Axios reports that the US Department of Agriculture (USDA) is saying that beginning November 1, “about 42 million low-income people won’t get Supplemental Nutrition Assistance Program (SNAP) benefits if Congress doesn’t agree to a deal to fund and reopen government.”
Meaning that supermarkets that generate any revenue from people using SNAP benefits – colloquially known as “food stamps” – will see their revenue numbers dipping next week as well.
The USDA Food and Nutrition Service website reads: “Bottom line, the well has run dry. At this time, there will be no benefits issued November 01.”
Axios provides some context for the current scenario:
“The SNAP freeze could kick in as an increasing number of Americans are going hungry and relying on food banks as the economy cools.
“Senate Democrats essentially shut down the government by demanding that the Republicans who control Congress extend Affordable Care Act subsidies. Without the subsidies, health care costs could soar for 22 million Americans on ACA plans.
“Now the shutdown could pit the needs of those 22 million ACA enrollees against those of the 42 million who could go without food assistance starting Nov. 1.”
While the GOP position is that the Democrats have shut down the Republican-run government by being unwilling to vote on a funding bill without a guarantee of extended ACA subsidies, Democrats argue that Republicans are unwilling to negotiate the issue until a funding bill has passed.
While there reportedly is enough money in the USDA’s contingency fund to cover about two-thirds of the SNAP payments that would go out at the beginning of November – meaning that people in need would get at last some of the assistance on which they depend, and stores would get at least some of the revenue on which they depend – the USDA has said it will not be going into the contingency fund, and that states paying out SNAP benefits to their citizens will not be reimbursed.
KC’s View:
Sounds to me like there are a lot of people who are feeling no personal pain from the government shutdown playing high stakes poker with the lives of people far more needy.
But since this is a business blog and – best as I can manage in these trying times when almost everything is political – not a political blog, I won’t comment here any further on the shutdown, nor on the priorities made very clear when people and parties decide what they will spend money on, and what they won’t spend money on.
I want to continue to emphasize this – in addition to people who won’t be able to feed themselves and their families in a few short days, there are businesses that, going into the holiday season, are going to start seeing revenue numbers lower than those to which they are used. (Note: the USDA has certified some quarter-million US stores to accept SNAP benefits.)
One of the things that happens is that customers of limited means that depend on government benefits start shopping more and more at value-centric retailers, such as dollar stores, limited assortment stores, and retailers such as Walmart and WinCo.
Here’s at least a bit of good news, showing how business can step into the breach created when so-called public servants serve their own priorities rather than those of the people they are supposed to represent:
The San Antonio Express-News reports that “one week before 3.5 million Texans who rely on federally funded food stamps could lose their food assistance because of the ongoing government shutdown, H-E-B announced Friday a $6 million donation to fight food insecurity across the state.
“The San Antonio-based grocer will give $5 million to food banks across Texas and $1 million to Meals on Wheels Texas, which delivers food to homebound seniors … The announcement comes after Texas officials began notifying residents that their benefits from the Supplemental Food Assistance and Nutrition Program, or SNAP, will be cut off in November if the shutdown continues past Monday, the Texas Tribune reported. Roughly 1.7 million of the 3.5 million Texans who rely on SNAP each month are children.” And, in Texas, “13.6% of seniors are at risk of hunger.”
The post Shutdown Likely To End SNAP Benefits To 42 Million People & The Stores Where They Shop appeared first on MNB.
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