Commonwealth Food Program Could Get State Rule But Not Funds Under New Law

Final congressional approval is expected today for legislation that could lead to a small step towards the equal treatment of Puerto Rico in the main Federal program for ensuring that low-income people have enough to eat.

The bill would require the U.S. Department of Agriculture to study the Commonwealth government’s practice of giving people cash for 25% of their Puerto Rico Nutrition Assistance Program (PAN) benefits.  The other 75% is provided through an electronic purchase card. In the States, cards are used for 100% of the benefits.

The Department would have 18 months to do the study.  It would include assessing any adverse effects on program beneficiaries and retailers of ending the cash assistance.

Depending upon the findings, providing 25% of benefits in cash would either be phased out 5% a year beginning in Federal Fiscal Year 2017 or continued by the U.S. Secretary of Agriculture.

The provision is contained in a compromise between House of Representatives and Senate versions of a five-year ‘farm bill’ worked out by the leaders of the agriculture committees of both houses. The House approved the compromise last week.  The Senate is expected to approve it today.

Most of the compromise’s more than $986 billion cost is for the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps.  The $2 billion a year Nutrition Assistance Program for Puerto Rico is a spin-off of SNAP.

The House bill would have prohibited the Commonwealth from providing benefits in cash, treating the territory more equally with the States. Representative Steve King (R-Iowa) championed the prohibition.  He did so because of  a U.S. Agriculture Department finding that the cash has often been used to buy goods other than food — including liquor, cigarettes, and lottery tickets, in addition to more worthwhile items.

Puerto Rico’s representative to the Federal government who has a seat in the U.S. House with a vote only in committees, Pedro Pierluisi (statehood party/D), opposed the prohibition and obtained the compromise.  The Federal affairs office of Governor Alejandro Garcia Padilla (“Commonwealth” party) also opposed the provision.

Office head Juan Eugenio Hernandez Mayoral additionally, however, wrongly charged that Pierluisi was responsible for the House provision. He claimed that Pierluisi caused it by proposing equal funding for Puerto Rico in SNAP.

In fact, the prohibition was sought by a Washington, DC lobbyist hired by Puerto Rico’s large food retailers.

A 2010 study by the U.S. Agriculture Department estimated that State treatment in SNAP in 2009 would have increased the number of low-income households in Puerto Rico receiving assistance 167,000, from 554,000 to as many as 721,000.  This could have provided food aid to an additional 501,000 Puerto Ricans.

Further, State treatment would have raised the assistance to the average household already getting benefits 9.6%, $23 per month from $240 to $263.  That would have further helped the 554,000 households receiving assistance, approximately 1,662,000 Puerto Ricans.

State treatment could have provided an additional $825 million during the year.  This would have been a major injection into Puerto Rico’s failing economy as well as benefitted needy Puerto Ricans and Puerto Rican farmers and food sellers.

In opposing the cash benefits prohibition, Pierluisi said that the territory should not have to comply with all program requirements unless it is funded equally in the program and in other programs for low-income individuals.  He also noted that PAN beneficiaries use the cash for necessities of life other than food that are not met in other programs for low-income individuals in which the Commonwealth is also funded less well than a State.

A counterargument is that the Commonwealth not having to adhere to national rules for the food assistance can be used as an excuse for its lesser funding.

Puerto Rico’s Commonwealth government claimed years ago that it was providing some of the assistance in cash to enable program beneficiaries to buy food from small retailers who did not have the equipment for electronic card purchases. But the Commonwealth has not enabled these small retailers to acquire the technology needed.

Although Puerto Rico was formerly treated like a State in Food Stamps, it was taken out of the national program and given a special — lesser — program in 1981.  The discrimination against Puerto Rico was made possible by its territory status, sometimes misleadingly called “Commonwealth.”

The Reagan Administration had proposed similar lesser programs for the States — but U.S. senators from the States blocked the change for the States. Because Puerto Rico is a territory, it had no senators to do that.

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