Rep. Frank Lucas, Chairman of the House Agriculture Committee, and Rep. Doug LaMalfa today issued statements after the Commodity Futures Trading Commission (CFTC) voted, 4-0, to exempt producers, utility companies, and other non-financial entities from being required to register as swap dealers when they enter into energy contracts with government-owned utilities.
Opening Statement of Chairman Lucas at Business Meeting to Consider a Propsal to Satisy the Committee's Reconciliation Instructions Required by H. Con. Res. 112
Tamara Hinton, 202.225.0184
Good morning, and thank you all for joining us to consider our budget reconciliation instructions.
It’s no secret that we’re facing a severe debt crisis right now. We have about $16 trillion in debt piled up, and if we don’t act quickly, we will be passing a crushing burden on to our children and grandchildren.
This Committee was asked to do our part by finding $7.7 billion in savings in the first year, $19.7 billion in five years, and $33.2 billion in savings over ten years.
Reducing government spending is never an easy task. We face difficult choices, but it is our responsibility to find ways to cut our costs so that we can once again live within our means.
The recommendations we’re considering today achieve more than $33 billion in savings from the Supplemental Nutrition Assistance Program (SNAP) by making credible reforms that reduce waste and abuse and close program loopholes.
SNAP—formerly known as food stamps—comprises almost 80 percent of agricultural spending. Over the past ten years, the cost of SNAP has nearly tripled—increasing by 270 percent.
The cuts we are proposing today cut only four percent over the next ten years.
I’d like to be clear from the start that none of these recommendations will prevent families that qualify for assistance under SNAP law from receiving their benefits.
We are working to better target the program and improve its integrity so that families most in need can continue to receive nutrition assistance.
We’ll do that in a number of ways:
First, SNAP’s resources have been stretched because the Obama administration has encouraged states to take liberties in how the program is administered.
Some states are making nominal Low Income Home Energy Assistance Program (LIHEAP) payments to households so that they get an income deduction to help them receive a higher amount in SNAP benefits.
In practice, that means that states can game the system by sending a $1.00 check which can trigger an increase of up to $130 in SNAP benefits.
Closing this loophole saves $14.3 billion over 10 years, and ensures that both LIHEAP and SNAP are targeted to the families who truly need assistance.
Similarly, many states have implemented categorical eligibility for SNAP, which means that any household who benefits from a low-income assistance program is automatically eligible for SNAP benefits.
Some of these benefits can be as simple as providing a household with a pamphlet or access to a 1-800 number hotline. When states implement categorical eligibility, these households do not need to meet SNAP asset or gross income tests.
This provision changes nothing for households that qualify for the program under the rules of SNAP law, and those households will continue receiving the benefit level for which they qualify. Families that receive cash assistance can still take advantage of categorical eligibility for SNAP. But by ensuring that only cash assistance triggers SNAP eligibility—and not other benefits like brochures —we can save $11.7 billion over 10 years.
We’re also trusting states to do their job in administering SNAP. Currently USDA awards $48 million per year to states for improving program efficiency. We all support good government efforts, but taxpayers cannot afford to pay bonuses to states that are essentially just doing their job.
My colleague, Dr. DesJarlais, has introduced legislation that ends state performance bonuses, and our recommendations include this policy change that will save the taxpayers $480 million over 10 years.
States operate Employment and Training (E&T) programs as part of SNAP. Federal formula grants help cover the costs of these initiatives. However, USDA also provides a 50-50 cost share benefit when states spend more than their federal grant on these E&T programs. By maintaining the federal grant but cutting the 50-50 cost share, we can save $3.1 billion over 10 years, while ensuring that SNAP participants can still access training resources.
States also provide nutrition education for SNAP participants. This is funded at $375 million and indexed for inflation. By eliminating the inflation indexing, we can save $546 million over 10 years while still encouraging SNAP participants to live a healthy lifestyle.
Lastly, we can save $5.9 billion ending an artificial increase in benefits from the American Recovery and Reinvestment Act.
Targeting this policy for savings is by no means new. My colleagues in the minority voted twice to end these benefits earlier than planned to find $14.5 billion in offsets for other programs last Congress.
Every one of these proposals represents common sense and good government in a time of fiscal restraint. We’re closing loopholes, reducing waste and abuse, and increasing the integrity of the program by ensuring SNAP serves only those households who qualify for the program.
There is no denying that SNAP provides important support for many Americans. That’s why it’s important that we ensure the integrity of this program.
By voting for this package, we are not only doing our part to reduce the debt, but also continuing to provide nutrition assistance for American families most in need.
With that, I’ll yield to the Ranking Member for any comments he may have.