This week marks the 41st anniversary of the 1977 Food Stamp Act, which laid the foundation for the Supplemental Nutrition Assistance Program (SNAP), the largest federal program aimed at combating hunger and food insecurity among low-income Americans. Below is a look at how SNAP works, who benefits from it, and its place in the federal budget.
In Fiscal Year 2016, the most recent year for which a complete set of data is available, SNAP:
In general, there are two paths for SNAP eligibility. Many participants are eligible for SNAP benefits because they receive assistance from other federal programs, such as Supplemental Security Income or Temporary Assistance for Needy Families. Households who do not receive assistance from those programs may still qualify for SNAP, but must meet certain income and asset tests. Apart from income eligibility standards, able-bodied adults ages 16 – 59 must also meet employment requirements to receive SNAP benefits.
When calculating benefit amounts for SNAP, the U.S. Department of Agriculture (USDA) relies on its Thrifty Food Plan, a set of dietary guidelines designed to meet nutritional needs at a low cost. Based on those guidelines, the USDA sets maximum benefits for different household sizes, shown in the table below. Not including SNAP benefits received, families are expected to spend 30 percent of their net income on food. Therefore, when determining benefits for individual households, USDA calculates 30 percent of a household’s net income and subtracts that amount from the maximum benefit. For example, in 2016, the maximum monthly benefit for a household with two people was $357. If the household’s net income totaled $500 per month, it would be expected to spend 30 percent of that, or $150, on food. Therefore, the monthly benefit would then be $357-$150 = $207. Of all households receiving SNAP benefits in a given month, 39 percent of them receive the maximum amount.
Individuals and households must submit an application and undergo an interview to receive SNAP benefits. Once deemed eligible, they receive an Electronic Benefit Transfer (EBT) card that is automatically filled with the designated benefit amount every month. EBT cards work like debit cards and can be used at any authorized food store. Households cannot use their benefits to purchase items like cigarettes and alcohol, or for hot foods.
SNAP comprises a very small portion of the federal budget and it is not a key driver of our structural deficit. The Congressional Budget Office (CBO) projects that spending for SNAP will make up less than 2 percent of total federal spending in 2018. However, SNAP is a counter-cyclical income security program, meaning that participation automatically — and by design — expands during economic downturns and shrinks in response to reduced need. As a result, spending spiked during the most recent recession, but CBO projects that SNAP spending will continue falling as a percentage of total outlays over the coming decade.
Lawmakers have proposed a range of changes to SNAP in recent years. Those proposals include strengthening work requirements for participants, eliminating some categories of eligibility, and shifting some of the burden of paying for benefits to states (benefits are currently paid for entirely by the federal government, although states pay some administrative costs for the program). Such proposals would likely result in lower benefits, as well as a decrease in the number of participants.
Ultimately, SNAP is a program with relatively small budgetary impact that benefits Americans who live in poverty or deep poverty; however, it is not a significant factor in causing our fiscal imbalance. Our nation’s most significant long-term structural fiscal challenges stem from an aging population and rising healthcare costs.1. The USDA used poverty guidelines from 2014 to set SNAP eligibility standards in 2015. ↩
Image credit: USDA's Food and Nutrition Service (FNS), Supplemental Nutrition Assistance Program