Trump Targets Food Stamps With Proposed Fee On Retailers

Tyler Durden's picture

Trump's proposal to overhaul the U.S. food stamp program, or the Supplemental Nutrition Assistance Program (SNAP) as it's currently known, has brought with it a widely overlooked fee that could end up costing food retailers billions.  Per MSN:

That provision is a new fee that the White House wants to charge retailers that accept food stamps, which is now known as the Supplemental Nutrition Assistance Program.

 

The Office of Management and Budget said the fee would be assessed when stores sign up and would require renewal after five years. The budget office said the amount would depend on the size and type of retailer, but the president's budget estimates that the fee would generate $2.4 billion in revenue over the next decade.

 

An OMB official described the fee as "modest" and "reasonable," emphasizing that some large retailers redeem a billion dollars or more in food stamp benefits each year.

 

"Although a small number of stores may choose to leave the program rather than pay the fee, we do not expect that this will affect access to authorized stores," the official said.

Of course, the fee is likely intended to cut down on the wildly unmanageable 260,000 different retailers that opt into the program each year.  That said, the biggest financial impact will accrue to traditional grocery stores, dollar stores and supercenters (aka Walmart) which collectively account for well over 80% of the $66BN in annual SNAP benefits.

 

The overhaul also proposes reducing overall expenditures on SNAP, a program which Budget Director Mick Mulvaney described as "a formula for waste and growth rates and costs that are simply unsustainable."

Beyond the new fee, the Trump administration is proposing $191 billion in cuts over the next decade to the food stamp program. The U.S. budget office said the reductions would come from tightening the work requirement to qualify for the benefits, but said the details would be left up to individual states. The administration also expects states to make up some of the lost funding.

 

The existing system "is a formula for waste and growth rates and costs that are simply unsustainable," Budget Director Mick Mulvaney said during testimony on Capitol Hill last month. "The total spending should not go down. Or if it does, it goes down because of efficiencies and not because of reductions."

Per the chart below, U.S. taxpayers currently distribute roughly $70 billion per year worth of food stamps to over 50 million people.

 

Meanwhile, if the Trump administration really wants to cut down on SNAP expenditures they should take a look at the state of Alabama which, as we pointed out yesterday, experienced an 85% decline in benefit payments when they decided to once again require able-bodied food stamp recipients, without dependents, to be employed and/or engaged in a job-training program in order to participate in the program for more than 3 months over a 3-year period.

* * *

Here is our note from yesterday:

13 Alabama counties experienced some 'shocking' results, or maybe not depending on your natural level of cycism, when they decided to once again require able-bodied food stamp recipients, without dependents, to be employed and/or engaged in a job-training program in order to participate in the program for more than 3 months over a 3-year period.

As background, Alabama, like many states, lifted their work/training requirements associated with food stamp benefits after the great recession.  That said, starting Jan. 1, 2017 the last of Alabama's 13 counties reinstated those requirements and they promptly experienced an 85% decline in taxpayer-funded food subsidies.  Per AL.com:

Thirteen previously exempted Alabama counties saw an 85 percent drop in food stamp participation after work requirements were put in place on Jan. 1, according to the Alabama Department of Human Resources.

 

During the economic downturn of 2011-2013, several states - including Alabama - waived the SNAP work requirements in response to high unemployment. It was reinstituted for 54 counties on Jan. 1, 2016 and for the remaining 13 on Jan. 1, 2017. As of April 2017, the highest jobless rate among the 13 previously excluded counties was in Wilcox County, which reported a state-high unemployment rate of 11.7 percent, down more than 11 percentage points from the county's jobless rate for the same month of 2011.

 

As of Jan. 1, 2017, there were 13,663 able-bodied adults without dependents receiving food stamps statewide. That number dropped to 7,483 by May 1, 2017. Among the 13 counties, there were 5,538 adults ages 18-50 without dependents receiving food stamps as of Jan. 1, 2017. That number dropped to 831 - a decline of about 85 percent - by May 1, 2017.

Food Stamps

Statewide, the number of able-bodied adults receiving food stamps in Alabama fell by almost 35,000 since Jan. 1, 2016.  Meanwhile, with each recipient receiving about $126 a month in benefits, that equates to over $50 million in annual savings for taxpayers based on just the state of Alabama alone. 

But sure, there is no fraud in the entitlement programs.

* * *

For those who missed it, below is a look back at a prior post which detailed exactly how Americans are spending the nearly $7 billion they receive through the SNAP program each year.

A new study just released by the USDA, offers a very detailed look at exactly how participants in the "Supplemental Nutrition Assistance Program" (SNAP, aka Food Stamps) spend their taxpayer-funded subsidies.  Unfortunately for taxpayers, the amount of money spent on soft drinks and other unnecessary junk foods/drinks is fairly staggering.  But, we suppose it's a nice taxpayer funded subsidy for the soda industry...so score one for Warren Buffett and the Coca Cola lobbyists.

Per the study, nearly $360mm, or 5.4% of the $6.6BN of food expenditures made by SNAP recipients, is spent on soft drinks alone.  In fact, soft drinks represent the single largest "commodity" purchased by SNAP participants with $100mm more spent on sodas than milk and $150mm more than beef.

Soft drinks were the top commodity bought by food stamp recipients shopping at outlets run by a single U.S. grocery retailer.

 

That is according to a new study released by the Food and Nutrition Service, the federal agency responsible for running the Supplemental Nutrition Assistance Program (SNAP), commonly known as the food stamp program.

 

By contrast, milk was the top commodity bought from the same retailer by customers not on food stamps.

 

In calendar year 2011, according to the study, food stamp recipients spent approximately $357,700,000 buying soft drinks from an enterprise the study reveals only as “a leading U.S. grocery retailer.”

 

That was more than they spent on any other “food” commodity—including milk ($253,700,000), ground beef ($201,000,000), “bag snacks” ($199,300,000) or “candy-packaged” ($96,200,000), which also ranked among the top purchases.

SNAP

 

Even worse, when we added up all of the commodities that would typically be considered "junk food" (i.e. soft drinks, candy, cakes, energy drinks, etc.), we found that roughly $950mm, or just over 14% of the aggregate $6.6BN of food expenditures made by SNAP recipients, is spent on unnecessary, unhealthy products.

SNAP

 

It's a good thing democrats re-branded Food Stamps as the "Supplemental Nutrition Assistance Program"....otherwise we would have confused it for a blatant waste of taxpayer money on sodas and energy drinks.

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venturen's picture

can we just eliminate junk food and soft drinks....I get by fine without those. Let poor have milk and water...an a piece of fruit.

Juggernaut x2's picture

Eliminate SNAP altogether and that will Make America White Again

Art Van_Delay's picture

The .gov tit is about to dry out for a few out there.

Especially for those that #TheyNeedToGoBack

Illegals Stopped Applying for Food Stamps Fearing Deportation

blueyefinity@yahoo.com's picture

Smart move.

Blame the market for dropping the food stamps.

chunga's picture

The fraud everywhere is fantastic. Leave it to fake malware spammers (dailywestern) to make jokes about this while trying to trick people with fake duplicate accounts. 

BTFDemocracy's picture

Infographic showing how many food stamp recipients for each Walmart store:

 

http://demonocracy.info/infographics/usa/food_stamps/food_stamp_nation-S...

Never One Roach's picture

Probably half of Walmart's customers are SNAP peeples and I am sure they will still make a profit after paying the gubmint a fee for the Gubmint paying these people.

It's like Amazon or Ebay charging a "referral fee" or "commission" to sellers on their web sites. This way, Uncle Sam is charging the sellers (Walmart, etc) a fee.

So far, i like it!

DownWithYogaPants's picture

Dear Bes:

Extremely misleading graphic you placed a link to.  Whites are the biggest % of population so a first guess would be to assume they would be the biggest % of food stamp recipients.  That begs the question what are the per capita rates of food stamp consumption.  AAAAAaaah you are tricky.  That graphic of yours was NOT per capita.  

PER CAPITA CONSUMPTION OF FOOD STAMPS GRAPHICS

To summarize what you will see in that graphic:  Blacks are 2x more likely to use food stamps on a per capita basis.

You have proved YET AGAIN that lefties and math or any other challenging modes of thought are NOT compatible.  Ooh I think I smell wood burning!  Must be Bes trying to think.

Got The Wrong No's picture

Good job at busting his ass. 

Lefty Trolls like Bes always stack the deck. They can not play in the real world with real facts. They stacked the election and are at a complete loss as to how to fix the their Party. They keep right on trying to stack the deck. Dumb as rocks. 

N2OJoe's picture

@ Never One Roach they do.

How about instead of more convoluted taxes, they just reduce (better, eliminate) the benefits so WE don't have to pay an army of accountants to track which hand the money is going to/coming from in one more stupid tax.

bluez's picture

You must look for the reality. Poor people don't get to join Costco -- they just find it necessary to go to local "convenience stores" that sell absolutely nothing except Pringles, Mountain Dew, etc., etc. Nothing else except perhaps milk and eggs if they get real lucky. And maybe, just maybe, some cans of 2x overpriced spinach. Also, they spent over a decade in some "school" where the teachers despised them and taught nothing except how Thomas Jefferson was God.

And look closer: They set up this food program, and now they want to create yet another layer of bureaucracy on top of it to charge retailers for participating. The retailers will obviously have to fill out 10666 forms to get tax deductions for these charges, and, of course, pay accountants big bucks to fill them out, who in turn will go to Costco. The snake is just eating more of its tail.

Also, there are no "jobs" in the old sense anymore. Unless you are a cop or a social worker or a "teacher" your best shot at a job will be at the local "convenience store", or perhaps Walmart if you get real lucky. Everything else was automated away, unless of course you happen to have Ivy League cronies. So no jobs for you. And no food. And for some reason, drug overdoses are now the leading cause of death. Meanwhile China eats our lunch. It's a great system if you have the right friends!

Darkthirty's picture

White 63.7 %  Black 12.2% of population in 2015.....you do the math.

BeanusCountus's picture

Can't eliminate entirely, even you don't want the really needy ones starving to death Jugg. And many are white if that means anything. My guess is you have a heart. But I'm certain there is a HUGE number of people who get this stuff that are capable of at least earning enough money for food.

Never One Roach's picture

They are not charging the SNAP'ers, they are charging the merchants. Simialr to credit card companies charging a tiny fee to the merchant. I guarantee, these merchants will still be begging to get those SNAP-PERS.

BeanusCountus's picture

Agree. Have no problem with charging retailers a small fee for accepting what amounts to a credit card.

Got The Wrong No's picture

By the looks of what they buy, a fee should be placed on Junk Food. 

suckerfishzilla's picture

I work at a small grocery store.  Merchant fees for SNAP benefits were implemented during Obama's last year in office.  That small fee was enough to wipe out the profit margin for my employer so they dumped SNAP as a payment system.  Maybe these fees aren't incurred by the big corporate food pimps yet.  

Got The Wrong No's picture

This fee would definitely hurt the small retailer. The big guy could make up for it in volume. I think a fee on junk food and things that are not necessities would be a more efficient way to go. 

mofreedom's picture

No shit, I questioned that as a kid working in a grocery store 25 years ago.  Earlier I had to actually steal the change to get that treat..  Don't worry, I'm still paying off this debt.

 

Oh regional Indian's picture

Yes yes, the people's president. Let's screw the po'mama while fluffing the loaded bankster's pocket even more.

Meanwhile how many more billions to the MIL/IND complex? How many billion's and even trillions LOST and UNACCOUNTABLE in the MIL complex?

It's pretty clear which side this BADministration keeps it's slant, eh?

Looking for the rah rah misturrrr Resident to begin from the ZH OJ lover peanut gallery.....

ChanceIs's picture

Hey, hey now.

Hussein Obama had the US at wr for every day of his eight year presidency.  Tell me he didn't love the MI complex.

Of course I fully expect that Prez Trump will repeat the feat.

Oh regional Indian's picture

Tired Logic. Like saying Meth is good because Krokodil is bad....

It was a kind of hobson's choice in thsi past eRection though. By design.

The freakshow that is ploitics is now open and centerstage all over the world.

Abe, Trump, Modi, Merkel, Macron, Kim Jong Un, May, June , July...whatever the fuck....

the joke, sadly is on all of us....

And US fucking with the reast of the world on behalf of your parasitical 51st state makes you the Spotlighted people....

Make no mistake, Americans are being set up to be universally HATED by everyone while the long nose snivelly bastard rubs his hands in glee, watching as the world turns on itself and ignores the baby cock-sucking long haired freak behind the curtain....

Got The Wrong No's picture

If you saw how many po'mama's pull up in their Escalades wearing fancy cloths with their nails and hair done to the max you wouldn't be so magnanimous with taxpayer money. There are people who genuinely need help but there are just as many who abuse the system. 

Oh regional Indian's picture

So riddle me this then. Do you right a greater wrong first, greater by orders of magnitude, or spend your time righting the far lesser wrongs?

To me this proves one of two things... either you are powerless and thus swat flies OR you are beholden to the doers of the far greater wrongs...

Mr Kurtz's picture

Aww c'mon. Escalades, really. That storyline went out of fashion with "the Gipper" and his welfare queen. However, to be fair, better to be chugalugging snap sodas then busting windows.

Cman5000's picture

You will get nothing and like it.

Peterman333's picture

I want a hot dog, I want a hamburger, no, a cheeseburger.

mofreedom's picture

I already told you:  I want to charge the leeches for reparations for theft by slack.

ThuleNord's picture

So the fattening of America was government subsidized?

HRH Feant2's picture

Yes.

Per the article: "Soft drinks were the top commodity bought by food stamp recipients shopping at outlets run by a single U.S. grocery retailer."

No further comment.

Got The Wrong No's picture

The Munchies are a Bitch. Junk food sales will go through the roof when Pot is completely legal. 

FoggyWorld's picture

The offset though will be fewer jobs because most of this stuff is from the US.

Never One Roach's picture

Actually, just th eopposite. people will be incentivized to get a job, make some money an dbuild self-esteem.

Vilfredo Pareto's picture

Lol.   I guess being fed sody pop and junk food as your staples as you grow up might explain some of the IQ disparities that the left claims doesn't exist,  and even if it did it doesn't mean anything lol

Larry Dallas's picture

Make America White / Thin Again.

Dragon HAwk's picture

Them hookers taking food stamps be raising their prices.

chunga's picture

Yeah fraud all around. I'm trying to remember the sign, you couldn't buy the gas station pizza slice with snap if it was under the heat bulb, but you could buy a whole frozen pizza, and the store would heat it and that was snap compliant. 

ToSoft4Truth's picture

People need jobs so they can spend the money they earn and we can keep the money we earn. 

BustainMovealota's picture

Negro gotta get a job

Dusty Rhodes' Muffler's picture

Please...Half Life 3...we all need it, don't we?

BustainMovealota's picture

I see the chicken category, but what about watermelon and Colt 45 Malt Liquor?

Never One Roach's picture

I'm waiting for them to come out with "Organic Beer" specially crafted for the snowflakes.

Miss Informed's picture

I saw "Gluten Free" beer at the store on Monday. There are psudohealthy boutique cigarettes too.

ToSoft4Truth's picture

This SNAP garbage is justification to euthanize the entire group. 

 

What's the point subsistence living?  From the SNAP system to the prison system.... 

 

They breed and breed as our purchasing power dilutes and dilutes. 

 

 

Omen IV's picture

It's not fair to these people to keep the benefits on subsistence basis - they would be better off working and get no benefits at all

Shpedly's picture

This is going to get interesting real fast.