FOOD STAMPS; 1984 A. OVERVIEW. Although six major food stamp bills were before Congress in 1984, only one
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1 FOOD STAMPS; 1984 A. OVERVIEW Although six major food stamp bills were before Congress in 1984, only one bill received active consideration and only three changes in law were, in the end, enacted. H,R. 5151, the Hunger Relief Act of 1984, was approved by the House in August It would have provided small benefit increases, liberal ized several rules governing eligibility for food stamps, and required increased State sharing in the cost of erroneous benefits. However, the Senate did not f take the bill\ up and it died with the end of the 98th Congress. Enacted food stamp changes were included in two omnibus pieces of legislation: The Deficit Reduction Act of 1984; and the "continuing resolution" making fiscal year 1985 appropriations for a number of Federal activities. The Deficit Reduction Act (P.L ) included two provisions intended to expand the ability of State welfare offices to verify recipients' income and assets, and permit increased collection of overpaid benefits. The fiscal year 1985 "continuing resolution" (P.L ) provided for an across-the-board 1-percent increase in food stamp benefits, effective November In addition, Congress made 1984 and 1985 appropriations for food stamps. In August 1984, the fiscal year 1984 supplemental appropriation (P.L ) included an additional $700 million for food stamps, bringing 1984 food stamp funding to $12.4 million (including money for the food assistance block grant that has replaced food stamps in Puerto Rico). In October 1984, the fiscal year 1985 "continuing resolution" enacted a $12.3 billion food stamp funding level (including Puerto Rico's block grant). Throughout the year, concern over a perceived increase in hunger was ex pressed in hearings and reports (primarily, those of the House Select Committee
2 -2- on Hunger and the President's Task Force on Food Assistance) and various legislative proposals. The Grace Commission on Federal cost control also made recomcommendations for substantial budget savings in food stamps. Debate over a proposed major rewrite of food stamp regulations was forestalled when the Administration postponed any major overhaul. B. ISSUES While proposals for major change were made by the Administration and others, most active Congressional debate centered on a limited set of revisions recommended in the report of the President's Task Force on Food Assistance, and providing adequate appropriations. After a review of the adequacy of food assistance programs in relation to claims of increased hunger in the country, the President's Task Force on Food Assistance made a number of modest suggestions for benefit and eligibility revisions in the food stamp program (and other food aid programs). These, and additional proposals for liberalization of food stamp benefit and elgibility rules, were included in H.R. 5151, the Hunger Relief Act of 1984, and other bills. However, the substantial cost of the added proposals for liberalization of benefits and eligibility and the lack of counterbalancing provisions for cost control provoked controversy. On the other hand, the Administration, and the President's Food Assistance Task Force, proposed to control Federal food stamp costs by requiring that States pick up a substantially larger share of the cost of erroneous benefits. In the House, the result was approval of a "bipartisan compromise" in the form of a scaled-down version of H.R It included the benefit and eligibility liberalization's recommended by the President's Task Force, several small additional benefit increases (including increases for the elderly and disabled),
3 -3- and a requirement that States begin picking up a larger share of the cost of erroneous benefits beginning in 1986; the net cost was estimated at $300 million in 1985, as opposed to the $1 billion cost of the original H.R However, Senate action was not forthcoming and the H.R package of amendments died at the end of the 98th Congress, with the exception of one provision. A 1-percent across-the-board benefit increase, effective November 1984, was enacted separately in the fiscal year 1985 "continuing resolution", P.L , restoring a 1982 benefit reduction as recommended by the President's Task Force. In addition to the response to the President's Task Force and the debate over costs that produced the compromise in H.R. 5151, other major legislative concerns included: (1) the adequacy of 1984 and 1985 appropriations; (2) proposals to allow States the option of a food assistance block grant; and (3) recommendations by the Grace Commission on Federal cost control. Early in 1984, it was recognized that food stamp appropriatons for fiscal year 1984 were insufficient to cover full benefit costs; Congress had appropriated 1984 funding at the level requested by the Administration in 1983, but had not made the food stamp budget cut amendments assumed in that level of appropriations. As a result, a $700 million supplemental appropriation for food stamps (P.L ) was enacted to allow full funding of program costs through the end of the fiscal year. The potential for a similar shortfall in 1985 funding arose in the consideration of 1985 appropriations measures. However, a "bestestimate" appropriation was, in the end, included in the 1985 "continuing resolution" (P.L ), creating at least the possibility that no 1985 supplemental will be needed. S. 1279, the Food Stamp Optional Block Grant Act, was proposed to allow each State to choose to meet the nutritional requirements of its low-income population by opting for an annual block grant of Federal funds, rather than
4 -4- operating a food stamp program. A similar propsal (for all nutrition programs) was supported by the President's Food Assistance Task Force. Although it was argued that food assistance block grants would improve administration of food assistance and target it to those most in need by freeing States from a burdensome complex of Federal rules and, indirectly, giving States a financial stake in the quality of administration, concerns over whether relatively fixed block grants of Federal funds could meet changing circumstances of need ended immediate consideration of this approach. Wide-ranging recommendations by the ^Grace Commission on Federal cost control would have: (1) revised benefit levels to reduce benefits to small households and increase them for larger ones; (2) removed the guarantee of a minimum $10-a-month benefit for eligible one-and two-person households; (3) reduced food stamp benefits to households with children receiving free school lunches; and (4) increased the use of the Internal Revenue Service (IRS) in verifying recipient income and assets and collecting overpaid benefits. The first three proposals did not receive Congressional consideration in 1984, although questions were raised as to the adequacy (or, in some cases, over-adequacy) of benefits. Increased use of the IRS in administering the food stamp program was adopted in the Deficit Reduction Act of In the end, Congress proved unwilling to make significant changes in the food stamp program in 1984, as was the case in C. LEGISLATION In addition to 1984 and 1985 appropriations legislation, two omnibus laws were enacted in 1984 with provisions affecting food stamps. They made minor changes in benefits and administrative rules.
5 -5- The Deficit Reduction Act of 1984 (P.L ) incorporated two Grace Commission recommendations increasing the role of the IRS in the administration of welfare, food stamp, and other programs. These provisions: (1) expanded the ability of State welfare offices to verify recipients' income and assets by mak ing IRS information available and requiring its use; and (2) permitted the Feder al Government to "intercept" income tax refunds to recoup overpaid benefits. The fiscal year 1985 "continuing resolution" (P.L ) making appro priations for various Federal agencies and programs (including the food stamp program) required a 1-percent, across-the-board benefit increase, effective November It thereby restored a benefit reduction legislated in 1982, and resulted in a one-time increase in food stamp monthly benefits of $l-$5 per household. Major active proposals that were not enacted included: o an additional 1-percent benefit increase for 1986 (included in H.R. 5151); o liberalized eligibility rules governing assets and car ownership (included in the President's Task Force recommendations, H.R. 5151, S. 2607, and S. 3017); o an increase in the State share of the cost of erroneous benefits (included in the President's Task Force recommendations, H.R. 5151, and the Administration's proposal). o targeted, small benefit increases for the elderly and disabled with medical expenses, for those with earnings, and for those with very high shelter expenses (included, with variations, in H.R. 5151, S. 2607, and S. 3017); o automatic food stamp eligibility for cash welfare recipients, including SSI recipients (included in H.R. 5151, S. 2607, S. 3017, and the President's Task Force recommendations); o a State-option block grant for food assistance (included in the President's Task Force recommendations and S. 1279); o a mandatory workfare program for food stamp recipients (included in the Administration's proposal);
6 -6- o a requirement that State sales tax revenues on food stamp purchases returned to the Federal Treasury (as in S. 3017) or used to finance increased food stamp benefits (as in S. 2607); and o increased flexibility for States to operate employment-related training and placement programs for food stamp recipients (included, with variations, in H.R and S. 3017) (NOTE: References such as H.R and S are to House and Senate food stamp bills of the 98th Congress. Only four legislative items, either enacted or under active consideration, are of interest to the elderly: the amendment to allow IRS information to be used to verify income and assets because this will be primarily used to identify unearned income and assets such as pension funds and bank accounts; the acrossthe-board 1-percent benefit increase because it affects all recipients; the not-enacted proposal to increase benefits to the elderly and disabled with medical expenses; and the not-enacted proposal to liberalize eligibility rules governing assets.) D. REGULATORY ISSUES/COMMITTEE HEARINGS Although Congressional hearings were held by the House and Senate Agri culture Committees (on proposed legislation and evaluations of hunger in the United States) and by the House Select Committee on Hunger (on hunger in the United States and food programs' responses), the major non-legislative influ ences on the food stamp program were exerted by: (1) the hearings and report of the President's Task Force on Food Assistance, which issued its report in January 1984: (2) the relatively high level of food stamp participation (given economic improvements) that helped force the need for a 1984 food stamp supple mental appropriation and a higher-than-requested 1985 appropriation; and (3) the potiential for a major overhaul of food stamp regulations, postponed indefinitely in early (NOTE: Look back to the issues discussion to see if you want any of that included here.)
7 -7- E. PROGNOSIS Given that the authorization for food stamp appropriations expires at the end of fiscal year 1985, as do the authorizations for most farm programs, major food stamp legislation as part of the 1985 "farm bill" is likely in Pro posals that were not enacted in 1984 will probably resurface, in addition to an evaluation of the adequacy (or over-adequacy) of food stamp benefits along the lines of the Grace Commission suggestions to re-orient food stamp benefits to ward larger households and the House provisions (in H.R. 5151) to increase over all benefits. Another potential issue is whether, given the 1-percent benefit increase, the present $12.3 billion 1985 food stamp appropriation will be ade quate without a supplemental. (NOTE: For details of 1984 legislation, etc., see the enclosed food stamp issue brief.)
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