The Ladder

A Blog from New America's Asset Building Program

PA Shoots Itself in the Foot

Published:  January 10, 2012
PA DPW Logo Depicts Only People with Less than $2000 to Their Name.
The PA DPW needs to reconsider what is meant by the word "welfare."

Pennsylvania is going backwards, and people are going to be hurt because of it and it is probably going to cost the state money. The state recently announced to the USDA the return of a stringent asset for the SNAP (formerly Food Stamp program.)You can read all about in today's Philadelphia Inquirer. Money quote:

Specifically, the Department of Public Welfare said that as of May 1, people under 60 with more than $2,000 in savings and other assets would no longer be eligible for food stamps. For people over 60, the limit would be $3,250.

Houses and retirement benefits would be exempt from being counted as assets. If a person owns a car, that vehicle also would also be exempt, but any additional vehicle worth more than $4,650 would be considered a countable asset.

The silver lining here is that the Inqy's article is a terrific read and points out just about all the criticisms we would make of this move, namely:

  • SNAP is a major program for supporting struggling families in a terrible economy, cutting it back in the name of reducing nearly non-existant fraud is penny-wise and pound foolish.
  • Except that it's not even penny-wise, as the state will spend more money trying to enforce this policy and any savings will accrue to the federal government.
  • Reducing people to total poverty is not a good strategy for promoting their economic well-being in the long run.
  • Most other states are eliminating or raising their asset tests, which streamlines administrative costs and allows families who need help to get it.
  • The new $2000 limit is comically low, the same as it was in 1980, and totally ignores 30+ years of inflation ($2000 in 1980 is more than $5400 today.)
  • This move will hurt the economy and small businesses in PA, as SNAP has a tremendous multiplier effect.

To borrow from Stephen Colbert, a tip of the cap to Alfred Lubrano and the Inquirer for a really solid job of reporting this piece; and a wag of the finger to the PA DPW. I could go on, but my colleague Rachel Black will have more on this in the coming days. If memory serves, her piece written in response to a similar move by Michigan is worth re-reading.

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