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House Plan to Corporatize SNAP Would Likely Disrupt Food Assistance for Poor

June 19, 2018 at 2:15 PM

The House could vote again this week on a partisan farm bill that, among its harmful nutrition provisions, would let states turn all SNAP (formerly food stamp) operations over to private corporations. States have long worked with private companies to run human services programs, and the Trump Administration has helpfully clarified the role that private companies can play. But fully corporatizing food assistance operations goes too far.

Indeed, doing so can be disastrous, experience shows, putting critical nutrition for low-income families at risk. Texas and Indiana gave key application and eligibility functions to private companies in the early 2000s, and neither the cost savings nor the efficiency improvements that proponents predicted materialized. Instead:

  • Shifting core SNAP functions to private workers left needy families without vital food assistance. Highly trained civil servants have nuanced knowledge of SNAP rules and are singularly motivated to effectively implement them. Corporations, on the other hand, are motivated to maximize their profits, and their staffers often don’t understand the complexity of SNAP laws and cases. As a result, the contractor employees often make mistakes, the corporations frequently have inadequate staffing, and efficiency can suffer.

     

    In Texas and Indiana, skewed incentives and insufficient trained staff compromised the timely and accurate provision of benefits to low-income households. Though federal SNAP rules require an eligibility determination within 30 days, thousands in Texas waited months for staff to process their applications, the Center on Public Policy Priorities and Feeding Texas recently noted. And many received misinformation and incorrect benefit allotments. Indiana had similar problems, with large application backlogs and clogged call center lines, and many eligible households saw their benefits improperly denied, terminated, or suspended.

  • Corporations compromised the security of participants’ data. In administering SNAP, states collect detailed information about applicants and participants, including Social Security numbers, income, and employment details. Giving the management of participants’ private data to corporations raises serious concerns about their ability to keep them secure. In Texas, the private contractor listed the wrong fax number on the state’s program materials. As a result, applicants’ and participants’ private information went to a warehouse in Seattle, putting the security of many at risk and delaying their access to assistance.
  • Outsourcing eligibility determinations undermined SNAP’s ability to respond to an economic downturn. The Great Recession of 2007-09 hit soon after Indiana began rolling out its privatization initiative, and it came in the midst of other implementation struggles. As in the rest of America, unemployment in the state soared and applications for food assistance rose substantially. With fixed contract terms and inadequate staffing, Indiana’s contractor couldn’t process the unanticipated volume of applications. Backlogs grew and call responses suffered.

SNAP is one of the nation’s most effective and efficient human services programs, largely because it’s grounded in a strong, balanced partnership between the public and private sectors. The House plan would disrupt this balance, placing undue risk on very vulnerable families. Congress needs to adopt a farm bill that enables states to maximize program efficiency while preserving SNAP’s ability to meet its core goal of ensuring that vulnerable Americans have enough to eat.

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