Connect with us

Business

The US struggle to pay for food: ‘No matter how well you budget, you will run out of something’

Source image: https://www.theguardian.com/us-news/2022/nov/22/kentucky-snap-recipients-allotments-reduced

Brett St Amand, a 59-year-old veteran living in Georgetown, Kentucky, never planned on using food stamps. For as long as he can remember, the self-identified Republican prided himself on his independence, preferring a life in the rural outskirts of town and making his living as a self-employed horse broker.

But in the early months of the pandemic, St Amand and his wife separated, setting off a period of instability. He moved out of their longtime house, put everything he owned into a storage unit and started bouncing from one temporary home to another. During this time, St Amand – whose only steady income is a monthly VA disability check for $152 – relied heavily on local charities and churches to get by.

One day, a friend gently suggested that St Amand enroll in the federal Supplemental Nutrition Assistance Program (Snap), more commonly known as food stamps. He rejected the idea at first. “I’m kind of prideful, you know?” he recalled in a recent interview. “I was embarrassed.”

Eventually, a reluctant St Amand filled out the program paperwork, and started getting $345 each month in benefits. This money meant that he could now afford his own groceries, instead of depending on the unpredictable inventories at nearby food pantries. And not only could he get staples like produce, bread, milk and water, but he could even occasionally indulge in the likes of steak and seafood. It was mundane stuff, but it also felt like a miracle. “I was doing backflips,” he said. “I just couldn’t believe that everything came together and I got it.”

So St Amand was devastated this past May, when he discovered that his Snap benefits would soon be slashed by nearly a third, from $345 to $250 a month. Immediately, he upended the way he shopped for groceries, almost entirely ditching fresh fruits and vegetables, and swapping seafood and red meat for poultry and eggs. Today, he subsists mostly on a starch-heavy diet of tortillas, rice and beans.

Brett St. Amand shops for food in a Dollar General grocery store in Georgetown, Kentucky.
Brett St. Amand shops for food in a Dollar General grocery store in Georgetown, Kentucky. Photograph: Jon Cherry/The Guardian

The turn in St Amand’s luck was the result of a controversial bill that Kentucky lawmakers passed a few weeks earlier, repealing the state’s Covid-19 emergency declaration. With that one maneuver, legislators drastically reduced the amount that Bluegrass state residents could receive in food stamps each month.

Before the repeal, the federal government had been giving recipients extra funds on top of their typical Snap allotment each month, a measure meant to mitigate heightened food insecurity during the Covid-19 pandemic. These top-offs, known officially as “emergency allotments”, amounted to at least $95 per household each month, and have been credited with helping poor families across the country put dinner on the table amid tumultuous times.

However, under program rules, emergency allotments are only available in states that have a Covid-19 emergency declaration in place. So when Kentucky lawmakers voted to remove the state’s declaration last March, the extra grocery money that residents had come to rely on disappeared alongside it.

Today, at least 16 other states have done the same, arguing that extended welfare programs are to blame for high unemployment and are a waste of taxpayer money.

The total amount of food assistance lost as a result is staggering: according to a new analysis by the Economic Hardship Reporting Project and the Guardian, states opting out of emergency allotments have collectively relinquished nearly $4bn worth of food stamps that would have gone toward helping their poorest residents avoid going hungry.

This loss of benefits has effectively created a two-tiered welfare system across the country, in which families living under identical circumstances may receive vastly different amounts of food aid based solely on where they live.

For low-income residents, the slashing of pandemic food assistance takes both a physical and a psychological toll. Food stamp users say they’re buying fewer groceries, accumulating credit card debt they can’t pay off and even skipping meals. The lost benefits also represent millions of dollars each month that are no longer circulating within local businesses.

In affected states, food pantries say they’re seeing steeply increasing demand even as the cost of providing hunger relief has gone up due to inflation and high gas prices.

In Kentucky, lawmakers advocated for the effective repeal of pandemic food assistance by suggesting that residents no longer ‘deserved’ it.
In Kentucky, lawmakers advocated for the effective repeal of pandemic food assistance by suggesting that residents no longer ‘deserved’ it. Photograph: Jon Cherry/The Guardian

“I can draw a direct correlation between the loss of benefits and increased need that we’re seeing,” said Vincent James Sr, president and chief executive officer of the Dare to Care food bank, a network of 300 anti-hunger organizations across Kentucky and Indiana. James estimates that there’s been a 20%-30% increase in visitors across the network, even as supplies have diminished – conditions that put families at a risk of being turned away empty-handed.

“Non-profits fill that gap where the private and public sector are not providing,” James said. “When we run out of food, that means that there are going to be people that are literally starving.”


Until May, Marie Cornelius, a 71-year-old retiree in Louisville, had been receiving about $240 a month in food stamps. The money made up her entire grocery budget, which she spent at her local Kroger. The food pantries that she had long relied on shuttered at the beginning of the pandemic and have yet to reopen. (Cornelius requested to be identified only by her middle and last names.)

When Kentucky lawmakers terminated the emergency allotments, Cornelius’s Snap benefits dropped to just $20 a month, the non-pandemic amount she’s eligible for based on her social security income. Now she buys groceries with her credit card, and tries not to think about the ballooning balance that haunts her from month to month. Earlier this year, she had to pay for a car repair and unexpected vet bills. Losing emergency Snap benefits means that she’s now in debt for food, as well.

“I have other bills that need to be paid off, not grocery bills,” she said when we met up recently at a park near her home. It was a windy day and her blond curls danced around her face as she spoke.

For decades, poor Americans like Cornelius have relied heavily on the federal food stamp program to afford groceries. Covid-19 emergency allotments were first introduced in their current form in April 2021, as a way to bump up benefits for all recipients during the pandemic, with all of its attendant challenges including low employment rates and high costs of living.

Over the past year, however, states began to mull an end to their Covid-19 emergency declarations, noting a decline in cases and the widespread availability of vaccines. In Kentucky, lawmakers advocated for the effective repeal of pandemic food assistance by suggesting that residents no longer “deserved” it.

“The question we really need to ask ourselves is: are we in a state of emergency?” said Kentucky statehouse representative Thomas Huff, who presented the bill ending the Covid-19 emergency declaration during a legislative session in March. “Are the hospitals overflowing? Are the deaths skyrocketing? Are the numbers climbing? That’s the question we need to ask, not whether we can squeak by another month on free federal money.”

“I’m not really interested in continuing to draw federal funds if they’re not deserved or needed,” Huff added later in the same session.

The Kentucky state legislature eventually answered Huff’s questions resoundingly: lawmakers in both chambers voted by veto-proof majorities to end the state’s Covid-19 emergency declaration, cutting residents off from extra Snap benefits beginning May onward. (Huff’s office did not respond to a request for comment.)

The lost funds translate to billions in no-strings-attached grocery money that the poorest Americans would have been able to use.
The lost funds translate to billions in no-strings-attached grocery money that the poorest Americans would have been able to use. Photograph: Jon Cherry/The Guardian

Cornelius panicked when she learned of the news while watching television one day, and decried what she felt as a lack of empathy from lawmakers for people facing hunger like herself. “[Food insecurity] can happen to anybody,” she said.

Cornelius wistfully recalled the healthy foods she used to buy with her extra food stamps. She’d eaten shrimp for the first time in years, and could even afford locally produced milk and organic fruits and vegetables. When she got dentures, she was able to buy fish like salmon, cod and tilapia, as well as frozen microwavable meals, all of which were soft on her gums.

These days, her drastically reduced benefits mean she forgoes almost all of that. Instead, Cornelius typically eats a banana for breakfast, Campbell’s soup and crackers for lunch, and a poached egg for dinner. In fact, eggs are the only food she now gets more of than ever – buying and eating approximately one carton a week – because they’re a relatively cheap source of protein, she said. But Cornelius is also supposed to be on a low-cholesterol diet, and she worries about what eating so many eggs will mean for her health.

Emergency allotments – had they remained in place – would have gone a long way for Cornelius and other Kentucky residents. In April, the final month in which the state was eligible for the benefit, over a quarter million households received nearly $53m in extra Snap benefits.

Put another way, with every passing month, the total sum of pandemic food assistance left on the table by Kentucky alone grows by tens of millions of dollars. Aggregated across all affected states, that value balloons to more than $3.9bn.

The Guardian and the Economic Hardship Reporting Project calculated this estimate as follows: for each month beginning with April 2021 – when emergency allotments were first introduced in their current form – we added up the number of households enrolled in the Snap program across all states that had eliminated the extra benefits by that point. We then multiplied the total number of affected households across all months by $95, the minimum amount of pandemic food assistance that each would have received every month.

The total amounts to more than $3.9bn through August 2022, the latest month for which federal data is available. This value is probably an undercount; while every household is guaranteed at least $95 in extra food stamps each month, under the emergency allotment policy, many got benefits worth far more. (The estimate also does not reflect lost emergency allotments between September and November, as Snap participation data for this period has not yet been released.)

The lost funds translate to billions in no-strings-attached grocery money that the poorest Americans would have been able to use to buy food over the past year – a period during which inflation has increased the cost of eating at home by 12.4%, according to the most recently available data from the US Department of Labor’s consumer price index.

Cornelius thinks a lot about what life would have been like had lawmakers not slashed her emergency Snap allotments. “It’s awful,” she said, about needing to put groceries on credit these days. “I just keep feeling like I can’t get ahead.”


Anti-hunger advocates say that the loss of emergency food assistance has been punishing for Kentucky’s poorest, who are now relying on food pantries more than ever. “We’re seeing folks that didn’t even come [earlier] during the pandemic,” said James, the president of the food bank network Dare to Care. “They’re coming now, and we’re seeing them for the first time. They’re having to decide between food and their medication, and between food and gas. And that’s an impossible choice that no one should have to make in America today. But yet, we have citizens that are making those choices.”

The increase in need has dovetailed with a number of other challenges that Dare to Care’s pantries are facing at the moment: less food to give away.

According to James, the network has seen the amount of food it receives from the federal government reduced by more than one-half in the past few months, which makes up a significant portion of the assistance it hands out to families.

Tania Whitfield stands for a portrait outside her her home in Lexington, Kentucky, on 14 October 2022.
Tania Whitfield stands for a portrait outside her home in Lexington, Kentucky, last month. Photograph: Jon Cherry/The Guardian

Tania Whitfield, 37, a single mother of two in Lexington, is one of the many Kentucky residents who have turned to food pantries occasionally for support during this time. “I only go when I really need it,” she said when we met up earlier this month.

Whitfield currently gets $740 a month in food stamps. If the state’s Covid-19 emergency declaration hadn’t been repealed, she’d be getting an additional $95 per month in emergency allotments – money that would go a long way in giving her and her daughters peace of mind.

For Whitfield’s family, the most stressful part of each month comes the week or so before their benefits run out. That’s when grocery money gets low, and Whitfield has found herself caught between buying chicken for dinner or snacks for her daughters to take to school. (Whitfield’s daughters qualify for free school breakfasts and lunches, but students have to bring their own snacks for recess.)

When this happened in September, Whitfield ultimately had little choice but to send her daughters to school empty-handed, promising them that she’d surprise them with something special once next month’s food stamps became available.

“My daughters don’t want to make me feel bad but they get comments at school like: ‘Why can’t your mom make more money?’ or ‘Why didn’t you bring a snack to school?’”

Whitfield, who’s working toward her GED, said she was fired from her most recent job as a restaurant server because she couldn’t work more than a few shifts each week. But her availability was limited by the fact that she couldn’t find affordable and safe childcare for her daughters for most of the available shifts.

She tries hard to shop frugally, but inflation at the grocery store has put even store-brand products out of reach at times. She buys household staples like frozen pizza and boxed macaroni and cheese half as often as she used to, and has eschewed fresh vegetables for frozen and canned alternatives. Family packs of chicken have gotten smaller, she says, but she feels like she’s shelling out more for them than ever.

“No matter how well you budget, you will run out of something,” she said when we met at a local cafe in October. At the time, her eldest daughter’s birthday was approaching, and Whitfield wanted to send her to school with birthday treats for her classmates. But Whitfield only had about $26 in benefits left for the rest of her Snap cycle, which wasn’t going to be enough. Whitfield eventually decided that she would borrow money from a friend to cover whatever food stamps wouldn’t.

Tania Whitfield places her items on a conveyor checkout line at a Kroger grocery store in Lexington, Kentucky, on 14 October 2022.
Tania Whitfield places her items on a conveyor checkout line at a Kroger grocery store in Lexington, Kentucky. Photograph: Jon Cherry/The Guardian

Anti-hunger advocates point out that every Snap dollar relinquished by Kentucky lawmakers is a dollar that would have circulated within the state’s economy. In April, the final month in which extra Snap money was available for Kentuckians, residents received over $52m in emergency allotments alone.

“That’s $50m not going to local farmers and grocers,” said Tyler Offerman, food justice fellow at the Kentucky Equal Justice Center, an advocacy group for low-income residents.

Other anti-hunger advocates in Kentucky said that giving people money to buy groceries doesn’t just help them avoid hunger – it also has a “multiplier effect” on the local economy. It’s one thing for people to get food from local charities, said Emily McCue, a Snap employment and training coach for a local Goodwill. “But it’s not putting money back into the community.”


In October, the federal government announced a 12.5% increase to Snap benefits across the board, as part of a standard annual cost-of-living adjustment pegged to the rate of inflation. For some, particularly those who receive a relatively high level of food stamps each month, the boost was significant.

Whitfield, the single mother in Lexington, saw an increase of more than $80 a month, which went a long way to bridging the gap left by the lost pandemic food aid. (It bears pointing out, however, that had Kentucky kept its Covid-19 emergency declaration in place, Whitfield would be getting both an extra $95 a month in emergency Snap benefits and a cost-of-living adjustment.)

But for many, the cost-of-living adjustment is cold comfort. For Cornelius, the retiree in Louisville, a 12.5% increase comes out to less than $3 a month.

Taken together, the predicaments faced by Kentuckians enrolled in the Snap program reflect not only a dire new level of food insecurity, but also a potential preview of a broader hunger crisis to come.

Should other states follow Kentucky’s lead and repeal their own Covid-19 emergency declarations, millions more Americans could find themselves facing the same hard choices faced by some Kentuckians. Then there’s a possibility that the federal government may do away with pandemic food assistance entirely.

As of right now, the continuation of federal emergency allotments is contingent on the existence of a national public health order. If that gets revoked in the coming months, it would eliminate emergency allotments for all Snap recipients, and could trigger a nationwide spike in hunger, said Ellen Vollinger, Snap director at the Food Research & Action Center, an organization that advocates against poverty.

“Food insecurity is really not rocket science,” she said. “It’s not a disease that we don’t know what to do about. The country knows what to do about food insecurity … The major factor is just a pretty obvious clearcut one, and that is: do people have enough money to be able to afford what they need?”

For St Amand, the veteran in Georgetown, the toll of getting his food stamps slashed extends far beyond the simple fact of not being able to afford food – it’s also brought a sense of dread and shame to the experience of grocery shopping.

In multiple instances, he’s had to take items out of his bags at the checkout line upon realizing that his food stamps won’t cover his bill. He credits the generosity of churches and neighbors for helping him stay afloat in the past few months.

“I’ve had people literally pay for my food and that brings tears to your eyes,” he said.

Source: https://www.theguardian.com/us-news/2022/nov/22/kentucky-snap-recipients-allotments-reduced

Continue Reading

Business

‘Financial pariah’: Adani crisis grows with protests in India over fraud claims

The crisis engulfing beleaguered Indian conglomerate Adani Group is spilling into politics, with hundreds of members of India’s opposition parties taking to the streets to demand a probe into fraud claims that are weighing on the broader Indian market.

Adani has lost about US$115bn from its listed entities, representing well over half its value, in a fortnight of heavy selling sparked by allegations by US investor Hindenburg Research that the conglomerate is engaged in a “brazen stock manipulation and accounting fraud scheme”.

Adani, a ports-to-power conglomerate that owns the Carmichael coal and rail project in Queensland, has denied the allegations in a detailed 413-page response. It won a rare reprieve from the stock rout on Tuesday after it repaid more than US$1.1bn in loans earlier than expected, easing some concerns over its debt load.

Share prices of several of the group’s entities, including its flagship Adani Enterprises, rose in early trading in Mumbai on Tuesday, although overall losses are steep. The conglomerate is also due to report what will be closely watched financial results.

Now in its third week, the Adani crisis threatens to escalate further after both houses of India’s parliament adjourned on Monday for a third consecutive sitting day amid demands for the matter to be debated in parliament and a supreme court inquiry into the allegations. The prime minister, Narendra Modi, is seen as close to the conglomerate’s chairman, Gautam Adani, and his government has been accused of protecting the Adani Group from scrutiny.

“It is clear that the Modi government is running away,” Jairam Ramesh, the general secretary of the opposition Congress party, said.

Opposition members have protested across the country this week, including outside several offices of a state-owned insurer and bank, both of which have exposure to Adani group companies. On Monday, over 200 members of the Congress party were detained for staging protests in Assam.

Mark Humphery-Jenner, an associate professor of finance at the University of New South Wales, said while the decision by Adani to make early loan repayments assuages some concerns, investors remain sceptical of its worth.

“It does seem like the market isn’t really believing what Adani is trying to say,” Humphery-Jenner said.

“The market doesn’t believe that Adani is worth anywhere near what it was, or potentially what it is currently trading at.”

Along with the stock selloff, bonds issued by Adani companies are trading at distressed levels amid fear that it might not meet loan obligations.

“Adani is being treated as a financial pariah at the moment,” Humphery-Jenner said.

The plunging share prices and recent decision to abandon a share sale raises questions over where Adani will turn to raise capital and whether it will need to sell assets.

Adani has said it has an “impeccable track record” of servicing its debt.

The wealth of the company’s billionaire chairman has slid alongside the value of his companies. After sitting alongside Jeff Bezos and Bill Gates among the world’s richest just a couple of weeks ago, Adani has dropped out of the top 20, according to the Bloomberg billionaires index.

Continue Reading

Business

Fed says more interest rate rises needed to cool inflation

The Federal Reserve chair, Jerome Powell, has said that more interest rates rise will be needed to cool inflation and the red-hot US jobs market.

“We think we are going to need to do further rate increases,” Powell said on Tuesday at the Economic Club of Washington. “The labor market is extraordinarily strong.”

The Fed chair’s comments came hours ahead of Joe Biden’s State of Union address to Congress at which he is predicted to tout his administration’s economic record, including strong job growth.

The US added 517,000 new jobs in January – far higher than expected and a sign of the continuing strength of the jobs market. The report came two days after the Fed announced another quarter-point increase in its benchmark interest rate, its eighth consecutive rate increase as the central bank fights to tame inflation.

“The disinflationary process, the process of getting inflation down, has begun and it’s begun in the goods sector,” Powell said in Washington. “But it has a long way to go. These are the very early stages of disinflation.”

Reacting to the stronger-than-expected employment report, analysts now expect interest rates to rise above 5% to ease wage pressure in the labor market and begin to cool inflation to the Fed’s 2% target. In December inflation stood at 6.5%.

While some have begun to declare victory over inflation, Powell said last week that officials need “substantially more evidence” to be confident that inflation is heading downward.

“The reality is we’re going to react to the data,” Powell said on Tuesday. “So if we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have to do more and raise rates more than is priced in.”

Continue Reading

Business

Crisis at Adani Group intensifies as Indian activists stage protests

The crisis engulfing the Adani Group has intensified as hundreds of members of India’s opposition parties took to the streets to press for an investigation into allegations by a US short-seller against India’s second-biggest business group which triggered its market rout.

The Adani Group said on Monday that its major investors, known in India as “promoters”, had pledged to prepay $1.1bn (£916m) in share-backed loans due for repayment by September 2024. The repayments include shares in Adani’s ports business, Adani Green Energy and Adani Transmission.

Shares in Adani Port & Special Economic Zone jumped 9% after the announcement.

Members of the opposition Congress party have been urging the prime minister, Narendra Modi, to order an investigation into the Adani Group companies after a US-based short-selling firm, Hindenburg Research, accused them of various fraudulent practices. The Adani Group has denied any wrongdoing.

In Delhi, Congress party workers threw fake currency notes in the air and chanted slogans. Some burned a suitcase plastered with images of Modi and the Adani Group head, Gautam Adani. Some protesters scaled police barricades and were detained and taken away in police vans.

Opposition party workers in the financial capital, Mumbai, and the southern city of Chennai gathered outside the offices of a state-run bank and the country’s largest insurer, which are known to have investments in Adani shares.

So far, there is no sign the fracas is spreading across India’s financial sector and the protests are more a reflection of political theater rather than spontaneous public outrage. Lawmakers disrupted parliament for a third day on Monday as calls mounted for India’s market regulator to look into Hindenburg’s claims.

Adani and his companies have lost tens of billions of dollars as investors dumped their shares. Last week, the group cancelled a $2.5bn share offering, promising to provide refunds to investors.

The billionaire’s fortune had grown by more than 2,000% in recent years. Critics say he has benefited from strong relationships with Modi and his government, while others point out he also prospered under previous administrations.

“What action has been taken, if ever, to investigate the serious allegations made over the years against the Adani Group?” Jairam Ramesh, the Congress party’s general secretary, said in a statement issued over the weekend. “Is there any hope of a fair and impartial investigation under you?” he said in a reference to Modi.

Shares in Adani Enterprises, the group’s flagship, wobbled on Monday and were down 2.1% by mid-afternoon. Its market value has shrunk by more than 50% since the Hindenburg report. Stock in five other Adani listed companies fell by 5% to 10%.

The move to repay share-backed borrowing early addressed one of the key concerns raised by Hindenburg: heavy borrowing using group shares as collateral. Adani said the pledge by major shareholders to repay that debt was “in continuation of promoters’ assurance to prepay all share-backed financing”.

The wild swings in share prices have highlighted concerns over corporate governance, especially as the country tries to woo foreign investors.

On Saturday, the Securities and Exchange Board of India (SEBI) issued a rare statement seeking to calm investors.

“During the past week, unusual price movement in the stocks of a business conglomerate has been observed,” the market regulator said, without naming the Adani Group. It said mechanisms were in place to deal with volatility in specific stocks. The SEBI would examine any information before taking appropriate action, it said.

On Friday, the finance minister Nirmala Sitharaman dismissed concerns that the controversy would alarm global investors, saying India’s financial markets were “very well regulated”.

Adani built a fortune in trading and in coal mining and then branched into construction, power generation, operation of ports and airports, manufacturing defence equipment and running a media company.

Before the latest troubles, Bloomberg’s billionaire index listed Adani as Asia’s richest person and the world’s third wealthiest. Bloomberg’s rankings now put him at 21st wealthiest after his net worth sank to $59bn from $120bn.

Continue Reading

Trending