The Food Stamp Program, administered by the U.S. Department of Agriculture, is America's largest food assistance program. Food stamps are designed to help low-income families purchase a nutritionally adequate, low-cost diet. Generally, food stamps may only be used to buy food to be prepared at home. They may not be used for alcohol, tobacco, or hot foods intended to be consumed immediately, such as restaurant or delicatessen food.

Title VIII of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act continues to fund the Food Stamp Program, but the maximum benefits have been reduced. The welfare-reform law lowered the program's expenditures by more than $23 billion from 1997 to 2002. In addition to reduced benefits for many families, it created time limits for benefits to able-bodied adults without dependents and eliminated benefits to most legal immigrants.

In June 1997 the Supplemental Appropriations Act (PL 105-18) gave states the authority to purchase federal food stamps with which to provide state-funded food assistance to those who had been eliminated from the program under the new welfare-reform law. The Agricultural Research, Extension, and Education Reform Act of 1998 (PL 105-185) restored food stamp benefits to 250,000 of the 900,000 immigrants who had earlier lost eligibility.

The typical American household spends 30 percent of its monthly income on food purchases. The program calculates 30 percent of the family's earnings and then issues enough food stamps to make up the difference between that amount and the amount needed to buy an adequate diet. These monthly allotments of coupons are then redeemed for food at retail food stores. Some food stamp programs provide benefits electronically through an electronic benefit transfer (EBT), a debit card similar to a bank card. In an effort to reduce fraud and to save money, the 1996 welfare-reform law required all states to convert to EBT issuance by fiscal year 2002.

The cash value of these benefits is based on the size of the household and how much the family earns. Households without an elderly or disabled member generally must have a monthly total (gross) cash income at or below 130 percent of the poverty level and may not have liquid assets (cash, savings, or other assets that can be easily sold) of more than $2,000. (If the household has a member aged sixty or older, the asset limit is $3,000.) The net monthly income limit (gross income minus any approved deductions for child care, some housing costs, and other expenses) must be 100 percent or less of the poverty level, $1,534 per month for a family of four between October 2003 and September 2004. (See Table 8.5.)

TABLE 8.3
Number and percentage distribution of federally administered awards, by sex, age, and eligibility category, 2001

TABLE 8.4
Number of persons receiving payments, by source of payment and eligibility category, selected years January 1974 and December 1975–2001

With some exceptions, food stamps are automatically available to SSI and TANF recipients. Food stamp benefits are higher in states with lower TANF benefits because those benefits are considered a part of a family's countable income. To receive food stamps, certain household members must register for work, accept suitable job

TABLE 8.5
Income chart for eligibility to receive food stamps, October 1, 2003–September 30, 2004

offers, or fulfill work or training requirements (such as looking or training for a job).

While the federal government sets guidelines and provides funding, the Food Stamp Program is actually carried out by the states. They certify eligibility as well as calculate and issue benefit allotments. Most often, the welfare agency and staff that administer the TANF and Medicaid programs also run the food stamp program. The regular food stamp program operates in all fifty states, the District of Columbia, Guam, and the Virgin Islands. (Puerto Rico is covered under a separate nutrition-assistance program.)

With the exception of some small differences in Alaska, Hawaii, and the territories, the program is run the same way throughout the United States. While the states pay 50 percent of the administrative costs, the federal government pays 100 percent of food stamp benefits and the other 50 percent of the operating costs. In 2001 the federal government paid only $15.5 billion in food stamp benefits, but by 2003 the federal government paid $21.4 billion in food stamp benefits, or an estimated average monthly benefit of $83.92 per recipient (based on preliminary data). (See Table 8.6.)

Food stamp participation increased significantly in the early and mid-1970s, remained relatively stable at between eighteen and twenty-two million recipients per year throughout the 1980s, and then rose again in the 1990s. Participation generally peaks in periods of high unemployment, inflation, and recession. In 1994, 27.5 million persons (about 10 percent of the population) participated in the food stamp program, a 36.9 percent increase from the number of recipients in 1990. In 2003 the Food Stamp Program served an average of 21.3 million people each month. (See Table 8.6.)

The food stamp program is the nation's largest source of food assistance, helping about 6 percent of all Americans. According to the U.S. Department of Agriculture, half of participants are children, 10 percent are elderly, and 13 percent are disabled.

Table 6.2 (in Chapter 6) shows the numbers and percentages of poor households that received food stamps in 2001. One-third (33.6 percent) of all persons below poverty level lived in households that received food stamps. Almost half (46 percent) of those under age eighteen living below the poverty level lived in households that received food stamps. Recipiency rates (rates of those receiving aid) were highest in households headed by women with children under six years old—59.5 percent.

The percentage of poor white households receiving food stamps was 25.3 percent in 2002, compared to 47.3 of poor African-American households and 33.7 percent of poor Hispanics.

Participation in the food stamp program has fallen markedly since the enactment of the PRWORA welfare reform in 1996. One reason for the decline is that many able-bodied adults age eighteen to fifty who do not have children are no longer eligible for benefits. In addition, studies indicate that former TANF recipients who make the transition from welfare to work tend to give up their food stamp benefits even though they may still qualify on the basis of low income. The U.S. Department of Health and Human Services reported that the proportion of households eligible for food stamps that actually participated in the program fell from 63 percent in 1996 to 54 percent in 1998.

Average monthly benefits per person rose from $34.47 in 1980 to a preliminary estimate of $83.92 in 2003, not accounting for inflation. (See Table 8.6.) Table 8.7 shows the maximum monthly food stamp allotments for October 2003 to September 2004 for households of varying sizes within the continental United States. During this period the maximum monthly benefit for a four-person household was $471.

In the early 1980s, Congress passed many laws designed to hold down the cost of the food stamp program by tightening administrative controls and setting tougher eligibility standards. The Omnibus Budget Reconciliation

TABLE 8.6
Food stamp program participation and costs
(Data as of December 19, 2003)

Act of 1981 (PL 97-35), the Agriculture and Food Act of 1981 (PL 97-98), and the Omnibus Budget Reconciliation Act of 1982 (PL 97-253) each contained provisions that held down costs. These measures included delaying inflation adjustments, establishing eligibility at 130 percent of poverty levels, ending eligibility for college students and strikers, and reducing benefits.

In 1985 the Food Security Act (PL 99-198) reversed the earlier trend, making food stamp rules easier to obtain and raising some benefits. However, the law required states to introduce employment and training programs for food stamp recipients. Several other pieces of legislation gave the homeless access to food stamps and increased benefits and accessibility for those receiving student aid, energy assistance, and income from employment programs for the elderly and charitable organizations. The Hunger Prevention Act of 1988 (PL 100-435) increased food stamp benefits and made it easier for people to get food stamps, as did the Mickey Leland Childhood Hunger Relief Act of 1991 (PL 103-66).

In 2002 most (89 percent) food stamp households earned less than the poverty guideline (that year, $17,050 for a family of four). In fact, one-third earned less than half of the poverty level. A report, Characteristics of Food Stamp Households: Fiscal Year 2002, prepared for the Food and Nutrition Service of the U.S. Department of Agriculture by Randy Rosso and Melissa Faux of Mathematica Policy Research (December 2003), presented detailed information on food stamp participants and households for 2002:

TABLE 8.7
Maximum food stamp allotments, October 2003-September 2004

• Over half (51 percent) of participants were children.
• Nine percent of participants were elderly.
• Fewer than a quarter of food stamp households also received TANF (21 percent).
• Almost 30 percent received SSI, and 24 percent received Social Security benefits.
• Forty-four percent of food stamp households with children had earned income.
• Almost all participants (97 percent) were U.S. citizens.
• 45.3 percent of the heads of food stamp households were white, 31.9 percent were African-American, and 12.2 percent were Hispanic.