Recent proposals call for phasing out full federal funding of Supplemental Nutrition Assistance Program (SNAP) benefits, requiring states to contribute a share of the benefit costs. The SNAP Reform and Upward Mobility Act and a recent proposal from Rachidi and Ford would phase in state cost-share amounts starting at 5 percent and rising to 50 percent over 10 years. In this brief, we show that plausible state responses to the fiscal pressures of a recession under a cost-share policy could lead to higher poverty due to lower SNAP caseloads or lower benefits.

Why This Matters

Under current policy, SNAP automatically expands to serve eligible families experiencing job loss in a recession. With a state cost-share, states would face increased SNAP costs during a recession, at a time when tax revenues are declining. Most states have balanced-budget requirements that prevent them from spending more than they receive in tax revenue and would need to cut SNAP benefits, reduce other state-funded benefits or services, or increase taxes when the economy would benefit from greater spending. This study focuses on what would happen under a state cost-share scenario if states imposed across-the-board benefit reductions to prevent SNAP costs from rising in a recession.

What We Found

Under current law, the cost of SNAP benefits is fully covered by the federal government. In that case, if an increase in the unemployment rate were equal to that of the Great Recession, American households would experience the following:

• 8 million households experiencing job loss would apply for and receive SNAP
• 3 million households already participating in SNAP would qualify for higher benefits
• 481,000 people in families experiencing job loss would be kept above the poverty level by the new or increased SNAP benefits

In contrast, under the same set of recession assumptions but with a 10 percent state cost-share, the following would occur:

• In addition to the SNAP benefit costs that states would already be required to pay under a cost-share model, states would need to spend an additional $980 million to cover increased benefit costs in the first year of the recession.
• If states did not increase their spending during the recession and instead reduced benefits for all participants to control costs, all SNAP participants—not just those who lost jobs—would face an average annual benefit reduction of $327 per household, and 862,000 people would fall into poverty who would otherwise be out of poverty if SNAP were fully funded.

How We Did It

We used the Analysis of Transfers, Taxes, and Income Security (ATTIS) model to simulate the effects of a major recession on SNAP benefits, family income, and poverty. ATTIS is a comprehensive microsimulation model of government programs affecting US households and can reflect the actual economic circumstances, benefit policies, and program caseloads in a particular year as well as hypothetical scenarios. We apply the model to combined 2022 and 2023 American Community Survey (ACS) data, adjusted to reflect 2023 income and population. We then modeled a substantial recession, based on the Great Recession, in which 5.3 percent of adults in the labor force lose their jobs.

Additional Materials

The appendix tables provide additional state-level detail and additional detail by demographic subgroup, including metropolitan status, whether the household worked before the recession, presence of children under 18, presence of children from birth to age 5, presence of children ages 6 to 17, and presence of people ages 18 to 24.