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June 14, 2013

Changing SNAP benefit rules won't contain growth

June 14, 2013

Under the banner of “federal agriculture reform and risk management,” the House Agriculture Committee passed its 2013 Farm Bill on May 13. More than half of the bill’s spending cuts come from the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps). Although SNAP critics regularly lament the growth in the program caseload, this provision of the Farm Bill is an ill-founded reaction because the benefits being cut account for a minor factor in that growth.

The proposed SNAP cuts result primarily from eliminating “categorical eligibility” rules, which make households eligible for SNAP if they receive other low-income support, including Temporary Assistance for Needy Families; Supplemental Security Income; or assistance with energy, transportation, or child care. By CBO’s estimate, eliminating these rules would lower the average monthly number of participants nationally by 1.7 million or 4 percent. But because the associated benefit loss of $90 per participant is below the program-wide average monthly benefit, the projected cost savings is less than 2 percent.

What contributed to SNAP’s caseload growth?

Let’s take a closer look at what contributed to SNAP’s recent growth. A February 2013 analysis by Mathematica Policy Research of the 2008 to 2010 trends in SNAP participation enables us to assess the underlying growth factors. The caseload increase was primarily related to weakened economic conditions, combined with an increase in SNAP participation among low-income workers.

Between fiscal years 2008 and 2010, the nation’s average monthly SNAP caseload rose from 28 million to 40 million: an increase of 12 million participants. About 11 million (92 percent) received SNAP under standard program rules. Only 1 million (8 percent) got SNAP through categorical eligibility rules and would not have qualified otherwise.

The 11 million more who received SNAP under standard program rules was a result of more people becoming eligible for the program (7 million) and a higher share of eligible people deciding to participate (4 million).  Of the latter group, fully 3 million can be attributed to a higher participation rate among the working poor.

SNAP

The major factor contributing to national SNAP caseload growth was thus the weakened economy during and after the Great Recession, which served to increase the number of eligible people through losses in income and wealth and through shifts in household living arrangements. A secondary growth factor was the higher rate of participation among those with earnings. These trends should be viewed as favorable program effects during this period, providing countercyclical stimulus and supporting the efforts of low-income workers to find and keep jobs.

Cuts may lead to greater administrative burdens

The categorical eligibility rules had little effect on SNAP’s recent caseload growth, and doing away with those rules would have little effect on annual program expenditures. The overwhelming majority of those who enter the program through categorical eligibility are already eligible under SNAP’s standard rules. The major consequence of removing the categorical rules would thus be to impose additional burdens on the state and local agencies that administer SNAP.

Photo by Matt Rourke/ AP

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