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Trump wants to curb food stamps and substitute food boxes

CNBC logo CNBC 2/13/2018 Ylan Mui


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 about 17 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."

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 more than $90 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."

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.


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