@reppaulRyan Budget Would Slash SNAP Funding By $135 Billion Over Ten Years #p2 #tcot

http://www.cbpp.org/cms/index.cfm?fa=view&id=3923

House Budget Committee Chairman Paul Ryan's budget plan includes cuts in the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program) of $135 billion — almost 18 percent — over the next ten years (2014-2023),[1] which would necessitate ending assistance for millions of low-income families, cutting benefits for millions of such households, or some combination of the two.  Chairman Ryan proposed similarly deep SNAP cuts in his last two budgets.

While Chairman Ryan has outlined some key features of his proposal as it affects SNAP — in particular, converting SNAP to a block grant — he has provided little information on how the cuts would be achieved or their timing over the ten-year period.[2]  

Since more than 90 percent of SNAP expenditures are for food assistance benefits for low- income households, and most of the remaining funds go for necessary state administrative costs to determine program eligibility and operate the program properly, policymakers couldn't possibly achieve cuts of this magnitude without substantially scaling back SNAP eligibility or reducing benefits deeply, with serious effects on low-income families and individuals.[3]   Table 1 provides state-by-state estimates of the potential impact.

• Cuts in eligibility:  If the cuts were to come solely from eliminating eligibility for categories of currently eligible households or individuals, 8million to 9 million people would need to be cut from the program.[4]

• Cuts in benefits:  If the cuts were to come solely from across-the-board benefit cuts, SNAP benefits would have to be cut by an average of about $24 per person per month in 2016 dollars.  This would require setting the maximum benefit at about 86 percent of the Thrifty Food Plan (TFP), USDA's estimate of the minimumamount that a family needs to afford a bare-bones, nutritionally adequate diet.  (Under SNAP rules, the maximum benefit levels for each fiscal year — which are the benefit amounts that go to households with no disposable income after deductions for certain necessities — are set at 100 percent of the cost of the Thrifty Food Plan for the preceding June.)[5]

  The impact of such a change would be pronounced.  All families of four — including the poorest — would see their benefits cut by about $95 a month in fiscal year 2016, or more than $1,100 on an annual basis.  All families of three would be subject to cuts of about $75 per month, or about $900 on an annual basis.  Of course, policymakers could shield some households from such deep cuts, but then other households would need to bear even larger cuts in order to produce the $135 billion in savings.

While Congress might not seek to hit the Ryan targets through eligibility cuts or benefit cuts alone, these examples illustrate the size of the proposed funding reductions that would have to be made.  There would not be a lot of other places to go to achieve the required cuts; as noted, more than 90 percent of SNAP expenditures are for food assistance benefits for low-income households.

Ryan's Proposed Cuts Rest on Inaccurate Claims

Chairman Ryan bases his proposed SNAP cuts on a series of inaccurate claims about SNAP program growth, work disincentives, and waste, fraud, and abuse. 

• Spending growth.  Chairman Ryan partially justifies deep SNAP cuts on the grounds that "[SNAP] is facing a budget crunch."[6]   While SNAP spending did grow substantially during the recession, the recent growth in SNAP expenditures is temporary and already has slowed.  SNAP grew because of three factors — the depth of the recent recession, improvements in the program's performance in reaching eligible low-income households (particularly working families), and the Recovery Act's temporary benefit boost (which will end later this year.)[7]   Moreover, the program does not contribute to the nation's long-term budget problem because it is projected to grow no faster than the economy over time.  As Figure 1 indicates, the Congressional Budget Office's (CBO) latest projections show that once the economy fully recovers, SNAP is expected to return to pre-recession levels as a share of the Gross Domestic Product. 

• Improved participation among eligible low-income households.  Chairman Ryan's budget documents also criticize longstanding bipartisan efforts at both the federal and state levels to increase SNAP participation among eligible low-income households.  The current and previous two Administrations and governors from across the political spectrum have sought to boost participation among low-income individuals who are eligible for SNAP but not participating.  These efforts have largely aimed at working-poor families and low-income elderly people, the two eligible groups with the lowest participation rates.  Overall, the efforts have paid off.  SNAP reached 75 percent of all eligible individuals in a typical month in 2010 (the most recent year available.)  This is a significant improvement from 2002, when the participation rate bottomed out at 54 percent.  The participation rate among eligible low-income working families rose from 43 percent in 2002 to about 65 percent in 2010.  For the elderly, it improved more modestly over those years — from 26 percent in 2002 to about 35 percent in 2010.  Chairman Ryan suggests that one benefit of capping SNAP funding would be to halt such efforts by inducing states to cease efforts to connect eligible low-income people to SNAP.
• Work and dependency.  Another of Chairman Ryan's justifications for cutting SNAP and turning it over to states is to imply that SNAP recipients do not have a strong work ethic.  The budget states that SNAP has "little incentive to help people get off the roles (sic) and find work."[8]   Yet, a recent Center analysis finds that the large majority of SNAP recipients who can work do so.  Among SNAP households with at least one working-age, non-disabled adult, more than half work while receiving SNAP — and more than 80 percent work in the year prior to or the year after receiving SNAP.  The rates are even higher for families with children — more than 60 percent work while receiving SNAP, and almost 90 percent work in the prior or subsequent year.  Among SNAP households that start receiving SNAP, only 4 percent that worked in the year before starting to receive SNAP did not work in the following year.  The number of SNAP recipients who work while receiving SNAP has more than tripled over the past decade.[9]
• Waste, fraud, and abuse.  Finally, Chairman Ryan justifies his SNAP proposals based on charges that SNAP is rife with waste, fraud, and abuse.  These claims ignore the fact that SNAP has one of the most rigorous quality control systems of any public benefit program.  Despite the recent growth in caseloads, the share of total SNAP payments that represent overpayments or payments to ineligible households reached a record low of 2.99 percent in fiscal year 2011.  In addition, the Agriculture Department (USDA) has cut "trafficking" — the sale of SNAP benefits for cash, which violates federal law — by three-quarters over the past 15 years.  Only 1 percent of SNAP benefits is trafficked.  USDA has also permanently disqualified thousands of retail stores from the program for not following federal requirements.  When cases of SNAP fraud are reported in the news, it is because the offenders have been caught, evidence that states and USDA are aggressively combating fraud.

Benefit Cuts Would Primarily Affect Low-Income Families with Children, Seniors, and People with Disabilities

The Ryan budget documents assert that Congress could achieve the required savings by capping federal funding for SNAP and "giving states more flexibility to design these programs according to their recipients' needs" through a block grant.  That description leaves the mistaken impression that the program is not serving a population that is overwhelmingly poor and that savings could be achieved without causing significant harm to millions of vulnerable Americans.  

Unlike most means-tested benefit programs, which are restricted to particular categories of low-income individuals, SNAP is broadly available to almost all households with very low incomes.  As a result, cutting SNAP would affect broad swaths of the low-income population.  Currently, 47.8 million people receive SNAP assistance to help them buy food for their families.  Census data show that in 2011 (the latest year for which these data are available), 46.2 million Americans lived below the poverty line, and 64.2 million lived below 130 percent of the poverty line, SNAP's gross income limit.[10]

• The overwhelming majority of SNAP households are families with children, seniors, or people with disabilities.  Almost three-quarters of SNAP participants are in families with children; more than one-quarter are in households that include senior citizens or people with disabilities. 
• SNAP households have very low incomes.  Eighty-three percent of SNAP households have incomes below the poverty line (about $19,500 for a family of three in 2013).  Such households receive 91 percent of SNAP benefits.  Two of every five SNAP households have incomes below half of the poverty line.  (See Figure 2.)  Such individuals and families have little flexibility in their monthly budgets to cope with deep reductions in food assistance.
• Low-wage workers rely on SNAP to boost their monthly income.  Millions of Americans live in households whose earnings are not sufficient to meet basic needs.  In 2011, some 38 million people (1 in 8 Americans) worked or lived in a working family with cash income below 130 percent of the poverty line (about $25,000 for a family of three in 2013).  Low incomes like these — which typically reflect low wages or limited work hours — can leave families unable to afford necessities like food and housing on a reliable basis.  SNAP benefits play a crucial role in boosting families' monthly income:  in 2011 a typical working mother with two children on SNAP earned $1,105 per month ($13,300 on an annual basis) and received $282 per month in SNAP benefits.[11]   If the Ryan proposal had been in place in 2011 and was implemented via across-the-board cuts, this family's monthly benefits would have been cut by $64 per month — or about 23 percent.

SNAP Already Faces Deep Cuts

The 2009 Recovery Act temporarily boosted the maximum SNAP benefit by 13.6 percent and raised benefits for all SNAP households.  Most households received an additional $20 to $24 per person per month in fiscal years 2009 through 2011 and smaller increases in fiscal years 2012 and 2013.  Economists consider this increase one of the most effective and fast-acting provisions of the economic recovery package. Low-income individuals generally spend all of their income meeting daily needs such as shelter, food, and transportation, so every dollar in SNAP that a low-income family receives enables the family to spend an additional dollar on food or other items.  Eighty percent of SNAP benefits are redeemed within two weeks of receipt and 97 percent are spent within a month.

The Recovery Act called for SNAP benefits to remain at their new, higher level until the program's regular annual inflation adjustments overtook it.  However, as a result of legislation passed in 2010, the increase will terminate in November 2013, causing a sizeable and abrupt benefit reduction for all households on the program.  Based on CBO's latest food inflation projections, for families of three, the cut likely will be $20 to $25 a month.  (See Figure 3.)  That is a substantial loss, especially in light of the low level at which basic SNAP benefits are set.  Without the Recovery Act's boost, SNAP benefits average about $1.30 per person per meal.

The November cuts will likely cause hardship for some SNAP participants, who include 22 million children (10 million of whom live in "deep poverty," with family incomes below half of the poverty line) and 9 million people who are elderly or have a serious disability.  Cutting these households' benefits will reduce their ability to purchase sufficient food to last through the month.  This cut will be the equivalent of taking away 14 meals per month for a family of four, or 11 meals for a family of three, based on calculations using the $1.70 to $2 per meal provided for in the Thrifty Food Plan.  USDA research has found that the Recovery Act's benefit boost cut the number of households in which one or more persons had to skip meals or otherwise eat less because they lacked enough money — what USDA calls "very low food security" — by about 500,000 households in 2009.[12]

More recent research finds that boosting SNAP benefits during the summer for households with school-aged children who don't have access to USDA's summer food program cut very low food security among these households by nearly 20 percent.[13]

The current SNAP benefit allotments may be inadequate, as a recent comprehensive study from the Institute of Medicine details.[14]   Given this, we can reasonably assume that a reduction in SNAP benefit levels of this size will significantly increase the number of poor households that have difficulty affording adequate food this fall.

In addition, the SNAP program's severe time limit that unemployed childless adults face — three months out of every three years — will be reinstated in many areas of the country in coming months.  Under longstanding authority, states can waive this time limit during periods of high unemployment.  (In addition, the Recovery Act suspended the time limit temporarily for all states in 2009 and 2010.)[15]   As a result, most states have had waivers from the three-month time limit since 2008 or 2009.  As the economy improves, states will no longer qualify for statewide waivers and will be required to reinstate the three-month limit in many or all areas.[16]   As a result, approximately 1 million unemployed low-income individuals will be cut off SNAP in a typical month.

Added SNAP Benefit Cuts Would Increase Hunger and Poverty

SNAP cuts of the magnitude that the Ryan budget proposes would almost certainly lead to increases in hunger and poverty.  Emergency food providers report that more people ask for help in the latter half of the month, after their SNAP benefits have run out.  A cut of the size that the Ryan budget calls for would mean that a typical household's SNAP benefits would run out a number of days earlier, placing greater strain on household finances (and on emergency food providers) and significantly increasing the risk of hunger. 

Deep SNAP cuts also would cause more families and individuals to fall into poverty and cause poor families to fall deeper into poverty.  Currently, the program helps lessen the extent and severity of poverty; Census Bureau data on disposable family income that include the value of SNAP and other non-cash benefits and taxes, along with cash income, show that:

• SNAP lifted 4.7 million Americans above the poverty line in 2011, including 2.1 million children.[17]
• SNAP kept more children — 1.5 million — from falling below half of the poverty line in 2011 than any other program.[18]

The Ryan SNAP cuts would thus have a sharp, adverse effect on millions of the lowest-income Americans.  Moreover, these cuts would not occur in isolation.  The Ryan budget contains steep cuts in other low-income assistance programs as well, compounding the effects of the SNAP cuts.  Many vulnerable families would lose health coverage, housing assistance, and other important supports such as child care at the same time they faced cuts in their SNAP benefits.

Cuts Could Be Even Larger Under a Block Grant

If a SNAP block grant had been in effect in 2012 at funding levels set in 2007, before the recession, the total amount of federal funds available nationally in 2012 would have been about 50 percent below the federal funds actually spent that year (excluding the amounts added by the Recovery Act).  Furthermore, under a block grant, SNAP would not be able to respond to increased food needs of individuals caused by natural disasters.  Hurricane Sandy victims in New York, New Jersey, and 11 other states were able to access temporary food aid through SNAP.

It also is likely that under a block grant, many states would shift funds away from food assistance to other purposes, which they would be tempted to do when they face large state budget shortfalls (as states continue to do today).  SNAP includes several non-food components such as job training and related child care as well as nutrition assistance.  Under a block grant structure states could easily divert funds away from food to these purposes and withdraw state funds currently expended for these services.

Table 1 Illustrative State-by-State Impact of the Ryan Budget's SNAP Cuts
State/Territory	Projected Number of SNAP Participants in FY 2014, and Hence the Number of People Who Would Be Placed at Risk1	Proportional Distribution of Ryan's SNAP Benefit Cuts over Fiscal Years 2014-2023 (in billions of dollars)2
Alabama	930,000	-$2.29
Alaska	93,000	-$0.31
Arizona	1,148,000	-$2.81
Arkansas	513,000	-$1.21
California	4,049,000	-$11.69
Colorado	502,000	-$1.33
Connecticut	412,000	-$1.15
Delaware	151,000	-$0.37
District of Columbia	144,000	-$0.39
Florida	3,424,000	-$9.22
Georgia	1,954,000	-$5.14
Guam	45,000	-$0.19
Hawaii	181,000	-$0.75
Idaho	238,000	-$0.60
Illinois	1,909,000	-$5.16
Indiana	928,000	-$2.38
Iowa	417,000	-$0.98
Kansas	311,000	-$0.75
Kentucky	867,000	-$2.14
Louisiana	969,000	-$2.55
Maine	258,000	-$0.62
Maryland	732,000	-$1.82
Massachusetts	880,000	-$2.26
Michigan	1,867,000	-$4.91
Minnesota	550,000	-$1.24
Mississippi	674,000	-$1.62
Missouri	968,000	-$2.41
Montana	129,000	-$0.32
Nebraska	180,000	-$0.43
Nevada	362,000	-$0.87
New Hampshire	119,000	-$0.27
New Jersey	844,000	-$2.18
New Mexico	448,000	-$1.11
New York	3,142,000	-$8.97
North Carolina	1,704,000	-$4.01
North Dakota	60,000	-$0.15
Ohio	1,846,000	-$4.96
Oklahoma	628,000	-$1.56
Oregon	833,000	-$2.07
Pennsylvania	1,837,000	-$4.57
Rhode Island	177,000	-$0.48
South Carolina	888,000	-$2.26
South Dakota	106,000	-$0.27
Tennessee	1,345,000	-$3.44
Texas	4,124,000	-$9.90
Utah	283,000	-$0.67
Vermont	99,000	-$0.23
Virginia	933,000	-$2.31
Virgin Islands	25,000	-$0.09
Washington	1,132,000	-$2.78
West Virginia	354,000	-$0.83
Wisconsin	853,000	-$1.93
Wyoming	35,000	-$0.09
Other SNAP spending2	NA	-$12.00
United States	47,600,000	-$135.00
Notes: 1. Not all SNAP participants would necessarily be affected by Ryan's cuts.  We distributed CBO's February 2013 projection of national SNAP participation in fiscal year 2014, based on each state's percentage share of fiscal year 2012 average participation. 2.  The total cut to the SNAP program under the Ryan budget plan is $135 billion over fiscal years 2014 to 2023.   More than 90 percent of SNAP expenditures are for food assistance benefits for low-income households.   The remainder goes to the federal share of state administrative costs for the program, block grants for nutrition assistance in Puerto Rico and American Samoa, funds for commodities for The Emergency Food Assistance Program (TEFAP), and funding for the Food Distribution Program on Indian Reservations (FDPIR).  We assume those other activities would bear a proportional share of the cuts ($12 billion).  This is a conservative estimate of the share that would come from SNAP benefit reductions because, in the past, Congress has favored these other activities and not looked to them for substantial budget cuts.  Under these assumptions, SNAP benefits would need to be cut by $123 billion over the period.  The $123 billion in benefit cuts were distributed across the states in accordance with each state's percentage share of total fiscal 2012 SNAP benefits.  Due to rounding, the state-by-state benefit amounts may not add precisely to the total.

End notes:

[1] House Budget Committee staff provided this figure verbally in response to a question from Rep. Chris Van Hollen during the mark-up of the proposed budget resolution on March 13, 2013.

[2] House Budget Committee, The Path to Prosperity  A Responsible, Balanced Budget, House Budget Committee, March 12, 2013, p. 33.  Chairman Ryan's budget "suggests that the federal government implement these reforms gradually to give states and recipients time to adjust."  This may mean that the cuts are smaller in the near-term and get deeper over the ten-year window.  During the mark-up, House Budget Committee staff mentioned two policies in addition to the block grant: repealing "expanded categorical eligibility" and ending a SNAP policy known as "heat and eat," two SNAP cuts that are part of the House Agriculture Committee's farm bill.  These would yield a very small share of the $135 billion in savings, as they would be in effect only for a few fiscal years and then presumably would be superseded by the block grant.

[3] More than 90 percent of SNAP expenditures are for food assistance benefits for low-income households.  The remainder goes to the federal share of state administrative costs for the program, block grants for nutrition assistance in Puerto Rico and American Samoa, employment and training and nutrition education services for SNAP households, funds for commodities for The Emergency Food Assistance Program (TEFAP), and funding for the Food Distribution Program on Indian Reservations (FDPIR).  For purposes of this analysis, we assume those other activities would bear a proportional share of the cuts.  As a result, we assume that SNAP benefits would need to be cut by $123 billion over the period.  This is a conservative estimate of the share that would come from benefits; in the past, Congress has favored these other activities and not looked to them for large budget cuts.  In addition, last year during the Budget Committee mark-up, committee staff indicated that under a block grant, states could cut benefits in order to fund other activities, such as job training.  So the cut to SNAP benefits could be deeper than this analysis assumes.
All estimates use the Congressional Budget Office's February 2013 baseline assumptions.  These estimates do not separately take into account the two policy proposals that House Budget Committee staff indicated were included in the $135 billion (see footnote 2).  Rather, they are intended to be illustrative of the size of the cuts that would be required.

[4] Estimates are relative to CBO's SNAP participation projections and assume that on average, the individuals who would be cut would otherwise have received the average benefit.  If the cut is assumed to go into effect in fiscal year 2014 (i.e., starting this October) and were the same proportion of projected SNAP participation in each year, then the reduction in the number of beneficiaries would be 8.5 million in 2014 and fewer people in later years because CBO assumes that the number of people participating in SNAP will decline as the economy recovers more fully.  If the cut is assumed to go into effect in a later year (2016), as is suggested in the budget document, then the number of people cut would have to average 8.8 million over the remaining years in the ten-year period.

[5] See USDA's estimates of the monthly cost of the Thrifty Food Plan at:  http://www.cnpp.usda.gov/usdafoodcost-home.htm.  To estimate an across-the-board cut, we reduced the size of maximum benefits relative to the TFP by 14 percent each year.  This estimate assumes the cuts would go into effect in November 2014, at the time the Recovery Act's benefit increase ends, and the same percentage cut would be applied to the program's maximum benefits (which are tied to the Thrifty Food Plan) in each year.  If the cut were delayed, it would need to be even deeper.

[6] The Path to Prosperity:  A Responsible, Balanced Budget, House Budget Committee, March 12, 2013, p. 33.

[7] Dottie Rosenbaum, SNAP is Effective and Efficient, Center on Budget and Policy Priorities, March 11, 2013, http://www.cbpp.org/cms/index.cfm?fa=view&id=3239.

[8] The Path to Prosperity:  A Responsible, Balanced Budget, House Budget Committee, March 12, 2013, p. 29.

[9] Dottie Rosenbaum, The Relationship Between SNAP and Work Among Low-income Households, Center on Budget and Policy Priorities, January 29, 2013, http://www.cbpp.org/cms/index.cfm?fa=view&id=3894.

[10] Under federal rules, a household's monthly income must be at or below 130 percent of the poverty line — or roughly $2,069 a month (about $25,000 a year) for a family of three in 2013 — to qualify.  There are some exceptions; for example, households with seniors and people with disabilities are not subject to the gross income test but must have net income (after deductions for certain necessary expenses) at or below 100 percent of the poverty line.  States have some flexibility to lift the gross income test for certain other households, while some categories of people are not eligible for SNAP regardless of how low their income and assets may be — such as strikers, certain legal immigrants and many college students, and all undocumented immigrants.  Unemployed childless adults may receive SNAP benefits for only three months out of every three years, except in areas with high unemployment.

[11] These are the mean earnings and SNAP benefit for a family of three with earnings and two children for fiscal year 2011, based on USDA Household Characteristics Data.  The benefit boost from the American Recovery and Reinvestment Act (ARRA) is scheduled to end in November 2013; this increase has been removed from the figures cited here to show what the typical working mother with two children would receive after the benefit increase is phased out under current law as well as under Chairman Ryan's budget plan.

[12] Mark Nord and Mark Prell, "Food Security of SNAP Recipients Improved Following the 2009 Stimulus Package," Amber Waves, 9(2), June 2011, p.6, http://www.ers.usda.gov/media/227714/foodsecuritysnap_1_.pdf.

[13] Evaluation of the Impact of Enhancement Demonstrations on Participation in the Summer Food Service Program (SFSP):  FY 2011; FNS, USDA, November 2012, http://www.fns.usda.gov/ora/menu/Published/CNP/FILES/SEBTC_Year1Findings.pdf.

[14] IOM (Institute of Medicine) and NRC (National Research Council), 2013, Supplemental Nutrition Assistance Program: Examining the Evidence to Define Benefit Adequacy, The National Academy Press.

[15] The 2009 Recovery Act included a provision that suspended the three-month time limit for the rest of 2009 and for fiscal year 2010.  Because almost all states would have been eligible for a statewide waiver from the time limit under longstanding policy, the effect of this provision was primarily to eliminate the need for individual state waiver requests and federal approval.  For information on the rules for state waivers, see 7 C.F.R. 273.24(f) and USDA guidance from December 3, 1996, March 11, 2004, and January 8, 2009, available at www.fns.usda.gov.

[16] Dottie Rosenbaum, The Relationship Between SNAP and Work Among Low-income Households.

[17] Based on CBPP analysis of the Supplemental Poverty Measure. See Kathleen S. Short, ""The Research Supplemental Poverty Measure: 2011," Bureau of the Census, November 2012, tables 1 and 5a, http://www.census.gov/hhes/povmeas/methodology/supplemental/research/Short_ResearchSPM2011.pdf.  The Census Bureau's Supplemental Poverty Measure defines poverty as family income (cash income after taxes plus the value of SNAP and other food assistance, housing assistance, and energy assistance, minus out-of-pocket medical and work expenses) that falls below an updated poverty line.  It uses a broader family unit that includes unmarried partners and foster children.

[18] Unpublished CBPP analysis of the March 2012 Current Population Survey using the Supplemental Poverty Measure.

rest at http://www.cbpp.org/cms/index.cfm?fa=view&id=3923