Rethinking the Welfare State: The prospects for ... - e-Library

Rethinking the selfare state 42
which demand-side subsidies are generally preferable to cash transfers in situations
where vouchers exhibit a high degree of cash equivalency. Indeed, the debate over
whether the FSP should be “cashed out,” i.e. converted to a system of untied cash grants,
is one of the most lively in contemporary American public nutritional policy research.
The rationales for government intervention
The mandate of the contemporary FSP
The official purpose of the FSP is to increase the amount that eligible households spend
on nutritious food, ensuring “that low-income households have the opportunity to attain a
nutritionally adequate diet.” 7 In contrast to the FSP’s original intention several decades
ago of increasing the sheer quantity of food consumed by poor families, the present
nutritional goal of the FSP is to raise diet quality. A number of studies have established a
negative relationship between poverty and nutritional intake. 8 This relationship, however,
exhibits some complexity.
For instance, one recent analysis employing the USDA’s own Healthy Eating Index
(HEI), a holistic scale of diet quality, observes that “the estimated effect of household
income on […] diet quality […] was not significant at conventional levels of statistical
significance” among FSP-eligible households, suggesting that when a household income
remains below a certain threshold level (namely, the FSP standard for eligibility),
marginal increases in income of as much as 20 percent do not produce commensurate
improvements in diet quality. 9 The same study, however, finds a positive relationship
between the value of FSP benefits received and overall diet quality. 10 Taken together, the
two findings suggest that “wealthier” FSP households do not fare better, while those who
receive more stamps clearly do. Such findings are the causes of the socalled “cash-out
puzzle,” which will be discussed in more detail in a subsequent section. Essentially, from
the perspective of traditional economic theory, it is perplexing that income differences do
not produce corresponding differences in diet quality, while voucher coupons do seem to
have a progressively positive effect on diet as the size of the disbursement increases.
Some critics of the FSP contend that “federal feeding programs [which] still operate
under their nearly half-century-old objective of increasing food consumption” are
contributing to obesity among poor Americans, and that the FSP’s half-century-old
objective—the prevention of undernutrition—does not match the actual dietary needs of
poor Americans in the twenty-first century. 11 Nevertheless, though contentious, the
negative relationship between income and dietary quality, particularly insofar as the low
consumption of fruits and vegetables and the high intake of cholesterol and animal fats
among poorer families are concerned, 12 may present some case for government
intervention to assist lower-income families in meeting the requirements of a balanced
diet.
A critical perspective on the FSP’s original objectives
Strong arguments, however, continue to support the notion that the poor were not the
legislators’ top priority when the food stamp program was instituted in the 1930s. The