Loophole saves food stamps for thousands States can interpret law to help some of their poor


WASHINGTON -- Because of a loophole in the new federal welfare law and a mistaken economic analysis underlying it, many of the hundreds of thousands of the nation's poorest men and women who were to have lost full food stamp benefits will continue to receive them for at least a year.

As a result, budget savings from the food stamp program could be as much as $2 billion less than the $5.1 billion projected over the next six years, the Congressional Budget Office said.

State officials have found that they can spare some of their DTC single and childless food stamp recipients, age 18 to 50, from cuts. There are about 1 million such recipients nationwide; up to 40 percent may be exempted.

These people, mostly jobless and unskilled, have always been eligible for food stamps. But with the law that President Clinton signed in August, Congress cut that entitlement to just three months of food stamps every three years, unless the recipients work, look for work or engage in work-related activities such as job training at least 20 hours a week.

In requiring that this group, like all other adults, go to work to continue receiving benefits, Congress nevertheless acknowledged that some live in places where jobs are difficult to find. So the law exempts them from the three-month, three-year provision if they live in communities with unemployment rates exceeding 10 percent or in areas -- not necessarily the same ones -- with insufficient numbers of available jobs.

The law does not specify how states should classify "insufficient jobs" areas and instead left that to the Department of Agriculture. In early December, after four or five states had applied for exemptions for cities and counties with more than 10 percent unemployment, the department issued instructions to guide states in invoking the second criterion.

It said they could use a variety of approaches, and in particular one the Labor Department uses to identify "labor surplus" areas among the 5,000 in the nation that it monitors. Areas are designated as having a surplus of job seekers if they have unemployment exceeding the national rate by 20 percent for two consecutive years.

Now, 13 states have asked the Department of Agriculture to exempt recipients in hundreds of cities and counties from the three-month, three-year provision.

In interviews, officials from six of 16 other states, including Pennsylvania and Missouri, said they would apply, too.

Under the exemptions, some large cities might be able to continue giving food stamps to single and childless men and women.

Pub Date: 12/22/96

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