Five Ways to Save Billions -- and Boost the Nation's Health

While Congress debates how to cure America's massive debt problem, let me offer a doctor's prescription: five smart cuts could save taxpayers $383 billion and make Americans healthier at the same time.

Right now, the U.S. government spends billions subsidizing the least healthful foods, fueling America's obesity epidemic and escalating healthcare costs. In contrast to federal nutrition guidelines that emphasize healthful vegetables, fruits, and whole grains, federal subsidies go in the opposite direction, supporting meat, dairy products, and sugar, and all the cholesterol, fat, and calories that are packed into them. This, despite abundant scientific evidence showing that increasing consumption of animal products is associated with obesity, diabetes, cardiovascular disease, hypertension, and certain forms of cancer, among other health problems.

So here's where to put the scalpel:

1. Cut Junk Food from SNAP

The government provides food for economically disadvantaged people through the Supplemental Nutrition Assistance Program, or SNAP (formerly the Food Stamp Program). One in seven Americans now draws SNAP benefits.

The enormous size of the program -- $65 billion a year -- is not a testament to the political clout of SNAP recipients. Rather, it's the food manufacturers who are profiting, as SNAP supports a growing market for candy, soda, fatty cheese, and specialty meats as much as it does for healthier foods.

SNAP perpetuates food deserts -- geographic areas with inadequate availability of healthful foods. Because shelf-stable junk food is covered on the same basis as perishable fruits and vegetables, grocers have little incentive to stock healthful foods, and providers of fresh fruits and vegetables operate at a disadvantage.

A vanishingly small number of Americans currently suffer from hunger, defined as an inadequate caloric intake. Instead, a great many suffer from poor nutrition -- too much fat, cholesterol, and overall calories, and not enough of the fiber, vitamins, and minerals provided by vegetables and fruits.

SNAP also has an unintended demeaning feature in that it tacitly suggests that economically disadvantaged people view unhealthful foods as necessities. I don't believe that for a minute. Everyone, regardless of their income, recognizes that unhealthful foods are not to be parts of our daily routine and that a continued supply of these foods is to our detriment.

Here's a better SNAP structure: SNAP should be limited to truly healthful staples: oats, rice, and other grains, dry beans, fruits, and vegetables, which could be fresh, frozen, or canned. Participating grocers could be required to stock certain items, such as no-salt-added canned beans and vegetables.

With these nourishing foods, an adult's monthly food costs would total approximately $134, which is one-third less than the $200 benefit provided by the most complete current program coverage. Were SNAP to be reorganized in this way, we could cut costs by $24 billion annually. For once, we could wipe out both hunger and malnutrition at the same time.

2. Prioritize Health in Commodity Purchases

American children today are in the worst physical shape of any generation in the nation's history. One in three is overweight. And according to the Centers for Disease Control and Prevention, one in three children born since the year 2000 will develop diabetes at some point in his or her life. As the years go by, the drain on America's health care resources will only escalate.

Contributing to this problem is the fact that the U.S. Department of Agriculture routinely uses school meal programs and other food assistance programs as a dumping ground for agricultural commodities. When cheese prices fall, the USDA buys up millions of pounds of cheese. When beef prices fall, it buys up beef. School menus then feature cheeseburgers, cheese pizza, and Salisbury steak. These purchases are designed to boost agribusiness income, but they do children no favors.

In fiscal year 2009, USDA spent more than $1.4 billion on commodity purchases of meat, dairy products, and eggs -- twice what it spent on all fruits, vegetables, grains, nuts, and oils combined. If USDA were to base commodity purchases solely on health value, we could reduce expenditures by about $14 billion over the next decade, save on medical care costs, and improve children's health.

3. Eliminate Direct Payments to Agribusiness

Food producers currently receive yearly checks in a direct-payment program set up as part of the 1996 Freedom to Farm Act. These payments are based on the historic use of land. That is, if you used to grow feed corn for livestock, you'll still be paid today. The direct payment program makes it profitable to keep land dedicated to the production of feed grains for livestock, and program restrictions block the growing of vegetables and fruits. Eliminating direct payments would save approximately $50 billion over the next decade.

4. Let Producers Buy Their Own Crop Insurance

Weather happens. When rain fails or floods arrive, food producers need to be insured against losses. All industries protect themselves against shifting profits and costs, and agribusiness is no different.

The cost of crop insurance programs was approximately $7.3 billion in 2009, and approximately 80% of crop-insurance costs are borne by the U.S. government. Unfortunately, these programs favor feed grains for livestock (especially corn and soybeans), providing a de-facto subsidy for meat production. It is difficult to argue that taxpayers should shoulder these costs. Privatizing crop insurance would save an estimated $70 billion over the next decade.

5. Make Polluters Pay

Feed-grain production and concentrated animal feeding operations create wastes that pollute rivers and streams. Government programs cover much of the clean-up costs, becoming yet another de-facto subsidy. In 2010, the Environmental Quality Incentive Program cost $839 million.

Producers raising crops for animal feed or raising livestock under intensive conditions should pay for their own waste clean-up. At the same time, governmental agencies that oversee environmental protection must have authority to enforce appropriate regulations to ensure a healthful, clean environment. Privatizing farm clean-up operations would save $9 billion over the next ten years.

Do the Math

Adding up our savings, we reach $383 billion over the next decade. But wait, there's more. As we stop promoting unhealthful foods, our healthier population will need less medical care. Today, the medical costs attributable to meat consumption are approximately $60 billion to $130 billion every year. If we can trim even a little of that, we're talking real money.