagues that that is money we had to borrow and
pay interest on.
In fact, improper payments are, as I said, rampant
throughout the Federal Government, not just this program. The
Office of Management and Budget designates SNAP as among its
highest risk programs due to the estimated dollar loss through
improper payments.
The Food and Nutrition Service provides State agencies with
bonuses for having low error rates and penalizes those with
high ones, but that, I think, has not exactly been the right
incentive for solving this problem of improper payments. In
2017, State agencies in Virginia, Wisconsin, and Alaska
admitted to False Claims Act violations for fraudulently
reporting low error rates to exploit this bonus system. This
committee is working on a better way to incentivize Federal
agencies and programs to report on the improper payments and to
try to solve this problem. Combined, these three States had to
repay over $16 million in fraudulently earned bonuses, and
other State agencies are still being investigated.
One of the most frustrating aspects about the program is
the lack of data transparency produced from the prior
administration. In fiscal years 2015 and 2016, data quality was
so poor in over 40 State agencies that the Food and Nutrition
Service decided it could not publish its annual national
payment error rate. That's a major problem. It means, for a
full 2 years, at a critical time for helping those grappling
during the recession to put food on the table, the American
public was left in the dark.
The Food and Nutrition Service has not published a national
payment error rate since fiscal year 2014. If you can't see how
bad a problem is, if you don't understand how bad the problem
is, you cannot possibly fix it. You can't get to a solution.
The national payment error rate for 2014 was 3.6 percent,
which accounts for $2.1 billion in overpayments and $500
million in underpayments. That is what we have been operating
on for over 3 years now with lack of data.
Today, we may hear how infrequent fraud is in the SNAP
program, but perhaps it is not frequent because it is not
appropriately measured.
As reported by the USDA inspector general, the Food and
Nutrition Service has not established how States should
compile, track, and report fraud in a uniform manner. The
Federal Government cannot possibly grasp the scope and
frequency of fraud in the program until we figure out how to
report it.
We also have a problem with the trafficking of SNAP
benefits that diverts Federal money away from the intended
purpose of providing nutritional meals to those in need. Food
and Nutrition oversees retailer trafficking where some store
owners have been found to illegally redeem over $1.2 million in
SNAP benefits.
Just a few weeks ago, investigators concluded a multiyear
investigation, Operation Halfback, finding hundreds of people
and businesses trafficked almost $4 million in SNAP benefits,
some of which went to purchase guns and drugs.
We have also noticed loopholes in the Food and Nutrition
Service regulations where retailers who have been permanently
disqualified from SNAP for trafficking are still in the system.
If someone owns a second SNAP-certified store, they are still
eligible to receive SNAP benefits in their non-disqualified
store.
So make no mistake, our fellow Americans deserve a helping
hand in times of hardship, but waste and fraud take this
assistance straight out of their hands and put it in the hands
of people who don't need it and who are abusing it.
I look forward to hearing solutions from our witnesses
today to bring sustainability and integrity to the program.
With that, Mr. Chairman, I yield back.
Mr. Jordan. I thank the chairman.
I will now turn to the ranking member from Maryland,
Professor Raskin.
Mr. Raskin. Mr. Chairman, thank you so much for calling
this hearing, and I want to thank the witnesses for appearing
today, too.
SNAP is, of course, America's most important antihunger
program. It reduces poverty and food insecurity, and improves
health and economic outcomes for more than 42 million
Americans, especially children. People receive an average $1.40
per meal through the SNAP program. In order to be on it, you
have to complete a detailed application and provide
documentation on your income, identity, immigration status, and
address. Nearly 90 percent of people on SNAP belong to
households with children under the age of 18, or elderly
persons over 60, or a family member with disabilities.
In my home State of Maryland, over 696,000 people benefit
from SNAP. In my district, it is 15,000 households. SNAP allows
families to purchase nutritious meals in retailer locations,
including farmers markets.
This is a program that, I think, matters to every Member of
Congress. Americans in every single congressional district
benefit from SNAP. I looked at all of our districts, Mr.
Chairman, and there are tens of thousands of our constituents
who are on the SNAP program.
The hearing occurs 1 week before the 2018 farm bill is
slated for consideration on the House floor. That bill would
impose dramatic new requirements that would effectively stop
more than 2 million Americans in need from receiving food aid
under SNAP.
That comes after the House passed a $1.5 trillion tax cut
that will give the wealthiest 1 percent of tax filers $84
billion in 2019 alone. As it turns out, the tax cut recently
enacted could finance the entire SNAP program for nearly 1.5
years. In fiscal year 2017, the cost of the entire SNAP program
was $68 billion.
So I find it touching that we can give away billions in tax
dollars to corporate investors who don't actually need it and
don't have to prove that they are even working to receive their
tax bonanza while at the same time planning to increase work
requirements and cut food aid for Americans who are going
hungry.
I know that some will try to justify cuts to SNAP with
allegations of fraud and abuse. Undoubtedly, there are
corrections that can be made to the 3 percent of payments that
are wrong, more of them, I understand it, underpayments than
overpayments. But in fact, SNAP has one of the lowest fraud
rates in the government at less than 5 percent.
Over the last several years, the U.S. Department of
Agriculture has taken aggressive steps to improve SNAP
oversight and to work with States on rooting out waste. The
USDA has brought down the rate of trafficking to about 1
percent of benefits over the last 20 years. While all of us
agree that waste, fraud, and abuse need to be rooted out, I
think there are clearly other places in the government we could
be looking.
Mr. Chairman, I will just close on that thought. We had a
hearing that found that there was $125 billion in immediate
savings that would be available by cutting waste at the
Pentagon, and I would hope we would be able to focus on that,
too.
I yield back.
Mr. Jordan. I thank the gentleman.
I now recognize the ranking member from Illinois for his
statement.
Mr. Krishnamoorthi. Mr. Chairman, thank you so much for
holding this hearing. I would like this committee to help
improve how the government serves the American people. We
should start by recognizing the enormously important public
service provided by the Supplemental Nutrition Assistance
Program otherwise known as SNAP.
SNAP feeds 42 million Americans who face hunger and food
insecurity. In my own district, the Eighth Congressional
District of Illinois, SNAP provides meals to nearly 28,000
households.
In fiscal year 2014, 69 percent of SNAP participants were
families with children. SNAP is vital to America's low-income
children. No other nutrition or income-support program reaches
as many at-risk children or contributes as much to helping very
low-income households who have children.
SNAP's value far exceeds its costs. This year, for
households in the program, SNAP will cost just $262.72 per
household per year. According to the Center on Budget and
Policy Priorities, SNAP averages just $1.40 per person per
meal. These meals are crucial to sustaining these indigent
families.
I know what I am talking about because I have personal
experience with SNAP's predecessor, the food stamp program. I
came to our country with my family from India when I was 3
months old, so my father could pursue his engineering education
and our family could embrace all the opportunities that America
has to offer. But despite my family's best efforts, it wasn't
easy, and there was struggle. When my family needed help,
thanks to the incredible generosity and goodwill of the people
of America and its government, we were allowed to be put on
food stamps.
Today, my father is an engineering professor, my brother is
a doctor, and I am honored to represent the people of Illinois'
Eighth Congressional District. That is the American dream, the
promise of a middle-class life with the opportunity for your
children to have an even better life than you did. That dream
was possible for my family because of my parents' hard work and
the opportunities our country makes possible. But it was also
possible because of food stamps. For families like mine and
millions of others, SNAP and its predecessors have served as a
critical social safety net and allowed us to bounce back from
financial hardship.
I believe that we must root out any fraud, waste, or abuse
in SNAP and any other government programs, for that matter.
According to the United States Department of Agriculture Food
and Nutrition Service, for fiscal year 2014, 3.66 percent of
SNAP benefits were issued through improper payments--3.66
percent. I should say that any amount of fraud, waste, or abuse
is too much. That is why I believe that the goal of our
Oversight Committee should be to eliminate even the smallest
amount of any improper payments, whether it is in SNAP programs
or any other government expenditures.
But I strongly disagree with any attempt to exploit common
ground--that is common ground to root out waste, fraud, and
abuse--to justify severe cuts to our Nation's premier
antihunger program that serves millions and millions of women,
men, children, seniors, and disabled Americans.
I believe firmly that the best antipoverty job program ever
created is a j-o-b, a job. But I also believe that it is wrong
to allow our most vulnerable citizens to go hungry.
I hope that the witnesses today will shed light on how to
improve SNAP program integrity without building greater
barriers to helping Americans who would go hungry.
Thank you, and I look forward to your testimony.
Mr. Jordan. I thank the gentleman.
I want you all to imagine the scenario that I think could
play out in every one of our districts later this afternoon.
There is a guy who works second shift at the local plant.
Remember, when you work second shift, you miss half your kid's
Little League games, you miss some of their afterschool
activities. But here's a guy who's working hard for his family.
He goes out to get in his truck to drive to work. As he's
getting in his truck, he looks a couple houses down and he sees
the guy sitting on the front porch drinking coffee, reading the
paper. And the second-shift worker knows the front-porch sitter
can work and won't work and is getting his money.
As he gets in his truck to drive to work, thinking about
the guy back on the front porch, he has the radio on. It
happens to be the news hour. The reporter comes on and says the
Federal Government has a $20 trillion debt. They have some
crazy program giving money to favorite corporations. One
company went bankrupt and cost the taxpayers millions of
dollars.
He hears all that, remembers the guy back on the front
porch, and guess what? This guy is ticked off. I would argue
that he has every right to be mad.
At the same time that he is driving to work, there is a
lady driving home from work. She teaches second grade at the
local school. She, like any good teacher, has busted her tail
all day long to help her students. She is driving home from
work, happens to have the radio on, happens to be on the same
station where she hears the same reporter say the Federal
Government has a $20 trillion debt. They have some program that
gives money to some connected corporation. This company went
bankrupt and cost the taxpayers millions.
She hears all that as she pulls into her driveway, which
just happens to be on the same street, and she sees the same
guy sitting on the front porch drinking his coffee reading the
paper. She knows he can work and won't work and is getting her
money. And guess what? She's mad, too.
I would argue that second-shift workers and second-grade
teachers are tired of this approach we have to social welfare,
which says to some people who are able-bodied adults, some of
them who are even able-bodied adults with no kids, you don't
have to do something to get taxpayer dollars.
So I know, over the next hour or so, we are going to spend
a lot of time talking about the 40 million people who get food
stamps, and that is appropriate. We need to. In some cases, it
is a very good program helping people just like the ranking
member talked about his own family. But I think we also have to
remember the 260-some other million folks in this country who
are paying for the program, and it is not too much to ask to
say, if you are getting a benefit from the government, you
should have to do something to receive that. After all, it is
hardworking taxpayers' dollars that we are talking about.
So I say all that, I hope, to set a little context for the
next few hours as we talk about this important program and as
we move into a debate on the farm bill, where we talk about
reauthorization of the SNAP program.
With that, I will turn to our witnesses. Let me introduce
our witnesses, then we will go to them.
Let me start with Mr. Brandon Lipps, Administrator of the
Food and Nutrition Service and Acting Deputy Under Secretary of
the Food, Nutrition, and Consumer Services at the U.S.
Department of Agriculture.
Mr. Lipps, we appreciate you being here.
We have Ms. Kathy Larin, director of education, workforce,
and income security at the U.S. Government Accountability
Office.
We appreciate you being here with us, Ms. Larin.
And Mr. Sam Adolphsen--Adolphsen? I don't know where to put
the accent. Say it again?
Mr. Adolphsen. Adolphsen.
Mr. Jordan. Adolphsen, all right. I put the accent in the
right place.
A senior fellow at the Foundation for Government
Accountability.
And Ms. Stacy Dean, vice president for food assistance
policy at the Center for Budget and Policy Priorities.
We swear you in here, so if you will all please stand and
raise your right hand, we will do this.
[Witnesses sworn.]
Mr. Jordan. Let the record show that each witness answered
in the affirmative.
Unanimous consent that Mr. Gianforte be able to participate
in all aspects of the hearing.
We are glad you are here.
The ranking member is recognized for a motion.
Mr. Krishnamoorthi. Mr. Chairman, I would like to submit
two letters for the record, one from EPIC.org, that is
Electronic Privacy Information Center, and the other from the
Network Lobby for Catholic Social Justice.
Mr. Jordan. Without objection, so ordered.
Mr. Jordan. Now, we will go right down the line here.
Mr. Lipps, you get your 5 minutes. You know how it works.
Try to keep it under, if you can. If you go over, don't go much
over. Then we will move down the list, and then we'll come back
to questions.
The gentleman is recognized.
WITNESS STATEMENTS
STATEMENT OF BRANDON LIPPS
Mr. Lipps. Good morning, Chairman Jordan, Chairman Palmer,
and Ranking Member Krishnamoorthi, and members of the
subcommittee. I appreciate the opportunity to talk to you today
about the Supplemental Nutrition Assistance Program commonly
known as SNAP. I am the Acting Deputy Under Secretary for Food,
Nutrition, and Consumer Services at USDA, and Administrator of
the Food and Nutrition Service, where I oversee 15 nutrition
programs, totaling nearly $100 billion per year. The largest of
these programs is SNAP, with a total of 40.7 million low-income
individuals being served.
Today, I want to talk to you about three priorities that
guide our work at FNS: integrity, self-sufficiency, and
customer service. These interdependent principles help us to
ensure that SNAP operates effectively, efficiently, and as
intended by law.
FNS works closely with our State partners to administer
nutrition assistance programs that leverage our Nation's
agricultural abundance. All those involved in these programs at
the Federal, State, and local level are accountable for the
program integrity.
In programs of this size, even low fraud rates can
translate into billions of dollars in taxpayer money.
Therefore, FNS uses advanced data analytics to prevent new and
emerging threats, as well as to identify and remove retailers
who take advantage of the program. We also work with States to
educate and equip them to fight participant fraud.
To that end, just yesterday, we announced a comprehensive
SNAP fraud framework geared at helping States with the tools
they need to combat participant fraud.
Another fraud reduction measure, which was included in the
fiscal year 2019 President's budget, is the National Accuracy
Clearinghouse, which improves States' abilities to check for
duplicate participation in SNAP across state lines.
It is also critical that benefits are issued only to those
who are eligible and in the correct amount. For the first time
in 3 years, FNS will announce a SNAP improper payment rate for
fiscal year 2017 in June. It is worth noting that the OIG's
audit findings suggest that State performance bonuses
incentivize this bias. The fiscal year 2019 President's budget
also called for eliminating these performance bonuses.
Another important piece of our strategy is coordinating and
enhancing ongoing efforts at the agency. That is why we
recently announced the hire of a chief integrity officer to
foster greater collaboration and to leverage lessons learned
across each of our 15 nutrition programs.
Another key agency priority is self-sufficiency. Nutrition
assistance programs should not only be measured by how they
provide for those in need but also how they support the
transition to independence for those able to move beyond
government assistance.
There are approximately 15 million working-age, able-bodied
adults on SNAP. Of these, over 9 million are not working. We
can, and we should, do better.
FNS recently published an Advance Notice of Proposed
Rulemaking, which received over 22,000 comments on how to best
help able-bodied adults without dependents, which we referred
to ABAWDs, move back to stable employment. As the economy
continues to improve, there is no better time than now to
discuss how we can more effectively help those ABAWDs move to
self-sufficiency.
I recently visited an employment and training site and had
a chance to talk to women training for nontraditional jobs. The
excitement in their voices about the prospect of a new career
and a new chapter in their lives was truly empowering. E&T
programs can have a profound effect on low-income Americans,
lifting them from poverty to prosperity. FNS's SNAP to Skills
project and our E&T Learning Academy are just two of the ways
we are working with States and local partners to identify and
ensure best practices and improve our employment and training
outcomes.
Finally, we have the responsibility to provide the best
customer service to all of our stakeholders. Though the Federal
Government develops SNAP policy and conducts monitoring and
oversight, State and local agencies are ultimately responsible
for delivering program benefits. We must empower them to
successfully execute this responsibility while also holding
them accountable.
I have met with SNAP administrators from across the country
to hear from them on what is working and what is not. Many have
indicated they are looking for more flexibility and less
regulation, so they can better serve their local populations.
To that end, we recently issued guidance to improve
customer service by expanding allowable activities for States
that use non-merit system personnel in their call centers. As
we move forward, we will continue to identify ways to improve
integrity, increase self-sufficiency, and deliver high-quality
service to all our customers.
As Secretary Perdue says, we can do right and feed
everyone. I look forward to continuing to work with Congress to
achieve that goal, and I am happy to answer any questions.
Thank you.
[Prepared statement of Mr. Lipps follows:]
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Mr. Jordan. I thank the gentleman.
Ms. Larin, you are recognized.
STATEMENT OF KATHY LARIN
Ms. Larin. Chairman Jordan, Chairman Palmer, Ranking Member
Krishnamoorthi, Ranking Member Raskin, and members of the
subcommittees, I am pleased to be here today to discuss GAO's
prior and ongoing work on USDA's Supplemental Nutrition
Assistance Program known as SNAP. Specifically, my testimony
today will address our work on SNAP employment and training
programs, improper payment rates, recipient fraud, and retailer
trafficking.
First, regarding SNAP E&T, according to our analysis of
USDA data, about 14 percent of SNAP recipients were subject to
work requirements in an average month of 2016, but only 0.5
percent of SNAP's 43.5 million recipients participated in a
SNAP E&T program that year. SNAP E&T programs are generally
designed to help SNAP recipients increase their ability to
obtain regular employment through services such as job search
and training.
States have broad flexibility in how they design their E&T
programs, and we found that they have made various changes to
these programs in recent years, such as increasing partnerships
with State and local organizations to deliver services, and
increasing their focus on able-bodied adults without
dependents, or ABAWDs. States we talked to noted that, in
recent years, ABAWDs have become increasingly subject to time
limits, which prevent those recipients from receiving benefits
for more than 3 months unless they are working or participating
in an employment program.
Regarding improper payments, in 2015, USDA reported that
3.66 percent of all SNAP benefits paid in fiscal year 2014,
$2.6 billion, were improper. GAO reviewed USDA's SNAP improper
payment rates in 2016, and we found that State and Federal
policy changes likely affected these rates in the last decade.
Specifically, we found that policies that simplified
program rules likely lowered improper payment rates while other
policies may have increased them. USDA did not report on
improper payments in 2016 or 2017 due to data quality issues
identified by the department and by the USDA IG. However, USDA
has been working with States to resolve these issues and is
expected to release new estimates by June 30 of this year.
Regarding recipient fraud, in 2014, we reported that States
faced several challenges in combating recipient fraud. For
example, we found that USDA guidance on the use of data
analytics to detect fraud lacked specificity, and we
recommended that USDA develop additional guidance. We also
found that tools recommended for monitoring e-commerce or
social media websites for potential fraud were ineffective.
USDA's recently released fraud framework may help address some
of these issues. Additionally, we recommended that USDA
consider revisiting its financial incentives to better support
cost-effective antifraud strategies, but the department decided
not to make changes to address this issue.
Finally, regarding trafficking, in 2006, we reported that
SNAP was vulnerable to retailer trafficking.
For example, we found that USDA did not have a system in
place to ensure that retailers at highest risk for trafficking
were quickly targeted for monitoring, and we recommended that
they provide earlier targeted oversight to these stores. We
also found that USDA's penalties for retail trafficking may
have been insufficient to deter traffickers, and we recommended
that penalties be increased.
Since we reported on these issues, USDA has established
risk levels for each retailer and proposed rules to increase
penalties. However, USDA has not finalized these rules, and as
of fall 2017, these rules were considered inactive.
In conclusion, many of our Nation's most vulnerable
citizens rely on SNAP to obtain an adequate and nutritious
diet, and USDA has taken some steps to improve the integrity of
the program, but more could be done.
GAO continues to examine these issues for the subcommittee
and looks forward to providing additional information later
this year.
This concludes my statement, and I am happy to answer any
other questions you have.
[Prepared statement of Ms. Larin follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Jordan. Thank you, Ms. Larin.
Mr. Adolphsen?
STATEMENT OF SAM ADOLPHSEN
Mr. Adolphsen. Chairman Jordan, Chairman Palmer, Ranking
Member Krishnamoorthi, members of the committee, thank you for
the privilege of testifying.
A couple years ago, I sat in an FBI office in Portland,
Maine, presenting suspicious food stamp data to FBI special
agents and investigators from the USDA. In my role as chief
operating officer at the Maine Department of Health and Human
Services, a colleague and I had discovered what we believed was
a massive case of welfare fraud. The Federal officials agreed,
and, after a lengthy investigation, Ali Daham, the owner of
Ahram Market in Portland, was found guilty of millions of
dollars in SNAP and other welfare fraud.
Daham, who was also fraudulently receiving SNAP benefits
himself, had been trading cash for food stamps in his corner
store for years. It is one of the largest fraud cases in Maine
history.
The Maine story is not unique. There are cases like this
around the country, even as some claim welfare fraud isn't a
problem or that it is a victimless crime.
It is a big problem, and the victims are very real. Fraud
steals from the truly needy and traps families in dependency.
An award-winning fraud director in one Ohio County said he
believes the real fraud number is as high as 20 percent, one in
five cases. When States look for food stamp fraud, they find
it. What is indefensible is that many don't bother to look. Too
many view Federal food stamp funds as free money instead of as
a resource to be carefully guarded.
To stop trafficking fraud where benefits are traded for
cash or drugs, we should limit the number of users of an EBT
food stamp card, require people to cooperate with fraud
investigators, and empower States to shut down retailers that
steal benefits.
To stop eligibility fraud, those cases when individuals get
on food stamps when they are not eligible, let's require real-
time reporting, conduct regular checks, and close loopholes.
There is much more detail on these solutions in my written
testimony.
Change needs to happen. That much is clear. But the best
way to stop welfare fraud is to get people off welfare and back
to work.
And not all food stamp fraud happens at a street corner
drug deal or in a dingy convenience store. The fraud that harms
the most people happens with the government stamp of approval.
Abuse of waivers of work requirements for able-bodied
adults has disfigured Federal law and waived work for millions.
So instead of working, able-bodied adults with no kids on food
stamps don't work. Despite record low unemployment and millions
of open jobs, three out of four don't work at all.
A Federal law allows waivers only when unemployment is at
least 10 percent or there are not enough jobs, but there are
1,200 counties and cities were work requirements are being
waived, and just 42 of those have unemployment above 10
percent.
Today, there are a record number of open jobs available in
the country, 6.6 million open jobs. California is that their
all-time low unemployment, and yet, they have been granted a
statewide waiver of work requirements for more than 800,000
able-bodied adults with no kids. One of these California
counties has 2.2 percent unemployment. These waivers should not
be allowed any more than swapping an EBT card for drugs is.
The waivers for work requirements were meant for tough
economic times. Instead, they continue to be handed out in the
best economy in decades. That is the definition of fraud. It is
not right, and it is not how the program should work. It robs
able-bodied adults of the opportunity and dignity that they
gain through the power of work.
This waiver fraud is possible because previous regulations
and guidance from USDA has allowed it and, in the past, even
encouraged it. By allowing the use of bad data, old data, and
gerrymandering, California and 33 other States waive work for
more than a third of the country.
It is clear that changes are needed to battle the
significant problem of trafficking and eligibility fraud, but
the best way to improve the integrity of food stamps is to stop
this waiver abuse and move millions of able-bodied adults from
welfare to work.
Thank you. I am happy to answer any questions.
[Prepared statement of Mr. Adolphsen follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Jordan. Thank you, Mr. Adolphsen.
Ms. Dean, you're up.
STATEMENT OF STACY DEAN
Ms. Dean. Chairman Jordan, Chairman Palmer, Ranking Member
Krishnamoorthi, members of the subcommittee, thank you for the
opportunity to testify this morning. I am Stacy Dean, the vice
president for food assistance policy at the Center on Budget
and Policy Priorities, a nonpartisan policy institute here in
D.C.
I plan to talk about three things this morning: the vital
role of SNAP, the vital role of program integrity in SNAP, and
the likely impact of the pending House farm bill on SNAP.
First, SNAP. SNAP is a highly effective antihunger program.
Today, it helps about 40 million low-income Americans afford a
nutritionally adequate diet by giving them benefits through a
debit card that they can use only to buy food. Benefits average
a $1.40 per person per meal, and one in eight Americans
participate in SNAP, which reflects SNAP's important role in
addressing the extensive need across the country.
SNAP is an entitlement, so anyone who qualifies can receive
benefits. That enables SNAP to respond quickly and effectively
to support low-income families and communities when the economy
turns down and need rises. So while SNAP enrollment expands
when the economy weakens, it also shrinks when the economy
recovers.
SNAP is also an important work support, helping workers
both when they are between jobs and supplementing their low
earnings. That is why looking at the work status of
participants at a specific point in time substantially
overstates their joblessness.
Mr. Lipps noted that, in an average month in 2016, about 9
million adults participating in SNAP did not have earnings, and
we agree with that. But about 4.5 million of them worked within
a year, so they were participating on SNAP when they were
temporarily unemployed. Of the other 5 million, over a third of
them couldn't work due to caregiving responsibilities, and most
have working spouses. Nearly a quarter had a disability or a
chronic health condition that limited their work, and close to
a third were going to school or were not working.
Second, let me turn to program integrity.
USDA and States take their roles as stewards of SNAP very
seriously, and they emphasize program integrity throughout
SNAP's operations, participant eligibility, state accuracy, and
participants redeeming benefits at SNAP retailers. The
authorizing committees have mandated some of the most rigorous
program integrity standards and systems of any Federal program,
and they do provide rigorous oversight of SNAP's accuracy and
fraud detection and prevention systems.
Numerous measures ensure the accurate assessment of
household eligibility during the eligibility determination
process, ongoing checks, and reassessment of eligibility. The
same is true with respect to the proper use of benefits, an
area of fraud prevention and detection where USDA plays a very
significant role.
These measures are designed to detect and prevent honest
mistakes, careless errors, systemic mistakes, and the less
frequent problem of intentional fraud.
CRS did an excellent job summarizing the SNAP program
integrity and error reduction efforts in a recent report, and a
few of its observations bear repeating.
First, errors are not the same as fraud. Many conflate the
two. Fraud is an intentional activity that breaks Federal or
State laws, but program stakeholders, particularly recipients
in States, may also inadvertently err in ways that can then
affect benefit amounts. Some acts, such as dual enrollment,
could be error or fraud, and it is important to calibrate the
response to the cause of the problem.
Second, SNAP fraud is rare, according to all available data
and reports. The illegal and inaccurate activities that do
occur are serious and merit a very serious response. However,
they do represent a small fraction of SNAP activity overall. We
strongly favor efforts to improve program integrity, so long as
they are warranted by evidence, are cost-effective, and would
not meaningfully impede program access.
Third, let me turn to the farm bill. Unfortunately, H.R. 2,
the farm bill that the House will likely consider next week,
could reduce SNAP's effectiveness. According to CBO, it would
cut benefits to poor households by more than $17 billion over
the next 10 years and would cause more than 1 million low-
income households with more than 2 million people, particularly
low-income working families with children, to lose their
benefits or have them reduced. It includes sweeping new work
requirements that would likely prove unworkable and increase
hunger and poverty. The bill would force States to develop
large, new bureaucracies but do little to increase employment,
and leave substantial numbers of low-income people with
barriers to work, such as very limited skills or chronic health
conditions, with neither earnings nor food assistance.
The farm bill could have been a bipartisan effort that
strengthens SNAP, promoted work, and shored up program
integrity. Instead, it is largely a package of harmful,
unworkable, and untested policies that will weaken the program.
Again, thank you for the opportunity to testify, and I am
pleased to answer your questions.
[Prepared statement of Ms. Dean follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Jordan. Thank you, Ms. Dean.
The gentleman from Alabama is recognized for 5 minutes of
questioning.
Mr. Palmer. Thank you, Mr. Chairman.
I was listening to your testimony, Ms. Dean, and I find it
interesting, some of the things that you quoted there, about
how this will harm people to go to work.
I grew up dirt poor. I mean, my father had an eighth-grade
education. He's blind in one eye. And I was able to get out of
that situation by working, not by going on a government
program.
What I want to point out to you is, work requirements were
implemented in the State of Kansas, and I just want to read
some of the results.
Jason, who was previously unemployed and was on food stamps
for 4 years, after the work requirements, he got a job, and he
is earning $45,000 a year.
Do you have a problem with that? I didn't think you did.
Amy was previously unemployed. She was on food stamps for 2
years. She is now earning $27,000 a year.
Matt was on food stamps for years. He is now earning
$34,000 a year.
Sarah was on for 3 years. She is earning $37,000 a year.
And I could go on.
The thing that really bothers me about all this is that it
comes across to me that some folks really do want to see people
remain dependent on the government, and that, I just can't
believe it.
I mean, I am going through the farm bill. I've read the
provisions in it for the improvements in SNAP and giving people
the ability to stay on food stamps while they are getting job
training or getting a job or volunteering, and it is just
beyond my comprehension that anybody would oppose that for
able-bodied adults without children.
I have even heard one of my colleagues say that it would
violate child labor laws, and I just want to emphasize, this is
able-bodied adults without children. It doesn't violate any
child labor laws.
I will tell you the opposition to it violates the laws of
common sense. I really believe that.
Mr. Adolphsen, one of the reasons the current work
requirements in SNAP have been largely ineffective is the
widespread use of waivers, as you pointed out. And I think it
is the GAO report, Ms. Larin, you point out that only about 0.5
percent actually took advantage of the training. Out of 43
million people, only about 200,000, is that correct?
Ms. Larin. Yes, 0.5 percent of SNAP recipients participated
in the SNAP E&T program. The vast majority of SNAP recipients
are not able-bodied adults. Many are exempt from work
requirements. Those include children, the elderly, the
disabled. But 15 percent were work registrants in 2016.
Mr. Palmer. That would be about 6 million, right?
Ms. Larin. Yes, that is correct.
Mr. Palmer. Fifteen percent of 43 million is a little over
6 million.
My point here is that there are, right now, about 6 million
available jobs. If that 15 percent of able bodies who do no
work entered into the work force, we could pretty well fill
those positions and still provide the benefits to the people
who truly need them, the disabled, the low-income families with
children.
One other statistic on this that gets me is that I believe
about 63 percent of the people who are on food stamps, Mr.
Adolphsen, correct me if I'm wrong, are under 35 years old. Is
that correct? No, a little over half, a little over 50 percent
of people on food stamps, on SNAP benefits, are under 35. Is
that correct?
Mr. Adolphsen. That sounds right, Congressman.
Mr. Palmer. Yes, and I think a little over 40 percent of
those are men.
This is the guy that was sitting on the front porch, Mr.
Chairman, drinking, you said, a cup of coffee. He may have been
drinking a beer, I don't know. I didn't drive by. That really
bothers me, again, having grown up the way I did and knowing
that the only way out of that situation is a good job, a good-
paying job.
As my colleague from Illinois pointed out, that is the best
antipoverty program, a good-paying job. It is the best thing to
do for an individual's health.
Would you agree with that, Mr. Adolphsen?
Mr. Adolphsen. Yes, I think we have seen the results in
States that have brought work requirements back into play. In
my home State of Maine, just a year after implementing that
requirement, the incomes of those individuals that left food
stamps more than doubled in just 1 year.
You mentioned Kansas. We have seen that work. I think
people aren't participating in E&T because it's not required.
It's typically done only as a voluntary thing, and there's no
penalty if they don't work or if they don't participate.
Mr. Palmer. Mr. Chairman, my time has expired. I just want
to close with this, that as a result of the tax cuts and JOBS
Act, we now have record unemployment. We have higher wages.
There are over 6 million job openings, and the economy is
poised to grow at an even greater pace. I cannot think of a
better time than this right now to help low-income families get
out of poverty, get off government dependence, and get a job
and really get themselves onto a brighter future.
I yield back.
Mr. Jordan. I thank the gentleman.
The gentleman from Illinois is recognized, the ranking
member.
Mr. Krishnamoorthi. Ms. Dean, I think that Mr. Palmer had
some points he made, and I think a couple of them were directed
toward you. Do you want to respond to any of those?
Ms. Dean. Thank you so much.
If I have left anyone with the impression that we don't
believe at the center that work is the single most powerful
pathway out of poverty, then I did a poor job. Of course, work
is crucial to family well-being and economic success. That is
why the center does so much work on key work supports, like the
earned income tax credit, Medicaid, and SNAP, which is a
program that supports low-wage working families.
The problem is that a lot of work does not pay. So in Mr.
Jordan's example, the custodian at the second-shift plant and
the teacher's aide in that second-grade teacher's class could
well be SNAP participants with inconsistent hours, low pay, and
no benefits. So the program does play a vital role in
supporting work.
The concern I have about H.R. 2, and I'll just be brief on
this, is that before you even get to the question of the work
requirements and whether the services that would be offered
would be the quality kinds of things that Mr. Lipps talked
about earlier, 7 million people would have to file a form every
month demonstrating that they were working 20 hours a week or
were exempt.
And this is where I think we talk about people getting
caught in a net. A mom with a young kid who was sick has to
prove that the child was truly sick to the satisfaction of a
caseworker. We are suggesting that large, massive bureaucracies
can make mistakes and put benefits at-risk. So we are putting
benefits to families with children and workers at-risk, and
that is a deep, deep concern.
So thank you for the opportunity. I'm sorry. I should let
you get back to your question.
Mr. Krishnamoorthi. So kind of explain to us how, as you
mention, if H.R. 2 were to go into existence or be passed, that
a million additional people would essentially go hungry without
the food stamp assistance that they would receive otherwise.
Ms. Dean. I want to be careful about ``going hungry.'' That
is an important and powerful term. I think we believe, without
food assistance, absolutely, hardship will increase, and
families would be at-risk.
CBO does say, for example, 400,000 working families with
nearly a million people would be terminated from food
assistance under the bill, which would repeal an option that
States have to extend the program. That is just making their
lives more precarious.
You are an example of a child that benefited from ensuring
steady, stable nutrition during key developmental years.
Mr. Krishnamoorthi. I think that is one of the fundamental
issues here, which is that children are in so many of these
families that receive this SNAP assistance. Through no fault of
their own, through nothing that they had to do with a mistake
on paperwork or bureaucratic errors, or anything like that,
they may go without the essential food assistance that they
have come to rely upon. Is that fair to say?
Ms. Dean. That's right. It's an untested scheme, which is
really unfortunate, because the last farm bill included $200
million to test very robust demonstration projects to look at
different interventions around work, so that Congress would
have a better sense of what works and what doesn't before
obligating billions of dollars to a new system. In the end,
it's true, it's poor families who are at-risk under this
approach.
Mr. Krishnamoorthi. Tell us, again, how many children will
go at-risk of losing food assistance because of H.R. 2?
Ms. Dean. Sorry, I don't have that number at the ready, but
a significant share of the 2 million are families with kids.
Mr. Krishnamoorthi. I understand. Ms. Dean, your testimony
discussed the positive impacts that SNAP has had in reducing
hunger and poverty in our country, yet, I've also heard people
say that our investment in antipoverty programs such as SNAP
has not had any impact on reducing poverty. So can you kind of
help us understand the discrepancy in these perspectives?
Ms. Dean. It absolutely has. The official poverty measure
doesn't include the value of income transfer programs like
SNAP. So that is why the Census Bureau recommends using an
alternative measure, the supplemental poverty measure, which
adds it back in.
When you add the value of transfer programs, SNAP lifts,
for the most recent year available, more than 8 million people
out of poverty, 4 million children. So poverty experts agree,
it is totally appropriate and preferable to include the value
of transfer programs. When you do that, you see the powerful
impact that the safety net has on addressing poverty.
Mr. Krishnamoorthi. Thank you, Ms. Dean.
Thank you. I yield back.
Mr. Jordan. I thank the gentleman.
The gentleman from Tennessee is recognized, Mr. DesJarlais.
Mr. DesJarlais. Thank you, Mr. Chairman.
Mr. Lipps, you mentioned in your testimony that SNAP is
intended to support the transition of able-bodied adults to
stable employment. Would you agree that there is a lack of
available data from USDA in regards to the amount of time
individuals actually receive the benefits?
Mr. Lipps. Yes, Mr. DesJarlais. We have some data on that,
but it is mostly survey data. We don't, at the national level,
have accurate data held on that.
Mr. DesJarlais. So would you agree, then, that it would be
very difficult for us to judge the effectiveness of the program
in transitioning people off of welfare if we don't even know
how long they are on the program?
Mr. Lipps. Yes, sir. I think the more data that we at FNS
are able to have, the better we can serve recipients.
Mr. DesJarlais. How do we fix that?
Mr. Lipps. I think we need to make sure that we can have
access to that type of data. States need to be measuring when
people are moving on and off of work.
Ms. Dean added some follow-up to my statistics on the
number of people not working. I don't disagree with those, but
I think part of the problem is that so many of these
individuals churn on and off work, and the employment and
training program is about helping people find long-term, stable
employment, and that is what we should be measuring on these
people.
Mr. DesJarlais. States currently receive bonuses for
meeting the minimum requirements for administering the program.
Is that correct?
Mr. Lipps. That's correct. Yes, sir.
Mr. DesJarlais. Okay. Do you also think that these bonuses
may incentivize States to potentially falsify their records to
become eligible for these bonuses? And how much are these
bonuses?
Mr. Lipps. The OIG did suggest in their investigation that
that was a factor in what States did. The bonuses are $24
million a year.
Mr. DesJarlais. To all States?
Mr. Lipps. To States. I believe we give them to eight
States with the best error rates and a couple additional States
on improved error rate.
Mr. DesJarlais. So they are actually sending money to these
States for doing a good job of signing people up to the
program.
Mr. Lipps. For processing them well, yes, sir.
Mr. DesJarlais. It is often reported by States that their
error rate is extremely low or even zero. Would you agree that
it is important to point out that, under current law, the
threshold for errors is actually $37?
Mr. Lipps. Yes, sir. That is important to know when
calculating what the error rate is.
Mr. DesJarlais. Do you think that should be changed?
Mr. Lipps. I think it is important that we accurately
report what the actual errors are and what people judge that to
be. Yes, sir.
Mr. DesJarlais. So if the threshold is $37, can you
speculate how much money may be being overlooked?
Mr. Lipps. I can't speculate on that exactly, but if you
consider that the average benefit is $123, I believe $37 is a
significant percentage of that.
Mr. DesJarlais. Yes, I would agree.
Mr. Adolphsen, you mentioned in your testimony something
known as broad-based categorical eligibility, or BBCE. As I
pointed out earlier, we have an extreme lack of data when it
comes to SNAP recipients. Would you agree that broad-based
categorical eligibility, which waives the asset test, is a
contributing factor?
Mr. Adolphsen. Yes, sir. Since we don't collect assets at
all, we have a limited view of the income and resources
available to a household.
Mr. DesJarlais. Can you go into some more detail on
additional problems associated with the BBCE?
Mr. Adolphsen. Sir, the broad-based categorical eligibility
relies on a gimmick where States convey a TANF-funded document,
usually a brochure, to a recipient, making them eligible. So by
handing them a TANF-funded document, and some States don't even
actually give it to them, that confers automatic eligibility on
them and waves the asset test. It also allows their income
level to be much higher than traditional eligibility.
Mr. DesJarlais. Isn't that kind of cheating the system?
Mr. Adolphsen. I believe it is, and, unfortunately, an
increasingly large percentage of cases are found eligible
through that door. I believe it is over 65 percent, at this
point.
Mr. DesJarlais. Would you say it is possible that some of
these programs that are cheating the system are also the States
where these performance bonuses are going?
Mr. Adolphsen. That is fair to say. I do know the current
version of the farm bill eliminates broad-based categorical
eligibility as well.
Mr. DesJarlais. Right. I agree. As you point out in your
testimony, there is quite a bit of confusion when it comes to
who faces a work requirement for SNAP and who is exempt, which
often leads to States not appropriately enforcing work
requirements. Would you agree that, instead of several
confusing categories, it would be more effective to simply have
one category of work-capable adults from age 18 to 59 with
exemptions being for those who were pregnant, mentally or
physically disabled, or a guardian of a child under age of 6?
Mr. Adolphsen. Yes, without a doubt, all able-bodied adults
should have a requirement in place, a work requirement.
Mr. DesJarlais. I think that is an issue that over 80
percent of America agrees on, whether you are Democrat,
independent, or Republican, so I think that is a winning issue.
And I yield back my time.
Mr. Jordan. I thank the gentleman.
We now recognize the gentlelady from New Jersey for her 5
minutes.
Ms. Watson Coleman. Thank you, Mr. Chairman.
I agree with everyone that every able-bodied person in this
country who has the skills and the opportunity, and is free of
discrimination, should be working, and that the work that they
have should pay a living wage so that they don't have to
supplement it with any kind of government assistance.
I recognize that SNAP costs a $1.40 a meal, and we are
sitting here having this long discussion, making assumptions
about people sitting on their porches, not knowing what the
hell their problem or issue may be, not even defining what
able-bodied might be, when we had no discussion on passing an
incredibly, incredibly generous, outrageous tax bill to the
wealthiest 1 percent of this country, and we had not a hearing,
not a committee meeting, not a vetting, not a darn thing, just
an opportunity to vote yes or no, and I voted no.
I am offended that we make assumptions about people who we
may think are able-bodied or should be working when they are
only receiving minimal help from the government in order to
ensure that they are nutritiously cared for, even if they have
children or don't have children.
The richest country in the world needs to spread some of
that generosity to those who need it the most. No one--no one--
should be hungry. And no one--no one--should be questioned
about whether or not they are eligible for a $1.40 a meal. And
this is very offensive to even have this discussion here right
now.
I want to ask, who represents the nonprofit? You, Mr.
Adolphsen. What does your nonprofit do?
Mr. Adolphsen. Our nonprofit is a public policy think tank
that focuses on welfare and health care issues.
Ms. Watson Coleman. Thank you. So did you all have any
opinion on the tax bill, the tax initiative that was passed
most recently? And if so, what was it?
Mr. Adolphsen. We do not engage in tax policy, but I think
it is fair to say that, in part because of that tax cut, that
work now pays like it never has before.
Ms. Watson Coleman. Do you have an understanding that the
situation of work availability has a lot to do with the
communities in which you live, the education which you have
had, and the color of your skin or your ethnicity?
We are having this Pollyanna discussion as if there is
equality in this country. There has never been equality in this
country. Inequality is at its absolutely highest level right
now.
So I am particularly offended to sit here and listen to
either my colleagues or those who are testifying to suggest
that there are people who are gaming a system at a $1.40 a meal
when 1 percent of this country has gamed an entire economy.
Ms. Dean, I want to thank you for the work that you do and
for the information that you have shared with us. I know that
you must agree that there needs to be better monitoring devices
to ensure that those few who shouldn't receive these benefits
don't receive these benefits. Do you have anything that you
would like to contribute along that line?
Ms. Dean. Thank you for the opportunity. Actually, 2 years
ago, I testified before a different set of subcommittees, as
well as the House Agriculture Committee.
We have suggested that States be given better access to
some of the kind of data systems that were built for health
coverage, healthcare.gov, that HHS has a big data system that
we think would give States quick assess when they are talking
to someone to verify what they are saying.
We do support the proposal to create a National Accuracy
Clearinghouse. We just have serious concerns about the way it
has been proposed in the farm bill.
I think also an increase in resources for fraud
investigators, both at the Federal level and at the State
level, is a welcome idea. Unfortunately, the farm bill didn't
do that.
May I jump in on one point that was raised?
Ms. Watson Coleman. If you do it really quickly, because I
have a question for Ms. Larin.
Ms. Dean. Absolutely. I just want to raise a point about
the success that has often been touted about Kansas and Maine.
I do think that often what is reported is what happened after
the intervention, but there is no actual comparison data
relative to what we would've seen in the absence of the
intervention.
When you compare employment and earnings rates post-
intervention to a year prior, there is virtually no difference.
I think that is really crucial in an evidence-based
environment, to not pursue an approach without a robust
assessment of the facts.
Ms. Watson Coleman. Thank you so much.
Ms. Larin, I guess you are best to answer this question.
You said that there is a certain percentage of these improper
payments that were made. What percentage was that? And what
percentage of those were determined to be fraudulent payments,
as opposed to improper payments?
Ms. Larin. Improper payments and fraud are two completely
different things.
Ms. Watson Coleman. I know that.
Ms. Larin. Right.
Ms. Watson Coleman. I'm not sure everyone does, but I know
that.
Ms. Larin. Yes. So improper payments occur when a
beneficiary either gets too much or too little.
Ms. Watson Coleman. So what percentage? I am asking a
really specific question here. What is your knowledge of the
percentage that are improper? And of that improper, what
percentage is actually fraudulent payments?
Ms. Larin. We do not know. The only fraud rate that USDA
measures is retailer trafficking, which does not cover
recipient fraud, so we have no idea what the recipient fraud
rate is.
Ms. Watson Coleman. Thank you.
My time is up. I yield back. Thank you very much.
Mr. Jordan. I thank the gentlelady.
The gentleman from North Carolina is recognized for 5
minutes.
Mr. Walker. Thank you, Mr. Chairman.
Under the Obama administration, SNAP recipients went from
28 million to 44 million. That is a 64 percent increase. The
population under that same time increased by 6 percent.
Ms. Dean, how do you explain that? What would be your
reasoning for that kind of spike?
Ms. Dean. I have two reasons.
First was the extraordinary economic downturn that occurred
as the Bush administration was ending and the Obama
administration was beginning. That was the primary driver of
enrollment.
But the second is that the share of eligible people was on
the rise. So the program now serves, I believe, over 80 percent
of eligible people relative to fewer than 75, so even if the
economy improves, the program will be serving ----
Mr. Walker. Okay, what is the point of transition off such
a program? I mean, do you have a plan or thought about how you
would transition people back into the work environment?
Ms. Dean. I think what we have now, which is a growing
economy and a low unemployment rate, is the best path.
Mr. Walker. Well, we have I know in our community and many
others many wages starting at $13 to $15 an hour, and it is a
problem to find people because of the level of some of these
government benefits.
My friends like to make this a humane argument, but what is
humanitarian about keeping people trapped at this poverty level
boggles my mind.
I think we have failed the American people when we begin to
perpetrate the idea that by adding people more to a program
somehow creates a success. Our ultimate goal would be, how do
we transition people off the government entitlement programs
such as SNAP?
Obviously, there are kids and there are family situations
who we want to back up and support, but for many people, the
able-bodied adults, the people that we are talking, it is a
God-given, created ability that many people have different
skills and unique talents. And when we put up roadblocks--to
me, that is a travesty--to be able to encourage and to motivate
people back into the work force ----
Ms. Dean. If I may ----
Mr. Walker. I am sorry. I don't have time to respond right
now. If I do at the end of the question, I will come back to
you.
Mr. Lipps, what is the total number of SNAP recipients for
the last fiscal year?
Mr. Lipps. Forty-two million, two hundred thousand.
Mr. Walker. And what is the total estimated cost of
benefits for those recipients?
Mr. Lipps. Sixty-three billion, seven million.
Mr. Walker. Okay. For that large of a population, I am sure
that USDA and/or maybe FNS has ways to prevent improper
payments. Are there any methods or programs of identifying
improper payments within USDA FNS?
Mr. Lipps. Yes, sir. FNS provides a lot of technical
assistance to States, and they have a lot of training programs.
Our quality control system is our measure of how well we are
doing in improper payments.
Mr. Walker. Can you describe the current process or program
by which the payments are identified?
Mr. Lipps. Yes, sir. So the quality control process is the
issue that we did have a problem with States inserting bias
into the process in years past. Prior to my arrival and
continuing now, FNS has done a great job of revising that
process both at the Federal and State level so that we will be
able to report an error rate to you this year.
Mr. Walker. OMB recently tried to address the issue of
improper payments with a National Accuracy Clearinghouse, the
NAC, in Alabama, Georgia, Florida, Louisiana, and Mississippi.
Has this program resulted in any significant reduction in dual
SNAP participation?
Mr. Lipps. Yes, sir. It was only tested in a few States, so
on the size of 40 million recipients. It is difficult to say
what is significant, but we think that any ability to root out
fraud in the program is significant, so we did recommend in the
President's budget that this be expanded nationwide.
Mr. Walker. Very good. How do you compare this to the
current PARIS system?
Mr. Lipps. The National Accuracy Clearinghouse provides a
lot of opportunity that PARIS does not. PARIS is not a real-
time check on dual participation and has some other issues that
can be fixed.
Mr. Walker. Fair enough. Thank you. If adopted, does FNS
have an estimate for total savings across a 10-year period
using the NAC, or the National Accuracy Clearinghouse?
Mr. Lipps. Yes, sir. The estimate in the President's budget
was roughly $1 billion over the baseline.
Mr. Walker. And I gave my word to Ms. Dean that I would
come back if I had an extra question. I want to honor that, but
let me preface it by saying this. Republicans are trying to be
presented here as non-compassionate. I spent much of my life
working the inner cities of Cleveland, New York, Baltimore.
This is about hope, not judgment. This is about being able to
help families and people find a way to fulfill their God-given
gifts and skills and talents, with which we are all uniquely
created. That is why we are passionate about this.
How do we help? How do we transition this without
continuing to create more and more government systems and
adding millions and millions of people on those roles?
I want to yield back. I have 30 seconds. I yield that time
back to you.
Ms. Dean. I just wanted to say, I think the true measure of
success is no food insecurity and no poverty. We tout
enrollment in SNAP as, I guess, a step along the way to that,
because it is so successful in addressing hunger and food
insecurity, but the goal is a country without those two
problems.
Mr. Walker. But when we see a spike from 28 million to 44
million, 64 percent, that ought to trouble us, not encourage
just to say, hey, we are serving, as we have heard today, we
are serving the American people. For able-bodied adults, there
is a better way, and we must work to find it.
Thank you, Mr. Chairman. I yield back.
Mr. Jordan. I thank the gentleman.
The professor from Maryland is recognized.
Mr. Raskin. Mr. Chairman, thank you very kindly.
First, I just want to say that I agree that all able-bodied
Americans should be engaged in productive work and not sitting
around all day tweeting or filing bankruptcy or watching TV.
And as Chairman Jordan points out, that can get the rest of the
population very angry, to see people who are not participating
in a meaningful way in the work force.
Now, the premise of some of the questions seems to be
either you are collecting SNAP benefits, or you were working.
And that puzzled me, because I always thought that working
people could get SNAP benefits if they were otherwise eligible.
Ms. Dean, can you clarify that for me?
Ms. Dean. You are absolutely correct. Unfortunately, too
many jobs pay too little or offer too few hours, so we have
millions of people who qualify for SNAP. About, of the working-
age folks on the program, I think 65 percent include a worker
of the able-bodied definition.
Mr. Raskin. All right, so I want to be clear about that.
You are saying nearly two-thirds of the people who receive SNAP
benefits are able-bodied working people who are, in fact,
working but not making enough money to support their family in
a way to avoid food insecurity?
Ms. Dean. Within that able-bodied age group. The number is
even higher amongst families with children. Of course, if you
look whether they were working before or after on SNAP, it is
even higher. SNAP is there both as a form of unemployment
insurance and a low-wage supplement.
So again, when thinking about work interventions, it is
important to think about who we are targeting, an individual
who will rapidly reemploy within a month or so on their own
and, therefore, spending money on expensive training might not
be the best first solution. Is it someone who actually needs
more robust intervention, or is there something else going on?
Mr. Raskin. But I was moved by Chairman Jordan's
instructive example at the beginning of two people going off to
work, the third person sitting at home, watching TV, tweeting
all day, whatever, and those people feeling uncomfortable or
irritated about it.
But in fact, because of the work requirement, that person
is likely to get in trouble, if they are really ripping off the
system, if everything is working right. It is more likely that
one of the two going to work could be using SNAP benefits for
their family. Is that right?
Ms. Dean. I think I gave the example of other folks in
their workplace who might be earning lower wages and would
benefit from the program. Yes, absolutely.
Mr. Raskin. Okay. But in any event, it is misguided for us
to think of the collection of SNAP benefits as somehow opposed
to work when, in fact, as you are saying, a majority of the
people collecting SNAP benefits are working.
Ms. Dean. Yes, you are correct.
Mr. Raskin. Okay. So, Mr. Adolphsen, let me just ask you
quickly, do you think that Americans have a strong work ethic?
Mr. Adolphsen. Yes, I think we are the greatest country in
the world, and we are built on hard work.
Mr. Raskin. All right, good. Then we agree on that. Thank
you.
So I want to come back to what the work requirements are
currently for people in the law.
Ms. Dean, could you recite for us what the work
requirements are for people who are nonetheless still applying
for SNAP benefits?
Ms. Dean. Sure. There are two categories.
The first is the population between 18 through age 59
without children under age 6 and who are not essentially
receiving a disability check or are very ill. That group has to
register for work, and they are the pool of people that States
can obligate or offer job training to.
States have a lot of flexibility on who they decide to
enroll. So when Ms. Larin said only 200,000 were enrolled, that
is not because the other group was refusing. It is because
that's the group that States are serving.
The second group, a subset of that, is between the ages of
18 to 49. They are subject to a 20-hour-a-week work test. They
may not participate for more than 3 months out of any 3 years
unless they are exempt, and that group is not offered a job
training slot as a condition of work. States can, but the vast
majority don't. So we call it a time limit, not a work
requirement.
Mr. Raskin. Okay.
Ms. Larin, I wanted to come to you about a question, which
is, States presently have the flexibility, as I understand, the
discretion, to impose additional requirements on recipients for
work. Are there any Federal restrictions on their ability to do
that? What are some of the restrictions that States have
imposed beyond the Federal requirements?
Ms. Larin. I am not familiar with individual States.
Mr. Raskin. Okay. I can research that separately.
Ms. Dean, let me come back to you. I know that your think
tank has worked on tax policy, and I have been able to benefit
from that. Were there any work requirements imposed on the big
tax bill that gave hundreds of billions of dollars to wealthy
investors? Did we require them to prove that they were actually
working, the way we require under the SNAP program?
Ms. Dean. I am not an expert on that subject, but I believe
the answer to that is no.
Mr. Raskin. They could be collecting the income passively
through corporate dividends and interest and so on.
I yield back, Mr. Chairman.
Mr. Jordan. Yes, but it is their income. I mean, it is sort
of a fundamental difference. It is not the taxpayer dollars
getting funneled through government.
Mr. Adolphsen, let me just run through some basics here.
What is the food stamp, overall, SNAP program population
today? What is that number? How many people?
Mr. Adolphsen. Forty-two million.
Mr. Jordan. And has that increased or decreased in the last
decade?
Mr. Adolphsen. That has increased.
Mr. Jordan. Increased from what to what? Do you know the
numbers?
Mr. Adolphsen. Seventeen million in 2000 from 28 million in
2008.
Mr. Jordan. A significant increase, right? How about in
dollars? What are we spending on it right now?
Mr. Adolphsen. It has been as high as nearly $80 billion.
It is at about $70 billion right now.
Mr. Jordan. And what was it before? Less than half of that?
Mr. Adolphsen. Less than half of that.
Mr. Jordan. All right. And then how many of that 42 million
are in this category we keep talking about, able-bodied adults?
Mr. Adolphsen. Twenty million.
Mr. Jordan. Twenty million. And of those 20 million, how
many are not working and yet are still receiving a benefit of
that 20 million subset?
Mr. Adolphsen. Sixty-two percent, so a little more than 10
million.
Mr. Jordan. More than 10. So we have 10 million people of
the 42 million who are able-bodied and not doing anything to
get the taxpayer benefit.
Mr. Adolphsen. That is correct.
Mr. Jordan. And then of that subset, how many are able-
bodied adults with no kids who are not working and still
getting the benefit?
Mr. Adolphsen. Sure. About 4 million, 75 percent don't work
at all, and about 3 million are in areas where that requirement
----
Mr. Jordan. Mr. Raskin just said that is not the case.
There is a work requirement now. But you are telling me there
are 4 million people able-bodied, no kids, who are doing
nothing and still getting taxpayer money. How can that be?
Mr. Adolphsen. Because of the waivers of that requirement.
Mr. Jordan. Because the States have waived it, right? And
they are waiving it at a time when the economy is pretty good.
In spite of the tax cuts that the other side keeps saying are
bad, the economy is pretty good right now, isn't it?
Mr. Adolphsen. It's very good, and there are a lot of ----
Mr. Jordan. What is the unemployment rate right now?
Mr. Adolphsen. Under 4 percent, I believe.
Mr. Jordan. Isn't that the lowest it's been in like 18
years?
Mr. Adolphsen. Fifteen States have their all-time low.
Mr. Jordan. All-time low. And yet, we still have 4 million
people with no kids, able-bodied, who could sit on the front
porch and drink coffee and read the paper while everyone else
is going to work, right?
Mr. Adolphsen. They could do that.
Mr. Jordan. They could do that. They may not be doing that.
They could be tweeting, as Mr. Raskin points out. They could be
watching TV. They could be doing that. But in our example,
they're sitting on the front porch, reading the paper, and
drinking coffee.
Mr. Adolphsen. The average American male spends 21 hours a
week watching TV or playing videogames. We are asking ----
Mr. Jordan. Well, I didn't know there was that much sports
on TV. That's amazing.
Okay, so, now, all we are saying is that, that group, those
4 million, should probably have to do something to get taxpayer
dollars. That's all we're saying, right?
Mr. Adolphsen. That's correct.
Mr. Jordan. What's the average length of time someone is on
food stamps today? How long are they on? Just take the general
population.
Mr. Adolphsen. The overall population, about 7 years.
Mr. Jordan. Seven years. How about that 4 million who are
able-bodied with no kids who aren't working? How long are they
typically on?
Mr. Adolphsen. For about 20 percent of that population, it
is the same number.
Mr. Jordan. Seven years. So we have able-bodied people with
no kids getting something from the taxpayer, not having to do
anything, and they can do it for 7 years?
Mr. Adolphsen. If there is no work requirement, and they
don't go back to work.
Mr. Jordan. Would you support not only a work requirement,
would you support a time limit? Like saying, you know what, if
you are an able-bodied adult, we are going to help you do some
kind of job training, some kind of work requirement, but if you
are not willing to engage in that, there is a limited amount of
time we are going to let you live off the taxpayer, not live
off the taxpayer, get a benefit from the taxpayer if you are in
an able-bodied adult not willing to work.
Mr. Adolphsen. Yes, that type of time limit has been very
effective in the cash assistance program.
Mr. Jordan. Mr. Lipps, would you support a time limit?
Mr. Lipps. Mr. Chairman, we would be happy to have a
discussion with you about that. The administration doesn't have
a position on that at the moment.
Mr. Jordan. Ms. Dean, do you support time limits?
Ms. Dean. No, and I believe the numbers Mr. Adolphsen
quoted include senior citizens and children. The average length
of time for, say, someone who is 65 and ----
Mr. Jordan. But he also said, I asked him that general
question, but I also asked him about the 4 million who are able
to work who are in the category of 18 to 59.
Ms. Dean. They already face a time limit, 3 months out of
36, unless they live in a waived area, which covers about a
third of the country right now.
Mr. Jordan. Unless they live in a waived area. It's kind of
a big exception.
Ms. Dean. A third of the country.
Mr. Jordan. A huge number of the population.
So I guess, are you for a time limit for everyone, not just
----
Ms. Dean. Absolutely not.
Mr. Jordan. And do you believe, Ms. Dean, do you believe
deadlines impact behavior?
Ms. Dean. With my kids, that's for sure.
Mr. Jordan. Yes, with everyone. They certainly do with
Congress. Congress couldn't get anything done if there wasn't a
deadline on something. So deadlines always impact behavior, but
somehow we can't have that for people receiving a benefit from
the taxpayer? There can't be a deadline?
Ms. Dean. I don't think the jobs that are available today
are paying or delivering ----
Mr. Jordan. You have to come to the Fourth District of
Ohio, because I guarantee you they are. I know what it is like.
Every single employer I talked to is looking for someone. There
are help-wanted signs in every single business, and many of
them pay very well.
And frankly, what employers are most looking for is someone
to show up. And if they will show up, they will give them the
training to get them a job that does pay a lot more than--what
was the example you used? The custodian worker at the school, a
lot more than that.
Ms. Dean. But I think that is an area where perhaps you and
the program Mr. Lipps mentioned and I have in agreement, which
is training that is offered to help bridge the skills gap and
to give employers the employees that they want I think is
something that would be ----
Mr. Jordan. Mr. Adolphsen, I have just a few seconds here.
Is there an asset test for people who get food stamps?
Mr. Adolphsen. Generally, no.
Mr. Jordan. Generally, no. So just to sum it up for the
taxpayer, we have seen a doubling, more than doubling of the
food stamp population in the last decade, from $30-some billion
to close to $70 billion in spending. Of that 42 million who
were in the food stamp program today, 15 million to 20 million
are able-bodied adults, approximately 10 million able-bodied
adults who are not working, and 4 million of those have no
children. And yet, they can stay on the program potentially 7
years. And we don't even ask them what kind of assets they have
in place.
Is that all fair?
Mr. Adolphsen. That is fair.
Mr. Jordan. That's why we have to change this program.
With that, I recognize the gentleman from California.
We have to go to this side, then we will come back to Mr.
Grothman.
The gentleman from California, then we will come back to
the gentleman from Wisconsin.
Mr. DeSaulnier. Thank you, Mr. Chairman.
I do feel the frustration on both sides here. I am old
enough to look at criminal justice reform and see where we have
come to some mutual agreements on how we should approach that
in evidence-based research.
I was in local government. I was very active in building a
new juvenile hall for our county in the bay area. When we built
it, we were told by the judges that it wasn't big enough. I
went out there recently, it is at 65 percent of capacity. I
asked the juvenile probation officers, what happened? They said
because we instituted largely nonpartisan, evidence-based
research, including helping families who were falling through
the cracks.
So, Ms. Dean, it is very frustrating. I don't think any of
us disagree with the idea that would like people to be able to
be self-sufficient. But we also know, I have sat in meetings in
my district, very different from Mr. Jordan's district, in the
bay area, but I have sat in meetings with UC students who got
4.2s, got into the University of California, the best public
university in the world, and they talk about housing problems
but also food problems.
So somewhere in here, we can make this system work.
When I was in the Legislature in California, we were very
low, and we still are low, in terms of our activity on SNAP. A
lot of it was because the State and the counties didn't want to
deal with the bureaucracy.
So how do we get this discussion turned around like we did
with criminal justice reform? And we are not there yet, but we
have come a long way to agreeing with what works, to have
evidence-based research that is truly impartial, so that we
give these people the support they need, so we get the results
we all want.
Ms. Dean. I think the first thing to do is to wait for the
results of the 10 pilots that the last farm bill funded. They
should be coming back, I believe, within the next year or 2.
Those were done on a very high-quality evaluation basis, in
terms of random assignment. And they looked at different kinds
of participants and different kinds of interventions, because
then-Chairman Lucas and the folks on the Senate side wanted to
have information before committing billions of dollars.
But I think there is an extraordinary common interest
around better job training that gives employers and employees
what they want. That, I don't believe, is under debate.
The question is, is a one-size-fits-all, 20-hour rule for
millions of people in thousands of jurisdictions around the
country the right approach? And who does it put at-risk?
So I feel there is a lot of common ground to pursue a
conversation here.
Mr. DeSaulnier. I appreciate that.
Mr. Chairman, I would like to yield the balance of my time
to Mr. Raskin.
Mr. Raskin. Thank you very much. I appreciate it.
Ms. Dean, let me come back to you for a second. Why would
someone need SNAP benefits if they're working, and they're
playing by the rules, and they're going to work every day, and
they're packing their lunch and so on? Why would they still
need SNAP benefits for their family?
Ms. Dean. A couple reasons. One might be that they have
committed to work 35 hours to their employer, but their
employer, in any given week, only offers them, say, 12 hours
one week, 27 another.
Mr. Raskin. What job categories might that account for?
Ms. Dean. Retailer, home health aide, all kinds of jobs
where the employer controls the hours, not the employee. They
can't take a second job, because they have to be available for
the first one.
And low pay. The reality is, eight bucks an hour still can
qualify a family for SNAP.
Mr. Raskin. How many people lost their jobs after the 2008
mortgage meltdown crisis, which accounted for a large part of
the dramatic increase in people on SNAP after President Obama
took office from--who was that?
Ms. Dean. President Bush.
Mr. Raskin. Yes, President Bush.
Ms. Dean. Mr. Raskin, I'm sorry, you may well know the
answer. It was millions and millions. I don't have the number.
Mr. Raskin. My recollection is that 11 million people lost
their jobs. Something like 12 million people lost their homes.
There was massive dislocation and poverty in the country.
Obviously, that was the major cause for people going on SNAP
benefits.
And because we have a very strong work ethic, as I think we
all agree, nobody is proud of that. But we are in a country
that stands by its own people, and we take care of our own. If
our people fall on hard times, we take care of them.
Why do States create waivers to make the program go on
longer or to create more relaxed requirements?
Ms. Dean. The Office of the Inspector General at USDA did a
report on why States seek waivers from the three-month time
limit.
The first reason was that many of the States believe that
this is a very harsh policy, and so they do it because they
think the underlying policy is unfair, and they seek to waive
unemployed workers from it.
The second reason is the rule is incredibly complicated and
error-prone. And not wanting to contribute to errors, they like
to relieve as much of the State as they can.
The third reason, and California is an example of this, is
they want to run their own employment and training program.
Again, they don't want the one-size-fits-all mandate of the 20-
hour rule. They offer alternative programs, granted, not across
the State or for all the individuals, but they have their own
approach.
That generally explains through three main reasons.
Mr. Raskin. I yield back, Mr. Chairman. Thank you.
Mr. Palmer. [Presiding.] I thank the gentleman.
The chair now recognizes the gentleman from Wisconsin, Mr.
Grothman, for 5 minutes.
Mr. Grothman. Thank you.
First of all, I will point out, and I have to point this
out to some members of our Ag Committee, too, I think there are
many jobs in my district in which they will train you for the
job. This idea that you need to go through some government
agency to get job training before you can find a job is just
preposterous. We have so many job training programs out there
already, but the idea that we have to expect people to go
through a formal job training program before they can find
work, you have to get in the real world.
But since you guys are experts on these nutrition programs,
why, wherever I go in Wisconsin or when I ask people in
Washington, do they sell food stamps for $0.50 on the dollar?
Could somebody give me an opinion why that's so wherever you
look?
Mr. Adolphsen. Congressman, it is pretty easy right now, in
some States in particular that aren't really looking for that
type of fraud. For example ----
Mr. Grothman. Not fraud. Why is it being sold for $0.50 on
a dollar? I mean, I really can't figure this out, because,
hypothetically, when you get these food stamps, it's not that
big amount. But wherever I go, you can buy them for $0.50 on
the dollar whenever I ask.
So the question is, why? It shows that there must be
something so fundamentally wrong with this program that people
are, in essence, selling a $20 bill for a $10 bill. But that's
what's going on, right?
Mr. Adolphsen. We had one store in Maine that was giving
$0.60 for dollar, and the store down the street that was giving
$0.50 reported them because they were undercutting their
competition.
This is done so that they can turn the benefit into cash.
Mr. Grothman. I know, but there's something wrong. You
understand what I'm saying? If I have $20 in my wallet today, I
don't sell it for $10. It must mean there are so many food
stamps floating around out there that people don't need, for
whatever reason--maybe they're cheating on the system, maybe
they're going to the food bank.
Could somebody tell me why you can again and again sell
food stamps for $0.50 on the dollar just about everywhere?
Mr. Adolphsen. They're using it for things other than food.
Mr. Grothman. That is apparent, but why wouldn't you sell
them for $0.90 on the dollar? Why is there this fire sale as
people try to get rid of food stamps?
Ms. Dean, do you have an answer for that, why, wherever you
look, they're selling them for $0.50 on the dollar?
Ms. Dean. Let's not my experience, Mr. Grothman. Families
use these benefits for food.
Mr. Grothman. When you ask people, say in low-income
housing areas, or when you ask people at the convenience store
or grocery store, how much they are selling, it's always $0.50
on a dollar.
It bothers me that so many people have who have set
themselves up as experts on this program don't know that that's
what goes on in this country everywhere.
Do one of you other guys want to guess? Ms. Larin?
Ms. Larin. When we were looking at recipient fraud in 2016,
what we heard is that some people were making very difficult
tradeoffs between paying their rent and paying for food. And if
they weren't getting housing assistance, sometimes they would
sell their food stamps or their SNAP benefits in order to get
the cash for housing.
Mr. Grothman. Do you talk to people who get into this
housing, the landlords and that sort of thing, as to whether
people are choosing between food and housing?
Ms. Larin. Yes, and landlords told us that they would take
food stamps or SNAP benefits for rent. There are some people
who are making those decisions.
Mr. Grothman. I would strongly suggest you guys get out and
talk to more people.
But I will give you another problem we have out there right
now. Again and again, when it comes to low-wage jobs, I am
having employers tell me that people either won't work or are
cutting themselves off at like 20 hours a week, because they
are afraid they will lose their benefits. Of course, that just
doesn't mean SNAP. It means you begin to dig into your low-
income housing. It means you begin to dig into your Medicaid,
whatever other benefits are out there.
Do you believe that the SNAP program is one of the reasons
why so many employees say that I can't take a rate raise, or I
can't work more than X number of hours a week? Is that one of
the reasons?
Ms. Dean. If I may answer, no. The program has several
earnings disregards that allow people to--basically, earning
more results in largely monthly income.
But I will say that H.R. 2 would reimpose a benefit cliff
and take away one of the key earnings incentives in the program
that allows people to earn their way up the ladder.
Mr. Grothman. Could you guys guess as to why it is common
for employers of people making minimum wage to 15 bucks an hour
not want to make more money in our society?
Mr. Adolphsen. I would say the bigger problem, Congressman,
is people not working at all. That is what we find in the data,
is that they are not actually going to work, those able-bodied
adults on the food stamp program.
Mr. Grothman. Well, I will give you the answer, because my
time is about up here. The answer is the earned income tax
credit encourages you to work and make a little money but not a
lot of money. That is why so many people want to make some
money but not too much money, because when you make too much
money, you lose not only your other benefits, but you lose your
earned income tax credit, too. But there's your answer.
Mr. Palmer. In closing, I just want to make a couple points
that we are having this discussion about the value of work, and
during the worst depression in the history of the country, the
Roosevelt administration set up a worker program that paid
people, but they had to work. I think a lot of that was not
just because they didn't want to spend money. It was the
dignity of work. Particularly at that time in our Nation's
history, no one, really, wanted to get a handout. They wanted
to earn it.
I think that is a big part of what we are talking about, is
individual dignity. Even with the Clinton welfare reform bill,
there were time limits on that.
But though point is really this, and I think my colleagues
and I would agree on this, that this country will never truly
achieve its fullest potential until we are able to unleash the
enormous talent and intellect and imagination of all of our
people. That is the thing that concerns me more than anything
else about where we are in terms of welfare, the millions and
millions of Americans who have been trapped in that system. And
the quality of all of our lives have been diminished because of
that, because we are not able to enjoy the enormous talent that
is trapped in that system.
So I thank our witnesses, again, for appearing before us
today. The hearing record will remain open for 2 weeks for any
member to submit a written opening statement or questions for
the record.
Mr. Palmer. If there is no further business ----
Mr. Raskin. Mr. Chairman, could I have a closing remark as
well?
Mr. Palmer. The gentleman is recognized.
Mr. Raskin. Thank you very much.
I just wanted to also try to close on a note of unity. I
think all of us agree that we want people who are able to work
to be working in a productive way contributing to our society.
That means we need good wages and fair wages. I have always
been a champion for the right of people to organize and to have
collective bargaining in the workplace, and the minimum wage
was a great historic triumph.
I think it's wrong that there are people who are working
full time who can't support their families without SNAP
benefits, but I think we have to look at that as a key part of
the equation of reducing SNAP payments to make sure that
everybody is making not just a minimum wage but a living wage.
Finally, I would hope that this whole discussion about the
farm bill and about SNAP does not take us into an area where we
are denigrating the work ethic of the American people, who I
think are the hardest working people on Earth. And we are a
people that's committed to supporting our families, but we are
also a people committed to supporting one another through the
ups and downs of the economy.
With that, I yield back to you, Mr. Chairman.
Mr. Palmer. I thank the gentleman.
My final comment in that regard is that, with the economy
growing the way it is, with the demand for labor, the things
that will determine what you make are work experience and skill
level. And I really believe that we are on a path to help
people achieve higher skill levels, better education, and, once
we get them into the work force, to be in a position where they
can earn a livable wage.
And I don't want them to just earn a livable wage, and I
don't think my colleagues want that either. We want them to
prosper, and the key to that is to be able to work.
If there is no further business, without objection, the
subcommittee stands adjourned.
[Whereupon, at 11:41 a.m., the subcommittees were
adjourned.]
APPENDIX
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