Because of concerns about poor diet, overweight, and obesity among low-income Americans, there is considerable interest in using federal nutrition assistance programs to promote healthy choices. Some argue that food stamp recipients should be prohibited from using their benefits to buy foods with limited nutritional value (commonly described as “junk” foods). The Food Stamp Act currently places few limits on the use of food stamp benefits, as long as they are used to buy food to eat at home. The idea of restricting the use of food stamp benefits may be appealing on its face. However, upon closer examination, serious concerns emerge regarding the feasibility and rationale for the proposed restriction.

A fundamental issue in the design of the Food Stamp Program (FSP) is the form benefits should take. Advocates of the current coupon system argue that coupons are a direct and inexpensive way to ensure that food stamp benefits are used to purchase food; that, despite some evidence of fraud and benefit diversion under the current system, the unauthorized use of food stamps is relatively limited; and that coupons provide some measure of protection to food budgets from other demands on limited household resources. Advocates of replacing coupons with cash argue that the current system limits the food purchasing choices of participants, places a stigma on participation; and entails excessive costs for coupon issuance, transaction, and redemption.