Washington Insider-- Monday

Administration Prepares to Boost Food Stamps

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

House Members Don't Press EPA's Regan On Biofuels, Ag Regs

The second appearance before Congress on the Fiscal Year (FY) 2022 budget for the Environmental Protection Agency (EPA) did not see issues on biofuels raised nor was there a major focus on any agricultural regulatory issues in the House Appropriations subcommittee session.

EPA Administrator Michael Regan reiterated his stance that EPA will work with all stakeholders on various issues. Asked how to address jobs in fossil fuel, coal, natural gas and oil sectors with the push toward electric vehicles (EVs), Regan said EPA would seek to "leverage the technologies to do so," noting that there need to be a "robust conversation" on how to achieve the goals.

He noted EPA will come forward in July with its proposal on tailpipe emissions from automobiles and in September relative to methane emissions. On agriculture, Regan reiterated he has established good working relationship with USDA Secretary Tom Vilsack and referenced his actions as a state environmental regulator in terms of addressing issues in the sector.

In his appearance Wednesday before a Senate panel on the FY 2022 budget, Regan said that no fuel technology is being excluded as the agency looks at meeting climate goals. He observed that there needed to be a glide path toward alternatives like EVs, and that "ethanol plays a significant role in providing those resources here and now today and will evolve as we start to look at the new futures for advanced biofuels and electric vehicles."

As for corn-based ethanol, Regan said, "Agriculture is at the table and biofuel plays a role in reducing our carbon footprint and so do many of the voluntary practices of our ag community to capture carbon and operate in a sustainable manner."

His comments still are not perhaps providing a greater deal of clarity on issues surrounding biofuels and other regulatory actions that are expected from the agency.

US Maintains Blockade On Restarting WTO Appellate Body

The U.S. this week refused to lift its effective block of the WTO Appellate Body, saying the country was still not in a position to back a plan to open the selection process to fill vacancies on the Appellate Body.

The proposal not supported by the U.S. has been backed by 121 WTO members. But the U.S. position of blocking new appointments to the Appellate Body goes back to the Trump administration and so far, the Biden administration has not shifted from that position.

There has been speculation that the new U.S. administration might look more favorably at restarting the Appellate Body. But the Biden administration has so far indicated they also want to see reforms to the dispute settlement appeals process.

The WTO Appellate Body has been inactive since December 2019 when the U.S. blocked appointing new members, preventing it from having a quorum to decide on appeals to WTO rulings.

Washington Insider: Administration Prepares to Boost Food Stamps

Bloomberg is reporting this week that the Biden administration is quietly laying the groundwork for a long-term increase in food aid -- without going through the ordeal of a fight with congressional Republicans.

The change apparently can be achieved by an obscure USDA shopping list used to determine food stamp benefits, known as "the market basket."

A review of the so-called Thrifty Food Plan, ordered by Biden two days after he took office, could trigger an automatic increase in benefits as soon as Oct. 1, a day after expiration of a temporary 15% boost in food stamp payments that President Biden included in his $1.9 trillion COVID-relief package.

James Ziliak, director of the Center for Poverty Research at the University of Kentucky, said the re-evaluation "could result in an upward adjustment of 20% or more in the benefits." That would amount to roughly a $136-a-month increase in the maximum benefit for a family of four, which was $680 before the temporary pandemic-related increase.

"This is really meaningful," said Jason Furman, a Harvard Kennedy School of Government professor who was chairman of President Barack Obama's Council of Economic Advisers. "It's one of the bigger things government can do for poverty without Congress."

The reappraisal culminates a years-long campaign by anti-hunger advocates to reassess the market basket. The value hasn't been increased other than adjustments for inflation for six decades.

The move is emblematic of a broad commitment to anti-poverty programs across the Biden administration. In April, the Agriculture Department extended a universal free school lunch program tied to pandemic relief through the entire 2021-22 school year.

However, it's a sharp reversal from the Trump administration, which tried to limit eligibility for food aid -- though the proposed restrictions were overturned by courts. Food stamps, formally known as the Supplemental Nutritional Assistance Program, once enjoyed broad bipartisan support, but have evolved into a partisan flashpoint in recent years. House Republicans tried to impose cuts in 2013 and 2018, the last two times the program was reauthorized as part of the five-year Farm Bill.

Biden often speaks of one of the most jarring images of the pandemic-year economic collapse -- cars lined up for miles outside food banks to wait for a box of groceries -- and invoked it again in his first address to Congress as he explained the importance of anti-hunger initiatives in his vision for the country. "I didn't ever think I'd see that in America," he told millions watching at home.

The pandemic stirred public concern over hunger as seemingly secure middle- and working-class families suddenly became vulnerable. By December, one in seven U.S. households reported not having enough to eat sometimes or often in the prior week and in January 41.8 million Americans were on food stamps -- 4.7 million, or 12.8%, more than a year earlier.

Advocates argue that the $22-a-day food budget USDA currently sets for a family of four is woefully inadequate and relies on outdated, unrealistic assumptions. The market basket assumes a family eats more than five pounds of beans a week, for example. And outside studies have found that the food plan requires spending about two hours a day preparing meals, largely from scratch, at a time the average American family spends just a half hour on daily food preparation.

SNAP benefits are calculated on a sliding scale based on income and the number and age of people in a household. Recipients are expected to spend 30% of their net income on food, with food stamps making up the deficit from the USDA food budget. Benefits can only be used to purchase groceries.

More than a quarter of the households enrolled in SNAP exhaust their monthly benefits in the first week after issuance, and more than half do so by the second week, according to a 2011 USDA study.

The Obama administration considered changing the USDA food budget and took the decision all the way up to the president. But at a June 2015 Oval Office meeting with his top economic and domestic policy advisers, Obama ultimately decided not to tamper with the market basket, mindful that Republicans then controlled both houses of Congress, according to Furman.

With Democrats now holding narrow majorities in the House and Senate, "the Republicans could put up a good fight, but at the end of the day I don't think they could stop it," said Mike Conaway, R., Texas, a former Republican House Agriculture Committee chairman who retired from Congress last year.

The U.S. has periodically reviewed the market basket, first established as the Economy Food Plan in 1961 and updated in 1975 as the Thrifty Food Plan, to adjust for changes in nutritional guidelines and food consumption patterns. The most recent review came in 2006. Yet the reviews were always constrained to keep costs constant.

This time, the review won't be required to be cost-neutral, said Stacy Dean, a senior USDA official leading the review on behalf of USDA Secretary Tom Vilsack.

The Biden administration isn't officially prejudging the outcome of the review, but officials have made clear they believe current benefit levels aren't sufficient.

"It's fair to say that the SNAP benefit is in many cases not adequate enough to provide the help and assistance that is needed," Vilsack told an anti-hunger conference in March, describing the review. "I suspect that we're going to find that the foundation of that program doesn't meet the activities of normal American families today and that may result in some adjustment in terms of the benefit."

The USDA nutrition programs were designed to benefit both those in need of food assistance and the producers who supply the products. Program advocates often point out that the increased program levels can be expected to support significant increases in demand for key farm products -- changes likely to be implemented in the coming months and which producers should watch closely as they appear, Washington Insider believes.

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