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The coronavirus (COVID-19) pandemic has led to a massive reduction of economic activity in the United States. Millions of Americans are out of work and are increasingly relying on the Supplemental Nutrition Assistance Program (SNAP), a key part of the social safety net that provides benefits to help those with low or reduced incomes buy food.
In June, the federal government spent $10.6 billion on SNAP — a 102 percent increase from the amount spent just three months before. Federal spending on the program grew at an average of 26 percent per month since April — nearly double the largest monthly growth seen during the Great Recession. Such a large increase in spending is unprecedented; the only times where spending on the program has grown nearly as fast were around February 2019, when benefits for that month were advanced to prepare for a government shutdown.
By design, spending on SNAP (sometimes referred to as Food Stamps) automatically rises to cover a greater number of people during economic downturns. Furthermore, the federal government recently expanded SNAP to provide additional financial support to those affected by the pandemic. Both the countercyclical structure of SNAP and recent legislation have contributed to the dramatic increase in spending on the program.
SNAP is an automatic stabilizer — participation in the program naturally increases when the economy slows. Such was the case during the Great Recession, when participation grew about 20 percent, reflecting large numbers of Americans without adequate access to food.1 Today, a similar situation exists because of the COVID-19 pandemic, as significant income loss has made more people eligible for benefits. While the latest federal data on SNAP participation has not yet been released, data published by a handful of states have shown a notable increase in participation — some as large as 20 percent between February and April.
As noted above, in addition to the countercyclical nature of SNAP, the growth in spending also results from legislative changes to the program. The Families First Coronavirus Response Act (FFCRA), which was signed into law on March 18, included provisions that expanded SNAP benefits for new and existing recipients during the ongoing public health emergency. In particular, the FFCRA:
The Congressional Budget Office estimated that those changes will increase program costs by $10.4 billion and $10.8 billion in FY 2020 and FY 2021, respectively.
While SNAP only composes a small portion of the federal budget, it is the largest food security program in the United States. The increase in spending on the program is therefore critical in providing assistance to families during the pandemic.
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