Capping Entitlements: Budget Rules and the Food Stamp Program

Abstract

The paper examines three forms of budgetary rule applied to the food stamp program — discretion, entitlement, and expenditure caps. The different budget rules are modeled with respect to their reversion point, the outcome that prevails by default if no cooperative agreement is reached. Hypotheses concerning budgetary politics and policy are derived from the models and tested using historical data from one arena over time. The case study is relevant to the broader problem of welfare spending. The dilemma is how to reconcile budget protection needed for the impoverished against the fragmentation and fluctuations of routine political conflict, and budget integration needed for democratic deliberation regarding the multiple tasks of government. Entitlement status insures program benefits for qualifying households, but it also carves off a portion of total outlays declared to be relatively uncontrollable, outside of the annual mechanisms of review and adjustment. Discretionary budgeting, by contrast, incorporates welfare within ordinary collective decision-making that establishes priorities across competing claimants for public funds, but it also risks making the poor in society victims of their own vulnerability. Expenditure caps have recently been proposed as a solution to the dilemma, allowing outlays to grow automatically up to a given threshold but requiring conscious choice if they threaten to breach the threshold. Caps are celebrated by proponents as an instrument fostering enhanced managerial oversight and reasonable expenditure control. This study of the food stamp program, however, reveals that caps are more likely to engender procedural complexities and substantive policy bias. Moreover, these are logical and foreseeable results, easily deduced from the models of budgetary rule.