US CBO sees anti-hunger program cost rising 10 pct

WASHINGTON, Jan 23 (Reuters) - The cost of the food stamp program, which helps poor people buy food, will rise by more than 10 percent in fiscal 2008, mostly because of the rising food costs, the Congressional Budget Office said on Wednesday.

Each month, more than 26 million people use food stamps, the major federal anti-hunger program. The average benefit is $1 per meal.

In a report, CBO forecast "outlays for the food stamp program will rise by more than 10 percent in (fiscal) 2008, to $38 billion, and by nearly 7 percent the next year, reaching $41 billion."

"Much of the growth is the result of significant near-term increases that are anticipated in the cost of food at home."

Food prices rose by 4 percent during 2007, an unusually large increase, and are forecast to rise 3.5 percent this year, the Agriculture Department said. Food stamp benefits are adjusted once a year to reflect changes in food prices.

CBO forecast that benefits would rise by 6.3 percent this fiscal year, with larger enrollment accounting for the rest of the increase in cost of the program. Benefits are projected to increase by 5.8 percent in fiscal 2009, when opens on Oct. 1.

The anti-hunger group Food Research and Action Center said the economic stimulus bill should include an increase in food stamp benefits. FRAC spokeswoman Ellen Vollinger said food stamps 'move help quickly" to Americans hurt by economic downturns. (Reporting by Charles Abbott; Editing by David Gregorio)