Cutting food stamps is bad economics and bad policy
September is shaping up to be a critical month for assessing the health of our economy. The 2012 annual poverty numbers come out Tuesday. Last Friday saw a weak monthly jobs report. Congress will likely debate Fed tapering and raising the national debt ceiling. It’s also national Hunger Action Month, when, coincidentally, Congress will debate whether to exact further cuts to food stamps.
Amid these critical economic conversations, it’s worth taking a clear-eyed look at some empirical evidence about poverty and government financial efficiency before we go too far down the food stamp–cutting road.
The upshot, which I’ll explain below, is that by the time a child is born, we already have a good idea whether she will grow up in circumstances that make her likelier to need government financial support as an adult. If she will, cutting programs like SNAP that improve her childhood financial situation is a bad investment in the future of government spending.
What we know about childhood poverty
Unique research by my Urban Institute colleagues tracked individual children’s poverty status at every stage of life from birth to about 30 years old. Their findings are sobering, but illuminating.
First, the sobering bit:
- 37 percent of all children live in poverty at some point in their lives.
- 10 percent of children are “persistently poor,” meaning they’re poor for more than half their childhoods.
- There is a profound black-white gap in childhood poverty: black children are 2.5 times likelier than white children ever to be poor and are persistently poor 7 times as often.
Now, the illuminating bit:
- Children who are born poor are likelier to spend much of their childhoods poor.
- Children who are poor during childhood are likelier to have worse adult outcomes.
- And this effect compounds: the more time spent in childhood poverty, the worse the adult outcomes.
- We therefore have a really good idea at birth which children are more likely as adults to live in poverty, fail to complete high school, and struggle to find work.
Government spending: it’s the long run that matters
Put that all together and what do you get? Cutting food stamps will increase economic hardship for today’s children as their families face tough tradeoffs between food and other essential needs like rent and transportation. While food stamp benefits aren’t included in official poverty calculations, you could call this decrease in consumption an increase in “functional poverty.”
These children are more likely to be poor years from now as adults. Further, new research suggests that lowering food stamp benefits compromises an important buffer against adult metabolic syndrome and, for women, lower earnings and higher participation in government welfare programs. These adults, now poorer and in worse health, will almost certainly rely more heavily on government economic support.
So as Congress debates cutting food stamps (and other safety net spending) this month, let’s hope it pays due respect to the short-run/long-run analysis. Those cuts might reduce today’s deficit, and perhaps tomorrow’s. But it’s probably not the right way to reduce 2025’s deficit.