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.

8 comments
Glenn Ballard
Glenn Ballard

I know exactly how it works. Some big corporations pay starvation wages, then count on the government to pay their employees. A form of corporate welfare, while putting our government deeper in debt, and deflating the tax base.

Matthew Crockett
Matthew Crockett

It was startling that JP Morgan Chase behaved as they did with the mortgage market. It was suspicious that they just Happened to get a bail-out. Now with the food stamp angle there is the terrifying fact that they literally have a solid motive to inflict lasting damage on the American economy.

Matthew Crockett
Matthew Crockett

As much as some would Desperately like to blame and hate-spew Obama for every problem that has Ever afflicted America, he didn't create any of this. No part is this came into being based on nay bills he has signed.

Ben Calvin
Ben Calvin

Sickening isn't it? That people that make a lot of money can take advantage of low income programs because they're considered to have no income. While people like me, live on $30 a week for food get shafted. I can try to rice and beans, spaghetti, and 99 cent sale foods as long as possible, but i'll eventually get sick of it and start vomiting. Fun times since the 70s. Thanks.

Jim Thurman
Jim Thurman

Of course, this is all part of the plan for a fascist America

Steven M. Krupinski
Steven M. Krupinski

Ever see what happens to the well dressed, working age Americans standing in line at WalMart when the cashier tells everyone in line that the EBT Food Stamp system is down? I did yesterday. They stood there confused and disappointed that the taxpayers weren't feeding them. Not sure if they even put their selected items back on the shelves. If they did, they could add "stacking shelves" experience to their resumes and then apply at WalMart..

BrandySmith
BrandySmith

@Leilani Bornman You're an idiot. You think food stamps came from Obama? OMG please get an education and don't breed.