Food stamp cuts could hurt more than you think

Food stamp cuts could hurt more than you think

Amira Watson, a working single mother of four in Brooklyn, recently had to sign up for food stamps after her marriage ended and she lost one of the two jobs she was working after taking maternity leave.

(Read more: Scary month for job growth in October, ADP says)

Though she applied a few months ago, her approval won’t take effect until Nov. 1—coincidentally or not, the day the cuts kick in.

Watson, who works nights as a medical assistant at an assisted-living facility for the disabled, worries that the SNAP benefits won’t be enough to feed her kids, ages 15, 13, 4 and 3 months.

“The job is good with medical benefits, but not with the paycheck,” she said. “I’m always in the hole with bills. If I pay the rent I’m sacrificing the light. If I pay the light bill I’m sacrificing the gas bill. It’s always something.”

Having the pantry on hand helps.

“Thank God for the food pantry and the Campaign Against Hunger,” she said. “While I’m waiting for all this processing—glitches here and glitches there—thank God I could go there and shop for some food. I got some baby milk for my newborn, got rice, got a nice amount of stuff that will sustain us until something comes up.”

People on food stamps have become easy to demonize—many nonrecipients have stood in line behind those who pile their shopping carts high, using their allocation to buy junk food.

And while there are some abuses, the need for the program says something about the dichotomy of the stock market’s soaring to new heights while income disparity widens to Great Depression-era levels.

(Read more: The economy? Who cares? The stock market is up!)

SNAP participation has doubled over the past 10 years and risen nearly 25 percent over the past four.

“Something has changed about America since the financial crisis, and the still widespread popularity of the SNAP program is emblematic of that shift,” Nick Colas, chief market strategist at ConvergEx, a New York-based brokerage and investment research firm, said in a report. “The American economic record, based on the food stamp data, is still pretty lousy.”

Colas said the economic hit from the food stamp cuts will be roughly $ 10 billion, with the numbers probably not telling the full story.

“It may not matter to the economic data on which Wall Street hangs its fedora, but it is certainly enough to spark a political response,” he said. “How this plays out, I honestly have no idea. We are in uncharted waters here, as the historical record clearly shows.”

—By CNBC’s Jeff Cox. Follow him on Twitter @JeffCoxCNBCcom.

Personal Finance


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