Food Stamps: An Important Government Transfer Program

1728 words - 7 pages

Food Stamps: An Important Government Transfer Program

Food Stamps are an important subsidy for poor families in the United States. The program began (in its most basic form) in the 1930s in response to the Great Depression and has seen many transformations since. Its original goal was to redistribute agricultural surpluses to needy individuals. It gained popularity in the early 1940s and in 1961, Congress launched a pilot program. The program became permanent under President Johnson's Food Stamp Act of 1964. At this time there were 1.4 million participants. By 1977 all states were required to provide Food Stamps to their underprivileged residents (Senauer). This plan eventually led to the arrangement in place today.

The Food Stamp Program is an in-kind government transfer. This means that the recipients are not directly given cash, rather they receive coupons (nowadays, a plastic card) that can only be exchanged for certain items. This guarantees that the money will be used solely on food. Numerous studies done by the Food and Nutrition Service of the USDA have shown that giving people Food Stamps caused them to purchase a significantly larger amount of food than they would with a cash subsidy (Super). Food Stamps allow recipients to purchase food for human consumption and seeds and plants that will grow into food.

In some cases they can also be used to pay for meals prepared by authorized meal delivery services, rehabilitation centers, women's and homeless shelters, and communal dining facilities for the elderly. They cannot be used for the purchase of alcohol, vitamins, foods prepared in the store, or any other inedible item (FNS).

Eligibility is determined by a means test. A household's gross monthly income must lie below 130% of the federal poverty line. A household is defined as any group of people who live and prepare their food together. Their net monthly income must fall below 100% of the federal poverty line. As of 2001, this amount equaled $1,421 for a family of four. These guidelines were established in 1964 and are updated annually based on the Consumer Price Index. They are adjusted for inflation (Senauer). The household may have no more than $2,000 in countable assets. A family unit may have $3,000 in assets if at least one member is over age 60 or disabled. Automobiles count as assets for any amount of their value over $4,650 (Super). People applying for Food Stamps in Pennsylvania must reside in the county in which they are applying but there is no requirement stating how long one must live there. As some recipients are homeless, a permanent home address is not necessary to obtain Food Stamps.

A household's net income is determined by subtracting taxes and several personal allowances. First, there is a standard deduction of 8.31% of the federal poverty level for that family size. This currently amounts to $134. All households are entitled to at least this amount. Households with five or more people are...

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