Although more aid was still provided to the public in terms of volume, in conjunction with the wave of cuts in federal spending in the mid-1990s, private sector aid became the fastest growing form of food assistance and had overtaken SNAP and other public aid. The 1996 Farm Bill represents the culmination of neoliberal-oriented public assistance reform that ramped up in the early 1980s, and marked the ongoing reallocation of tax dollars from public support programs to corporations themselves. This bill drastically reduced and reshaped federal food and agricultural support. SNAP in particular was cut by $26 billion over six years in the 1996 Farm Bill, a central part of Clinton’s campaign pledge to reform the public assistance system that consolidated Reagan’s neoliberal program of small government, tax cuts, deregulation, free trade agreements, and monetarist financial policies at the expense of low-income communities and communities of color. Although SNAP was reauthorized in the 1996 Farm Bill, major changes to the program were enacted in conjunction with the concurrent Personal Responsibility and Work Opportunities Reconciliation Act of 1996 , framed as a supposed “reassertion of America’s work ethic.” Most significantly, the 1996 Farm Bill and the PRWORA together eliminated SNAP eligibility for most legal permanent residents and placed a time limit on SNAP receipt for able-bodied adults without dependents who are not working at least 20 hours a week .
Following the concurrent cuts to federal aid under the 1996 Farm Bill and the Personal Responsibility and Work Opportunities Reconciliation Act, pipp drying racks substantial changes were made to SNAP in the early 2000s. These cuts, in part, caused a dramatic rise in hunger, and loss of support for low-income communities and communities of color. The 2001 Farm Bill restored SNAP eligibility to an estimated 148,000 households, including LPRs. However, eligibility was restored to only about two-thirds as many families as would have been affected by a full restoration to pre-1996 support, which was extended to all legal immigrants, regardless of length of US residency or age. Over the course of the decade, SNAP spending grew from $21 billion in 2000 to $80 billion in 2012. The financial crisis of 2007 and 2008, and the recession it precipitated, was responsible for a significant part of this increase. The budget for SNAP was substantially bolstered in 2009 as part of the American Recovery and Reinvestment Act, with an additional $45.2 billion authorized over four years that allowed SNAP to temporarily maintain and increase monthly benefits for low-income communities and communities of color. Neoliberal political and economic restructuring from the late 1970s and early 1980s has promoted corporate profiteering from public assistance programs such as SNAP, albeit at the expense of low-income communities and communities of color. The Economic Policy Institute’s 2012 “The State of Working America” report maintains that low wages are caused by low minimum wage and weakened unions, as well as the effects of globalization, driven in large part by neoliberal economic policy. Thus, highlighting how corporations stand to benefit from keeping wages low, Jan Hatzius, chief US economist at Goldman Sachs stated, “The strength is directly related to the weakness in hourly wages.” Toward this end, according to a 2015 University of California, Berkeley Labor Center Study, “real hourly wages of the median American worker were just 5% higher in 2013 than they were in 1979, while the wages of the bottom decile of earners were 5% lower in 2013 than in 1979.”
Significantly, according to the National Employment Law Project, the majority of low-wage workers are actually employed by large corporations, with 57.4% of workers employed by the food services industry—among the largest job sectors in the United States. In short, the federal government picks up the tab for corporations with programs such as SNAP. According to the same UC Berkeley Labor Center study, “when jobs don’t pay enough, workers turn to public assistance in order to meet their basic needs.” Overall, the study found that between 2009 and 2011 the federal government spent $127.8 billion per year on SNAP, Medicaid/CHIP, Temporary Assistance for Needy Families , and the Earned Income Tax Credit for working families, and that the states collectively spent $25 billion per year on Medicaid/CHIP and TANF for working families for a total of $152.8 billion per year. In all, $280.6 billion, or 56% of combined state and federal spending on public assistance goes to working families. The SNAP program in particular had 10.3 million working families receiving assistance, comprising 36% of the total program enrollment and $26.7 billion in costs, or 38% of total federal expenditures on this program. Significantly, SNAP and these other programs provide vital support to millions of working families whose employers pay less than a livable wage. Overall, higher wages and employer-provided health care would not only lower state and federal public assistance costs, and allow all levels of government to better target how their tax dollars are used, but it would also rightfully hold corporations accountable to their employees and thus challenge the status quo of federal and state subsidization of corporate profit. Beginning in the late 1990s and early 2000s, as part of the larger shift toward privatizing public assistance systems and putting SNAP benefits on ATM-style Electronic Benefit Transfer cards, large banks themselves have also benefitted from SNAP and other safety net programs. They have done so, in part, by way of the contracts they hold with states to help administer benefits. Specifically, regardless of the actual effectiveness of EBT-based benefits, J.P. Morgan Chase and other banks cover none of the operating and equipment costs, which are instead covered by and split evenly between states and the federal government, while reaping the benefits of large contracts, interest collected on federal reserve money held for government programs, and user penalties including EBT card loss, out-of-network-use, and balance inquiries. According to the Government Accountability Institute, for example, J.P. Morgan Chase made more than $500 million between 2004 and 2012 from the transaction fees of government benefits to US citizens. In New York alone, J.P. Morgan Electronic Financial Services has a nine-year EBT services contract with the State Office of Temporary and Disability Services worth $177 million. Furthermore, according to a 2012 study entitled “Food Stamps: Follow the Money,” the characteristics of such contracts provide other key indices of banking power and profit. The study found that J.P. Morgan Chase held contracts for EBT in 21 states, Guam, and the Virgin Islands, signaling significant market power and a relative lack of competition. Contract terms varied widely among states, thus indicating a lack of efficiency and standards as well. Collectively, and perhaps most significantly, banks profits from government programs during both bad and good economic times: during times of economic hardship because more people enroll in assistance programs, and during times of economic strength because rising interest rates mean more profit on the money they hold to distribute to beneficiaries.
Furthermore, corporate and banking control and windfall profits—enhanced and secured by neoliberal restructuring—have affected the socio-economic well-being, and thus food security, of low-income communities and communities of color beyond the struggle over wages. The trend toward bio-fuels in particular—shown in Part I to be predominantly a corporate-controlled affair— has had a direct impact on the cost of food. A 2011 Food and Agriculture study concluded that the expansion of bio-fuels production, particularly in the United States with corn-based ethanol, vertical grow room and in the EU with bio-diesel, is at fault for the demand shock for cereals since 2000. Such control of demand has had a large impact on tight commodity markets, such as corn. US ethanol, for example, consumes 40% of the country’s corn, and 15% of global corn production. While estimates vary on the impacts, the National Academy of Sciences concluded that 20 to 40% of the global food price increases in 2008 and the growth widespread hunger were due to bio-fuels expansion. Furthermore, other studies have found that each billion-gallon increase in ethanol production yields a 2 to 3% increase in corn prices. Finally, although the Farm Bill originally intended to stave off food insecurity and support the economy, the result has been detrimental to public health. Specifically, the continued subsidization of commodity crops, and re-entrenchment of this system of supports under neoliberal political and economic restructuring, has helped produce the obesity epidemic in the United States. As of 2012, for example, 96% of US cropland was dominated by grain and oilseed commodity crops. Between 1995 and 2010, $16.9 billion in federal subsidies went to companies and organizations that produced and distributed corn syrup, high fructose corn syrup , cornstarch and soy oils. In this light, as of 2012, the United States has the highest global per-capita consumption of HFCS at a rate of 55 pounds per year. Furthermore, as of 2013, 54% of the oil consumed by Americans is soy oil primarily in the form of cooking oil, baked good, and frying fats. As can be expected from mass consumption of these products, the rates of diabetes and obesity in the US have reached alarming levels: more than a quarter of the US population, or approximately 90 million people are obese, and 21 million have diabetes. Moreover, these food-related health challenges disproportionately impact communities of color as follows: Black adults have 47.8% obesity, Latinos/as have 42.5% obesity, and Asian Americans have 10.8% obesity. Significantly, the combination of ease of access, low cost, and negative health impacts of such foods, further harms low-income communities well-being while corporations themselves continue to profit. Conservative politicians and news pundits have maintained an assault on federal anti-poverty and safety net programs, and on SNAP in particular. The attacks on federal anti-poverty and safety net programs have consistently targeted the use of SNAP by such communities by relying upon anti-poor and racist “culture of poverty” stereotypes that readily blame marginalized communities for their social and economic conditions. Leading up to the passage of the 2014 Farm Bill, for example, House and Senate Republicans—both House Republicans inside and outside the House Agriculture Committee— aimed to impose new work requirements on SNAP recipients, under the assumption that those that receive public assistance have no incentive to work; to allow states to require drug testing for SNAP beneficiaries, under the assumption that low-income people and people of color are likely to use that money to purchase drugs, or that their substance abuse is the primary cause of their hardship, not vice-versa; and to ban ex-felons from ever receiving nutrition assistance, under the belief that ex-felons no longer deserve the support of society. Although the underlying set of beliefs remains deeply embedded within society, many of these provisions were ultimately stripped from the bill and none of those measures were included in the 2014 Farm Bill. The most pervasive myth is that people on SNAP are “not in a hurry to get off,” primarily because of the supposed lack of incentive to work and the ease of profiting off federal support. On the contrary, most SNAP recipients remain in the program for a short period of time until they become financially stable and are able to transition to self-sufficiency, with half of all new participants leaving SNAP within nine months and many others leaving the program once their immediate need has passed. Moreover, as of 2011, many SNAP beneficiaries are already working: nearly 10.3 million working families receive assistance, comprising 36% of the total program enrollment, with more than three times as many SNAP households working as those that rely solely on public assistance for their income. Moreover, according to a 2012 Congressional Budget Office report, SNAP usage is expected to decline between 2012 and 2022, reflecting a potentially improved economic situation and declining unemployment rate. Finally, despite sustained claims of fraud that accompany efforts to cut SNAP benefits, SNAP continues to have one of the lowest fraud rates among Federal programs. According to a 2013 USDA Food and Nutrition Service report, the rate of SNAP fraud has declined from 4% of benefits down to about 1% over the last 15 years. SNAP is among the most widely used anti-poverty programs in the United States and, according to the Center on Budget and Policy Priorities, the second most responsive federal program during economic downturns, only behind Unemployment Insurance .