Report: How Food Stamps Benefit Corporations (EBT is Big Business)

We have written before about the big business of Food Stamps in this country. To Pizza Hut lobbying for Food Stamp use in their restaurants, to JP Morgan servicing the program for hundreds of millions of dollars, it’s not hard to see why SNAP, EBT, WIC, Food Stamps, whatever are becoming more entrenched in our economy and society. There’s a lot of money to be made in these programs.

I feel like it needs to be said, again, that no one should go hungry, especially not children if we can help it. Life can be hard, very hard sometimes, and we certainly do not begrudge anyone who must avail themselves of food assistance. There are better ways to deliver such services other than through the government, but that is not the point of this post, nor of the attached report, at least primarily.

What is of particular concern is that corporations now have a vested interest in seeing food assistance programs expand. Food Stamps have become a profit center for some companies, and that is a very sad and potentially dangerous development for our country.

(From: The Report : Profits from Poverty)

Originally conceived as a means to prop up sagging crop prices to support American farmers, the Food Stamp Program, now called the Supplemental Nutrition Assistance Program, or SNAP, has exploded into a welfare program that costs tax payers a record $75.67 billion in 2011.Almost everyone has heard this story, but few realize that only three corporations have cornered the market for providing SNAP services to the needy and destitute. According to JP Morgan, the largest food stamp industry player, the business of food stamps “is a very important business to JP Morgan. It’s an important business in terms of its size and scale…. Right now volumes have gone through the roof in the past couple of years or so. The good news from JP Morgan’s perspective is the infrastructure that we built has been able to cope with that increase in volume.” And JP Morgan has good reason to be pleased, since the bank profits from programs designed to help the poor.

An investigation by the Government Accountability Institute has found that:

Three companies – J.P. Morgan EFS, Affiliated Computer Services, and eFunds – provide EBT services for 49 states and 3 US territories.

Since 2004, 18 of 24 states who contract with J.P. Morgan to provide welfare benefits have contracted to pay $560,492,596.02. New York alone has a seven-year contract worth $126,394,917.

Projected average food stamp spending post-recession will be 175% greater than prerecession average spending, from $28 billion to $77 billion.Since 2009, 32 states have followed the USDA’s suggestion to use Broad Based

Categorical Eligibility “as a way to increase SNAP participation and reduce State workloads.”

Changing the rules for eligibility, along with state-level changes in

application methods, has contributed to a 70 % increase in food stamp participation from 2007 to 2011.

Lax security by EBT processors and states invites food stamp fraud, often through social media. There are understaffed fraud investigation units at both the federal and state level. For example, Florida has just 63 staff positions to police approximately 3 million EBT users state-wide. These investigators not only handle TANF and SNAP eligibility fraud, but also EBT trafficking, Social Security Disability and Medicaid eligibility fraud, Emergency Financial Assistance for Housing, and Low Income Energy assistance, among many others.

Click here for the report.

124 comments
Pipi Longstoking
Pipi Longstoking 5pts

Carol Tracy, what do you think of the bank bailouts (too big to fail policies), and companies not paying a dime of taxes? What about "black ops" that the USA tax payer can't even inquire as to how much taxes go to black military ops?

Nickolas Anzelmo
Nickolas Anzelmo 5pts

food stamps should only be good for raw whole fruits and vegetables

Brus Simpson
Brus Simpson 5pts

O and the people on the left funding corporate welfare are giving the $$$ to right wing corporations. You prople don't get it. Government is the facade used by big business to run the nation.

Brus Simpson
Brus Simpson 5pts

Astounding and very disheartening for the working sector who receive no benefits from what they fund.

Shane Scheid
Shane Scheid 5pts

FWIW....the part where it says "Read full report here" is a dead link

Cesare Beccaria
Cesare Beccaria 5pts

It's another reason the politicians are not going to stop the growth of welfare and illegal immigration. Their donors profit from it at the expense of taxpayers.

George Osborne
George Osborne 5pts

People Just don't get it.. Obama has said that any state refusing refugees would be an act of war and he would respond accordingly , NOW do you understand ???

Frans Gerard Bouman
Frans Gerard Bouman 5pts

Benjamin Stockton The Right is as dependent on government handouts as the left is. The makeup is a little different, but not much.

Frans Gerard Bouman
Frans Gerard Bouman 5pts

How would you prevent malnutrition if not through government programs? They came into being because private charity was not working. Business is not going to conduct sufficient charitable giveaways to accomplish anything during a depression (which is what we had starting 2008).

Benjamin Stockton
Benjamin Stockton 5pts

And Michael, make no mistake, the mobs *will* reach you, unless perhaps you are way out in the boonies. And even then, you'll feel the effects when transportation systems break down and whatever fancy toys you have can no longer have replacement parts shipped to you.

Benjamin Stockton
Benjamin Stockton 5pts

Like I said before Michael, if you have the balls, you just go right on ahead and eliminate food stamps. See what happens. That's where the Faux News propaganda you've been fed will slam right up against reality. Go ahead. I dare you. I am at peace with the God(dess)es of my ancestors, and am prepared to die. Are you?

Steve Fredrickson
Steve Fredrickson 5pts

Providing poor food assistance naturally finds the providers of same the same businesses that feed everyone else ...

Johnny Bynum
Johnny Bynum 5pts

Pay people fairly so they don't qualify for aid. Boom. Done.

Tom Diamond
Tom Diamond 5pts

Your right Michael McNamara Sr., my statement was one one of less government not more. The fact that crony capitalists know that they don't have to do right is the problem. I am not a republican or democrat, or libertarian. There is no party who will willingly take care of this. Too much money involved.

Michael McNamara Sr.
Michael McNamara Sr. 5pts

Broken Window Fallacy. The money goes back into the economy, but in order to get $1 of food stamps into the economy, you have to set up a huge taxation bureaucracy, a food stamp bureaucracy, thousands upon thousands of local offices in every county in the country, staffed with grossly overpaid government workers, etc etc. So you need to take at least $10 out of the economy in order to put $1 back in. Pretty stupid, huh? And no, you don't need to jump through anything. The fastest growing segment of the Food Stamp recipient demographic is college kids. Able-bodied young people who are certainly capable of working, but would rather take the free food and not work, because....well, because they can. It's so easy to get food stamps, even dead people collect them. Nobody is saying poor people don't deserve to live. Nobody is saying don't help people who need it. But let's not get stupid about these programs. It's extremely illuminating to note that in states where a work requirement was imposed on food stamp recipients, participation rates dropped dramatically. What more proof do you need that some component of those collecting food stamps are doing it because it's easier than working? That's not helping people in need. That's subsidizing laziness.

Michael McNamara Sr.
Michael McNamara Sr. 5pts

Benjamin Stockton I'm sorry reading comprehension is not a strong point with you. Let's clarify so you can follow along. You stated that we need huge government programs to feed all the starving people in America, and that without those programs millions would die. That's called a positive declaration, see? You have made a positive claim (two of them, actually). Then I pointed out the glaring contradiction that this country is chock full of fat people. So much so, that your President has declared obesity a national security risk. You see? In a country where you claim millions are on the brink of starvation and would die without government assistance, the reality is that nearly everyone is overweight. Most are grossly so. Now that we've clarified the question for you so you can understand it more easily, please explain the contradiction. Because I keep reading Liberal blogs and Administration policy wonks who fret about millions of American children going to bed hungry every night, but I've never met one. I have met plenty of roly-poly fat kids who clearly never missed a Twinkie in their lives. So where is this near-starvation happening, which is so severe we need a MASSIVE government program to combat it?

Marylyn Revell
Marylyn Revell 5pts

this is why they are so hot to get these foreigners into our country. according to the Washington Examiner 87% of illegal alien family's are on welfare 72% of legal immigrant family's are on welfare . remember in 2004 the Minutemen had to go to our southern border to try and keep them out? see.2008.borderinvasionpics.com 2015 see.Border Crisis and Which Way Home on you tube.Trump 2016.

Rusty Corneliusen
Rusty Corneliusen 5pts

Perhaps I am an aberrant, but I do not get a receipt when I 'donate' because my contribution is not made in lieu of a tax break or any other fiscal consideration.

Francisco Amezcua
Francisco Amezcua 5pts

So now you want to reward them??? You wonder why they don't want to find jobs to get off it !!! It was created during a real depression, to assist, not to live off it !!!

Francisco Amezcua
Francisco Amezcua 5pts

Hahaha if the sorry ass liberals would stop giving to the lazy & not giving in to demands by the leeches to allow them to be used there, there would be no problem with crony capitalism !! Idiots !!! It's supposed to help them, not for them to live off it or raise a family on it !!!

Pierce McDowell
Pierce McDowell 5pts

Yes, and it benefits poor communities and small businesses as well.

Tim Kelly
Tim Kelly 5pts

Doesn't matter - they aren't owed and they keep demanding more free stuff while deserving of none

Gary Hettinger
Gary Hettinger 5pts

be ready to hire more police, if hungry people will do whatever is necessary to eat

Gary Hettinger
Gary Hettinger 5pts

Sam Levi Clinton changed welfare, Bill that is, it's not a life long check anymore, you can only get it for 3 to 5 years depending on the states and you must be taking job training and actively looking for work, it has been changed then from it was in the past

RonaldSandidge
RonaldSandidge 5pts

Gary, Clinton's, or the Republican Congress welfare reform has fallen to the wayside. That reform has pretty much and well been circumvented and is pretty much back like it was with a few of the reforms still in. It can be and is a life long check once more for a majority.

Mari Doino
Mari Doino 5pts

Profitizing Poverty! Fake non profits, subsidized housing, poverty is an industry!

John Eriksen
John Eriksen 5pts

Who do you think really pays corporate taxes and who do you think that hurts the most?

Tom Diamond
Tom Diamond 5pts

Michael McNamara Sr., I have three businesses, we meet payroll every week. We have to compete with other firms to attract and retain the best personal. In this area there has been a slew of businesses in my arena close, so there is a glut of talent unemployed. We could pay less, but then who do punish with our shortsightedness? And if we do pay low wages, how many will leave the industry and look elsewhere for their livelihood. So I do understand capitalism, I've been a willing participant for over three decades. People like the Waltons who control walmart make billions every year, and for the most part do not take care of their employees. The federal government (which is all tax payers) does. Don't confuse capitalism, with crony capitalism. G.E., Boeing, G.M. Dupont, the Federal Reserve, Wall Street Firms, hedge Fund manager types, they get special treatment. Treatment we on main street do not.

Tami Chapman
Tami Chapman 5pts

We need to care for the vulnerable of our society. Everyone deserves to have the basic necessities of life life, no matter what their financial status is.

Tami Chapman
Tami Chapman 5pts

The money goes back into the local economy and you practically have to jump through hoops to get it anyway, so I don't know what people's problem is. It makes me sick that so many think that the vulnerable of our society don't deserve to live, which is exactly what they are saying when they are against helping people who need it.

JohnStephens1
JohnStephens1 5pts

I don't think this is saying those people who need it shouldn't get it.  I think they are saying there are people who are getting it fraudulently and those through whom it is administered are profiting from it.

RonaldSandidge
RonaldSandidge 5pts

@JohnStephens1 The welfare institution in DC has admitted some years ago that they pretty much can say it is riddled with up to 50% fraud. But is built into the system and uncontrollable. That is the problem, it just feeds into itself.

Benjamin Stockton
Benjamin Stockton 5pts

Daryn, we already have self-driving cars. Have you looked at the advances made in robotics in just the past decade? I would suggest some research before you cavalierly dismiss what I said about automation. "Things will continue to be this way because they have always been this way" is a flimsy argument anytime, but it is especially fallacious to make it about technology in the 21st century.

Michael McNamara Sr.
Michael McNamara Sr. 5pts

Who wants wages kept low? Are you just making up crap? Wages rise on their own. When was the last time you had to meet a payroll, skippy? How many people's livelihoods have depended on your ability to make sound business decisions? How many jobs did you create last year? How many interviews did you conduct and how many people did you hire? Since the answer to those questions is obviously ZERO, lemme explain a few things to you. Employers know when they're paying the rightcwage, when they have no trouble finding qualified applicants to fill openings. When they have trouble finding people willing to take the job, they need to make the position more attractive, and one way to do that is to offer higher pay. That's called life. You'll find that in some areas of the country walmart and McDonald's are already paying $12/hr voluntarily. They're not doing so out of the goodness of their hearts but because they have to pay that much in those areas to get people to work for them. Didn't need government meddling to get there. See how that works, chief?

Rebecca Davis
Rebecca Davis 5pts

People are more inclined to not spend wisely if the money they are spending... They didn't work for. Convenience stores offen have huge signs staying they take food stamps, while anyone on food stamps shouldn't purchase there... Price is high, food is hardly food... So on

Daryn Rabbe
Daryn Rabbe 5pts

Now it's 98%? Lol. You're emotion-based, self-absorbed, minimalizing debating tactics are quite pathetic. Take a deep breath & look at yourself. Look in the mirror that some capitalist company produced. Do you see anybody else? It's just you right? Frightening & scary stuff huh? I'm done here. Sheep gonna sheep....

Daryn Rabbe
Daryn Rabbe 5pts

Most work will be done by computers/automation? Like constructing millions of those homes, (communes?) commercial & retail buildings? Wiring electricity? Repairing AC/hearing units? Plumbing? Building bridges, highways & streets? Repairing & maintaining millions of various modes of transportation? Welding? You know, only Christian people use. In your puppy dog & rainbow world, how is automation going to build everything you virtually see around you? ...or will those pesky, laboring meaningless jobs be allocated via the "equality-minded" egalitarian central economic planners towards Christians only?

Don Francis
Don Francis 5pts

Doing away with the old commodities program was a very bad move- but great for businesses and bad for kids. I never understood why that happened.

Benjamin Stockton
Benjamin Stockton 5pts

Daryn, the most prosperous societies in the world allow capitalism, but also impose social controls and redistribution of the wealth so a small cadre of capitalists doesn't accumulate all the wealth while everyone else gets poorer (which is your preferred system, because you naively think you'll be in the top 1%). In short, they use the features of capitalism that make sense and compensate for the defects. Yes, capitalism has defects--the market isn't Jesus Christ sent down to feed the masses.

Sam Levi
Sam Levi 5pts

Shira, without welfare, we would have had widespread economic collapse more frequently and more severely than we have seen since the industrial revolution. The greatest generation put in safeguards to prevent massive collapse and runaway debt. Their children, being the spoiled brats they were, bought into the Reagan era propaganda and drove our economy into the ground and forced it onto government funded life support.

Daryn Rabbe
Daryn Rabbe 5pts

Everywhere in the world where you see the least amount of starvation & overall misery is exactly where you see a high-degree of free-market Capitalism & private property rights. (Privately owned & operated means of production). The alternative is of course State-owned & controlled Capitalism. (State owned/operated property including your personal time, talents & labor). In otherwords, you don't own yourself. You're a servant of the state. That's worked out so well in the past hasn't it? That's a fact and it's unfortunate for everyone that spoiled sheep like Benjamin are unable to comprehend this. ...something so glaringly obvious yet, distant and... dare I say... "isolated?"

Benjamin Stockton
Benjamin Stockton 5pts

Daryn, I'm sorry that you're so antisocial you think society is just a "herd." But as I said before, you're pretty much pitting yourself against 98% of so of the human race. People want security. They want friends. They want to know that if they get injured or sick they won't be disposed of and discarded like a defective cog in some machine. But hey, if you don't like American society, by all means, exercise your freedom to leave. You could move to...hmm...Canada? Nope, socialized medicine. Britain? France? Spain? Ireland? Italy? Portugal? Greece? Germany? The Netherlands? Nope, all more socialized than America. Japan? No, they're social too. Australia? Nope, social programs there, too. India? No. That leaves...well, you people constantly compare anyone who disagrees with you to China and North Korea, so those are out. How about Somalia? Yeah, that's more your speed. That's the closest thing on Earth to "every person for themselves and shoot the wounded." THERE'S NOT A SINGLE OTHER COUNTRY IN THE WHOLE WORLD for you to move to.

Sam Levi
Sam Levi 5pts

Strange given that only one party has made any effort to reduce the demand for welfare (thus actually trying to solve the problem that is indicated by welfare trends. Welfare is not now, and never was the problem. It merely serves as an economic bellwether. In a perfectly healthy economy, you could have all the welfare programs in the world and the welfare rate would be zero. Welfare only comes from excessive inequality and labor/consumer exploitation.)

Sam Levi
Sam Levi 5pts

This is why all welfare is corporate welfare. And yet idiots still argue for lower corporate taxes and against higher wages while wondering why welfare is so high and demanding perpetually higher profits.

Eb Bruner
Eb Bruner 5pts

Just plain outrageous. The whole program