WASHINGTON (FNS) -- The House has forwarded a massive welfare reform plan to the Senate that would freeze spending for the federal food stamp program but preserve federal jurisdiction over it.
The sweeping reform package would cap funding for the food stamp program at a 2% annual increase based on an increase in the calculation for the basic costs of food.
The cap is intended to reap $16 billion in savings over the next five years. However, this reduction in federal support could also cut national retail sales by $3 billion to $7 billion over the same five-year period, the U.S. Department of Agriculture estimated.
Under the House measure, the food stamp program also would be reformed in an effort to reduce more than $2 billion yearly in illegal food stamp trafficking. Under the reform, the federal government would be able to seize property and proceeds from illegal food stamp activity. Store owners unaware of fraud being perpetrated by employees would be protected from seizure, however.
The House bill also would allow the states to operate their own food stamp programs as block grants if statewide electronic benefits transfer systems have been put in place -- something retailers favor. Currently, Maryland is the only state with a statewide EBT system.
Food stamps would be one of the few entitlement programs left intact under a Republican-backed welfare reform plan that would turn most entitlement programs over to the states as block grants. The welfare reform plan passed the House last month. The Senate is expected to draft its own welfare reform package that considers the food stamp program, but has taken no action so far.