GOP Lawmakers Restrict Aid to Needy, While States Give Millions Of Dollars in Corporate Subsidies

News & Politics

In the past week, Republican lawmakers in several states have led a full-frontal assault on assistance to needy families.

In Kansas, this took the form of restrictions on cash benefits under the Temporary Assistance for Needy Families (TANF) program which would prevent recipients from withdrawing more than $25 per month in ATM cash benefits – and also prohibit withdrawals in locations such as cruise ships, swimming pools, and liquor stores.

In Missouri, Republican state representative Rick Brattin and other GOP lawmakers have sponsored legislation to prevent Supplemental Nutrition Assistance Program (SNAP) recipients from using their benefits to purchase “cookies, chips, energy drinks, soft drinks, seafood, or steak.”

In Colorado, Republican state senator Vicki Marble was successful in moving a bill to ban the use of Electronic Benefit Transfer cards at marijuana dispensaries and strip clubs. Maine's Republican governor Paul LePage has put out a legislative package banning the use of EBT cards at liquor stores and smoke shops and requiring TANF applicants to apply to three jobs before claiming benefits.

Without debating the individual merits of these bills, it's important to note that none of these things – as one example, the use of SNAP benefits for steak – are a big drain on the public treasury. These benefits are a set amount no matter how they are utilized, and it's difficult to ascertain from a bird's eye view the circumstances that may lead to an impoverished recipient withdrawing funds at a certain location.

There's also the fact that these bills are promoting myths about widespread fraud and abuse in the benefits system. Fraud in the SNAP program is about one cent on the dollar in 2006-2008; research done on SNAP recipients found that recipients who are comparable to the non-SNAP receiving population were only 1.7 percentage points more likely to have illicit substance use disorders. The panic over cash benefits being withdrawn at pot dispensaries in Colorado was over a grand total of around $23,000 over six months – an extremely tiny sum, hardly reflective of the population of people receiving benefits. Despite the claims of recipients withdrawing funds in liquor and tobacco stores, EBT cards have long been prohibited from being used for alcohol or tobacco purchases – it's simply a non-issue.

Rather, these bills are an attempt to practice the politics of shame – to direct public anger at the poor and imply that they are using their meager government benefits to live lives of luxury. They also distract from the fact that TANF and SNAP benefits are actually beneficial for the economy – they are given to people who spend almost all of their income, and that money goes right back into the local economy. Moody's Analytics estimates that a dollar increase in SNAP benefits generates $1.70 in economic activity.

The irony is that in each of these states, taxpayers are the hook for millions of dollars in giveaways in the form of tax credits and direct subsidies to corporations. While many would argue that these subsidies are helpful for the economy – for example, film tax credits that can be an incentive film shooting in certain states – they have not been shown to have the consistent economic benefit of much-demonized SNAP and TANF benefits, and often disproportionately benefit the ultra-wealthy at the tops of the businesses that receive them.

The primary difference between aid to the indigent and corporate subsidies, of course, is political. The very poor do not have powerful lobbyists, and the corporations do. Here's a tour of some of the starkest examples.

My Subsidy Good, Your Subsidy Bad

If there is any state that has been ground zero for handing out tax credits to big business while gutting basic needs, it's Kansas. The state faced an enormous budget deficit after years of cutting taxes and essential services, and had its debt rating downgraded. While its lawmakers are taking aim at the specter of poor families withdrawing government aid at cruise ships, they were busy investing heavily in corporate subsidies. Since 1985, the state has given out $788,173,451 in 1,059 subsidies to private corporations, according to the online Subsidies Tracker tool. As one example, the Cerner Corporation received $48,500,000 in a training reimbursement last year; its CEO and co-founders Neal Patterson and Chris Illig are major donors to the Republican governor Sam Brownback.

In Missouri, where Rep. Brattin has proposed the particularly offensive bill implying that people living on meager food stamp benefits are dining on lobster and steak, corporate subsidies are among the highest in the union. A 2014 estimate put Missouri's subsidies to corporations at $5.2 billion. Despite the already-high level of spending on tax credits, loans, and other incentives, Missouri lawmakers bent over backwards last year to offer $2 billion in subsidies to a single company – aerospace company Boeing – in order to try to convince it to build its Boeing 777X in state. The bid failed.

Colorado lawmakers are tackling the supposedly pressing problem of EBT withdrawals at marijuana stores, but has been less vigilant in policing the subsidies being handed out to businesses. Subsidy Tracker has logged 7,019 subsidies given since 2000, totaling $640,899,975. Colorado's moral panic about public benefits being withdrawn at ATMs at weed shops is over a grand total of $23,608.53 found to have been withdrawn. For comparison, in 2011 Starwood Property Trust – a mortgage mega-firm – nabbed $300 million in subsidies from a single Colorado city – Aurora.

Maine, too, is guilty of this double standard. In fiscal year 2012, it meted out $52.7 million to 1,800 corporations – 55 percent went to only 20 corporations – as a part of its business and equipment tax reimbursement (BETR) program, a targeted subsidy.

It's not hard to imagine that the profits reaped by corporations in all of these instances may have been dispensed through withdrawn at strip clubs, cruise ships, seafood restaurants and other supposedly taboo locations. And unlike, say, SNAP benefits which cannot be used for this purpose, it's not a huge stretch of the imagination to say that the CEOs reaping the profits could very well have spent them on products such as alcohol or marijuana.

In an America where political power rests primarily with the very rich, these sorts of double standards exist all over the country – where highly-stimulative meager cash payments given to the poor are demonized as unearned wealth but lavish subsidies given to profitable corporations are justified as smart investments in the state economy. It's a trick that exists as long as the public allows it.

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