BUDGET DIGEST: SNAP Reform

Last week, the U.S. Department of Agriculture (USDA) finalized a rule to improve work requirements for the Supplemental Nutrition Assistance Program (SNAP), the federal government’s largest domestic food assistance program. According to the USDA Secretary Sonny Perdue, the rule is intended to “move more able-bodied recipients of SNAP benefits toward self-sufficiency and into employment. The rule restores the system to what Congress intended.”[1]  In 2019, the federal government will spend approximately $65 billion to provide SNAP benefits to almost 40 million low-income Americans. Over the next ten years, the cost of SNAP is projected to exceed $650 billion.[2] The rule is the first of three regulatory changes the Administration is expected to finalize to better target resources to those most in need and lift Americans out of poverty by encouraging work. The changes are set to take effect on April 1, 2020.

Rule Improves Work Expectations in SNAP Program. The Personal Responsibility and Work Opportunities Reconciliation Act of 1996[3] established work requirements in the SNAP program. SNAP recipients who are able-bodied adults without dependents (ABAWDs) are generally required to work at least 20 hours a week in order to continue receiving benefits. States and localities can be exempt from the work requirements for ABAWDs under certain circumstances, one of which is having an unemployment rate that is 20 percent above the national average. This requirement was designed to ensure that low-income Americans would be eligible for basic food benefits if jobs were unavailable. The Administration’s finalized rule adds to this requirement a minimum unemployment rate of 6 percent in order to receive this type of waiver.

With the current national unemployment rate at 3.5 percent[4] — a five-decade low — now is the time for policymakers to reform safety net programs to increase labor force participation. The U.S. economy is strong; last month alone, the economy added 266,000 new jobs.[5] Further, there are currently more jobs available than Americans looking for work.[6] This reform will encourage work and save taxpayers $5.5 billion over five years, according to the USDA.[7]

Going Forward. The Administration has proposed two additional rules to SNAP. One would reform broad-based categorical eligibility, where SNAP eligibility is conferred from receipt of benefits from other anti-poverty programs such as the Temporary Assistance for Needy Families (TANF) program. If adopted, this rule would require a substantial (at least $50 per month), ongoing benefit from TANF in order to be eligible for SNAP under this category. This rule, which is intended to address elevated program costs and better direct resources to those most in need, is projected to save SNAP more than $9 billion over five years.[8] The other rule would reform regulations to standardize the USDA Food and Nutrition Service Standard Utility Allowance across states to ensure that “eligible households receive SNAP benefit amounts which more accurately reflect their circumstances, no matter the State in which they reside.”[9] It is projected to save taxpayers approximately $4.5 billion over five years.

All of these reforms are consistent with proposals included in last year’s House-passed farm bill (H.R. 2, The Agriculture and Nutrition Act of 2018) and previous House Republican budget resolutions.

 

[1] https://plus.cq.com/doc/news-5783082?0&utm_medium=newsletter&utm_source=btmorning

[2] https://www.cbo.gov/system/files?file=2019-05/51312-2019-05-snap.pdf

[3] P.L. 104-193. Enacted into law on August 22, 1996.

[4] https://www.bls.gov/news.release/empsit.nr0.htm

[5] https://www.dol.gov/newsroom/releases/osec/osec20191206

[6] https://www.bls.gov/news.release/jolts.nr0.htm

[7] https://s3.amazonaws.com/public-inspection.federalregister.gov/2019-26044.pdf

[8] https://www.federalregister.gov/documents/2019/07/24/2019-15670/revision-of-categorical-eligibility-in-the-supplemental-nutrition-assistance-program-snap

[9] https://www.federalregister.gov/documents/2019/10/03/2019-21287/supplemental-nutrition-assistance-program-standardization-of-state-heating-and-cooling-standard

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