Trump wants to cut back on food stamps for the poor and substitute with packaged food deliveries - CNBC News

Trump wants to cut back on food stamps for the poor and substitute with packaged food deliveries

A proposed food delivery program would replace about half of food stamp benefits for households who qualify for the boxes.

The plan would put the U.S. government directly in charge of what goes on the dinner plates of more than 16 million low-income households.

Critics say the program would be inefficient and costly, and would end up reducing benefits for low-income families and communities.

Ylan Mui | @ylanmui

Published 8:35 AM ET Tue, 13 Feb 2018 Updated 4:36 PM ET Tue, 13 Feb 2018

CNBC.com

American Harvest Box could replace food stamps for 16-million low income Americans American Harvest Box could replace food stamps for 16-million low income Americans

4:35 PM ET Tue, 13 Feb 2018 | 01:42

Move over, Blue Apron. Uncle Sam could soon be delivering "America's Harvest Box."

The Trump administration is proposing replacing a portion of the federal food stamp program with actual boxes of food delivered to recipients' front doors, putting the U.S. government directly in charge of what goes on the dinner plates of more than 16 million low-income households.

White House budget director Mick Mulvaney likened the model to that of the dominant meal-kit delivery service, Blue Apron, and called it one of the most "innovative" ideas in the president's budget.

"I don't want to steal somebody's copyright," Mulvaney told reporters Monday. "You actually receive the food instead of receive the cash."

President Donald J. Trump (C) stands at the podium as U.S. Vice President Mike Pence (L) and Speaker of the House U.S. Rep. Paul Ryan (R-WI) (R) look on during the State of the Union address in the chamber of the U.S. House of Representatives January 30, 2018 in Washington, DC. White House budget calls for 2% cut in discretionary spending

12:08 PM ET Mon, 12 Feb 2018 | 01:23

The program would be a vast logistical undertaking for a federal bureaucracy that President Donald Trump has repeatedly criticized as unwieldy and wasteful. The White House said the new boxes would go to households qualifying for $90 or more per month in food stamps, representing about 81 percent of those participating in what is formally known as the Supplemental Nutrition Assistance Program. Currently, SNAP recipients can choose what they spend the money on while shopping at any approved retailer.

According to a summary of the proposal compiled by the Agriculture Department and obtained by CNBC, the boxes would replace about half of the current program's cash benefits. All food would be grown domestically and include "shelf-stable" items such as juice, pasta, canned meat and beans. The USDA estimated it would save $129 billion over a decade, driven in part by the government's unique purchasing power.

"It lowers the cost to us because we can buy prices at wholesale, whereas [beneficiaries] have to buy it at retail," Mulvaney said. "It also makes sure they're getting nutritious food. So we're pretty excited about that."

But the proposal drew swift opposition from many fronts – including the $840 billion supermarket industry, where food stamps drive 7.5 percent of sales, according to Customer Growth Partners. The firm estimated that Walmart alone reaps more than one-fifth of all food stamp sales.

"Perhaps this proposal would save money in one account, but based on our decades of experience in the program, it would increase costs in other areas that would negate any savings," FMI chief public policy officer Jennifer Hatcher said. "Retailers are looking to the administration to reduce red tape and regulations, not increase them with proposals such as this one."

President Donald Trump speaks during a meeting with state and local officials to unveil his administration's long-awaited infrastructure plan in the State Dining Room at the White House February 12, 2018 in Washington, DC. President Trump's proposed budget is more of a wish list

10:00 AM ET Tue, 13 Feb 2018 | 03:07

The food box also faces an uncertain political future as the Republican chairmen of the House and Senate agriculture committees signaled their skepticism. The White House budget also calls for $58 billion in cuts to farm and insurance subsidies over 10 years.

"The task at hand is to produce a Farm Bill for the benefit of our farmers, ranchers, consumers and other stakeholders. This budget, as with every other president's budget before, will not prevent us from doing that job," Texas Rep. Michael Conaway and Kansas Sen. Pat Roberts said in a joint statement. "We are committed to maintaining a strong safety net for agricultural producers during these times of low prices and uncertain markets and continuing to improve our nation's nutrition programs."

According to the USDA summary, states would have "substantial flexibility" to distribute the food boxes and could use commercial delivery services. The White House also argued that the government already is providing direct food aid to many households through programs such as free and reduced-price school lunches and a food delivery program for senior citizens.

But Stacy Dean, vice president for food assistance policy at the left-leaning Center on Budget and Policy Priorities, said only about 630,000 people participate in the delivery service for seniors — a minuscule number compared with the vast apparatus that would be required to administer the food boxes. She also challenged the administration's claim that it could save billions by purchasing the food directly.

The end result, she said, would likely simply be fewer benefits for those who need them most.

"When combined with cutting health insurance and other core supports, it's just a devastating blow to low-income individuals and communities," she said.

Here's the USDA's summary of the "America's Harvest Box" proposal:

"USDA America's Harvest Box is a bold, innovative approach to providing nutritious food to people who need assistance feeding themselves and their families – and all of it is home grown by American farmers and producers. It maintains the same level of food value as SNAP participants currently receive, provides states flexibility in administering the program, and is responsible to the taxpayers." - Secretary Sonny Perdue

USDA America's Harvest Box

Under the USDA America's Harvest Box proposal, all Supplemental Nutrition Assistance Program (SNAP) participating households receiving $90 per month or more in benefits will receive a package of nutritious, 100-percent U.S. grown and produced food. Approximately 16.4 million households, or about 81 percent of SNAP households would be impacted by this proposal.

The amount of food received per household would be scaled to the overall size of the household's SNAP allotment, ultimately representing about half of their benefits. SNAP participants would receive domestically-sourced and produced food in lieu of a portion of their SNAP benefits.

USDA would utilize a model similar to that currently used to distribute USDA Foods to other nutrition assistance programs to provide staple, shelf-stable foods (such as shelf-stable milk, juice, grains, ready-eat-cereals, pasta, peanut butter, beans, canned meat, poultry or fish, and canned fruits and vegetables) to SNAP households at approximately half the retail cost.

This proposal creates a new approach to nutrition assistance that combines retail-based SNAP benefits with delivery of USDA America's Harvest Boxes supporting the President's leadership on Buy American. This proposal is cost-effective, enhances the integrity of SNAP, and provides for states' flexibility in administration of the program.

The remainder of the household's benefits will still be provided via the current Electronic Benefit Transfer card.

This proposal would save $129.2 billion over the ten-year period between Fiscal Year (FY) 2019 and FY 2028. This estimate accounts for about $2.5 billion annually in additional administrative funds for states.

USDA currently purchases a wide variety of food for several nutrition assistance programs, including the National School Lunch Program, the Commodity Supplemental Food Program, The Emergency Food Assistance Program, and the Food Distribution Program on Indian Reservations.

States will be given substantial flexibility to distribute these food benefits to participants. States can distribute these boxes through existing infrastructure, partnerships, and/or directly to residences through commercial and/or retail delivery services.