Congress has decided the best way to avoid widespread teacher layoffs and Medicaid cuts is to reduce food stamp spending instead. Is this as bad as it sounds? No. And yes.
Here's the story. As you probably know by now, states face a huge budget crunch because of the recession: More people are out of work and need financial assistance of some sort, yet slow economic activity means the states aren't getting as much tax revenue. In the past, the federal government has frequently provided extra, temporary funding to the states, to help avoid those cuts while also putting some more money into the economy. But this time, Republicans and conservative Democrats have blocked these efforts, saying they're not fiscally responsible and demanding offsets in the form of alternative spending cuts. Stymied, Democratic leaders finally turned to the Supplemental Nutrition Assistance Program (SNAP), which is what the food stamp program is called now.
Wait, why on earth would you cut food stamps during a recession? Not only do food stamps address an immediate and urgent human need. They're also among the very best ways to stimulate economic growth, since a dollar in extra government spending on food stamps goes right back into the economy--whoever gets that dollar is going to use it, quickly, to buy something at the grocery store.
Here's where the situation isn't quite as bad as it might seem, although it's a bit complicated to explain. It turns out that last year's Recovery Act included a temporary boost in food stamp spending via a special formula that would, by design, phase out in a few years--specifically, 2014, according to projections at the time. But recently the projections have changed, thanks to lower-than-expected inflation. As a result, the formula would keep the higher food stamp spending in place an extra few years--until 2018--according to the latest available predictions.
Once these projections got out, sources tell TNR, members of Congress started looking at the 2014-2018 food stamp spending--money, again, that was not expected to be there in the first place--as a way to pay for different initiatives. Given the likelihood that the money was going to get diverted anyway, Democratic leaders figured it was better to divert the money into state aid rather than, say, a collection of pet projects and corporate subsidies.
As the argument goes, by taking money that would have been spent between 2014 and 2018 and spending it now, the move will act as a stimulus, albeit a tiny one. (To be clear, my understanding is that food stamp spending for the next few years will not be affected.) And by 2014, hopefully, the country will be out of recession. The need for food stamp spending shouldn't be so great then and, if it is, a future president and Congress can deal with that on the spot.
The logic is compelling, given the political circumstances. But the political circumstances are tragic.
Even with food stamps, many families still can't pay for an adequate diet, which means--according to the Center on Budget and Policy Priorities--they "face stark choices between purchasing food and paying for rent and other necessities." Was taking away a future boost in food stamp levels, planned or not, really the best way to pay for an anti-recession measure? As Ezra Klein notes, Vermont Senator Bernie Sanders has proposed reducing oil and gas subsidies by $35 billion? Wouldn't that be a better place to look for money, at least for starters? This is a test of congressional priorities. And the congress is failing.
Update: Edited for clarity, particularly about the timing of the food stamp cut.