Lunch for the rich v. lunch for the poor

Patricia lives in Seattle and has worked for Walmart for 11 years. Her pay is now up to $13.10 an hour. She works 34 hours a week with a schedule that is so flexible she can't get a second job. She is one of the many working poor, working yet qualifying for food stamps. Her wages plus food stamps and child support are more than her routine expenses of rent, utilities, basic health needs and such. But not by much, leaving just a few hundred dollars to pay for food, doctor visits (she can't afford to properly manage her diabetes), school fees for her daughter, and debts from a recent hospital stay.

Wages are so skimpy at Walmart that higher wage employees -- those earning $12 an hour or more -- were asked to bring in canned goods to donate to those less fortunate -- fellow employees earning $8 an hour.

As desperate as Patricia's condition is, Congress, through the "sequester" last January cut $5 billion from food stamps. The debate this fall is whether to cut food stamps by another $4 billion (the Senate version of the Farm Bill) or $40 billion (the House version).

Terrence Heath reviews the benefits of food stamps. Food insecurity and poverty leads to health problems and obesity because the poor have worse choices for healthy food. Healthy and well-fed children learn more and are better able to stay out of poverty as adults. Food stamps are great at economic stimulus.

A better way to reduce the deficit by $4 billion: cancel the tax write-off for business entertainment expenses. Heath notes the richer one is the more that exemption is used. And a tax deduction for lunch means taxpayers are paying for that lunch. So. Stark choice: $4 billion of our money to pay for lunch for rich executives or $4 billion to pay for lunch for needy kids. Actually, it should be an easy choice.

Heath quotes Joseph Stiglitz:

Small, powerful interests [rent-seekers] — in this case, wealthy commercial farmers — help create market-skewing public policies that benefit only themselves, appropriating a larger slice of the nation’s economic pie. Their larger slice means everyone else gets a smaller one — the pie doesn’t get any bigger — though the rent-seekers are usually adept at taking little enough from individual Americans that they are hardly aware of the loss. While the money that they’ve picked from each individual American’s pocket is small, the aggregate is huge for the rent-seeker.

This proposed $40 billion cut in food stamps is just a nastier version of this effort.

Rent-seeking -- skewing policies in your favor -- isn't done just over food. Newsweek reports on how common it is for companies to soak us for a few more pennies. There are now small fees to prepare your monthly bill. There are regulatory fees because the company hired lobbyists to shape regulations in their favor and need to recoup the cost of the lobbyists. There are fees a corporation pays to the federal agency that regulates them but when the cost is passed to the customer it is just a few cents more. Or, perhaps, the fee to gov't used to be paid, but the item on your bill remains.

This may add up to a few cents per transaction per month, but for the corporation it quickly adds up to billions of dollars.