WASHINGTON -- The Bush administration announced yesterday that it has completed one of the biggest changes in the history of the food stamp program, replacing paper coupons with electronic benefits and debit cards.
At the same time, the administration said it wants to rename the program because the term "food stamps" has become an anachronism. It is also inviting the public to suggest how to rechristen a program that became a permanent part of the government during the vast overhaul of government assistance and anti-poverty programs by President Lyndon B. Johnson, known as the Great Society.
The shift to electronic benefits is a sign of the digital age and has the potential to reduce the stigma of food stamps for many recipients. Electronic benefits have replaced food stamp coupons in all states, and more than half the states now issue electronic benefits in place of welfare checks as well. In addition, some states are using debit cards for Medicaid and the Special Supplemental Nutrition Program for Women, Infants, and Children.
Agriculture Secretary Ann M. Veneman declared an end to the "paper era" of the food stamp program at a conference of state officials here yesterday.
"This month, the food stamp program arrived in the 21st century," she said. "States are destroying the paper coupons, and we don't anticipate that we'll ever have to print them again."
Food stamp recipients generally like debit cards because they avoid the stigma that can be associated with paper coupons. Grocers like the new technology because they receive payment faster, often within 48 hours; cashiers do not have to handle vouchers; and there are no coupons to sort, count and bundle.
State officials said they prefer the electronic system because it is simpler to administer and has helped reduce fraud and abuse by eliminating the paper coupons that can be lost, sold or stolen. Over the years, food stamps have been sold on the black market and used as a form of currency to buy narcotics and other contraband.
California was the last state to complete the shift. Christine Dunham of that state's Health and Human Services Agency said Los Angeles County, with 40 percent of California's food stamp recipients, made the change to electronic benefits in March, and six other counties switched over this month.
More than 23 million people receive food stamp benefits each month, but nationwide only three of five eligible people are participating. Unlike most other assistance programs, food stamps are available to most low-income households with few assets regardless of age, disability or family structure.
Under the new system, each recipient has an account in which benefits are electronically deposited each month. A food stamp recipient can draw on the account in the checkout line of a grocery store, by sliding a plastic card through the same device used by other customers paying with commercial debit or credit cards. The food stamp recipient needs to punch in a four-digit personal identification number. The account is debited for the precise amount of the transaction, and food stamp recipients do not get cash back in change.
Connie B. Reinhardt, the electronic benefits director at the Florida Department of Children and Families, said the new technology had produced an increase in the use of food stamp benefits there because recipients no longer had to go to a state office once a month to pick up coupons. In the past, she said, about 15 percent of the people enrolled in the Florida program failed to pick up the vouchers to which they were entitled.
The number of people in the national food stamp program has shot up by 6.5 million, or 38 percent, in the last three years and by 2.8 million, or 13 percent, just in the last year, to 23.8 million in March 2004.
The soft economy is one reason for the increase. Another factor is that the government has been encouraging eligible people to participate, emphasizing that the program is not welfare but nutrition assistance.
The food stamp program has its roots in the Depression. It operated as a temporary measure from 1939 to 1943. After 18 years of studies and legislative debate, it was restarted as a pilot program in 1961 and made permanent three years later.