Policymakers are appropriately considering additional stimulus measures in the face of mounting job losses and other dire economic signs due to COVID-19. A top item on their list should be raising SNAP (food stamp) benefits as a way of mitigating hardship and injecting fast, high "bang-for-the-buck" stimulus into the economy.
SNAP has proven to be one of the most effective mechanisms available both to reach low-income households and to provide counter-cyclical help in recessions. That's why we recommend that policymakers increase the SNAP maximum allotment by 15 percent until economic measures show that unemployment is no longer significantly elevated. That would amount to about
SNAP benefits are one of the fastest, most effective forms of economic stimulus because they quickly inject money into the economy -- and a SNAP benefit increase can be implemented virtually immediately. Low-income individuals generally spend all of their income to meet daily needs such as shelter, food, and transportation; every SNAP dollar that a low-income family receives enables the family to spend an additional dollar on food or other items. Some 80 percent of SNAP benefits are redeemed within two weeks of receipt; 97 percent are spent within a month. That's why the
Increasing SNAP benefits also helps families afford adequate food. Evidence from the Great Recession shows the effect that higher SNAP benefits can have on easing hardship; the 2009 Recovery Act's benefit increase helped lessen food insecurity (the lack of consistent access to nutritious food because of limited resources) among SNAP households.
In addition to the benefit increase, we recommend that policymakers include several additional changes to SNAP and the
* Suspending the three-month time limit on SNAP benefit receipt that adults aged 18-50 who aren't employed and aren't raising minor children face, until the economy has recovered;
* Suspending implementation of several Administration regulations that would take away food assistance from 4 million low-income individuals;
* Ensuring that
* Supplementing states' funding for SNAP administration; and
* Adopting two changes to WIC that would extend the program's reach to young children before they reach school age, as well as protect babies from losing WIC coverage during the downturn.
To be sure, the food assistance provisions of the Families First Coronavirus Response Act are providing some additional SNAP benefits to many households. But that expansion will only last during the public health emergency, and it leaves out nearly 40 percent of SNAP households, including those who have the lowest incomes and thus have the most difficulty affording adequate food. Some 5 million children are among those now left out.
Economists Rate SNAP Among the Fastest, Most Effective Options for Economic Stimulus
Effective economic stimulus and recovery measures work by increasing the demand for goods and services when there is insufficient existing demand to keep businesses operating at capacity and to generate full employment. Measures that increase demand begin to put people back to work during times when business and consumer confidence is low and economic activity is declining. Such measures continue to do so in the early stages of a recovery from a recession./2
SNAP benefits are one of the fastest, most effective forms of economic stimulus because they get money into the local economy quickly for two reasons: first, states can issue additional SNAP benefits to SNAP households without delay, and second, recipients will spend virtually all of the additional resources rather than save them. States can increase SNAP benefits through the same channels as regular SNAP benefits, within days or weeks of enactment. And since SNAP recipients have low incomes, they generally need to spend their resources to meet their daily needs such as shelter, food, and transportation. Additional resources from SNAP also can free up other household income for other needed goods and services.
Some 80 percent of SNAP benefits are redeemed within two weeks of receipt; 97 percent are spent within a month./3 CBO and
Every dollar in new SNAP benefits spent when the economy is weak and unemployment elevated would increase the gross domestic product by
The impact of this increased spending by SNAP households "multiplies" throughout the economy as the businesses supplying the food and other goods -- and their employees -- have additional funds to make purchases of their own. This multiplier effect on the economy may extend well beyond the initial money provided to SNAP participants.
SNAP, by design, operates as an "automatic stabilizer" because its participation and spending can expand automatically when the economy experiences a downturn that raises unemployment and reduces household incomes. The program experienced large but temporary growth during and after the Great Recession; caseloads expanded significantly between 2007 and 2011 as the recession and sluggish economic recovery dramatically increased the number of low-income households that qualified and applied for help. Beyond the automatic stimulus from caseload growth, in the 2009 Recovery Act, policymakers raised the level of maximum SNAP benefits beginning in
Higher SNAP Benefits Also Reduce Food Insecurity and Other Hardship During Economic Downturns
Increasing SNAP benefits also helps families afford adequate food. While SNAP is effective at reducing "food insecurity" (lack of consistent access to nutritious food because of limited resources), there is substantial evidence that the SNAP benefits levels fall short of what many participants need to obtain a healthy diet throughout the month, and that additional benefits would further reduce food insecurity./8
The SNAP benefit increase in the 2009 Recovery Act lessened food insecurity among SNAP recipients, according to
This evidence suggests that the Recovery Act's benefit increase helped cushion the blow of the recession by providing more income for families to purchase food. Another study found that, as inflation eroded the value of the Recovery Act benefit boost between 2009 and 2011, very low food security began to rise among low-income SNAP households, from 12.1 percent in 2009 to 13.8 percent in 2011 (at a time when low food security did not rise among low-income households not receiving SNAP). The study controlled for other factors that might have influenced household food security, such as income and employment./10 The results of these studies indicate a strong relationship between SNAP benefit levels and recipients' food insecurity.
Without the Recovery Act's SNAP benefit boost, poverty would have risen more for SNAP recipients than it did. The SNAP increases in the Recovery Act alone kept close to 1 million people out of poverty in 2010, in addition to the 3 million that the existing SNAP benefits kept out of poverty, a 2011 CBPP analysis estimated./11
Temporarily Increase Maximum SNAP Benefits by 15 Percent
To provide economic stimulus and push back against the increased hardship the coronavirus is causing, we recommend a temporary 15 percent increase in the SNAP maximum allotment level (known as the Thrifty Food Plan, or TFP)./12 Such a measure, which would be similar to the SNAP benefit increase included in the 2009 Recovery Act, would increase SNAP benefits by about
If the increase took effect in
SNAP benefits are based on a household's expected contribution toward buying food. Households with no disposable, or net, income (after deductions for certain key household expenses) receive the maximum SNAP allotment for their household size, while households with some net income receive a benefit equal to the difference between the maximum allotment for their household size and their expected contribution (30 percent of their net income).
A 15 percent increase in the maximum SNAP benefit would raise SNAP benefits for all participating households, and by the same amount for all households of the same size (with one exception, discussed below). In 2020, one-person households would receive an added
The one exception would be that households that receive SNAP's minimum benefit, which is available to eligible one- and two-person households that otherwise qualify for little or no benefit, would receive an additional
Nutrition Assistance to Territories, Emergency Food Network Also Needs Boosting
In addition to SNAP benefit levels, the TFP also is the basis for annual inflation adjustments for the capped block grant that provides nutrition assistance to households in
Both the block grant and TEFAP received modest additional funding in the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. But those bills were designed only to address short-term needs related to the pandemic. The severity and likely length of the economic downturn warrant a more significant increase to equip both programs to deal with the heightened need. At a minimum, they should receive roughly a similar percentage increase to that for SNAP.
As we discuss below, we also recommend extending the Families First Pandemic-EBT provision to
Retain 15 Percent Increase Until a Strong, Sustainable Recovery Is Clearly Underway
We recommend setting SNAP benefits at a level 15 percent higher than the 2020 TFP until economic measures show that unemployment is no longer substantially elevated, or until the program's regular annual inflation adjustments overtake it, whichever occurs first. The recession's rapid onset and unusual genesis have created substantial uncertainty about how long economic stimulus measures will be needed. If, like after the Great Recession, it takes several years for the economic recovery to reach lower-wage workers, it would make sense to leave the SNAP increase in place for such a period. Based on the surge in unemployment insurance claims starting in March, various forecasters, including Goldman Sachs and CBO, project a sharp near-term spike in the unemployment rate to Great Recession or higher levels, with unemployment then remaining elevated for an uncertain duration but at least through much or all of 2021. And if the economy recovers more quickly, it then will be appropriate to end the temporary SNAP increase earlier, as stimulus measures will no longer be necessary.
To account for the uncertain trajectory of the recession, we recommend that policymakers design a "trigger" so the SNAP benefit increase ends automatically based on when certain economic indicators are met. Such an approach is preferable to ending the stimulus measure too soon and expecting
An approach could be used here similar to the approach we recommend for the unemployment insurance (UI) measures included in the CARES Act. Those UI expansions are now slated to expire this year, some over the summer and others at the end of the year; but the economic slump will likely last well past then. We suggest that the UI eligibility and benefit improvements be turned off when there are solid indications that the economy is recovering significantly -- for example, that the three-month unemployment rate has fallen for two straight months and is within 1.5 percentage points of its level before the crisis. (Since the unemployment rate prior to the recession was 3.5 percent, that level would be 5 percent.)/17
Another option would be to scale back the 15 percent bump in 5 percentage-point increments annually once the labor market has recovered, as measured by the unemployment rate returning to a level close to pre-recession levels. Alternatively, policymakers could end the entire benefit increase when such a trigger based on labor-market indicators is pulled.
Include Other SNAP and WIC Changes in Next Major Stimulus Package
In addition to the 15 percent increase to SNAP maximum benefits, we recommend that policymakers include several additional changes to SNAP and WIC in the next economic stimulus package./18
Preserving and Extending Eligibility for SNAP
For SNAP, we recommend:
* Suspending the three-month limit on SNAP benefit receipt until the economy has recovered. The three-month limit for adults aged 18-50 who aren't employed or in training 20 hours per week and aren't raising children at home should be suspended in all states in recognition of the severe effect the crisis is having on job opportunities. The Families First Coronavirus Response Act suspends the time limit until the end of the month after the public health emergency declaration is lifted. The adverse effects of the economic slowdown on labor market opportunities for workers in low-wage occupations, however, will extend beyond the end of the public health emergency, so the suspension should remain in effect until the economy improves.
* In mid-March, a federal district court issued a nationwide injunction temporarily halting a
* Suspending implementation of two other pending regulations. The Administration currently is seeking large cuts in SNAP through both the final regulation mentioned above and two other regulations that the Administration has proposed but hasn't yet promulgated as final rules. If all three regulatory changes go into effect, they will take away SNAP assistance from 4 million low-income individuals and cut SNAP spending by nearly
* Providing supplemental funding for states' SNAP administrative costs. Many states have been inundated by SNAP applications, and the demand is likely to continue to grow as the unemployment rate rises further./21 This is happening at a time when states' workforces are stretched due to offices that are closed to walk-in traffic (and have been reduced in many areas because of illness and school closures). Despite recent advances in online services for participants, before the public health emergency the SNAP application process in most states entailed substantial in-person interaction between clients and state eligibility workers, and many states had not developed telework capacity.
* Once the public health emergency lifts, we expect states to be far behind in processing SNAP applications, even as more applications continue to be submitted as a result of the economic downturn. To help states with the costs of rising demand for services, implementing temporary programmatic changes, and preparing for the possibility of more remote work, we recommend that the next stimulus package make available to states an amount equal to 10 percent of the federal payments provided for states' SNAP administrative costs in the most recent fiscal year. This provision should be in effect during the period that the SNAP benefit increase is in effect. This measure, as well, was included in the 2009 Recovery Act.
* Improving the Families First Pandemic-EBT provision. The Families First P-EBT provision gives states the option to provide school-aged children who are missing out on free and reduced-price meals due to school closures with benefits that are provided via a SNAP or SNAP-like electronic benefit transfer (EBT) card and are equal to the federal reimbursement rate for free school breakfasts and lunches./22 Only a handful of states have implemented this option to date; some states have suggested the option could be streamlined and reworked to offer states more flexibility on how to use it, as well as extending the option so that it can cover the period when, in normal times, low-income children would be receiving meals through summer programs or summer meal sites. Many of those sites and programs could be closed this summer throughout much of the country. In addition, as noted above, the Pandemic-EBT option should be extended to
Taking Precautions to Retain WIC Participants
WIC is a national public health and nutrition program that each month serves more than 6 million low-income women, infants, and young children at nutritional risk across
The Families First Act included several useful provisions that allow states to seek waivers to enroll, recertify, and issue WIC benefits to low-income families without requiring the usual in-person appointments, as well as to ease other requirements to ensure ongoing service to eligible households./23 We recommend two additional changes to WIC to extend the program's reach to more young low-income children before they reach school age and to protect low-income infants from losing WIC coverage during the downturn. While these changes would be sensible permanent improvements to the programs, for the purposes of a stimulus package they would likely need to be temporary.
* Temporarily extend WIC eligibility to age six. Temporarily extending WIC eligibility for children by one year -- until their sixth birthday -- would ensure that children receive WIC benefits until they become eligible for free or reduced-price school meals.
* Temporarily extend WIC certification periods for infants to two years. Giving states the option to certify infants participating in WIC for two years rather than one would facilitate infants staying on WIC longer, which is associated with better diets./25 Many families drop out of the program when an infant turns one, in part because of the burdensome recertification appointment, a problem that the current crisis is exacerbating. Providing states with the flexibility to extending the certification period would also help streamline WIC administration at a time when there will be increased demand for the program that stretches administrative capacity.
Families First Act's SNAP Provisions Last Only Through the Public Health Emergency; Exclude Nearly 40 Percent of SNAP Households
The Families First Coronavirus Response Act provided several temporary, but important nutrition program flexibilities and benefit changes to supplement existing programs in addressing the short-term public health emergency./26 These provisions are providing important help to families and states, but they expire at the end of the public health emergency as declared by the Secretary of
The Families First Act provides authority for
While these SNAP emergency allotments are providing a measure of economic stimulus and alleviating hardship for the households receiving them, some 40 percent of SNAP households already receive the SNAP maximum benefit and thus cannot receive any additional resources for food under this provision. These SNAP households are, by definition, the SNAP households with the lowest incomes; they receive the maximum benefit because they have no disposable income available to purchase food under the SNAP benefit calculation rules./27
In total, 12 million of the poorest individuals participating in SNAP are not being helped by the current SNAP emergency allotments. Those not helped include 5 million children, many of whom are less than 5 years old, about 1 million households with elderly members and 600,000 households with people who have disabilities. These numbers will only grow as the incomes of more households decline and more households apply for SNAP benefits.
The 15 percent increase in the SNAP maximum benefit that we recommend as economic stimulus doesn't change who is eligible for SNAP or the conditions under which they apply. Rather, it adds -- on a temporary basis -- a modest
(5) Canning and
(11) Arloc Sherman, "Poverty and Financial Distress Would Have Been Substantially Worse in 2010 Without Government Action, New Census Data Show," CBPP,
(12) SNAP benefits are based on the cost of the
(13) We assume here that stimulus legislation would be enacted in
(14) We provide these SNAP caseload assumptions to illustrate the higher end of a range for additional SNAP spending from the change. We do not intend to predict anything specific about the recession or about SNAP caseload growth nationally or in any particular state.
(18) In addition to the policy changes included here, the uncertainty about the length of the pandemic emergency and the depth of the economic downturn make this an important time for
(21) See, for example, Chris Lisinsi, "Mass. Residents Turning to Public Assistance Programs," WGBH,
(24) "Kindergarten Entry Status: On-Time, Delayed-Entry, and Repeating Kindergartners,"
(27) The maximum benefit is tied to the