The SNAP Festival of Corporate Hypocrisy

Editor’s Note: We are pleased to present this guest post by our colleague Derek Fields.

There is no coherent way to justify buying poor people billions of dollars worth of sweetened beverages with taxpayer dollars. That does not stop politicians and junk food companies from trying, though.

On February 16, the House Agriculture Committee held a hearing on the possibility of placing restrictions on the Supplemental Nutrition Assistance Program, often called “SNAP” or “food stamps.” Big Soda’s influence at the hearing was both destructive and obvious. As you can see in the video of the hearing, the “evidence” on both sides of the debate seemed fairly balanced, and some members of Congress on the committee expressed their conflicted feelings on the issue.

SNAP has recently received more critical examination due to the USDA report first analyzed here on the Russells’ blog and later in The New York Times. Marion Nestle, a professor of nutrition, food studies and public health at NYU, and author of Food Politics, best summed up the report in the NYT article when she explained, “SNAP is a multibillion-dollar taxpayer subsidy of the soda industry.” It’s difficult to imagine even Big Soda saying outright that there’s a good reason for taxpayers to subsidize their industry with billions of dollars each year. Recall that in the Russells’ blog article first analyzing the USDA report on SNAP, we used USDA data to estimate that taxpayers were buying $6.44 billion worth of soda via SNAP yearly.

The food-stamp program developed in 1939, and the program’s coverage of soda has been hotly debated since the Food Stamp Act of 1964. Early versions of the measure restricted soda purchases, but that restriction was eliminated from the final version of the bill and hasn’t been in place since. The following timeline, found on eatdrinkpolitics.com, comes from a report by Michele Simon titled Food Stamps, Follow the Money: Are Corporations Profiting from Hungry Americans? Simon’s report gives a wonderful outline of the program over the years.
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Back in 1964, Illinois Senator Paul Douglas (D-IL) made a refreshingly clear argument for restricting soda purchases with food stamps:

I do not want to include Coca-Cola or Pepsi-Cola or any of that family. I like them myself, but I do not believe they should be permitted to be substitutes for milk. They are not valuable for the diet. They can be a waste of money especially for young people. Personally, I think it is a great mistake to include them … My suggestion is that the item which is included be not merely soft drinks, but carbonated soft drinks. That would exclude Coca-Cola, Pepsi-Cola, Dr. Pepper, and all the varieties of the family of cola drinks. If we include them, this will be used as propaganda against an otherwise splendid and much needed measure. I want to help the poor and hungry and not sacrifice them for Coca-Cola. The Senator knows that these have no nutritional value—none at all. … Actually, they are bad for kids, rather than good for them. I hesitate to use such language, but the only benefit I can see in the present language is that it will increase the sales of the Coca-Cola and other cola and soft drink companies.

Douglas raises several important points about nutrition and the benefits, or lack thereof, of soda consumption. It’s a fact that soda has zero nutritional value and that doesn’t need to be debated anymore. However, he also points out that the inclusion of unhealthy products such as soda could be used as “propaganda” against food stamps. Opponents of the program who seek to cut it or eliminate it altogether can point out that the program buys unhealthy products for Americans and is thus not worth taxpayers’ money. This makes perfect sense and is, interestingly enough, the exact opposite of what some opponents of restricting soda claim today. In a February article on SNAP, a Washington Post editorial made the same case that Douglas did before the passing of the 1964 bill. Opponents of restrictions say that raising a debate about which foods are junk foods and which should be excluded from SNAP eligibility just gives ammo to politicians looking to cut funding for the SNAP program.

However, the Post (like Douglas) points out that the exact opposite is more likely to be true: Politicians could add to SNAP’s integrity by focusing the program on actually supplementing the legitimate nutritional needs of poorer Americans. Restricting soda would thus grant the program more legitimacy and leave those who seek to gut it on weaker ground. Dr. Angela Rachidi of the American Enterprise Institute was one of the witnesses in the Agriculture Committee hearing. Rachidi is an expert, having spent a considerable amount of time drafting proposals to restrict SNAP in New York City. And she conveyed this eloquently in point two of her four-point testimony to the Agriculture Committee, which can be found here.

It should shock absolutely no one to know that we’ve been stuck in the same SNAP soda debate since 1964, considering the interests at play. Big Soda has lobbied to keep their multi-billion dollar subsidies. While we can’t know how much they spent on specific issues, all four of the American Beverage Association’s 2016 quarterly lobbying reports mention SNAP as one of the issues they lobbied on, as do the 3rd and 4th quarter reports from Coca-Cola.That lobbying effort is particularly well timed since the Farm Bill, which contains SNAP, is up for renewal this year and is a large part of why this debate has been renewed. You can find the ABA’s 4th quarter report for 2016 on the U.S. Congress website and Coca-Cola website. Though we can’t know how much they spent buying influence on specific issues, Coca-Cola, Pepsi, and the American Beverage Association together spent a total of $12,230,000 on lobbying in 2016.

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The ABA has to legally admit that they’re buying government influence to keep their subsidy.

If SNAP’s goal is to provide nutrition to program participants, it’s certainly worth examining the health outcomes the program achieves. The American Journal of Preventive Medicine published a study last year titled “SNAP Participation and Diet-Sensitive Cardiometabolic Risk Factors in Adolescents,” available free through their website. The study compared adolescent SNAP participants to both adolescent non-participants who were income-eligible for SNAP and non-participants dubbed “higher-income” using a variety of metrics, including BMI, waist circumference, waist-to-height ratio, consumption of vegetables and sugary beverages, and many other measures. The data didn’t bode well for the adolescent participants in SNAP or the program’s effectiveness.

The conclusion of the study’s abstract states,

“Adolescent SNAP participants have higher levels of obesity, and some poorer markers of cardiometabolic health compared with their low-income and higher-income counterparts.”

The full-length study breaks the data down further, saying that while food security is important,

“Stakeholder-supported policies to strengthen the nutritional impact of SNAP deserve further consideration. With its broad reach, SNAP has the potential to influence the diets of millions of children and adolescents, and thus represents a unique opportunity to reduce disparities and improve the lifelong health of those most vulnerable to food insecurity and poor nutrition.”

With that information in mind, let’s dive into the debate on those policies that could strengthen SNAP’s nutritional impact.

The “arguments” presented in the testimony against restrictions on SNAP during the House Agriculture Committee hearing are rather lacking. The most obvious food industry arguments came from Leslie Sarasin of the Food Marketing Institute, which of course represents U.S. Food Industry and Food Retailer interests, and Dr. Diane Schanzenbach of the Brookings Institution, a D.C.-based think tank. Sarasin’s written testimony can be found here, and Schanzenbach’s written testimony is available here.

Sarasin and Schanzenbach both contended that the costs of placing restrictions on SNAP would be “astronomical.” Sarasin went so far as to claim that “tens of thousands” of new grocery products are introduced each year, so determining which were unhealthy and thus should be restricted on SNAP would cost the USDA untold enormous sums of money. They also stated that restrictions would place high costs on food retailers, especially in slowing things down in the checkout line, which hurts businesses that operate on a 1-2% margin. Additionally, Sarasin, Schanzenbach, and even congressional representatives claimed that restrictions would stigmatize SNAP program recipients as they had to separate their SNAP-eligible foods from ineligible foods, which violates human dignity and freedom of choice.

It’s not surprising that the Food Marketing Institute and the Brookings Institution came to the defense of Big Soda’s subsidies–they take soda money and are close to Big Soda executives. The Food Marketing Institute describes itself as “The Voice of Food Retail” on its website. When we investigated the members of the Food Marketing Institute to see how much money they took from Big Soda, we ran into some problems. Virtually all the relevant information–including membership directories, financial documents, and information on the board of directors–was behind a membership paywall. We contacted FMI and they sent us to the director of membership’s voicemail, but no one ever returned our calls. Just knowing that FMI represents food retail and that they work on many reports like this one with the Grocery Manufacturer’s Association tell us about their interest and motivation in the SNAP debate. Gary Ruskin from U.S. Right to Know provides some wonderful background information on the GMA, which works frequently with FMI. He describes GMA as “the leading trade group for the junk food industry,” and claims they frequently mimic Big Soda’s approach in opposing warning labels and claiming that “voluntary regulation” is enough. We also recently covered GMA violation of Washington State’s campaign finance laws, which resulted in a record-breaking $18-million dollar judgement against them.

The Brookings Institution, though it doesn’t officially represent the food industry, also has formal connections to Big Soda funding and executives. Brookings’ 2016 Annual Report tells us that PepsiCo gave Brookings somewhere between $100,000 and $249,999, while Coca-Cola gave them somewhere between $25,000 and $49,000 last year. Additionally, Brookings elected Laxman Narasimhan of PepsiCo Latin America to their Board of Trustees, which is charged with safeguarding “the independence of the Institution’s work.” Coca-Cola isn’t left out either. George David of the Coca-Cola Hellenic Bottling Company sits on Brookings’ International Advisory Council.

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Rest assured knowing that PepsiCo is safeguarding the independence of Brookings research.

Fortunately, Sarasin and Schanzenbach accidentally picked apart most of their own “arguments,” and none of them hold water anyway. While there may very well be “tens of thousands” of new grocery products introduced each year, there are not tens of thousands of sweetened carbonated beverages introduced each year. SNAP already restricts purchases of alcohol and tobacco products and is only usable on food products, so many items in grocery stores, such as cleaning products and toiletries, are not SNAP-eligible. New products in these categories are introduced each year, and such new products, when scanned at a register, cannot be purchased with SNAP money. There are government employees who manage that part of the SNAP program. Adding sweetened carbonated beverages to a list of products that won’t scan for SNAP at a cash register really shouldn’t add “astronomical” costs as Sarasin claimed. As Representative Doug LaMalfa (R-CA) joked, we probably have some supercomputers that could handle that.

Though it’s a smaller, more complicated program, Women, Infants, and Children (WIC) is another food and nutrition supplementation program through which the government places many product-eligibility restrictions. For example, WIC will only pay for milk and juice as beverages, and it has very specific definitions of what constitutes eligible juice and what isn’t allowed. So it’s possible for federal food programs to restrict soda and other products that aren’t deemed nutritious, and no one is crying out for freedom of choice regarding WIC.

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Differentiate unsweetened, vitamin-C containing, 100% fruit juices from soda? Inconceivable!

The idea that restrictions would massively increase costs to retailers and cause backups in checkout lines is simply false too. Sarasin herself said that half of SNAP transactions are multi-tender, meaning people pay for some items with their SNAP money and then conduct a second transaction, paying for other items with their own money. Dr. Schanzenbach pointed out that SNAP only amounts to roughly $4.50 per person per day, so people really have to use some of their own money anyway in order to afford groceries. If people are already using their own money and conducting multi-tender transactions, how is putting any sweetened carbonated beverages into the pile of goods they’re buying with their own money–where any alcohol, tobacco, and toiletries already are–going to somehow slow things down all of a sudden and hurt food retailers’ thin margins?

Lastly, the stigma and freedom of choice arguments aren’t very persuasive either. Since many SNAP recipients are already conducting multi-tender transactions and using their own money, any “stigma” associated with the program is already unfortunately placed on SNAP recipients as they pay separately for their two piles of goods. And freedom of choice, which Representative David Scott (D-GA) made an impassioned plea for, doesn’t apply to other people’s money. The Atlanta-based congressman also flatly stated,

“Soda, candy, sweet things, that’s not what makes us obese. It’s our children not exercising.” 

This is the same message Coca-Cola’s Global Energy Balance Network promoted, then retracted.

Andy Fisher, author of Big Hunger: The Unholy Alliance between Corporate America and Anti-Hunger Groups, is an expert on SNAP and told The Russells’ Blog that groups truly concerned about both hunger and freedom of choice could possibly find a middle path that still limited the billions that taxpayers spend on Big Soda each year. Fisher said in an email:

… this could look like a system where SNAP participants could choose between two versions of SNAP. The default would exclude (sugar-sweetened beverages) while providing bonus funds for healthy food purchases, such as fruits and vegetables. The other option would be the current version of SNAP, which would allow them to use their benefits on any eligible foods, but without the (fruit and vegetable) incentives. This way participants could still exercise their freedom of choice, while the program nudged them in the right direction, from a health perspective.

Fisher told us that groups in California and at Yale’s Rudd Center have proposed such a compromise, which could be a step in the right direction for SNAP’s integrity and public health. Fisher also told us that there’s hope the USDA will move in the right direction too, releasing even more data on SNAP. He stated in an email,  

USDA just lost a lawsuit filed by the Argus SD newspaper that forces them to divulge the locations where SNAP benefits are spent … Transparency is crucial from my perspective and we seem to be moving in the right direction although not entirely. Legislative and/or legal action will be the ways to go to move USDA.”

(The Food Marketing Institute has since filed to temporarily prevent the USDA from having to release this information, and the court granted its motion, pending appeal. So if/when FMI loses the appeal, the USDA will release the info.)

We hope that, working together with people such as Andy Fisher, we can demand greater transparency and call attention to the most important legislation and litigation that will have a positive impact on SNAP’s integrity as a program, health outcomes for participants, and fiscal responsibility for taxpayers.

Many people agree that individuals should be able to do what they want with their money, but the money funding SNAP comes from United States taxpayers. It doesn’t make much sense to preach freedom of choice when it comes to spending taxpayer dollars to buy food that makes people sick, only to then cost taxpayers even more paying for the health consequences of that consumption via Medicaid.

Representative LaMalfa broke down the first three letters in SNAP in the following terms:

  1.       Supplemental – this isn’t all the money that SNAP participants have. They have their own money where they should have freedom of choice. It’s just a supplement, not something that controls their entire lives.
  2.       Nutrition – this program is supposed to add to people’s nutrition, making their bodies healthier. Are sweetened carbonated beverages really doing that?
  3.       Assistance – someone else is paying for this to help poor people. Are we really helping these people by buying them carbonated sweetened beverages?

This interrogation of the program left the opposition speechless.

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Representatives Doug LaMalfa and John Faso chose to represent common sense in the hearing.

Other representatives on the Agriculture Committee shared Mr. Lamalfa’s common sense. Representative John Faso (R-NY) asked if any of the witnesses believed that soda has nutritional value. When no one uttered a single word, he asked what the problem was restricting soda in a program based on “supplemental nutrition,” emphasizing those last two words heavily. He also stated that he was willing to upset his food merchant friends to point out that it would be easy to differentiate soda using the same electronic systems that are already used to differentiate taxable food items and non-taxable food items (note: prepared food from a grocery store hot bar is subject to tax, but fresh food meant for preparation elsewhere generally isn’t taxed) and alcoholic beverages.

Common sense is stirring in smaller jurisdictions around the US as well. Florida, Maine, and New York City have all put forth propositions to restrict SNAP purchases. At this time, it’s unclear whether Trump’s USDA will grant the waivers necessary to allow for these state and local restrictions. We can only hope that common sense, fiscal responsibility, and a concern for public health win out over subsidies for Big Soda and chronic disease.

2 comments

  1. Kyla Hayden

    Let them buy it. Track the SNAP purchases. If a person uses SNAP to buy sugary beverages and ends up with a related chronic disease then big soda can pick up the associated medical bills.

    Kyla

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