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

Rethinking the selfare state 56
now. Given that fewer than 20 percent of food stamp recipient households rely solely on
non-governmental sources for income, 75 the cashing-out option would have a detrimental
effect on a high proportion of households.
A more immediate concern of cashing-out is the loss of political support for the FSP
from the taxpaying population. The program has enjoyed political longevity and public
endorsement for over 35 years. Once the limitation to food is lifted, the public perception
of the program becomes “just another welfare payment.” In a certain sensfe, the program
may lose its political legitimacy. It moves from being a program that directly feeds the
hungry to a program that provides general income maintenance support.
Conclusion
The FSP is the largest public assistance program in the United States available to all
households based on financial need. Its relative success gives some credibility to the
voucher concept as a politically popular means of delivering government-financed goods.
Moreover, the constrained choices implicit within the FSP reflect both American
society’s willingness to provide food for the needy and its concern that public assistance
will be abused. At the same time, however, it is important to note that most industrialized
countries have consistently preferred the latter option. There thus is no a priori reason to
believe that social assistance alone cannot meet both these concerns and hence why food
stamps are inherently preferable to cash transfers in the form of adequate welfare
benefits. As we have seen, evidence that FSP coupons actually increase household
spending on food as compared with an equivalent cash grant is equivocal at best, and the
effect varies according to household type. Furthermore, the political success of cashtransfer
programs in other nations suggests that there is also no a priori reason to believe
that “cashing-out” cannot gain popular support, particularly where it can be justified on
grounds of fiscal efficiency.
Nevertheless, the simple claim that cashing-out will do the same job as the FSP while
automatically lowering administrative costs is also not beyond doubt, particularly as there
is some reason to believe that cashing-out will create some additional incentive for overparticipation,
particularly if it becomes clear that FSPs are not entirely cash equivalent.
The empirical case for or against cashing-out is still unresolved, and more cash-out
experiments are needed to illuminate the debate further. What the FSP example does
establish with some certainty is that a few issues common to all voucher initiatives—
consumer and supplier qualification, voucher valuation and political concerns—are
decisive in determining their economic and political feasibility. It vindicates the view that
particular voucher programs like the FSP fail or succeed not because they are voucher
initiatives, but because they are able to respond well or poorly to a range of common
design challenges as they manifest themselves in a given program area, as well as to local
political imperatives.