Obama's Hollow Victory

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On Tuesday, President Obama signed a $26 billion bill to help state and local governments cover Medicaid payments and avoid having to lay off teachers and other public employees. In what passes for high drama in Washington, the House of Representatives was called back from its summer recess to vote on the package, and the successful outcome was hailed as a major Democratic victory. "We can't stand by and do nothing while pink slips are given to the men and women who educate our children or keep our communities safe,'' Obama said. "That doesn't make sense.''

No, it doesn't. But only by the occluded standards of contemporary Washington could this aid package be considered a victory. What began three months ago as a $50 billion emergency spending bill limped to the president's desk at half that size and was largely paid for -- "offset'' in the clinical terminology of the budget -- by cutting $12 billion from the food stamp program. In other words, a measure designed to help one group struggling in the recession came at the expense of another that is even worse off -- and growing rapidly.

The number of people receiving food stamps stands at a record 41 million, or one out of every eight Americans. Driven by the downturn, that number has risen every month for the past 18 months. Last year alone, it grew by 20 percent. It's grown by 50 percent since the recession began.

Food stamp recipients are often demeaningly cast as being akin to welfare queens -- indolents on the public dole. But contrary to stereotype, half of those who depend on food stamps are children, and many more are elderly or disabled. The benefits are hardly generous: an average recipient household receives $133 a month, or $4 a day. And recipients are anything but indolent. Nearly half of households with children that receive food stamps are ones in which a parent is employed, a number that has grown steadily over the past two decades as real wages have fallen. As Obama himself took to pointing out in the presidential campaign, his own family required food stamps when he was a child.

The "good news'' from an economic standpoint is that food stamps are a terrific vehicle for stimulus, because recipients spend them quickly. A 2008 Moody's study found that the fastest way to infuse money into the economy is by expanding the program. No surprise, then, that such an expansion featured prominently in the 2009 stimulus package, which added about $20 a month in temporary benefits.

So why cut food stamps as the recovery is suddenly faltering? The short answer is, because Republicans insisted on it. Not food stamps specifically -- that idea came from the White House, although no Republican objected. But Republicans compelled the cuts by insisting that any new spending measures, even on something as seemingly unobjectionable as saving teachers' jobs, be "offset'' in the budget. A grim necessity, they claimed, to prevent the deficit from killing the recovery. But that's a political argument, not an economic one.

"It was a lousy offset,'' said Democratic Representative Jim McGovern of Worcester, the co-chairman of the House Hunger Caucus. "We're robbing Peter to pay Paul.''

The justification offered by proponents was that food prices haven't risen as much as Congress expected them to, and therefore cutting benefits to hungry kids isn't really so bad, especially since the cuts won't take effect until 2014. The trouble is, forecasts aren't very rosy. It is projected that food stamp recipients will increase to 43.3 million next year, and beyond that, who knows? "President Obama pledged to end childhood hunger by 2015,'' McGovern pointed out. "It's hard to see how you do that while you're cutting food stamps.''

Faced with imminent layoffs, Democrats had little choice but to act, and that meant cutting something. But the idea that they've won anything overall is hard to sustain. They sacrificed the most effective form of stimulus and capitulated to the Republican idea that deficits matter above all else. Their decision about who should bear the brunt of the offsets, and the silence that greeted it, suggests a moral capitulation as well. It may be a victory. But it's nothing to brag about.

Joshua Green writes a weekly column for the Boston Globe.

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Joshua Green is a former senior editor at The Atlantic.

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