Washington Insider-- Monday

New Report on Possible Food Stamp Changes

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Final SNAP Food Stamp Rule Coming

A top USDA official said compromise on a final rule will give low-income recipients of food stamps healthier options when they shop in convenience stores and truck stops without imposing burdens on retailers.

"I would expect a step forward in terms of choices for low-income families whether they are in the SNAP program or not," Kevin Concannon, undersecretary of Food, Nutrition, and Consumer Services, said Thursday, referring to the Supplemental Nutrition Assistance Program (SNAP), formerly known as the food stamp program.

The final rule for retailers that accept SNAP requires convenience stores and non-grocery stores to carry a minimum of 84 items in four basic food categories. Retailers who sell pizza as well as stock canned and refrigerated foods can continue to do so as long as half of their total gross sales do not come from hot foods. The final rule will also increase offerings of fresh fruits and vegetables and dairy products such as yogurt at non-grocery store retailers.

Concannon said the final rule revises areas in an earlier proposed rule that generated bipartisan opposition in Congress, pushback from the convenience store industry and 1,200 public comments. He expects the Federal Register to publish the rule later this month.

The implementation period will range from four months to 1 year on different requirements. The changes are designed to maintain the network of 265,000 grocery stores, convenience stores and other non-grocery stores that participate in the SNAP program. "We wanted to make sure we could propose a final rule that was implementable. We're very committed to maintain access," Concannon said.

Grocery stores, where 81% of SNAP food purchases are made, are unaffected because they already carry a variety of foods in the four categories required under the 2014 farm bill, Concannon said.

The final rule keeps chicken pot pies as a staple food, resolving an issue that had been controversial. But Concannon said retailers will no longer be able to count potato chips and other snack foods toward meeting minimum requirements for food variety.

Japanese Parliament Ratifies TPP

Japan's parliament has ratified the Trans-Pacific Partnership (TPP) trade agreement, a mostly symbolic step because of opposition by President-elect Donald Trump that is forcing Tokyo to look at other free-trade deals.

U.S. President-elect Donald Trump said last month he would pull the U.S. out of the 12-nation TPP on his first day in office in January. The agreement requires U.S. ratification to come into force. If Trump carries out his pledge as most expect, Japan has several options: pursue TPP without the U.S., negotiate a two-way trade deal with the U.S. or prioritize free trade with other countries.

Prime Minister Shinzo Abe, while acknowledging that the odds are against him, has said he still hopes to persuade Trump to revive TPP. The two men met in New York last month. Abe said today that parliament's ratification of TPP would send a message about the importance of regional free trade. The upper house voted 165-70 to approve the pact, following earlier approval by the lower house.

Japan and the European Union (EU) are set to hold talks next week with the aim of reaching a basic deal this year. Japan is also part of a 16-nation bloc in Asia called the Regional Comprehensive Economic Partnership, or RCEP, which is exploring a trade deal.

Trump has said he prefers two-way trade talks to multinational deals. Japan is wary of negotiating one-on-one with the US, having experienced talks in the 1980s and 1990s that threatened to damage the broader relationship. "Japan won't do" a bilateral free-trade agreement with the U.S., deputy chief cabinet secretary Koichi Hagiuda said at a recent symposium.

Washington Insider: New Report on Possible Food Stamp Changes

The Associated Press is reporting that House Republicans are laying the groundwork for a fresh effort to overhaul the nation's food stamp program during the coming administration's term. The key changes are expected to be tighter work and eligibility requirements for large numbers of current recipients.

The GOP majority of the House Agriculture Committee says it is releasing its two-year review on Wednesday. The review apparently stops short of making specific policy recommendations, but it does hint at areas that congressional Republicans could focus on using their control of both chambers: strengthening current work requirements and perhaps creating new ones, tightening some eligibility requirements or creating new incentives to encourage food stamp recipients to buy healthier foods.

"There's nothing off the table when it comes to looking at solutions around these areas where we think improvements need to be made," House Agriculture Chairman Mike Conaway, R-Texas, told the Associated Press.

The food stamp program, now called the Supplemental Nutrition Assistance Program, or SNAP, serves about 43.6 million people and cost $74 billion in 2015. Participation in the program rose sharply as the country suffered a recession, as it was designed to do, but it still costs roughly twice what it did in 2008.

The report is based on 16 House Agriculture Committee hearings and lays out several findings, including that better enforcement of some SNAP work programs is needed in some states and that 42 states use broader eligibility standards than some Republicans prefer. It also encourages more incentives to get people to buy healthy food with their food stamp dollars, based on criticisms that recipients use SNAP money to buy junk foods, especially sweetener beverages that typically account for 10% of purchased by SNAP households.

It's also unclear how or when an overhaul could happen, observers say. Food stamp policy is included in a wide-ranging farm bill every five years; the next one is due in 2018. It could also be part of a larger effort headed by House Speaker Paul Ryan, R-Wis., to tackle welfare or entitlement reform that could be taken up by the next Congress.

Still, food stamp reform always leads to tough fights in Congress. Democrats almost unilaterally oppose any changes, and some Republicans from poorer districts also are wary. The 1996 welfare law added some new work requirements, but Congress declined to convert the federal food stamp dollars into block grants for the states, a move that would cut spending for the program and which was pushed by the House leadership.

In 2013, House Republican leaders tried to cut the program by 5% annually by passing broad new work requirements as part of the farm bill. The House bill also included drug testing for recipients. The then-Democratic Senate balked, though, and the final bill included a much smaller cut and no allowances for drug testing.

Conaway said he's open to any of those policies, but suggested that block granting the program -- a past priority for Ryan -- or drug testing recipients are not his priorities. "We don't want to be helping folks on drugs, but then again, folks on drugs have children," Conaway said.

On block granting, Conaway said it's not off the table, but not a top priority either. "We want to be more focused on getting people off the program and into successful lives and on their own two feet as opposed to being focused on how many people are there, how much money we're spending," he said.

Part of the dynamics of the fight will depend on what Ryan proposes. He strongly supported block granting food stamps as part of his larger plans for welfare reform when he was chairman of the House Budget Committee. But an agenda he released earlier this year after becoming speaker was vaguer, only suggesting that some food aid programs could be consolidated.

As for Trump, he's said little about what he'd want to do with the program. But he has frequently mentioned how the rolls have increased since President Barack Obama took office.

Kansas Sen. Pat Roberts, the Republican chairman of the Senate Agriculture Committee, was heavily involved in the 1996 welfare reform. He has said his committee will review the food stamp program, but hasn't made any specific proposals.

He says block grants would face significant opposition in the Senate, and he's not sure whether new work requirements would pass muster, either. "To be determined," he said.

So, perhaps the big unknown is how much capital the new administration wants to spend on an issue that has been headlined most heavily by Paul Ryan. Clearly, the budget hawks will be supporting Speaker Ryan, perhaps to an important degree. So, it will be interesting to see whether Pat Robert's apparent lack of commitment proves meaningful, or not.

This is a meaningful fight for agriculture, although an indirect one. It should be watched closely as it proceeds, Washington Insider believes.

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