Proposed Reforms to the Food Stamp Program

The Bush administration’s proposed changes in the Food Stamp Program are a step in the right direction but have some negative effects as well. The president would change the program’s name to the Food and Nutrition Program, exclude retirement accounts and Internal Revenue Service–approved college savings plans from asset-limit considerations, eliminate the cap on the dependent care deduction, and provide competitive grants to deal with obesity among the low-income population.

Once the program is fully implemented, more than 300,000 people in low-income working families who are not receiving cash assistance will be eliminated from the Food Stamp Program. The administration’s plan would also eliminate the Commodity Supplemental Food Program and the Community Food and Nutrition Program. Families in Delaware, Maine, Maryland, Massachusetts, Michigan, North Dakota, Oregon, South Carolina, Texas, Washington, and Wisconsin will be among those suffering the most from these changes because their states use categorical eligibility for food stamps.

Recently Sen. Saxby Chambliss of Georgia introduced Senate Bill 591, which would amend the 1977 Food Stamp Act. This bill goes beyond the Bush administration’s plan to exclude retirement accounts and IRS-approved college savings plans and does what has not been done in more than twenty years: change the asset limit to allow more liquid assets. Currently the limit for liquid assets is $2,000. If the asset limit were indexed with inflation, it would be raised to approximately $4,000. This increase, along with the exclusion of retirement accounts and college savings plans, will allow more Americans the opportunity to save and invest in their future and the future of their children.

Reforming Food Stamp asset limits has the potential to help many Americans break the cycle of poverty. For more information on asset limits and the proposed changes in the Food Stamp Program, contact Dory Rand or Patrick Hain.